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options pros and cons
options pros and cons

Options: Pros and Cons

Options: Pros and Cons

Pros:

Flexibility

Limited risk

Buying options limits your exposure. The maximum you can lose is the value of the option, the price you paid for it.

Purchasing options as a speculative vehicle offers limited downside — you cannot lose more than the price you paid for the option — and unlimited upside, at least on a call. If you purchase a put, your profit is technically limited to the underlying currency going to zero.

The cost of the option may be less than the margin on the same spot position.

Hedging

Cons:

High costs

Liquidity

You pay for the time value of an option. In spot forex, other than rollover charges (typically small), you do not pay for the time you hold a position.

Complexity

Time decay

 

How to Draw Trend Lines

Support and Resistance Lines

Forex Trend Trading

 

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