Options on Currency Pairs

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l3580

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Good day to all who read this.

I am looking for an online broker who offers traded options on currency pairs. I have found options on currencies

thanks
 
l3580 said:
Good day to all who read this.

I am looking for an online broker who offers traded options on currency pairs. I have found options on currencies

thanks
Click to expand...
I might be missing something blindingly obvious here... How are options on currency pairs different from options on currencies?
 
I'm not sure there is a difference....

I enquired about currency options with options xpress and was told that they offer options on currencies but not on currency pairs?? So a bit confused myself.

I am currently trading mini lots and would like to trade options

Any suggestions would be appreciated
 
My sugestion is that until you know and understand the answer to that question, you don't trade anything. Surely this is a discussion you should have been having on the phone with options xpress, but that's still no good if you don't undestand their answer.

What do you know about options, and how are you intending to trade?
 
I started trading european and us style options in 2003 (FTSE & DOW companies). i haven't traded options in approx 18 months, i have been trading fx with interbank(mini acc). I woud like to use my current strategies trading options on currencies. interbank doesn't offer options and options xpress don't seem to know their rear-end from their elbow when it comes to fx. Do you know of any online brokers offering options on fx....

My current strategy utilises STOCHS + MACD + SMA + CANDELSTICK. And i would be looking to trade 3 month contracts (no spread trading), just standard puts and calls

I traded options with IGINDEX in the UK and could go back with them, but wasn't entirely happy with the platform and performance of the site(used to drop out alot)
 
http://www.xtb.com/strona.php?p=664

dont know if this will or hinder you, but I have been looking at using options on currencies as well.

the "vanilla" options are your conventional ones, where values might fluctuate depending on volatility and time, etc.

But I have been looking at European-style Digital options, where you can quantify risk from the get-go. (looking to hedge my daily on a weekly option basis)

hope it helps.
I cant vouch for XTB, as I only downloaded their platform over the weekend, but have been monitoring how their prices fluctuate, etc.
 
GammaJammer said:
Problem with retail trading options is the spreads. Gonna kill you.
Click to expand...

Is options trading a style of trading that you have been active in...?

When you say that the spreads will kill, can you give some insight into the strike prices and the problems encountered...

I recall when i used options as a form of trading that the spreads were resonable, although this was equity options and not currency.
 
I have traded options yes, but I was merely highlighting the fact that, compared to the interbank market, spreads in retail are considerably wider, making it harder to make any money. When you compare it to spot it's very noticeable (as most retail traders have access to pricing that bears a striking resemblance to the wholesale market in it's tightness).

I don't have examples of pricing to hand for two reasons;

1) I don't have a retail options account - I'm an interbank trader.

2) The interbank market prices in vol terms, whereas most retail traders trade either % base notional or dependant ccy 'pips'. So more often than not, while it's possible to tap it all through and compare apples with apples, it's a bit of a pain in the @rse to do.

But I'll make you a deal - come to me with a two way price that you're seeing, including all the relevant trade details (strike price, spot reference, exp date etc) and I'll tap it through on my bloomberg and get a rough vol approximation so we can see if it's scary wide or not.

Can't say fairer than that.
 
Oh - and one other thing you could investigate is getting an account to trade at the CME (depending on what size you trade). Getting pretty tight there (although of course you are bound to the exchange dates which may or may not be a hindrance depending on your trading style).
 
GammaJammer

I appreciate the time you have given to assist with this, thank you.

I have contacted the CME and they have suggested a broker through which i can access their exchange. (OptionsXpress :|). As mentioned in a previous thread, i currently trade with interbank and i was under the impression that trading options might increase my profit potential by reducing my losses on trades that i have the correct direction, but my timing is slightly off, causing me to get stopped out. I am not a scalper, so hopefully the killer spread of which you speak will not deter me from moving to options

Once i have my sh1t together with OptXPres i will send through the relevant information relating to strike price, spot refrence, exp date etc.
 
I had a quick look on their site and culdn't find a single reference to FX options fwiw...

There must be someone else surely.
 
I have contacted OptXPres again and they don't offer FX options.....aaargh (n)

I will keep the search alive
 
I followed the link and ACM does not offer traded optionS on currency pairs. They offer spread trading and margin trading.

NO TRADED OPTIONS!!!!
 
You can get CME (futures options) prices + chains from their website, and I think they quote in both ticks and vol terms
 
Not quite. I think the vol quotes are for an entirely different product (specifically vol quoted option) and not fungible with the mainstream options (which are quoted, as you say, in ticks). And the vol options on CME are much lower volume (despite the fact that the otc interbank market trades almost entirely on a delta neutral, vol quote basis).

So when there's siginificant size going through on the CME you need to see it straight away and know where spot is, in order to tap it through on a pricer and 'reverse solve' for what Implied Vol level is being traded on.

There's probably some super scientific way to do that, but personally I just get my pricer to grab a very rough vol quote, then I stick in the date, strike and spot ref and see where premium comes out. Then I adjust the vol in small increments by hand until I get the right number of pips and bingo - whatever vol I needed in order to do that is where we're at.

Needs the depo rates / fwd points to agree as well of course, but it's definitely not rocket science...
 
memory is a bit shady on this, but I thought I read in the CME bumpf that they were fungible with the tick quoted contract, and if you ever traded one they just plugged the IV you traded at through a standard calculator..??

I'll try and find the bumpf I'm talking about, but in the meantime there is this link (which might not work)

http://datasuite.cmegroup.com/dataS...tClassURL=http://www.cmegroup.com/trading/fx/

if not, go CME.com -> fx products -> CME "E-quivalents"...

... click on one of the "volatility products" and you will get a "register here" page, but you can then use that banner to go

FX -> American/European volatility options -> choose your underlying -> option chain
 
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