Forex Options Can Earn You $7,000 Plus Weekly

By Richard Tyrell

Forex Options is a derivative of the Forex Market. In the Forex Market you are actually trading currencies. With Forex Options you do not trade the currencies at all in the traditional way. Some traders who are quite advanced in their ability prefer to use Options trading. This type of trading limits risk and gives some opportunities to increase profits.

The two main types of options used by Forex traders are the call/put option and the SPOT option. When a trader buys the first type of option he buys both the call and the put side of the contract. An example might be that a trader (A) decides to buy two lots of YEN/USD at .0091 in four weeks. If at the end of four weeks the price has dropped to .0090 the option expires worthless and trader (A) loses only the premium (.0001 multiplied by the amount of money he invested originally). If he had invested say 10,000 then he would lose only $1. If on the other hand the price rose to .01090 then trader (A) can buy two lots (20,000 worth) of the stock at .0090 and sell them on the open market for .0099. This transaction could nett trader (A) 200 profit.

The SPOT or Single Payment Option Trade is very like the call/put option but it automatically converts your successful trade to cash so that you don't have to go to the bother of selling the currencies yourself. The only downside to SPOT trading is that it costs you more as the broker's charges are higher.

There are numerous types of SPOT trading but if you want to find out more just search around the net and there is plenty of information.

However I would not advise a beginner to go into this area of business. My advice to all beginners is purchase an automated system so that you commit and focus, learn the ropes from your support team who are there 24 hours a day, do simulated trading or demo trading for a couple of weeks and finally when you do start trading start small. Do not use leverage until you are very competent. Then in the course of time you might consider Forex Options.

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