MoneyTec Traders Community Forum - View Single Post - How do options affect the price of a currency?

Mongoose · 08-12-2003, 02:53

It's pretty simple really:

The option WRITER will try to move the market (pair) out of the money so that the option expires at parity or better

The option BUYER will try to move the market (pair) into the money so that the option expires at parity or better

This will only happen if it is financailly viable and within risk parameters, and if the costs of moving the market is less than the potential reward from the option.

I tend to witness that option WRITERS have a more active roll than option BUYERS and that price is moved in their favour.

That said, i have no statistical backup for my claims, but I have observed this behaviour, and noticed it's prescence.

Mongoose

08-12-2003, 02:53	#3
Mongoose level 3 Join Date: Oct 2002 Posts: 116 Downloads: 0 Uploads: 0 Rep Power: 0	It's pretty simple really: The option WRITER will try to move the market (pair) out of the money so that the option expires at parity or better The option BUYER will try to move the market (pair) into the money so that the option expires at parity or better This will only happen if it is financailly viable and within risk parameters, and if the costs of moving the market is less than the potential reward from the option. I tend to witness that option WRITERS have a more active roll than option BUYERS and that price is moved in their favour. That said, i have no statistical backup for my claims, but I have observed this behaviour, and noticed it's prescence. Mongoose