Significance of Forex Options

I was wondering if some of you more experienced, wiser traders had any wisdom to share about the importance of (if any) Forex Options. Since there is no "technical" order flow in forex that I am aware of yet, it seems to me, this seems like a loose-knit general overview of where the big concentration of money is being put into. I use FXCM right now (hold your comments please [img]images/icons/icon10.gif[/img]) and noticed they give you a great deal of Options info. I BELIEVE (not sure) that this information comes from Thomson financial, which is a very reputable information/data service among many other things. So if you were to follow where the money is being thrown by larger banks or institutions, wouldn't it make sense to follow the big money? Of course I'm sure it isn't that cut and dry, but if anyone knows anything else about this, please respond. Thanks.

I've often wondered about investigating arbitrage opportunities between the FX futures and spot mkts, but I also don't enough about FX futures mkts to know. Due to FX futures being traded through exchanges is it possible to trade FX futures on a 24 hr continuous basis like the spot mkt ? Is anyone aware of any FX futures tick by tick datasets available to investigate trading opportunities, and furthermore are there any internet brokers that allow clients to trade both FX spot and FX options simultaneously ?

Bumping this old thread. I always see mention made on the Oanda news tick of options expiration and especially options barriers. One such example:

Thursday, May 10, 2007 9:35:00 AM





[14:29 New York, May 10. The AUD/USD vol curve has been offered this morning, and that has carried into early New York trading. 1-wk which closed 7.9/8.2 after dealing at 8% the day before; is being quoted 7.3/8.15 on the wide, dropping the pivot by 0.35%, and the New York market will offer better as evidenced by yesterday"s price action. 1-mth is trading 7.3/7.6, off about 0.2% from yesterday; threes have given up about 0.1% at 7.15/7.45, whereas sixes and l-yr are little changed at 7.15/7.3 and 7.1/7.25 respectively. London dealers reported only light trading in AUD/USD options today; however a good sized AUD/NZD 1-mth went through, a 1.1400 AUD call, NZD put that traded at 6.6% in A$250mn. There aren"t that many topside strikes coming up on the calendar, however there are 0.8350 live strikes good thru next Wednesday, and some 0.8435 expiries earlier in the week (^^^^2370^). There are rumours of a 0.8350 barrier in play.]


How do options affect currency prices? An intelligent explanation or perhaps a book recommendation would be much welcomed!

those option levels seem to be a very good support or resistance level.

I trade FX futures on CME Globex, they're available 23 hours a day, from 6pm-5pm Sun-Fri. There are several advantages, the top two in my book are earning the true IRD (no broker interest spread), and the ability to be filled on your side of the market (just like all ECNs). I rarely pay the spread, which is also rarely larger than 1 pip anyway.. You can get free live quotes for all FX futures directly from the CME here (regis. req'd but no cost).

Try here or here for free back data, but for something as specific as intraday tick data for the FX futures, you may have to pay extra, I'm not sure.

I trade with InteractiveBrokers. They support nearly all world exchanges from one platform, and of course offer spot, FX futures and FX futures options (1-2 pip spreads on futures, 0.5 - 2 pip spreads on spot majors). I'm not aware of your experience level, but a word of caution, they are not for novice traders, customer support is very limited and the platform is structured for advanced traders.