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Non-desk dealer that offer currency options?

  • #1
  • First Post: Aug 3, 2007 1:05pm Aug 3, 2007 1:05pm
are there any non-desk dealers that offer currency options? recently, I've grown tired of worrying about stop losses. buying an option would automatically limit me to premium loss, usually, market flutuates, a stop loss would close my position, but options remain until it expires or i decide to liquidate it.
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  • #2
  • Aug 3, 2007 1:11pm Aug 3, 2007 1:11pm
Quoting jjk2
are there any non-desk dealers that offer currency options? recently, I've grown tired of worrying about stop losses. buying an option would automatically limit me to premium loss, usually, market flutuates, a stop loss would close my position, but options remain until it expires or i decide to liquidate it.

Hey,

I'm doing a dangerous thing here by thinking, BUT, I think FXCM and Oanda do ( Though I think Oanda's are not TRUE options, hell maybe fxcm aren't either )....best bet, just goggle/web search "currency options".....probably get a better answer and more choices.

You most def. will find them thru the regulated currency brokers...RCG, PFG, Lind-Waldock....excetra, to name a few....lots more though.....
Proper Prior Planning Prevents Piss Poor Performance
  • #3
  • Aug 3, 2007 1:12pm Aug 3, 2007 1:12pm
Check MB Trading Futures

If you dont know how to properly trade options, just buy options. Selling options are extremely risky trades if you dont know how to trade them.
  • #4
  • Aug 3, 2007 3:37pm Aug 3, 2007 3:37pm
yea i think oanda's "options" are just garbage. any products these marketmakers offer i no longer trust.

futures dont have the same downside risk control as options....thats defeating the purpose

im really surprised theres no true ECN/NDD offering options.
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  • #5
  • Aug 3, 2007 4:12pm Aug 3, 2007 4:12pm
Quoting jjk2
yea i think oanda's "options" are just garbage. any products these marketmakers offer i no longer trust.

futures dont have the same downside risk control as options....thats defeating the purpose

im really surprised theres no true ECN/NDD offering options.
With MB you can trade currency options, futures and spot forex
  • #6
  • Aug 3, 2007 4:32pm Aug 3, 2007 4:32pm
can i get a confirmation on currency options?

i've asked them about currency options thru chat, and they clearly said it was unsupported.


btw, fxcm no longer offers options. http://www.fxcm.com/double-one-touch.jsp

i wonder why :lol
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  • #7
  • Aug 3, 2007 6:37pm Aug 3, 2007 6:37pm
You can trade vanilla currency options on CBOE through MB. The vast majority of FX options volume is traded OTC tho, much if it still on the phone. But, quite honestly, if you think options are "easier", i think you should think again, they are much more complex instruments than a "primitive" spot transaction.
  • #8
  • Aug 3, 2007 7:28pm Aug 3, 2007 7:28pm
well now im looking at the CME FX products and recnelty they offer american style fx options OTC....this is awesome. i can trade thru any broker but i dont know what the costs are exacly probably expensive.

options are yes are quite complex like all derivative instruments.

However, i still think its more advantageous to have that downside risk control. with spot, i have unlimited loss. when i'd rather pay like 10 pip premium on options than set stop loss to 25 ~50 pip.
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  • #9
  • Aug 4, 2007 7:24am Aug 4, 2007 7:24am
The CME cannot offer anything OTC by definition..
Also i think you are talking about the spread, not the premium. Be sure you understand options before you trade them! You need to know the math, even if you want to trade solely with discretion. I can highly recommend "Options, Futures and other derivatives" by John Hull. This book is really a standard work, every student of fin. math probably read it. (hint: look for an "evaluation-copy" on emule )
  • #10
  • Aug 4, 2007 1:20pm Aug 4, 2007 1:20pm
how can i connect to CBOE thru MB Trading?

could u give me a link? or some insight on how i can do this ? I looked at CBOE's site, but they dont have currency vanilla options under their products for trading.

why doesn't CME offer OTC? doesn't it say so on their website?

right now, all i want to do, is to go long options, not write them. I can predict where the prices are going most of the time but i keep getting stopped out(i know very well why). so if i can limit my downside risk to the premium paid on the option contract, and have unlimited profit potential, i could do significantly better than now.
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  • #11
  • Aug 5, 2007 8:22am Aug 5, 2007 8:22am
OTC means "over the counter", as in not traded on a regulated exchange like the CME, but traded in a private agreement between 2 counterparties. Because its not traded on an exchange, there is no need for special contract specification, that means it is much more flexible. I.E. you can have whatever expirations, quantities and strikes, and exotic structures like digital or binary options. Because of that, there is also not always a liquid secondary market for such options.

