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Forex Options Strangle System

  • #161
  • Jan 16, 2011 11:03pm Jan 16, 2011 11:03pm
I'm using the OptionsXpress Xtend platform. The only way to browse things to trade is to enter a symbol. Is there some resource where I can learn what ticker symbols will allow me to trade options on currency pairs? It doesn't seem to work the same way Saxo does, where everything is listed by the actual currency pair. I assume I have to enter a symbol that relates to one of the exchanges we were discussing, like CME, ISE or PHLX.
  • #162
  • Jan 17, 2011 12:28am Jan 17, 2011 12:28am
Quoting skoda2008
Agreed....
Skoda, some interesting points:

1) Yes, it is more complicated and requires a different perspective.
2) You can have stop losses, or even roll points, but not in the same way as spot.
3) It isn't addictive like a video game, but it can be quite exciting.
4) Yeah, it is a much more realistic way to trade. But you don't martingale yourself into the stratosphere or into blowing up your account either.
  • #163
  • Jan 17, 2011 1:41am Jan 17, 2011 1:41am
Dear Thread,

Have been making the round of possible FX cash options brokers and they are very very few, unfortuntely. Basically, it's Ikon and Saxo. And, in terms of platform useability and pure range of choice, it's Saxo; for spreads, it's Ikon----Saxo's are scandalous, coming in at around 20 pips. Ikon says they charge 10 pips. As well, about 5-7% more premium in Ikon options than in Saxo's but their range of options is far more limited, painfully limited. For a many billion dollar market, I'm surprised there are not more retail portals into this options market. Why is that? Does anyone know of any good non-retail brokers which would require more money to play?

Thanks,

Lenoxer

PS And what would it take to become your own portal here, to buy, as it were, a seat on the exchange?
  • #164
  • Jan 17, 2011 1:43am Jan 17, 2011 1:43am
Quoting agent6488
I'm using the OptionsXpress Xtend platform. The only way to browse things to trade is to enter a symbol. Is there some resource where I can learn what ticker symbols will allow me to trade options on currency pairs? It doesn't seem to work the same way Saxo does, where everything is listed by the actual currency pair. I assume I have to enter a symbol that relates to one of the exchanges we were discussing, like CME, ISE or PHLX.
Agent,
When you use Options Express for Currency Option you are talking about Exchange Traded Currency Options
Such as ISE currency options http://www.fxoptions.com/Site/Default.aspx
or Options on Currency ETFs such as FXA

When you talk about SAXO currency options they are not Exchange traded but Saxo's own Over The Counter Product
Good thing about Saxo's currency options is to do things like Covered Call you get large Leverage for the underlying , Bad thing = spreads and you are the mercy of a Market Maker

With Exchange Traded Options the Good = True Exchange no MM BS
Bad thing is low leverage for underlying
  • #165
  • Jan 17, 2011 2:30am Jan 17, 2011 2:30am
Lenoxer,

I believe UBS will let you play directly on the interbank market if you have at least $500,000
  • #166
  • Jan 17, 2011 9:02am Jan 17, 2011 9:02am
Quoting skoda2008
Agreed. It is the only form of forex trading I have done that consistently makes money.

I think there are probably a few reasons it's not more popular on this forum:

1. Initially seems quite complicated, and requires a different perspective.
2. No stop losses - freaks a lot of people out.
3. It's a boring way to trade - you get to do other things with your life and don't have to sit there all day drawing pretty coloured lines all over the charts.
4. You can't start with $500 and expect to turn it into millions, realistically you need a fairly...

