Foreign Exchange Options

The currency options market shares its origins with the new markets in derivative products, which have blossomed in recent years. They were developed to cope with the rise in volatility in the financial markets world wide. In the foreign exchange markets, the dramatic rise (1983-1985) and the subsequent fall (1985-1987) in the dollar caused major problems for central banks, corporate treasurers, and international investors alike. Windfall foreign exchange losses became enormous for the treasurer who failed to hedge, or who hedged too soon, or who borrowed money in the wrong currency. The investors in the international bond market soon discovered that the risk on their bond positions could appear insignificant relative to their currency exposure. Therefore, currency options were developed, not as another interesting off-balance-sheet trading vehicle but as an alternative risk management tool to the spot and forward foreign exchange markets. They are a product of currency market volatility and owe their existence to the demands of foreign exchange users for alternative hedging and exposure management techniques.

Basics Of Forex

Basics Of Forex

Insider Techniques To Profitable Forex Trading. In any business or moneymaking venture, preparation and foreknowledge are the keys to success. Without this sort of insight, the attempt to make a profitable financial decision can only end in disaster and failure, regardless of your level of motivation and determination or the amount of money you plan to invest

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