Have you heard of "deal cancellation?" | Forex Factory

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Have you heard of "deal cancellation?"

  • #1
  • First Post: Edited Jul 1, 2017 3:23am Jun 30, 2017 9:05pm | Edited Jul 1, 2017 3:23am
Have you heard of deal cancellation ?
Will it be beneficial for your trading or not?
atheer1
  • #2
  • Jul 1, 2017 3:19am Jul 1, 2017 3:19am
Deal cancellation as I read about it is a measure that you can enable at the time when you open the trade for a fee............with an expire time(1 hour)........if the trade goes against you or hit your stop loss within this set of time you lose nothing if you close the trade or trade closed by your stop.............and if you close in profit fee will not apply.............margin returned to the account will be different due to different exchange rate..................I read that from one broker site.........you can google that........as I have no affiliation with any broker.............but opened the subject for discussion as I see this new for me..........

I see this: as added cost to trading.,though it can save you from huge loss?what do you think about it?
atheer1
  • #3
  • Jul 1, 2017 8:10am Jul 1, 2017 8:10am
Quoting atheer1
Deal cancellation as I read about it is a measure that you can enable at the time when you open the trade for a fee............with an expire time(1 hour)........if the trade goes against you or hit your stop loss within this set of time you lose nothing if you close the trade or trade closed by your stop.............and if you close in profit fee will not apply.............margin returned to the account will be different due to different exchange rate..................I read that from one broker site.........you can google that........as I have...

Sure in effect you are just buying a put or call option with an hour expiry and the 'fee' is the premium. Not sure when you say "..and if you close in profit fee will not apply. .." is correct though.
Its a smart thing to do. Institutions very rarely take outright positions and hence will almost always be hedged either in the options market or in a correlated market.

The advantage of this over buying an option is that you do not need to do the volatility calculations ie how many options do you need to cover your position.
The disadvantage is that it expires in a hour whereas the option doesnt. Say you go long on a currency pair and buy a Put option to hedge your position and your trade makes a profit. You still have the option, it is currently worthless however you can either still use it as insurance on a new trade or just leave it until it expires as it might end up in the money.
Boxing clever since 76.
  • #4
  • Jul 1, 2017 1:57pm Jul 1, 2017 1:57pm
Quoting copi88
{quote} Sure in effect you are just buying a put or call option with an hour expiry and the 'fee' is the premium. Not sure when you say "..and if you close in profit fee will not apply. .." is correct though. Its a smart thing to do. Institutions very rarely take outright positions and hence will almost always be hedged either in the options market or in a correlated market. The advantage of this over buying an option is that you do not need to do the volatility calculations ie how many options do you need to cover your position. The disadvantage...
Thanks for your reply.......
Fee does not apply if your trade was closed with profit.........checked this over the internet and verified that.....I think you are right when this feature is enabled the broker will hedge the risk in other markets mostly option and that is why when you are in profit will not charge you the fee becuase his option also in profit........correct me if I am wrong
atheer1
  • #5
  • Jul 1, 2017 2:42pm Jul 1, 2017 2:42pm
https://www.forexfactory.com/showthread.php?t=608252

found this thread related to the subject
atheer1
  • #6
  • Jul 1, 2017 3:09pm Jul 1, 2017 3:09pm
They are using vanilla options not binary options I think
atheer1
  • #7
  • Last Post: May 9, 2018 3:29pm May 9, 2018 3:29pm
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