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frang0nve
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FX fixed options

Postby frang0nve » Sat Oct 03, 2009 10:33 am

Hello,

I've found a free online ebook about FX fixed options here:

[s]http://www.forexspyderoptions.com/helpdesk/index.php?_m=downloads&_a=viewdownload&downloaditemid=1[/s]
BROKEN LINK

http://forexspyder.com/helpdesk/index.p ... id=6&nav=0



Registration after download required.

Table of Contents
Volume I
Chapter 1 - The Forex Market
Chapter 2 - What are Fixed Forex Options?
Chapter 3 - Fixed Options Types
Chapter 4 - Who are the participants in the fixed options market?
Chapter 5 - Writing Fixed Options
Chapter 6 - Buying Fixed Options
Chapter 7 - Fixed Options Advantages
Chapter 8 - How are fixed options are priced?
Volume II
Chapter 1 - Why you should NEVER use a Stop Loss
Chapter 2 - Virtual Leverage of 1,000:1 and Higher
Chapter 3 - Using Fixed Options to Predict Future Spot Movement
Chapter 4 - Advanced Option Writing - "Create your own Pricing Engine"
Chapter 5 - Fixed Option Strategies
Chapter 6 - What is the Optimal Premium? - Your Personal Strategy
Chapter 7 - What's Next?


Cheers.

Francisco
Last edited by frang0nve on Wed Sep 08, 2010 11:21 pm, edited 2 times in total.

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MightyOne
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Re: FX fixed options

Postby MightyOne » Sat Oct 03, 2009 11:33 am

frang0nve wrote:Hello,

I've found a free online ebook about FX fixed options here:

http://www.forexspyderoptions.com/helpdesk/index.php?_m=downloads&_a=viewdownload&downloaditemid=1

Registration after download required.

Table of Contents
Volume 1
Chapter 1 - The Forex Market
Chapter 2 - What are Fixed Forex Options?
Chapter 3 - Fixed Options Types
Chapter 4 - Who are the participants in the fixed options market?
Chapter 5 - Writing Fixed Options
Chapter 6 - Buying Fixed Options
Chapter 7 - Fixed Options Advantages
Chapter 8 - How are fixed options are priced?
Volume II
Chapter 1 - Why you should NEVER use a Stop Loss
Chapter 2 - Virtual Leverage of 1,000:1 and Higher
Chapter 3 - Using Fixed Options to Predict Future Spot Movement
Chapter 4 - Advanced Option Writing - "Create your own Pricing Engine"
Chapter 5 - Fixed Option Strategies
Chapter 6 - What is the Optimal Premium? - Your Personal Strategy
Chapter 7 - What's Next?


Cheers.

Francisco


Thank you Francisco :)

AndreasF
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Postby AndreasF » Sat Oct 03, 2009 11:38 am

MO

will FX options be the tool to move your 450$ account to 450,000$?

Andreas

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MightyOne
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Postby MightyOne » Sat Oct 03, 2009 12:39 pm

AndreasF wrote:MO

will FX options be the tool to move your 450$ account to 450,000$?

Andreas


I plan on trading Spot Forex for that, but I do plan on opening a Nadex account.
I think my maximum for Binary Options will be 100 options per trade until every trader under every rock knows what they are.

$400 trade 50% max ($200 trade & $200 hold position size)

Drop back to Trade1 after account drops 20%

We will assume a high risk of $20 per option (can be 3-4x less):

Trade1: $200 into $360 or dip into spare $200
Trade2: $360 into $600 or $300
Trade3: $600 into $1080 or $480
Trade4: $1080 into $1880 or $880
Trade5: $1880 into $3320 or $1520

$3320 / $400 = 8.3 to 1

Account grows to $2,000:

Trade1: $1000 into $1800 or dip
Trade2: $1800 into $3240 or $1440
Trade3: $3240 into $5800 or $2600
Trade4: $5800 into $10440 or $4640
Trade5: $10440 into $18760 or $8360


Spot vs Option:

Why not both?

aliassmith
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Postby aliassmith » Sat Oct 03, 2009 3:00 pm

MightyOne wrote:
AndreasF wrote:MO

will FX options be the tool to move your 450$ account to 450,000$?

