What Are Your Options Concerning Forex Options Brokers

Forex option brokers generally fall into two distinct categories. There are forex brokers that offer online forex trading platforms as well as forex brokers that broker forex option trading through telephone calls. A few forex options brokers offer both online and live forex option trading.

Different forex option brokers require trading accounts to be minimum size. Minimums range from a few thousands dollars to more than fifty thousand. Some forex option brokers require that traders trade forex options contracts that have minimum nominal values (contract sizes), not less than $500,000. Last but not the least, certain forex option contracts may be open for trading and can be closed at any moment. Depending upon the type of option contract, you might be locked in until expiration or settlement. Before trading, investors must speak to their forex broker about the minimum trading account and minimum contract size requirements.

Brokers can offer traders a range of forex option trading options. Investors should understand the distinctive risk characteristics of each forex option trading item offered by brokers.

Plain Vanilla Forex Options broker – Plain vanilla options typically refers to standard option and put contracts traded through exchanges. However, in the case forex option trading plain vanilla options would be the standard, generic option options that are traded through an OTC forex clearinghouse or dealer. Vanilla forex options are simply the selling or buying of a standard Forex call option contract, or forex put option.

Only a few forex brokers/dealers offer basic forex options online with streaming quotes available 24 hours a-day. Most forex option brokers or banks only offer forex options via phone. Vanilla forex options available in major currencies are well-liquidated and can be entered or closed quickly.

Vanilla forex option options can be combined with other spot forex contracts or with one another to form a basic strategy. This could include writing a covered call or more sophisticated forex trading strategies such a butterflies, strangles (or ratio spreads), synthetics, etc. Vanilla options are often the basis for exotic options.