There are two types of forex option brokers: online forex trading platforms and offline forex brokers. Forex brokers that only offer forex option trading via phone can be classified as forex brokers. A few forex brokers provide both online forex trading and a dealing/brokerage desk to investors who prefer placing orders through a live forex broker. Continue reading?
Different forex option brokers may require traders to have trading accounts with minimum notional values (contract sizes) of between a few thousand and fifty thousand dollars. Forex option brokers might require that investors trade forex options contracts with minimum nominal values (contract sizes) of up to $500,000. Last but not least, some types of forex options contracts are open to trading at any time. Others lock you in until settlement or expiration. You might find yourself stuck with an option contract that you cannot trade out of, depending on which type of forex option contract it is. Investors should speak with their forex brokers to find out about minimum trading accounts, minimum contract sizes, and contract liquidity before trading.
Forex option brokers offer a variety of forex trading products to investors. It is important that investors understand the distinct risk characteristics of each forex option trading product offered by forex brokers.
Plain Vanilla Forex Options Broker: Plain vanilla options refers to standard put or call option contracts that are traded on an exchange. However, in forex option trading, plain vanilla options refers to standard, generic option contract contracts that are traded via an over-the counter (OTC) forex broker. Vanilla forex options can be described as buying or selling a standard forex call option or forex option contract.
Only a handful of forex option brokers/dealers offer online plain vanilla forex options with live streaming quotes 24 hours per day. Forex option brokers and banks typically only offer forex options by telephone. Vanilla forex options for major currencies offer good liquidity. You can easily enter or exit the market at any hour of the day or night.