FX option trading VS Spot FX (New strategy)

ivoluxe

Newbie
3 0
Hello fellow traders,

I've been trading spot FX for more than 10 years (3 years full time) and have a good understanding of it.

Recently I was introduced to new a FX option trading strategy that looks very, very interesting.
But since I have very little knowledge about FX options I just would like to reach out for some help to any FX option traders out there?!

My first question is about forward points.
As I understand all the FX options premiums are based on future price?
For my new strategy, I still trade spot FX (not FX options, I just use FX options for data calculation and finding the edge)
So since I enter trades on spot FX, do I need to add/subtract Forward point from the FX option strikes?

And if yes, does the forward point calculation would be different if I go LONG vs if I go SHORT?
For example. In spot FX if I Buy AUD/USD I get paid swap (the difference between two currency interest rates) so forward point for AUD/USD is negative value (since at spot FX you get paid from day one)
Now, if I go short AUD/USD in spot FX I have to pay swap every day, does this mean the forward point for AUD/USD, in this case, is a positive value?

Hope it makes sense, :)

Any help would be much appreciated,
Cheers,
Ivolux
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock