Excerpt from: Forex Training
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| January 22, 2009 | | What are currency options? | Currency options are an interesting inclusion in forex trading strategy. Lately, they have been popular when dealing with emerging market currencies. The Forex Blog reports on currency options:
Specifically, some traders have begun to write "out of the money" put
options- the equivalent of selling insurance to investors that wish to
protect themselves from further declines in emerging market currencies. ...
Regardless of whether you plan to employ such a strategy, it's worth
paying attention to currency options prices, as they represent valuable
snapshots of a given currency's perceived health.
It is possible to consider currency options in your forex trading strategy, and to incorporate them when making a plan. Indeed, for some traders they work rather well. It is important to note, however, that they can be risky, and it is possible to lose money as well as make it with currency options.
| Topic Tags: currencies, currency options, emerging market, emerging market currencies, forex blog, forex trading, forex trading strategy, trading strategy | |
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