I have been able to make around 20% consistently except in 2009 when the EUR got stuck between 1.4 and 1.5 for the last half of the year I did 90%.
  • #167
  • Jan 17, 2011 9:15am Jan 17, 2011 9:15am
Quoting moksha
When you use Options Express for Currency Option you are talking about Exchange Traded Currency Options
Such as ISE currency options
or Options on Currency ETFs such as FXA
Ok, thanks. It sounds like my understanding of how Saxo works was correct.
As for the non-OTC stuff, I'm still confused as to how I get simple, comparable information about each Currency Option from each exchange, how it moves and what platforms have it.
I've been to that FXOptions site, and it's pretty vague. Is it an ISE site?
My other thread gave me:
http://www.cmegroup.com/trading/fx/g...l#prodType=AME

which is a pretty cryptic site.
  • #168
  • Jan 17, 2011 10:27am Jan 17, 2011 10:27am
Hey Agent,

I understand your frustration. I've been researching this for a couple of weeks now. My decision basically came down to a few points and two options.

Q: How much money do I want to devote to fx options strategies?
A1) < 10k use saxo (alpari to have cash options soon too)
A2) > 10k CME is the largest exchange for fx options (bigger margin, smaller spread)

Q: Do you trust market makers?
A1) Yes, they are angelic. (use saxo)
A2) Hell no, they are digital devils (use an exchange listed option)

Q: Do you want to have to hold a mirror to some of the charts to see them correctly?
ie
ChfUsd - CME
vs
UsdChf - Saxo

Basically it will take longer to learn the ins and outs of the CME contracts vs the Saxo options. For me personally, their spread makes it worth it. Saving $300 on a trade to make $3000 is 10% and alot of Dominos pizza.
  • #169
  • Edited 6:21pm Jan 17, 2011 11:22am | Edited 6:21pm
Awesome. That is a great distillation of what I need to know. It sounds like CME is a good place to start. Now I just need to know how I find out what platforms CME options are on, and how I learn the available ticker symbols.
???

Also:
Quoting qtmspin
alpari to have cash options soon too
Where did you hear this? I'm seeing some general info online about Alpari FX Options, but it doesn't say if they are cash or exchange.

Edit: I checked out the Alpari Options demo. Payouts and spreads seem pretty dismal.
  • #170
  • Jan 17, 2011 11:55am Jan 17, 2011 11:55am
I use Interactive Brokers - speaking of which - you can tie in Excell and get market data directly from IB.... which will allow you to track your options trades and manage deltas exctra - has anyone done this???
  • #171
  • Jan 17, 2011 12:13pm Jan 17, 2011 12:13pm
Quoting qtmspin
I use Interactive Brokers - speaking of which - you can tie in Excell and get market data directly from IB.... which will allow you to track your options trades and manage deltas exctra - has anyone done this???
Most people who offer stock options will offer options on the currency ETFs:

CurrencyShares Australian Dollar Trust ETF (FXA)
CurrencyShares British Pound Sterling Trust ETF (FXB)
CurrencyShares Canadian Dollar Trust ETF (FXC)
CurrencyShares Euro Trust ETF (FXE)
CurrencyShares Japanese Yen Trust ETF (FXY)
CurrencyShares Mexican Peso Trust ETF (FXM)
CurrencyShares Russian Ruble Trust ETF (XRU)
CurrencyShares Swedish Krona Trust ETF (FXS)
CurrencyShares Swiss Franc Trust ETF (FXF)

However one problem with forex option trading with ETF's is that things like the EURJPY, EURAUD, GBPCHF, may not be available or available in good volume.
  • #172
  • Edited 1:28pm Jan 17, 2011 12:30pm | Edited 1:28pm
I'm reading that CurrencyShares ETFs are some sort of branded option? Is that related to the exchanges we were discussing, or something different?
Sorry if I'm going on and on here, but I'm still having a hard time separating and comparing my trading avenues.
  • #173
  • Jan 17, 2011 4:14pm Jan 17, 2011 4:14pm
Quoting agent6488
I'm reading that CurrencyShares ETFs are some sort of branded option? Is that related to the exchanges we were discussing, or something different?
Sorry if I'm going on and on here, but I'm still having a hard time separating and comparing my trading avenues.
There are lots of companies that offer currency ETF's. The CurrencyShares ETF's are the most direct comparison to spot.

