What is an option on Forex?
The option is translated from Latin as “choice” or “desire.” And it means a contract, which a potential seller or potential buyer of an asset has the opportunity to either sell or buy at a price agreed in advance in the period specified in the contract or in the future …
But the seller of the option is obliged to make a return purchase or sale of the asset based on the time specified in the contract. Such a contract is advantageous in that, with an increase in the price in the process of trading, the buyer can win in the price.
In the Forex market, the option is presented as an option for an option buyer to exchange one currency for another date at a rate of exchange, which is agreed in advance. Use such options Forex basically exporters / importers in case of hedging against the risk of a change in the exchange rate of the contract of foreign economic and the currency of sale / purchase of goods on the domestic market.
To date, the Forex currency market is one of the few highly effective ways of earning, where in an instant an experienced and professional market user can dramatically increase their deposit, or on the contrary without having the professional skills in trading in the Forex market and without a trading system to lose it. And so the Forex options can provide some protection against losing the deposit.
Experts say that options are more profitable and much riskier than in the Forex market in currency terms. Options are of two types, namely:
• American – the owner of an option at any time specified in the contract may use the right either to buy or sell the goods.
European – the owner of the option can buy or sell only at the end of the term.
Accepted options on Forex were not in vain. Lovers of stable earnings on the market appreciated that now they can hedge their deals. One of them is Ilya Tarakanov, a trader who finished his studies at the Forex Academy and the exchange trade Masterforex-V.
He says that after several months of training at the options department, he began to understand the market differently, and after a couple of weeks on the demo account he switched to real and his deposit grew steadily. For half a year on options, Ilya earned $ 15,000.
The first three months for him had no losses, which was due to the temporary disintegration of options. And also, because of the margin of strength of deals on long-range strikes …