Forex Blog: Currency Trading News & Analysis.

August 15th 2005

Currency options gain popularity

Derivatives have always been an important part of forex trading. As if 200:1 leverage isn’t enough, many traders enjoy speculating on currencies through the long and short purchases of derivatives (forwards, futures, options, and swaps). Most popular among retail forex traders are currency options, in which one pays for the right to purchase or sell a currency at a fixed exchange rate at some point in the future. In fact, one firm recently introduced a new type of options trading designed in an intuitive way for forex traders. The vehicle is known as a box option and allows traders to graphically select support and resistance levels for a particular currency pair, in the shape of a box. The return depends on if and by how much the theorized levels are actually breached. Business Wire reports:

This is the first and only product of its kind in the financial marketplace. “BoxOption provides…investors with a powerful new derivative for which they can do any number of things, from hedging exchange rate risk and currency positions, to direct investing in the movement of the currency markets.”

Read More: OANDA’s BoxOption Opens a New Era in Currency Options Trading

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Posted by Adam Kritzer | in Investing & Trading | 1 Comment »

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One Review of “Currency options gain popularity”

  1. Tom Schoen Says:

    I have been playing with BoxOptions on Oanda. What I find to be fairly odd is that the you can purchase the BoxOptions but the only people who you can sell the option to (and that same person sets the price) is Oanda. I think it would be great within future releases if other traders had the ability to make offers on options that people were trying to dump. Just my 2pips.

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