Recent content by mirolho

i found a way to make it possible to do a completelly hedged carry trade. Puts that are very in the money are very cheap, so you can buy the spot and a put for a low price. This way you have a completelly hedged carry trade.

Im sorry, but i dont understand how that would change anything. If i buy a 0,20 call and sell a 1,10 call, by the expiration date i will buy the spot for 0,20 and sell it for 1,10 (0,90 profit). But i will pay less than 0,90 for it.

i agree. If the very-in-the-money calls had a normal price (at least the implied value) we would have a very low risk carry trade (buy spot and sell very-in-the-money calls, i would only lose if the spot would go below the strike price). But since i dont pay/earn interest on the options, i can...

I believe there are no costs to use leverage, at least thats what my broker told me when I emailed her this question. I think thats just the way forex works. If you buy eurusd and it goes up 1 pip, its less than 0.01%, but you gain 1% in your account (assuming you buy 100000). Anyway, what I...

as far as i know, options do not gain interest

i think you got it. I agree there is some risk that the unexpected will happen. But the eurusd will not fall 30% overnight. If it gets close to the point where i start losing money, i can just close the position. Depending how long it takes to get there, i might even win some money. Because i...

you only lose protection if the spot price goes below the strike price, so you choose an option with a very low strike price. For example, if I buy eurusd and sell a call with the strike price of 0,2000. I will lose money only IF, by the time of expiration, the spot is below 0,2000 (its at about...

yes, the downside is open, thats why you choose a strike price that you are almost sure that the spot will never reach. This way you get very little premium, but you get the interest, wich is what you wanted all along

I've been thinking a lot about hedged carry trades lately, and another way it would work in theory is if you buy the spot and sell a call with a strike price that you think the spot will not reach by the time of expiration. For example, i think that by next month eurusd will not be worth 1,3000...

Hello all. Im new at this forum. I have found an options spread possibility that (in theory) has VERY little risk (almost 0) and a reather good return (from my calculations, 200% a year or more). Its basically a bull call spread (buy a call at one strike price and sel another call at a higher...

I understand i lose some in the spread. But I want to make a long term trade (i found options to june/2009). Say I buy one lot and it costs me US$1.000,00 (thousand dollars), perhaps I'll lose US$200,00 on the spread, but if my position is correcly hedged and I make US$6,00 per day, i can...

I'm still new in forex trading, but i have some knowledge on options hedges. So i heard about carry trades, and i thought about doing a carry trade by buying the pair and hedging it with options. For example, i could buy EURUSD(on interbank they pay $6 per day, if i understand it correcly) and...