Currency Options Trading

Currency option trading is the practice of buying a contract in which the trader has the option or right to buy or sell a currency at a specific exchange rate over a period-of-time. But the trader is not obligated or bound by this contract to do anything. The trader does have to pay a premium for this contract to a broker and the price can vary depending on how many contracts are purchased from the broker.

Although currency options trading is considered to be an advance trading strategy, it would be wise for every beginner trader to learn how to trade options sooner rather than later because options are a great tool to hedge against unfavorable trends in the currency market. Unlimited gains with limited risk.

Where many traders get in trouble (nearly 90 percent) or lose assets is buying options out of the money and at a too short of a time frame, being too aggressive or buying on a hunch that an option at a price that has little likely hood of hitting the mark. Although this strategy could net you huge gains, the odds are stacked against you.


Think of it this way, would you rather make slow steady gains over a long period or take an all or nothing approach to your nest egg?
In my opinion it makes more sense to buy options long, in the money with the trend and sell longer odd options to the other 90% of the traders that are looking to make the big score. I like to compare this to being the house in Las Vegas, sure the casinos will let you bet on the long shot with a potential of a big payday but for every one big winner they have thousands of other gamblers betting the long shot that never come close. To make this even simpler; I would rather bet on 100 close to a sure thing than one big potential score.

For one thing, this strategy keeps you in the game longer, and the longer you are in the game the more will learn, the more you learn the better you will get at your craft and the more money you will make.

So, if you are not trading options at this time, I suggest you learn everything you can about trading options. It's a great way to hedge against unfavorable market changes and if done properly, tip the odds in your favor while making a ton of money off others' greed.