Nearly every equity option provider should cover these symbols.
  • #174
  • Jan 17, 2011 4:24pm Jan 17, 2011 4:24pm
Ok. I guess my question is, what is the difference between something like a CurrencyShares option and a CME option?
  • #175
  • Jan 17, 2011 6:41pm Jan 17, 2011 6:41pm
Quoting agent6488
Ok. I guess my question is, what is the difference between something like a CurrencyShares option and a CME option?
1) Currency Shares ETF are just like shares
They track currency SPOT because in real term these ETFs just park the money in respective currency, for example you go to the ETF with X $ and request for new units/ shares to be created ,say AUD they will convert your USD in to AUD and park it ina AUD deposit in a Bank. hence the monthly dividend ( dividend = Interest earned on the deposit)

The downside of the Currency ETF options is currency tardes 24/6 while ETF trades only during market hours! so gaps

2) Now the CME Currency options I believe are Options of Futures
ISE options are also I think Otions on Futures

I am not 100% sure about no 2) cna somebody confirm it

Doing Covered Calls:
I am interested in exploring the idea of "Leveraged Covered call" on Currency options

- With Saxo it is easy to understand all is in one platform
- With ETFs it is also easy to understand buy the ETF and sell calls , max leverage = 1:1 ( ETF is just a stock so that is all you are going to get)

- CME or ISE currency options how can one do covered call?
GO Long the underlying Futures? and Sell Calls against it?
If so what is the leverage?

Can somebody explain?
MJ
  • #176
  • Jan 17, 2011 6:44pm Jan 17, 2011 6:44pm
Quoting agent6488
I'm reading that CurrencyShares ETFs are some sort of branded option? Is that related to the exchanges we were discussing, or something different?
Sorry if I'm going on and on here, but I'm still having a hard time separating and comparing my trading avenues.
What do you mean by "Branded option"?
They are just Exchange traded Options on ETF just like option on QQQQ
Why complicate things?

I think the only remaining question is are CME and ISE currency options on Currency futures?
  • #177
  • Jan 17, 2011 7:00pm Jan 17, 2011 7:00pm
"CurrencyShares" is a brand name owned by the Rydex company as far as I can tell. I was just wondering how they differ from the pure exchange options.

I'm much more interested in covered call strategies as just mentioned. Saxo seems like the easiest platform to do that on, I just don't have $10,000 to do it with.
  • #178
  • Jan 17, 2011 8:02pm Jan 17, 2011 8:02pm
Quoting agent6488
"CurrencyShares" is a brand name owned by the Rydex company as far as I can tell. I was just wondering how they differ from the pure exchange options.

I'm much more interested in covered call strategies as just mentioned. Saxo seems like the easiest platform to do that on, I just don't have $10,000 to do it with.
Again you are confusing for no reason... currency shares are shares in an ETF not Options, and then there are options ( ETOs) on these ETFs

So the question about how they ( Currency Shares) differ from Pure Exchange Options is a mute one

How can you compare Shares with Options ?

Did you mean to say " How do Options on Currency shares differ from Options on normal shares"
They don't
  • #179
  • Jan 17, 2011 8:06pm Jan 17, 2011 8:06pm
I don;t in which country you are based but you can trade with Saxo Banks White label partners in Australia,
I don;pt think they ask for 10K to start with

( as long as you are happy with whatever risk you are going to take with a OTC / Australian money rules )
  • #180
  • Jan 18, 2011 12:17pm Jan 18, 2011 12:17pm
I'm in the U.S. I'm seeing that most ETFs trade in increments of 100 shares. That requires you to have at least a $10,000 account. ETFs seem so much better than OTC options (learningmarkets has some videos on this). I would think that everyone with enough money would go the ETF route, and the OTC would be picking up the small accounts. I guess they're competing for the same market though, as places like Saxo have a high minimum deposit, leaving us sub-10,000 guys with just spot trading and no way to hedge effectively.
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