Forex options
Easy Forex Options
Buying OPTIONS at Easy-Forex gives you the right, but not the obligation, to buy (call) or to sell (put) a specified amount of a foreign currency. You specify the rate ("STRIKE") that you wish to ensure, and you determine the period of time for such an OPTION to exist.
To facilitate the OPTION deal you are required to pay a PREMIUM.
Paying the PREMIUM allows you to keep the OPTION until its maturity date, or to sell it at any given point of time prior to its maturity.
Let's assume that you are uncertain and concerned about future fluctuations in currency exchange rates. You want to ensure a foreign exchange rate for a period of time, say 30 days from today. (Actually - you may select a date, which could be any business day up to six months from now).
How could you do it and benefit from this?
You could purchase an OPTION deal, ensuring that you'll be able to buy (call) USD 10,000 and sell (put) Euro (EUR), for the next 30 days, at a certain pre-set rate that you determine (STRIKE), say 1.0700 USD per EUR.
How does it work? Let's cover it, step-by-step
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