Anyone trades FX Options?

Discussion in 'Forex Brokers' started by RK_trader, Aug 2, 2008.

  1. RK_trader


    I have a hard time finding brokers for Options on Fx spot. So far it seems only SaxoBank offers it - even CityFx does not have options on currencies yet!!!!!

    On the other hand, volume on Fx futures option is so thin and spreads thus pretty high that it is most of the time a dangerous proposition.

    I don't know what I am missing here as I heard there is a huge Fx Options mkt out there (OTM), but how does a small investor tap into it. Where and how do big guys trade it?

  2. enkidu



    i was tired of being raped by option spreads on stocks....

    i wonder how bad it is for fx
  3. henry76


    Dear Rk , where did you hear there was a huge fx options market???
  4. The OTC FX options-market is bigger than OTC fixed income.
  5. RK_trader


    According to Societe Generale Report called "Trends in e-FX Options Market" published in August 2007, electronic trading in FX options is estimated to account for USD42 billion of average daily volume in 2007 and may reach USD 100 bn by 2010. But that is only about 20% of average daily turnover in FX options market (voice brokered trading accounts for USD 168 bn in 2007). So the mkt is needless to say huge. But it seems to me it is mainly dominated by hedge funds and big banks and less so by smaller retail investors.

    I was just wondering if anyone has had experience trading OTC FX options though a broker online or via voice-activated platform...

    It is an amazing instrument for those who know how to handle it...
  6. RK_trader


    Hi Enkidu,

    You wonder how bad it is? I just had some option spreads expiry on Friday. Had 18% return for 2 months. This is not annualized return; this is return for 2 months only. Not bad, eh?
  7. FX exotics are very tight, vanillas even more so. I am up 280% in my FX exotics account YTD in EURUSD and yen-based DNT options. There are fantastic opportunities in fx options, as there are in any market.
  8. RK_trader


    Atticus, which broker do you use? Happy with them? Do you trade vanilla options as well or just exotics?
  9. UBS and Oanda. Happy with both. There are arb opportunies with dealer markets as well as "public" markets.
  10. RK_trader


    I saw that Oanda offers some exotics but no plain straightforward options on FX spots. Similar for UBS. It is a bit surpising to me that there are not more brokers offering online FX options. It seems that professionals are doing it almost 100% over the phone.

    Does anyone know anything more about how this mkt trully work?
    #10     Aug 4, 2008