Currency Trading Information Channel
What are Your Options Regarding Forex Options Brokers?
Forex option brokers can generally be divided into two separate categories: forex brokers who offer online forex option trading platforms and forex brokers who only broker forex option trading via telephone trades placed through a dealing/brokerage desk. A few forex option brokers offer both online forex option trading as well a dealing/brokerage desk for investors who prefer to place orders through a live forex option broker.
The trading account minimums required by different forex option brokers vary from a few thousand dollars to over fifty thousand dollars. Also, forex option brokers may require investors to trade forex options contracts having minimum notional values (contract sizes) up to $500,000. Last, but not least, certain types of forex option contracts can be entered into and exited at any time while other types of forex option contracts lock you in until expiration or settlement. Depending on the type of forex option contract you enter into, you might get stuck the wrong way with an option contract that you can not trade out of. Before trading, investors should inquire with their forex option brokers about initial trading account minimums, required contract size minimums and contract liquidity.
There are a number of different forex option trading products offered to investors by forex option brokers. We believe it is extremely important for investors to understand the distinctly different risk characteristics of each of the forex option trading products mentioned below that are offered by firms that broker forex options.
Plain Vanilla Forex Options Broker - Plain vanilla options generally refer to standard put and call option contracts traded through an exchange (however, in the case of forex option trading, plain vanilla options would refer to the standard, generic option contracts that are traded through an over-the-counter (OTC) forex dealer or clearinghouse). In simplest terms, vanilla forex options would be defined as the buying or selling of a standard forex call option contract or forex put option contract.
There are only a few forex option broker/dealers who offer plain vanilla forex options online with real-time streaming quotes 24 hours a day. Most forex option brokers and banks only broker forex options via telephone. Vanilla forex options for major currencies have good liquidity and you can easily enter the market long or short, or exit the market any time day or night.
Vanilla forex option contracts can be used in combination with each other and/or with spot forex contracts to form a basic strategy such as writing a covered call, or much more complex forex trading strategies such as butterflies, strangles, ratio spreads, synthetics, etc. Also, plain vanilla options are often the basis of forex option trading strategies known as exotic options.
Exotic Forex Options Broker - First, it is important to note that there a couple of different forex definitions for "exotic" and we don't want anyone getting confused. The first definition of a forex "exotic" refers to any individual currency that is less broadly traded than the major currencies. The second forex definition for "exotic" is the one we refer to on this website - a forex option contract (trading strategy) that is a derivative of a standard vanilla forex option contract.
To understand what makes an exotic forex option "exotic," you must first understand what makes a forex option "non-vanilla." Plain vanilla forex options have a definitive expiration structure, payout structure and payout amount. Exotic forex option contracts may have a change in one or all of the above features of a vanilla forex option. It is important to note that exotic options, since they are often tailored to a specific's investor's needs by an exotic forex options broker, are generally not very liquid, if at all.
Exotic forex options are generally traded by commercial and institutional investors rather than retail forex traders, so we won't spend too much time covering exotic forex options brokers. Examples of exotic forex options would include Asian options (average price options or "APO's"), barrier options (payout depends on whether or not the underlying reaches a certain price level or not), baskets (payout depends on more than one currency or a "basket" of currencies), binary options (the payout is cash-or-nothing if underlying does not reach strike price), lookback options (payout is based on maximum or minimum price reached during life of the contract), compound options (options on options with multiple strikes and exercise dates), spread options, chooser options, packages and so on. Exotic options can be tailored to a specific trader's needs, therefore, exotic options contract types change and evolve over time to suit those ever-changing needs.
Since exotic forex options contracts are usually specifically tailored to an individual investor, most of the exotic options business in transacted over the telephone through forex option brokers. There are, however, a handful of forex option brokers who offer "if touched" forex options or "single payment" forex options contracts online whereby an investor can specify an amount he or she is willing to risk in exchange for a specified payout amount if the underlying price reaches a certain strike price (price level). These transactions offered by legitimate online forex brokers can be considered a type of "exotic" option. However, we have noticed that the premiums charged for these types of contracts can be higher than plain vanilla option contracts with similar strike prices and you can not sell out of the option position once you have purchased this type of option - you can only attempt to offset the position with a separate risk management strategy. As a trade-off for getting to choose the dollar amount you want to risk and the payout you wish to receive, you pay a premium and sacrifice liquidity. We would encourage investors to compare premiums before investing in these kinds of options and also make sure the brokerage firm is reputable.
Again, it is fairly easy and liquid to enter into an exotic forex option contract but it is important to note that depending on the type of exotic option contract, there may be little to no liquidity at all if you wanted to exit the position.
Firms Offering Forex Option "Betting" - A number of new firms have popped up over the last year offering forex "betting." Though some may be legitimate, a number of these firms are either off-shore entities or located in some other remote location. We generally do not consider these to be forex brokerage firms. Many do not appear to be regulated by any government agency and we strongly suggest investors perform due diligence before investing with any forex betting firms. Invest at your own risk with these firms.
