Currency Trading.
Online currency trading is the most widely used type of binary options trading, with the foreign exchange market currently boasting a daily turnover of over $5 trillion per day, which is the highest turnover of any asset type.
In binary options, online currency trading is as straightforward as it gets.
Online currency trading in binary options always involves currencies traded in pairs. The Euro will therefore most commonly be traded against the U. S dollar, the Japanese yen, the British Sterling pound, and any other currency for that matter. The format for currency pair is as follows:
Base Currency/Quote Currency (e. g EUR/USD)
If this currency pair’s rate is 1.3574, this indicates that 1 euro is being exchanged for 1.3574 U. S dollars. We’re quoting the euro with the U. S dollar being used as reference.
When performing online currency trading activities, a trader speculates on the rate of one currency against other one’s with which it is paired. Let’s take the most commonly traded EUR/USD pair as an example. A rise in the pair’s market price has two possible causes: either the euro got stronger, or the dollar got weaker. A drop in the pair’s market price can only mean that the base currency is weaker than the quote currency.
Let’s take a look at a basic example of online currency trading in binary options.
A trader places a 60-second CALL option on the EUR/USD pair at a strike rate of 1.3645. This means that the trader speculates that the pair’s value will finish higher than the strike rate at the end of its 60-second expiry. If the trader’s prediction is correct and the expiry rate is anything over 1.3645 – even an ever so slightly higher rate such as 1.3646 – the trade is said to be In The Money and the trader makes profit on top of his/her initial investment. If the pair’s expiry rate is anything under 1.3645 – even by just one pip (1.3544) – the trade is said to be Out Of The Money and trader loses his initial investment. If the pair’s expiry price is the same as the strike price, the investment amount is returned to the trader with no losses or gains.
This section of the website will examine the details of online currency trading as well as currency pairs, their correlations, and the factors which influence their market rates on a daily basis and on the long run, as well as various valuable trading tips and strategies.

Forex Option & Currency Trading Options.
DEFINITION of 'Forex Option & Currency Trading Options'
A security that allows currency traders to realize gains without having to purchase the underlying currency pair. By incorporating leverage, forex options magnify returns and provide a set downside risk. Alternatively, currency trading options can be held alongside the underlying forex pair to lock in profits or minimize risk. In this case, limiting the upside potential is usually necessary for capping the downside as well.
BREAKING DOWN 'Forex Option & Currency Trading Options'
Not all retail forex brokers provide the opportunity for option trading. Retail forex traders should research prospective brokers because for traders who intend to trade forex options online, having a broker that allows you to trade options alongside traditional positions is valuable; however, traders can also open a separate account and buy options through a different broker.

Currency Option.
What is a 'Currency Option'
A currency option is a contract that grants the buyer the right, but not the obligation, to buy or sell a specified currency at a specified exchange rate on or before a specified date. For this right, a premium is paid to the seller, the amount of which varies depending on the number of contracts if the option is bought on an exchange, or on the nominal amount of the option if it is done on the over-the-counter market. Currency options are one of the most common ways for corporations, individuals or financial institutions to hedge against adverse movements in exchange rates.
BREAKING DOWN 'Currency Option'
Options pricing has several components. The strike is the rate at which the owner of the option is able to buy the currency, if the investor is long a call, or sell it, if the investor is long a put. At the expiration date of the option, which is sometimes referred to as the maturity date, the strike price is compared to the then-current spot rate. Depending on the type of the option and where the spot rate is trading, in relation to the strike, the option is exercised or expires worthless. If the option expires in the money, the currency option is cash settled. If the option expires out of the money, it expires worthless.

Option currency trading

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