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
