I'm not a brand new trader anymore. Been trading equity options for a little while now. Want to start accumulating options on the EUR/DKK pair, but have absolutely zero currency options experience. Is there a decent resource someone can point me to? Also, does Interactive Brokers support options on this pair? Any guidance would be well appreciated. BNT
You're gonna have a real issue trading EURDKK options. There's very little liquidity, since this trade is mostly abt reasonably unhedgeable jump risk. So you might be able to get some ATM liquidity, but it's going to be tricky even there, given the recent volatility in fwds.
I see... so you think my best bet would be to just trade the pair and forget the options due to the lack of liquidity?
Well, trading a pegged spot exchange rate is rather pointless, innit? You're going to have to use too much leverage, given the jump risk, IMHO (same reason options are such a pain in the butt). The best thing to do, if you could, would be to trade the forwards, since that's where all the action is these days.