Options vs Forex

Hello Traders,

Those who have traded options and forex, why did you choose one over the other?

As a trader, i trade both side by side.
Honestly it's easier to find strategies for binary, but harder in MM. vise versa for Forex.
In the end, they can be both profitable or one of them cover the losses.

Cheers
Feel Free to Discuss

Do you mean stock options or forex options? I started my trading career with stock options, but switched to Forex because it was cheaper, faster, less research, and FAR better compounding.

Sorry, just looking to clarify did you switch to spot forex or forex options? If latter what brokers have you had experience with?

There is a wide scope of earnings in forex. The market is the largest trading market as of now and offers unmatched liquidity with range of markets to choose from. So yes, forex is what I would choose.

I am in the UK and we have the widest choice of trading routes available. Options are a complicated and therefore more expensive and error-prone route for market access. CFD's are simpler and cheaper. Spreadbetting is simpler still and has no tax implications. So I'm spreadbetting.

You are right. Even I'd choose forex.

Both are good to trade but option is very more risky and is very expensive as compared to Forex.

Faster? Less research?!!! Really? How?

Hello. Is it okay to assume you have not traded both? Or perhaps it was just a difference for me because my processes are completely different. Either way, yes, Forex is much faster, cheaper, and less research.

Faster. Forex cycles profitably several times a day. Stock options usually took 3-5 days to get into profit range.

Cheaper. If I remember correctly, (it was a long time ago), I had to pay $12.95 to enter a stock option, $12.95 to exit a stock option, plus the spread. Forex only costs the spread.

Less research. Stock options required analyzing several stocks to choose the best one to trade through reading stock fundamentals, evaluating multiple stock option exercise periods, evaluating stock technical analysis, and timing the purchase within the market cycle. Forex is simply a matter of trading the price cycle against mathematical probability. It takes me about 1-3 seconds of analysis to make a Forex trading decision.

should choose forex. and BO, I have not seen anyone living with it. In other words, BO floor is market marker

Yes that's true, options are riskier, but I think that somewhere this risk component can be managed by playing the game with caution. Everyone should be careful on risk management.

I have traded all kind of options, vanilla and exotics.

It's just a matter of leverage and (time decay).

You constantly have to watch over them, also the new ones if the others expire or have been knocked out.

With fx otc you can accomplish the same results with much lesser "stress & search" - so you can purely focus on just one asset class/market.

I have tried both binary options and forex, and if you compare the two, I would definitely prefer forex. That's because that's where I can control the situation to the last and sell the deal or keep it. But there's nothing I can do about binary options. Besides, the profit on forex is definitely higher, but on the other direction you can only earn a percentage of the amount you use. But if you look at it objectively, forex requires more competent analysis, there will be little that you understand that the price will go up. You need to determine as accurately as possible what level it will reach. But it's better for me than to take risks and work too fast.

Hi,
Interesting question. They are different vehicles with different properties and thus likely to appeal to different kinds of traders. If I were to summarise, very briefly, vanilla options compared to direct forex:
- are more flexible with more types of strategies available
- are more complex, there are more variables to consider
- tend to have very much higher round trip costs

I really liked options but moved on from them several years ago because I think it is is ultimately more difficult to make money with options. If you are an options buyer you essentially make money only if the market moves significantly your way in a short period due to premium cost and time decay both working against you. Neither are factors in direct forex and you don't need a big or rapid move, either. Conversely, if you are an options writer your maximum profit is limited to the premium received and can only get worse from there.

Binary options are something a little different again, essentially a simple higher or lower bet settled at a specified future point. In my rather more limited experience here, the pricing basis and the typically wide dealing spread set the probabilities against you to a significant degree.