FX Options

[RealFX]

This might have been asked before..

But is anyone using FX options sucessfully??

I've made a little money with them... but we are seeing mega trends on some currencies that leads me to ask about an "edge"-

If it exists with options where would it be? Prediciting the future maybe

I have been trying to use payouts of 2:1 a week or more time frame mainly trend following.. but it seems like you could hedge somehow with them. I'd like to know more

[jasperforex]

In the long term you will find it impossible to money using just options. It's best to use them for specific things or as part of a strategy. I use them for news trading have recently started using them for building ranges.

[Gamma_Jammer]

There are a few people using sites like xodds/BoM to punt short term timeframes. The fact that they leave the price hanging out tehre for so long means I guess that you can news trade it as well. I bet u don't get the usual 2 mins over payrolls though ;-)

GJ

[Baruch]

Originally Posted by jasperforex

In the long term you will find it impossible to money using just options. It's best to use them for specific things or as part of a strategy. I use them for news trading have recently started using them for building ranges.

Jasper

Do you use your options method today (Tuesday)? How much cost the options at IG Index tday?

[jasperforex]

I didn't use them today as I traded normal fx instead. I had a plan exactly what I thought would happen happened. That is I was planning to short any uptick on bad deficit as its no longer seen as the number one influence. Options would have worked though. Just that I viewed fx would give more bang per buck.

[Baruch]

Originally Posted by jasperforex

I didn't use them today as I traded normal fx instead. I had a plan exactly what I thought would happen happened. That is I was planning to short any uptick on bad deficit as its no longer seen as the number one influence. Options would have worked though. Just that I viewed fx would give more bang per buck.

OK. But more bang per buck? How?

[Nonpiker]

If you are trading atm (at-the-money) options your delta will probably be .60-.65 increase as it goes deeper in the money (that is the nature of being long gamma). In addition volatiltiy is going to be at a premium prior to major data releases contract after thereby shrinking your premium. Thereforea nice move your way may only move the option to 75-85% of the spot value. Again this a very rough generalization by nature there are a lot of other factors (such as where you are currently on the theta curve) that come into play.

I think this is what he was getting at.

[Baruch]

Originally Posted by Nonpiker

If you are trading atm (at-the-money) options your delta will probably be .60-.65 increase as it goes deeper in the money (that is the nature of being long gamma). In addition volatiltiy is going to be at a premium prior to major data releases contract after thereby shrinking your premium. Thereforea nice move your way may only move the option to 75-85% of the spot value. Again this a very rough generalization by nature there are a lot of other factors (such as where you are currently on the theta curve) that come into play.

I think this is what he was getting at.

Well Jasper has told us about 200-300 % profits in one day in news trading using options. I don't think you can earn so much so quick with traditionel fx trading?