Do you want to know how to hedge forex risk through currency options? In this video, we'll teach you the basics of currency options, including the benefits and risks.
If you're looking to invest in forex but don't know where to start, this video is for you. We'll walk you through the basics of currency options, explaining the benefits and risks along the way. By the end of this video, you will have a good understanding of how to hedge forex risk through currency options.
Ever wondered what FX (Forex) options are?
FX options are like equity options and give the buyer the right but not the obligation to buy or sell a currency pair at a specific price and on a particular expiry date. The key point of difference is that a call option on one currency is necessarily a put option on the other currency.
There are two types of FX options, calls and puts. OTM options tend to be cheaper and offer more leverage but are more prone to time decay. ATM and ITM options, on the other hand, are more sensitive to price changes in the underlying and can lead to a higher loss of premium if expired and worthless.
Traders can generate income by selling FX options in exchange for a premium, with the maximum gain being the premium received and losses being unlimited.
Understanding FX options can open up new opportunities in currency trading. #Fxtrading #OptionsTrading #Forex
Trading can result in losses. Refer to our PDS and TMD via home.saxo/en-au
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