On the CME you can trade options on futures (i.e. options on the EuroFX contract). You can look look their specs up on their website. You should be able to trade them through MB (not sure actually, i only trade the odd index option to secure a longterm future position). Sorry about the CBoE-information, apparently they dont offer FX options (but they are still listed on the MB website as option-exchange).

Can you give me a link to the CME otc thing? I couldnt find anything on their site.
  • #12
  • Aug 5, 2007 12:52pm Aug 5, 2007 12:52pm
man this sucks. i can't just go with saxo or IKON....

i might have to ditch currency in general, start scalping commodities :/


on CME website, if u look carefully they will offer american style FX options, globex is no longer supported, but they have 3rd party front-ends that allows u to trade....however, i dont know the minimium deposit, and other costs as well.

if u find anything else let me know....where else can i trade options OTC ? customized expiration, strike, this is all too good. since i will not be needing expiration date of no more than 3 days, i hope the premium is low.
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  • #13
  • Sep 7, 2007 3:05pm Sep 7, 2007 3:05pm
my questions boils down to this.

 

  1. CME has currency options. But MBT doesn't support it. How do i Trade it without actually being in the trade pits.
  2. is OTC currency options safe? such as Saxobank and so on.
  3. What is options on a currency futures and difference from options on SPOT currency.
  4. If I am able to trade currency options, is it viable to trade options with expirations less than 3 days. What would the premium be.

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  • #14
  • Sep 7, 2007 3:47pm Sep 7, 2007 3:47pm
You can trade legitimate options here but if you don't know what you're doing I would bother. Options are a sophisticated instrument with many dynamics and you're trading against someone who knows how they work.
  • #15
  • Sep 7, 2007 4:58pm Sep 7, 2007 4:58pm
Quoting philmcgrew
You can trade legitimate options here but if you don't know what you're doing I would bother. Options are a sophisticated instrument with many dynamics and you're trading against someone who knows how they work.
thanks. have u traded with them? is there a simulator where I can try out the trade platform.

how are these currency options priced? i know for like stock options they are 100*strike, with time and volatility factor including.

is ISE offering OTC options or options on futures like the CME?

is it possible to sell currency options like stock options for profit. is it viable?
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  • #16
  • Sep 7, 2007 5:32pm Sep 7, 2007 5:32pm
Quoting jjk2
thanks. have u traded with them? is there a simulator where I can try out the trade platform.

how are these currency options priced? i know for like stock options they are 100*strike, with time and volatility factor including.

is ISE offering OTC options or options on futures like the CME?

is it possible to sell currency options like stock options for profit. is it viable?
ISE.com has several videos and webinars on their options. Thsee are stock options and the currency trades just as if it were a stock quote so they are calculated the same way all options are priced. Not the funny business that your fx broker offers you. These are not OTC, they are exchange regulated and cleared through the OCH (options clearing house) which guarantees all stock options traded in the US. They are priced and quoted the same as stock options therefore you do have to multiply by 100 to get the price of a contract.

Can you sell them? Yes, they are for all purposes, stock options. You can exercise and be assigned. They are cash settled.

Have I traded them? Yes, I currently hold a couple positions.
  • #17
  • Sep 7, 2007 6:02pm Sep 7, 2007 6:02pm
Quoting philmcgrew
ISE.com has several videos and webinars on their options. Thsee are stock options and the currency trades just as if it were a stock quote so they are calculated the same way all options are priced. Not the funny business that your fx broker offers you. These are not OTC, they are exchange regulated and cleared through the OCH (options clearing house) which guarantees all stock options traded in the US. They are priced and quoted the same as stock options therefore you do have to multiply by 100 to get the price of a contract.

Can you sell them? Yes, they are for all purposes, stock options. You can exercise and be assigned. They are cash settled.

