Yes. Fx ops liquidity is very good for major pairs during appropriate hours. Maybe OP can offer counterexamples from his own experience.
liquidity on all options is very low, not just forex. why? because nobody trades it. why? who knows... probably you can't make any money with it. just my point of view.
The FX options market is very liquid. But most of the volume is OTC. The FX options volume is low on exchanges.
You can trade on-exchange at middleish prices, because it's an easy arb vs OTC for the mms. Give it a try -- throw in some limit orders. Or try FXE, FXY, etc. ops.
To clarify my question , look at the significant difference between the forex options volume and the most distant expiration date : http://www.nasdaq.com/aspxcontent/optionsWC.aspx http://currencyshares.com/products Compared to options on share like aapl or index like spy : https://finance.yahoo.com/q/op?s=AAPL+Options https://finance.yahoo.com/q/op?s=SPY+Options
forex options are traded otc. (however, there is a bit of liquidity on the CME). there is no liquidity on any other US exchange.
Which OTC platform offers american (not european) vanilla forex options with wide and distant expiration dates ?