I'm trying to figure out the logistics of a carry strategy using options to hedge, and I'm not sure exactly how to go about doing it. I assume at the institutional level, a hedge fund or corporate could go to their big bank who would counterparty to the transaction. I would hold the currency pair indefinitely then put an iron condor on the trade, rolling it indefinitely for net zero credit. Why do this instead of using some other yielding instrument? Tax Free Income.
For a retail trader, how could I affect an options strategy that is deliverable in spot? For example, CME Group has FX options that are contracts on futures. Thus, they are priced in USD denominated lots (for example, 125,000 euro) and they are a derivative of a derivative. Where can I find liquid options on the crosses themselves and trade them both in the same account?
For a retail trader, how could I affect an options strategy that is deliverable in spot? For example, CME Group has FX options that are contracts on futures. Thus, they are priced in USD denominated lots (for example, 125,000 euro) and they are a derivative of a derivative. Where can I find liquid options on the crosses themselves and trade them both in the same account?