The cool thing about trading options is that you can limit your downside risk to the amount you paid for the option. So you can shoot for a profit homerun without risking a lot of working capital. Essentially you pay less money upfront for a spot forex position and increase your profits.
SPOT options enable you more flexibility to in the currency markets. Use it as a standard, no-touch SPOT, digital SPOT, one-touch SPOT, double one-touch SPOT, and double no-touch SPOT. You receive a payout if the price depending on how you play the market. So if the price falls above or below a particular price, you still have an opportunity to make money depending on how you utilize the option.
There are risks associated with options. For example, once a SPOT option is purchased, it’s yours. You can’t sell it and must hold them for the duration of the trade. Even worse, it’s hard to tell exactly how the market will react so may wipe out your working capital and your account will run a deficit if the market does the opposite of what you predicted.
External Resources:
Forex Option Trading Guide
Forex Trading Resource
