Hello everyone,
I have worked out a scenario in which I will try to either buy or sell in one direction for a currency pair with spot currency, while hedging the risk of the wrong direction with Forex options contract.
In other words, if I execute an order in favor of where the price goes during the month, that's perfect. I take in the profit, and let the option contract expire while paying the premium. If the currency pair goes into the opposite direction of where my Forex spot went to, then my option contract will cover the losses, and I don't lose much compared to what I could have lost.
I'm just wondering whether that is possible, and how is it exactly done. I'm certain that there are some Forex old timers here who are capable of teaching me a bit more about Forex options, something that I've never touched before.
Thanks!
I have worked out a scenario in which I will try to either buy or sell in one direction for a currency pair with spot currency, while hedging the risk of the wrong direction with Forex options contract.
In other words, if I execute an order in favor of where the price goes during the month, that's perfect. I take in the profit, and let the option contract expire while paying the premium. If the currency pair goes into the opposite direction of where my Forex spot went to, then my option contract will cover the losses, and I don't lose much compared to what I could have lost.
I'm just wondering whether that is possible, and how is it exactly done. I'm certain that there are some Forex old timers here who are capable of teaching me a bit more about Forex options, something that I've never touched before.
Thanks!