John Nobile - Senior Account Executive
MORE RESOURCES updated Wed. March / 03 / 2021
Which Are the Basic Forex Trading Styles? NameCoinNews
What is the Interbank Market? Investment U
Forex Trading – How Do I begin? - NuWireInvestor NuWire Investor
Moscow Exchange Reports Stable FX Volumes at $325 Billion Finance Magnates
FDCTech Accepts Payment in Bitcoin (BTC) as Market Acceptance of Digital Currency as a Medium of Exchange Grows Rapidly - GlobeNewswire
FDCTech Accepts Payment in Bitcoin (BTC) as Market Acceptance of Digital Currency as a Medium of Exchange Grows Rapidly GlobeNewswire
U.S Dollar Correlates with Market Risk Appetite Yahoo Finance
The Currency-Market Snoozefest Might Not Last The Wall Street Journal
New York attorney general warns cryptocurrency industry: 'Play by the rules or we will shut you down' - CNBC
New York attorney general warns cryptocurrency industry: 'Play by the rules or we will shut you down' CNBC
How to Trade Commodity Currencies in Forex Trading Moneyshow.com
2 crypto currency trading platforms shut down by New York Attorney General WWTI - InformNNY.com
Comprehending Forex Trading Signals Live Bitcoin News
3 Simple Forex Trading Strategies Mighty Gadget
How safe is forex trading in Kenya? Capital FM Kenya
How to Start Home-Based Business with Forex? The African Exponent
How to use fractal trading strategy ForexLive
ECB's Weidmann: 2021 German inflation seen somewhat higher than December forecast of 1.8% - Forex Crunch
ECB's Weidmann: 2021 German inflation seen somewhat higher than December forecast of 1.8% Forex Crunch
EUR/USD Forex Signal: Looking Bearish DailyForex.com
Gold Price Analysis: Rising real yields raise the prospect of a serious XAU/USD fall – Credit Suisse - Forex Crunch
Gold Price Analysis: Rising real yields raise the prospect of a serious XAU/USD fall – Credit Suisse Forex Crunch
How to increase consistency in making money doing Forex Trading Australian Times
Global Foreign Exchange Software Market Top Players 2026: eMoneyexchangesoft, Thomson Reuters FX Trading, AFEXDirect, Banking Circle Real-time FX, Biz4x etc. - The Bisouv Network
Global Foreign Exchange Software Market Top Players 2026: eMoneyexchangesoft, Thomson Reuters FX Trading, AFEXDirect, Banking Circle Real-time FX, Biz4x etc. The Bisouv Network
Swedish PM Lofven condemns knife attack in Vetlanda Yahoo Finance
EU’s Breton: Aim to increase covid vaccine production capacity to 2-3B oses per year by end-2021 - Forex Crunch
EU’s Breton: Aim to increase covid vaccine production capacity to 2-3B oses per year by end-2021 Forex Crunch
USD/INR Established A New Trading Range Between 72.80 To 73.80 With A Weaker Bias - Investing.com India
USD/INR Established A New Trading Range Between 72.80 To 73.80 With A Weaker Bias Investing.com India
Foreign Exchange Margin Trading Market 2020-2025 | Gaitame, Central Tanshi Online Trading, Money Partners, Daiichi Commodities, FXCM - The Courier
Foreign Exchange Margin Trading Market 2020-2025 | Gaitame, Central Tanshi Online Trading, Money Partners, Daiichi Commodities, FXCM The Courier
Befimmo SA: Transparency declaration Yahoo Finance
UK's Sunak: Will do whatever it takes to support British people and businesses through crisis - Forex Crunch
UK's Sunak: Will do whatever it takes to support British people and businesses through crisis Forex Crunch
Central bank, police officials warn against investment in forex trading floors - http://en.vietnamplus.vn/
Central bank, police officials warn against investment in forex trading floors http://en.vietnamplus.vn/
What Is Forex Trading? Forbes
Trading Forex For Living – is it for real? TechFinancials
The 6 Best Online Forex Trading Classes of 2021 Investopedia
Forex Brokers: Are They a Scam? | Investing | US News U.S News & World Report Money
Inside the weird new world of social ‘forex’ trading—where you sign up friends, and some report risky red flags for investors - Fortune
Inside the weird new world of social ‘forex’ trading—where you sign up friends, and some report risky red flags for investors Fortune
Forex Market: Unlocking Opportunities for Investors Visual Capitalist
A Forex Trading Guide For Beginners | Sponsored | state-journal.com State-Journal.com
Next Forex Trading Terms You Need to Know Before Trading North Forty News
Cryptocurrency And Regulation Of Official Digital Currency Bill, 2021 And Legal Framework Ahead - Live Law - Indian Legal News
Cryptocurrency And Regulation Of Official Digital Currency Bill, 2021 And Legal Framework Ahead Live Law - Indian Legal News
Making Money By Forex Trading The FINANCIAL
Facts You Need To Know About Forex Trading Forbes India
Everything To Know About Getting Into Forex Trading GQ Australia
Foreign exchange data wars heat up as rivals take on ‘Big Two’ Financial Times
How to Trade Forex? - A Guide to Forex Trading in 2021 DailyForex.com
A guide to forex trading instruments - Boca Raton's Most Reliable News Source - The Boca Raton Tribune
A guide to forex trading instruments - Boca Raton's Most Reliable News Source The Boca Raton Tribune