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The Complete Idiot's Guide to Foreign Currency Trading, 2nd Edition by Lita Epstein, Gary Tilkin

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Chapter 22
Forex Trading Using Options
In This Chapter
• Understanding options
• Looking at puts and calls
• Reviewing pricing
• Managing risks
• Learning some forex market strategies
Options give you a way to trade forex without actually buying and selling currency pairs. With an option, you enter into a contract with a buyer or seller for the right to buy or sell a currency pair.
Options based on currency pairs are not the only types of options. They have been used in the market since 1982, when the Chicago Board of Trade began trading options on Treasury bond futures. Today they are used to trade physical commodities, securities (stocks and bonds), and real estate. Typically, speculators in the forex options markets are investors seeking to profit ...

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