What are FX options and how to trade foreign exchange options at IQ Option?
You have the right to exchange one currency for another at a preset exchange rate with FX options. In the FX options contracts, you can exchange rates at a specified moment of time in the future.
There are two main types of FX options.
- Call option: It gives you the right to buy an asset.
- Put option: It gives you the right to sell an asset.
How to trade FX options at IQ option?
On the right-hand side of the menu, specify the amount of your investment.
Here, select the expiration time which is the time when the option contract ceases to exist by pressing the time button.
You can find the expiration time on the chart indicated by the red solid line.
Selecting strike price for FX options
Now you can select the strike price which is a set price of an asset at which it can be bought or sold in case the option is exercised. Strike prices are indicated in white and accompanied the chart.
Now, here you can see the profitability scale next to the strike prices. Go to the higher button for buy positions call options to check the potential profit for the chosen strike price or over the lower button for sell positions put options. your profit will be indicated by the green scale while the red one will be showing your loss.
When you choose strikes manually, it will influence the size of the price band. Choose the price direction. Click on higher if you think that the price will go up. Click on lower if you believe the price will go down.
How to fix profit/loss before expiration time?
You can fix your profit or loss before the expiration time. by selling an option ahead of time. For this, press the sell button.
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