A HECK OF A THREAD!
Some link with tutorials and definitions from Investopedia.
Sorry to not posts the text but we could have some copyright problems. I've read almost all links and everything is fine
Options Basics: Introduction
Single Payment Options Trading (SPOT)
Barrier Option with all definitions about options barriers, DT, DNT, ST and so on. This is the best link
Getting Started In Forex Options
The Four Advantages Of Options
Option spread strategies
A little glossary about forex.
There are many mentions with words about options.
If someone wants to expect a webminar about options here is one link:
Can I get some guideline about outwrite trading. Which is one form of Future trading. Is there any info about its advantages ??
BR / GKBRIA
Sorry. I don't understand. Could you explain youserlf a bit more.
At Saxobank found there are Forex Spot, Outwrite, Option and Future trading tab. They are showing totally different than what we trade in spot and Futurre comodity/currency.
As got some idea about option from you, so I requested if any info available regarding this matter.
Got it now: advanced carry trade.
The carry trade is very popular for people who manage big amounts of money.
Let's say you have 1M Euros and you could leverage that amount at 20:1.
You take your newly Euros 20 million and buy EURJPY. Currency rates is 4.25 for Euro and 0.5 for JPY. Difference is 3.75 y/y. 20M x 3.75% is 750000 Euros profit without do nothing.
Ok, that's are the easy maths. But you would be affected by the currencies movements during the long year.
Because our main focus is to profit just with the interest rate differentials we could choose some strategies to hedge the position limiting the risk.
Our friends form Investopedia will help us with the rest:
For example, let's say a U.S company known as ZXY imports most of its materials from the U.K. every six months and the executives believe that the value of the domestic currency is going to decrease. If the domestic currency's value does decrease, it will take more U.S. dollars to buy the same amount of materials. In this case, a forward outright transaction would be appropriate: the two parties involved can agree on a certain exchange rate today, and when ZXY needs to purchase materials in six months, it will not be affected by adverse changes in the exchange rate.
The main problem with this type of transaction is the same as any other option trades. What if the currency moves against us.
We buy a forward outright to buy EURJPY today at 161.79. If during August 2009 EURJPY is again =< to 161.79 we made a good choice but what if price is lower?.
Outrights/ FX- swaps
For more info about forward outrights read carefully the file attached.