Trading Options On Currencies/Forex

Futures; ChicagoVol. 35 Nbr. 12, October 2006

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Summary


Few forex trading platforms offer forex options because the big boys go directly to bank dealing rooms. That may be changing as more money managers and retails traders are turning to options. One of the things that attracts investors to options is the fact that for almost any market outlook, time horizon and risk appetite, there is an appropriate options strategy. Forex options are tremendously popular in the institutional/corporate market but have yet to really gain the same sort of acceptance in the retail market, says Patricia Muchinsky, an options trader at Forex Capital Markets. Most commodity trading advisors focus their currency option trading to exchange traded currencies on the Chicago Mercantile Exchange. Options on currencies should be used more frequently by retail traders, and that education in options is very important to a trader's success. Currency options, whether exchange traded or OTC will continue to grow as more investors and traders understand the benefit of options.

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Trading Options On Currencies/Forex

Few forex trading platforms offer forex options because the big boys go directly to bank dealing rooms. That may be changing as more money managers and retails traders are turning to options.

Futures spoke to several futures commission merchants (FCM) and commodity trading advisors (CTA) to gauge the demand for forex options and se...

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