User:Forex Options Trading

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Forex Options Trading

Forex (fx) is an acronym of Foreign Exchange. Forex Trading is the act of trading currencies from different countries against each other.

Forex option trading is different from regular forex trading. When an owner is buying or selling actual currencies, this is known as forex trading or currency trading. However, in forex option trading, the owner is buying the option not the currency i.e. they are entering into a contract to buy or sell currencies at a fixed price within a specified time frame.

A forex option is a type of binary option which means that the payout is determined when the contract is created i.e. the potential gain and the potential loss from the trade is known from the offset. There are only two possible outcomes: or the option expires in-the-money and the owner receives a fixed amount of cash; or the option expires out-of-the-money and the owner receives nothing. However, if forex option trading is carried out with anyoption™, an owner receives 15% back if his option expires out-of-the-money.

In forex options the underlying asset being traded is a currency pair – hence why they are also called currency options. These could take on numerous possibilities: EUR/GBP, AUD/USD, USD/JPY, GBP/JPY and more.

Receiving a payment when trading forex options is independent of the magnitude by which the price of the currency moves. For example, an owner may buy a call option for £100, expiring at the end of the day, for a return of 70% on the currency pair USD/EUR currently at 0.7037.

If at the end of the day, the currency pair ends at 0.7041 then the option has expired in-the-money and the owner will receive £170. They receive the full 70% payout, regardless that the stock only moved 0.04 points. This demonstrates the relative simplicity of trading forex options.

Over the past 2 decades the forex option trading market has exploded, with individuals entering a previously elite industry. They understand how learning a small amount about different currencies can lead to potentially huge profits with all risks being calculable in advance.

How to understand Forex Option Trading

Forex option trading (or currency option trading) is when an owner enters into a contract to trade one currency in exchange for the other, hoping to make a profit as the rates against each other fluctuate. The option is bought at a set price and within a specified time frame. With anyoption™, a trader can profit as much as 70% if the trade expires in the money. Even if the option expires out-of-the-money, then 15% of the principal investment is paid back.

Note: the owner is buying the option and not the currency itself

Select the currency pair which you would like to trade on e.g. USD/EUR, GBP/JPY

Decide if you want to make a call option or a put option. If you buy a call option then you predict that the rate of the currency pair will increase. If you buy a put option then you predict that the rate of the currency pair will decrease.

Choose your expiry date – do you want the option to expire at the end of the nearest hour or at the end of the day, week or month?

Enter investment amount – decide how much you would like to invest in this option.

Wait for the expiry - the expiry level of your chosen currency pair at the selected expiry time and date will be displayed in the trading box

To begin trading, you must have opened an account at anyoption.com.

anyoption™ is a new binary option trading platform available for private and institutional investors worldwide. Our option trading platform is 100% web based, and does not require software download or any other previous trading experience.

anyoption™ pricing and execution modules set up a new standard in the online trading market: the interface is self explanatory and easy to use, the range of products we offer options on is incomparable and the speed and accuracy of settlements is flawless. We use the most advanced and stable technologies to assure your safety and satisfaction.