FX Options Strategies

[buffting]

If: Client looking to buy EUR/USD 3mth basis - but thinks market will move higher before going lower. What strategy could I employ?

Ideas: Risk is market continues to increase or stagnates

So you would want to buy call option accordingly right?

Any other strategies that would be beneficial to client?

Cheers

 

[GammaJammer]

Depends on whether client has ability / appetite to trade exotics or not. That dictates how much tailoring can be done.

Other thing you need to consider is whether client wants to use options to express this view, or to hedge against his view being wrong (either in timing, direction or whatever).

But to be honest if this really is a client of yours, do you think they'd be particularly happy having you advise them on theit options trading if you have had to go onto an anonymous internet forum to get the answer? Are you possibly a little underqualified to give ouy advice?

 

[buffting]

was hypothetical situation haha - just part of me training getting knowledge from you guys - which i appreciate - not actually advising anyone.

It is actually hedging against the view (EUR/USD going lower) being wrong rather than being speculative.

how would the strategy differ if he were speculative btw?

Given talking more vanilla options - a call option would be sufficient right? to hedge rate goign up but also benefiting if the rate goes lower because of the need to buy. Could do a bull call spread if believes marginal increase only on the cards. but cant really think of anymore strategies?

any possibilities im missing...?