The forex options market started as an over-the-counter (OTC) financial vehicle for large banks, financial institutions and large internationalcorporations to hedge against foreign currency exposure. Like the forex spot market, the forex options market is considered an "interbank" market.However, with the plethora of real-time financial data and forex option trading software available to most investors through the internet, today's forexoption market now includes an increasingly large number of individuals and corporations who are speculating and/or hedging foreign currencyexposure via telephone or online forex trading platforms.
Forex option trading has emerged as an alternative investment vehicle for many traders and investors. As an investment tool, forex option tradingprovides both large and small investors with greater flexibility when determining the appropriate forex trading and hedging strategies to implement.read more..........
Forex option trading has emerged as an alternative investment vehicle for many traders and investors. As an investment tool, forex option tradingprovides both large and small investors with greater flexibility when determining the appropriate forex trading and hedging strategies to implement.read more..........
Most forex options trading is conducted via telephone as there are only a few forex brokers offering online forex option trading platforms.
Forex Option Defined - A forex option is a financial currency contract giving the forex option buyer the right, but not the obligation, to purchase or sell aspecific forex spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the forexoption buyer pays to the forex option seller for the forex option contract rights is called the forex option "premium."read more..........
Forex Option Defined - A forex option is a financial currency contract giving the forex option buyer the right, but not the obligation, to purchase or sell aspecific forex spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the forexoption buyer pays to the forex option seller for the forex option contract rights is called the forex option "premium."read more..........
The Forex Option Buyer - The buyer, or holder, of a foreign currency option has the choice to either sell the foreign currency option contract prior toexpiration, or he or she can choose to hold the foreign currency options contract until expiration and exercise his or her right to take a position in theunderlying spot foreign currency. The act of exercising the foreign currency option and taking the subsequent underlying position in the foreigncurrency spot market is known as "assignment" or being "assigned" a spot position.
The only initial financial obligation of the foreign currency option buyer is to pay the premium to the seller up front when the foreign currency option isinitially purchased. Once the premium is paid, the foreign currency option holder has no other financial obligation (no margin is required) until theforeign currency option is either offset or expires.
On the expiration date, the call buyer can exercise his or her right to buy the underlying foreign currency spot position at the foreign currency option'sstrike price, and a put holder can exercise his or her right to sell the underlying foreign currency spot position at the foreign currency option's strikeprice. Most foreign currency options are not exercised by the buyer, but instead are offset in the market before expiration.for more informations......
On the expiration date, the call buyer can exercise his or her right to buy the underlying foreign currency spot position at the foreign currency option'sstrike price, and a put holder can exercise his or her right to sell the underlying foreign currency spot position at the foreign currency option's strikeprice. Most foreign currency options are not exercised by the buyer, but instead are offset in the market before expiration.for more informations......
Foreign currency options expires worthless if, at the time the foreign currency option expires, the strike price is "out-of-the-money." In simplest terms, aforeign currency option is "out-of-the-money" if the underlying foreign currency spot price is lower than a foreign currency call option's strike price, orthe underlying foreign currency spot price is higher than a put option's strike price. Once a foreign currency option has expired worthless, the foreigncurrency option contract itself expires and neither the buyer nor the seller have any further obligation to the other party.
The Forex Option Seller - The foreign currency option seller may also be called the "writer" or "grantor" of a foreign currency option contract. The sellerof a foreign currency option is contractually obligated to take the opposite underlying foreign currency spot position if the buyer exercises his right. Inreturn for the premium paid by the buyer, the seller assumes the risk of taking a possible adverse position at a later point in time in the foreigncurrency spot market.
Businesses and municipalities can place certain segregated client funds in an interest-bearing account.
ForexGen's Segregated Deposit Account gives you convenience and efficiency in managing client funds that cannot be commingled. This service is appropriate if you are a brokerage firm, financial company, money management firm, investing or insurance broker or intermediary that holds segregated funds on behalf of clients.
Our robust solution enables you to gain access to multiple segregated accounts with one access. You can easily divide earned interest among the participating parties.
Why use a Segregated Deposit Account?
Enhance the yield on segregated client funds
Enhance efficiency in administering and managing multiple segregated accounts
Enjoy the convenience of consolidated reporting for all of your customer accounts
Learn more through http://institution.forexgen.com/institutional/segregated-deposit-account-2.html
No comments:
Post a Comment