Tag: fx options

Guide to Trading Forex Futures Part 3: Hedging Strategies

Yesterday, we looked at the differences between traditional futures and forex futures. Today, we'll be looking at the one of the main uses for...

Guide to Forex Options Trading Part 10: Option Volatilities

Option volatilities are a measure of the magnitude and frequency of the changes in the price of a currency. On the other hand, implied...

Guide to Forex Options Trading Part 9: Risk Reversals

Risk reversals reflect the expectation of the market in terms of the direction of an exchange rate. When used in the correct context, risk...

Guide to Forex Options Trading Part 8: Theta and Vega

Theta Theta measures the time decay associated with an option, which is the amount that an option will lose each day as a result of...

Guide to Forex Options Trading Part 7: Delta and Gamma

The price of options don't always move in exact correlation to the price of the underlying currency pair, as other factors such as volatility...

Guide to Forex Options Trading Part 6: Hedging Strategies

One of the most common uses for FX options among forex traders is to use them as a hedge against cash positions. Today, we're...

Guide to Forex Options Trading Part 5 – A Worked Example

In the previous instalments, we've looked at the differences between the various types of option. Today, we're going to look at an example of...

Guide to Forex Options Trading Part 4 – Pricing

There are several factors that influence the value of options. These are: Intrinsic value This is a measure of how much the option would actually be...

Guide to Forex Options Trading Part 3 – Why Trade Options?

There are a number of reasons why options are appealing to traders. Here are some of the main ones: Downside risk is limited to the...

Guide to Forex Options Trading Part 1: Traditional Options

Although options are more commonly associated with the stock market, these financial derivatives can also be used to trade the currency markets. Although it...
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