What are FX options and how to trade foreign exchange options at IQ Option?
FX options are contracts that gives you the right to exchange one currency for another at a preset exchange rate at a specified moment of time in the future.
There are two main types of FX options. A call option gives you the right to buy an asset. Of put option gives you the right to sell an asset.
How to trade FX options at IQ option?
Specify the amount of your investment on the right-hand side of the menu.
Select the expiration time the time when the option contract ceases to exist by pressing the time button.
The expiration time is shown on the chart by the red solid line.
Selecting strike price for FX options
Now select a strike price. A strike price is a set price of an asset at which it can be bought or sold in case the option is exercised. Strike prices are indicated in white and accompanied the chart.
Next to the strike prices, you can see the profitability scale. To check the potential profit for the chosen strike price mouse over the higher button for buy positions call options or over the lower button for sell positions put options. The green scale will be indicating your profit while the red one will be showing your loss.
You choose strikes manually thus influencing the size of the price band. Choose the price direction. Click on higher if you think that the price will go up. Click on lower if you believe the price will go down.
How to fix profit/loss before expiration time?
You may sell an option ahead of time and fix your profit or loss before the expiration time. In order to do this press these sell button.
Have a pleasant trading experience.
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