Have I traded them? Yes, I currently hold a couple positions.
thanks.

i see that ISE are EUROPEAN STYLE options only....why not american? i mean with american options, when prices are in my favor, I can just excercise my holdings....but european only restricts me to that single day....what are the advantage of this??

btw, when i said sell, it was misleading. I didn't mean writing options, but liquidiating options that I was holding. is this better than excercising?

approximately much of the currency options are excercised as opposed to holdings being liquidated? we know that in american style stock options are rarely excercised.

is there a way to use the ISE's platform...like a free trial or simulation? what is the minimum deposit to open up an account.

also, you said multiply by a hundred. so ignroing time, and other factors, lets say USD/EUR is 0.8000 then essentially one contract's value would be 80.00? also, including expiration and such and commission fees what would it come out to be.

ISE could finally be my answer...no more getting stopped out...
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  • #18
  • Sep 7, 2007 8:00pm Sep 7, 2007 8:00pm
Quoting jjk2
thanks.

i see that ISE are EUROPEAN STYLE options only....why not american? i mean with american options, when prices are in my favor, I can just excercise my holdings....but european only restricts me to that single day....what are the advantage of this??

Most option traders don't exercise because they are speculating or hedging. When you exercise you take possesion of, or are short, the underlying. I think the only way to keep a common currency was to quote with the USD as the base currency. By settling in cash (USD), the exchange does not have to take possesion of various world currencies. Most option traders I know rather prefer European style options.

btw, when i said sell, it was misleading. I didn't mean writing options, but liquidiating options that I was holding. is this better than excercising?

Yeah, I assumed that otherwise I would have gone on a rant on why you should not trade naked options.

approximately much of the currency options are excercised as opposed to holdings being liquidated? we know that in american style stock options are rarely excercised.

I have no way of knowing this but don't be afraid to ask the ISE or PHLX. You would be surprised how willing they are to help you learn their products. If you forced me to guess I would say the vast majority are never exercised. The only time I've ever exercised options was on or very near expiration when I wanted to save a few bucks on commissions and I had an offsetting option position that would leave me flat.

is there a way to use the ISE's platform...like a free trial or simulation? what is the minimum deposit to open up an account.

Good question and again, I don't know the answer. The ISE is an option exchange, not a trading platform.

also, you said multiply by a hundred. so ignroing time, and other factors, lets say USD/EUR is 0.8000 then essentially one contract's value would be 80.00? also, including expiration and such and commission fees what would it come out to be.

Yes, 0.8 x 100 = 80. Commissions are up to your broker. TradeStation charges $1 per contract. There are no other fees associated with options except the spread.

ISE could finally be my answer...no more getting stopped out...

I don't know about that and would encourage you to investigate this. These options do not offer the leverage upon which you have been accustomed to enjoying. If you are getting stopped out too much you should examine that. Stay and fight for what's yours.
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  • #19
  • Sep 7, 2007 10:47pm Sep 7, 2007 10:47pm
Quoting philmcgrew
.
thanks again for such detailed answer. I have contacted ISE about some of the stuff about min deposit and such.

i understand, however if these currency options are traded like the stocks, with similar leverage, then i'd be pretty happy. I know stock options ATM usually costs at least few to easily several hundred dollars, and the returns on these are very handsome if successful. So why not currency options? because we multiply by 100 same as teh stock, shouldn't we except similar leverage at a cheaper premium?

Again, options, or any derivative for that matter wouldn't be so simple. but limited risk and unlimited profit is whats so attractive about these options contracts.

philmcgrew, what were your experiences like? are you having success trading currency options? if ur not busy, could I contact you via email or instant messaging.

Thanks again!
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  • #20
  • Sep 7, 2007 11:05pm Sep 7, 2007 11:05pm
I'm just as happy talking to you here. Perhaps someone else would benefit as well. I traded options full time before moving to forex and loved them. I have waited for a long time for the marriage of forex and options. The one point I'm trying to make is that an option contract controls the equivelant of a mini-lot, not a standard lot. Yes, you can buy an OTM option for $80 but that gets you a mini-lot. Options do give you leverage but to start, you have to give up the spot leverage that you now enjoy.

On the spot market I can set a 50 pip stoploss and buy a GBPUSD contract with $500 risk. To control the same amount of money with options I would have to buy 10 contracts at somewhere around $100 each and still only get a delta of 50 whereas the spot has a delta of 100.

As far as my experience, they are relatively new but they are the same as stock options. The USDCAD and USDJPY charts are just like they would be for the spot. The EURUSD and GBPUSD are inverted so that USD comes first.

I don't think ISE can tell you what a minimum deposit is going to be. As I stated previously, ISE is an options exchange, they facilitate trading just like the NYSE, NYMEX, CME or any other exchange. To trade options you have to open an account with a broker.
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