How to trade Currency Options?

Discussion in 'Options' started by Wolfgang1756, Nov 9, 2009.

  1. What is the easiest (if any) way to trade currency options?

    For example I want to buy some Yen and Euro Calls. I see the options of the XDN and XDE indexes, but the volume and liquidity is terrible.

    For Euro there seems to be TWO different chains of options with XDE and FXE! Both same thin trading wide bid/ask spreads.

    Are futures options more liquid with tighter spreads?

    Can one trade Forex Options like with a Forex account?

    Any advice?

    Thanks in advance.
  2. I am not asking anyone to do research for me. Since this is a options forum if there were any traders who traded currency options then it would be helpful to know which is the best marketplace. My pariticipatation would only add to the liquidity of that marketplace so would benefit everyone anyway.

    Thanks for those links. But that is not what I am looking for. Sorry I should have clarified that I am looking to trade some plain valina options on an exchange with proper and safe clearing.
  3. Take a look at CME Group and their currency future options.
    6J, 6E are the underlying symbols.

  4. I just looked at the prices and volume at the CME Group web site. And unless I am mistaken it shows the Volume as just 1 for the Euro Options. Yes 'one'. Which was a 1.49 Put for December.

    There is SO much trading of the currency futures contracts at CME. It is showing like 5200 contracts today for Yen and 7300 contracts for Euro. But just 1 options contract? How can it be?

    Surely currency options are a huge market for the big corporations, hedge funds and other 'institutions'.

    So where is all the trading being done? :confused:
  5. Thanks. That is a great link. Is that really CME Volume? Its thin, but not that bad. I wonder why CME's own web site shows much lower numbers...
  6. I think this link is either end of day friday or today...CME website is kinda hard to fiqure out...also, it is not real time and and relfects trading like right now and not much going on...try again looking there during regular hours...barchart has very good data on all futures options
  7. almost the entire volume in currency options is done OTC not through listed.

  8. Volume is thin overnight but during RTH they are liquid.
    Pulling up Options for 6E at this morning: All levels have 10 - 200+ contracts available but actual transacted volume is minimal 1 - 15.

    These options are pricey compared to FXE ETF currency options.. ATM options approx $1500...

    #10     Nov 10, 2009