Andreas


I plan on trading Spot Forex for that, but I do plan on opening a Nadex account.
I think my maximum for Binary Options will be 100 options per trade until every trader under every rock knows what they are.

$400 trade 50% max ($200 trade & $200 hold position size)

Drop back to Trade1 after account drops 20%

We will assume a high risk of $20 per option (can be 3-4x less):

Trade1: $200 into $360 or dip into spare $200
Trade2: $360 into $600 or $300
Trade3: $600 into $1080 or $480
Trade4: $1080 into $1880 or $880
Trade5: $1880 into $3320 or $1520

$3320 / $400 = 8.3 to 1

Account grows to $2,000:

Trade1: $1000 into $1800 or dip
Trade2: $1800 into $3240 or $1440
Trade3: $3240 into $5800 or $2600
Trade4: $5800 into $10440 or $4640
Trade5: $10440 into $18760 or $8360


Spot vs Option:

Why not both?


I don't disagree that binary options can be lucrative, but your
risk is pretty high.

You said use $20 to make $80 which is really nice 1:4 R:R. The
thing is $20 times 2 contracts is $40 risked. $40 out of your $400
is a 10% risk per trade. So, not to confuse anyone we should
say that this is a high risk/high reward trading style.

Unless of course you see it differently.

Someone that is a 50/50 trader can make a lot of money doing this!

win one +160
loss one -60
win one +240
loss one -100
win one +320
ect.....

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es/pip
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Postby es/pip » Sat Oct 03, 2009 3:09 pm

i am going to look into this

i said i was going to before but i put it off like i normally do :roll:


quick q.

can you trade these naked

-- i think the market is going down so i sell calls instead of buying puts

just curious
Bend over and assume the position for another 4 years of hope and change.

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MightyOne
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Postby MightyOne » Sat Oct 03, 2009 3:34 pm

aliassmith wrote:
MightyOne wrote:
AndreasF wrote:MO

will FX options be the tool to move your 450$ account to 450,000$?

Andreas


I plan on trading Spot Forex for that, but I do plan on opening a Nadex account.
I think my maximum for Binary Options will be 100 options per trade until every trader under every rock knows what they are.

$400 trade 50% max ($200 trade & $200 hold position size)

Drop back to Trade1 after account drops 20%

We will assume a high risk of $20 per option (can be 3-4x less):

Trade1: $200 into $360 or dip into spare $200
Trade2: $360 into $600 or $300
Trade3: $600 into $1080 or $480
Trade4: $1080 into $1880 or $880
Trade5: $1880 into $3320 or $1520

$3320 / $400 = 8.3 to 1

Account grows to $2,000:

Trade1: $1000 into $1800 or dip
Trade2: $1800 into $3240 or $1440
Trade3: $3240 into $5800 or $2600
Trade4: $5800 into $10440 or $4640
Trade5: $10440 into $18760 or $8360


Spot vs Option:

Why not both?


I don't disagree that binary options can be lucrative, but your
risk is pretty high.

You said use $20 to make $80 which is really nice 1:4 R:R. The
thing is $20 times 2 contracts is $40 risked. $40 out of your $400
is a 10% risk per trade. So, not to confuse anyone we should
say that this is a high risk/high reward trading style.

Unless of course you see it differently.

Someone that is a 50/50 trader can make a lot of money doing this!

win one +160
loss one -60
win one +240
loss one -100
win one +320
ect.....


You would have to have an extremely bad run to blow up.

You can only use the nearest $100 in your risk calculation and add the unused funds back in.

win = account rounded down to the nearest 100 * 1.8
loss = account rounded down to the nearest 100 * 0.8

$1,000

w. $1800
L. $1440
w. $2560
L. $2060
w. $3660
L. $2940

L. $2360
L. $1900
L. $1520
L. $1220
L. $980 <---Starting to dip into reserve
w.$1800
w.$3240 <---Already bounced back with just 2 winners in a row!
w.$5800 :)

As per aliassmith's suggestion I will add that this is a high risk trading style without a deeper reserve than 1 to 1.

