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Originally Posted by throw
I seem to be consistenly getting stopped out of my positions. I have heard there is a way using options to insure my positions better more or less boxing my position so to speak. Can anyone steer me in the right direction...
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What you want to do is buy a futures option contract to hedge your spot position. Liquidity is your only issue there, but you have the legal right to exercise them, with most FX options you cannot exercise. If you can find some FX options that are comparable prices to the futures market and are exercisble than jump on it. The key is that your not going to buy and option for a day trade or even a week. You swing trade with options holding your position for 3 months. The options cost around 2k or 200 pips, big deal, in 3 months or more you could gain 1200 pips or more and the max your risking is 200 pips per 100k position.