I quite don't get the term future currency options. I know that futures are one thing, options another and well as you might guess currencies another thing. Are you talking about a new type of trading or what?
I quite don't get the term future currency options. I know that futures are one thing, options another and well as you might guess currencies another thing. Are you talking about a new type of trading or what?
Ignored
Just think of these aas plain options. Only difference, the underlying asset is a currency future. American options can be exercised anytime before maturity, and Europeans can't. Say the Eur/USD jan future is trading at 1.3300. You think sometime before expiration, it will go up to 1.3700. You can buy a 1.3400 (or 1.3300 or 1.3500 or w/e) call option. This way you will limit your risk to the premium you pay to buy the option. Your profit potential is unlimited. If the futures move up past your break-even point (spot moves up, then in most cases, so do the futures. Otherwise there are arbitrage opportunities) then you make money.