A reserve of 9 to 1 should do the trick:

$1000 trade & $9000 to dip into to maintain a min lot size of 10.
Last edited by MightyOne on Sat Oct 03, 2009 4:59 pm, edited 3 times in total.

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MightyOne
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Postby MightyOne » Sat Oct 03, 2009 4:16 pm

es/pip wrote:i am going to look into this

i said i was going to before but i put it off like i normally do :roll:


quick q.

can you trade these naked

-- i think the market is going down so i sell calls instead of buying puts

just curious


I assume we are talking about Futures?

Writing call options is nearly the same as going short the spot only you can profit from time decay and decreasing volatility.

Before writing options you should have option valuation software.

Writing options has its risks though as I have seen some of my call options jump 821% over night and they were only at the money.
I have also liquidated an option for a fat profit and it was worth 16% of what I liquidated it for 30 minutes later.

You would not want to be on the wrong end of these trades :shock:

aliassmith
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Postby aliassmith » Sat Oct 03, 2009 9:18 pm

MightyOne wrote:
aliassmith wrote:
MightyOne wrote:
AndreasF wrote:MO

will FX options be the tool to move your 450$ account to 450,000$?

Andreas


I plan on trading Spot Forex for that, but I do plan on opening a Nadex account.
I think my maximum for Binary Options will be 100 options per trade until every trader under every rock knows what they are.

$400 trade 50% max ($200 trade & $200 hold position size)

Drop back to Trade1 after account drops 20%

We will assume a high risk of $20 per option (can be 3-4x less):

Trade1: $200 into $360 or dip into spare $200
Trade2: $360 into $600 or $300
Trade3: $600 into $1080 or $480
Trade4: $1080 into $1880 or $880
Trade5: $1880 into $3320 or $1520

$3320 / $400 = 8.3 to 1

Account grows to $2,000:

Trade1: $1000 into $1800 or dip
Trade2: $1800 into $3240 or $1440
Trade3: $3240 into $5800 or $2600
Trade4: $5800 into $10440 or $4640
Trade5: $10440 into $18760 or $8360


Spot vs Option:

Why not both?


I don't disagree that binary options can be lucrative, but your
risk is pretty high.

You said use $20 to make $80 which is really nice 1:4 R:R. The
thing is $20 times 2 contracts is $40 risked. $40 out of your $400
is a 10% risk per trade. So, not to confuse anyone we should
say that this is a high risk/high reward trading style.

Unless of course you see it differently.

Someone that is a 50/50 trader can make a lot of money doing this!

win one +160
loss one -60
win one +240
loss one -100
win one +320
ect.....


You would have to have an extremely bad run to blow up.

You can only use the nearest $100 in your risk calculation and add the unused funds back in.

win = account rounded down to the nearest 100 * 1.8
loss = account rounded down to the nearest 100 * 0.8

$1,000

w. $1800
L. $1440
w. $2560
L. $2060
w. $3660
L. $2940

L. $2360
L. $1900
L. $1520
L. $1220
L. $980 <---Starting to dip into reserve
w.$1800
w.$3240 <---Already bounced back with just 2 winners in a row!
w.$5800 :)

As per aliassmith's suggestion I will add that this is a high risk trading style without a deeper reserve than 1 to 1.

A reserve of 9 to 1 should do the trick:

$1000 trade & $9000 to dip into to maintain a min lot size of 10.


I'll be running my Binary demo next to my live spot account next
week to see how they compare. I want to see what timeframe chart
would be best to trade these options. Whatever timeframe will allow
me to get options for less than $20 and hit in the next 5 candles or so.

a sequence of about 5 to six trades at 50% accuracy will get about 100% return with the money management I was looking at.

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brettnchrism
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Postby brettnchrism » Sun Oct 04, 2009 2:56 am

I opened a demo ig account. Im not sure but i guess there are many ways to trade. Strike, No Strike, then hourly, daily, weekly and monthly close high or lower than a set price. I was reading the thread here and it looks like there is a way to trade similar to spot forex where there is a stop loss but I cant find much information about this.

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