Have you heard about George Soros; The legendary manager of Quantum Hedge Fund who had made a cool $1 Billion profit from a single bet. In the early 1990s, one day he was sitting in his office discussing currency markets with his associate. Both of them were of the opinion that the British pound was overpriced and Bank of England could not sustain its price for long.
He decided to purchase $10 Billion of puts and calls options by using all their funds assets as collateral. George Soros was willing to gamble everything on a single bet.
He was convinced that the Bank of England cannot sustain the overpriced British pound. In a short time, other speculators also joined action. There was a huge selling pressure on British pound. In a matter of just 24 hours, Bank of England had to take British pound out of the European Monetary System and let it float freely.
British pound plummeted in the currency markets. George Soros had won his bet. He became famous as the man who broke the British pound with his pictures in all the famous newspapers and magazines.
Currency markets are huge. Everyday roughly $3 trillion gets transacted in the forex markets. There are many methods, the traders can use for profiting from the volatility in the currency markets.
Spot, futures and options are three contracts that are traded on centralized exchanges and available to you as a retail forex trader. Swaps and Forwards are two more contracts traded in forex markets for hedging by large institutions like big banks, multinational corporations and off course hedge funds.
Options are derivative contracts that let you buy or sell an underlying asset at a price called exercise price before a certain date known as the strike date. Unlike futures, you dont have the obligation to actually buy/sell the currency.
The underlying asset in case of the forex options is the currency. Now, forex options give you the right but not the obligation to purchase/sell a certain amount of a particular currency on payment of a premium.
You may or may not exercise your right to buy/sell the currency. If the market price of the currency is above/below your strike price, you can buy/sell that currency by exercising your option.
If the currency market price is below/above the strike price of the forex options contract that you had purchased by paying a small premium; you can simply let the options contract expire. You only lose the premium.
There is a very good Non Directional Forex Options Trading Strategy that does not depend on the direction of the market. In other words you dont need to predict whether the currency price is going to go up or down and make your profit regardless.
This forex options strategy guarantees 30-50% ROI sure shot profit for you. If you feel satisfied with this much return you need to take a look at this method. - 22871
He decided to purchase $10 Billion of puts and calls options by using all their funds assets as collateral. George Soros was willing to gamble everything on a single bet.
He was convinced that the Bank of England cannot sustain the overpriced British pound. In a short time, other speculators also joined action. There was a huge selling pressure on British pound. In a matter of just 24 hours, Bank of England had to take British pound out of the European Monetary System and let it float freely.
British pound plummeted in the currency markets. George Soros had won his bet. He became famous as the man who broke the British pound with his pictures in all the famous newspapers and magazines.
Currency markets are huge. Everyday roughly $3 trillion gets transacted in the forex markets. There are many methods, the traders can use for profiting from the volatility in the currency markets.
Spot, futures and options are three contracts that are traded on centralized exchanges and available to you as a retail forex trader. Swaps and Forwards are two more contracts traded in forex markets for hedging by large institutions like big banks, multinational corporations and off course hedge funds.
Options are derivative contracts that let you buy or sell an underlying asset at a price called exercise price before a certain date known as the strike date. Unlike futures, you dont have the obligation to actually buy/sell the currency.
The underlying asset in case of the forex options is the currency. Now, forex options give you the right but not the obligation to purchase/sell a certain amount of a particular currency on payment of a premium.
You may or may not exercise your right to buy/sell the currency. If the market price of the currency is above/below your strike price, you can buy/sell that currency by exercising your option.
If the currency market price is below/above the strike price of the forex options contract that you had purchased by paying a small premium; you can simply let the options contract expire. You only lose the premium.
There is a very good Non Directional Forex Options Trading Strategy that does not depend on the direction of the market. In other words you dont need to predict whether the currency price is going to go up or down and make your profit regardless.
This forex options strategy guarantees 30-50% ROI sure shot profit for you. If you feel satisfied with this much return you need to take a look at this method. - 22871
About the Author:
Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in online trading especially options and forex trading. Read more about Forex Options Non Direction Trading System. Discover a revolutionary new Forex Robot
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