Expiry options are talking about the value date that forex options are set to expire. There are two important times and two markets you should understand if you are going to trade options. To learn forex trading in detail it helps to understand all the different choices you have for trading. Options are just one type of trade you can place. Most stick with the spot market since it is easier to understand, yet you can always aspire to options trading.
Learn Forex Trading: Expiry Options
The spot market is handy for regular trades and a good profit. It is also the easiest to understand. You buy or sell and the trade is completed. You then buy or sell to close the position when you have made the profit you desired. You don’t have to worry about expiry dates or value dates. If you have elected to learn forex trading for options, then you do need to be aware of expiry dates.
Currency options are always set to expire at two different times of the day. It depends on the market you trade in. There is a Tokyo expiry, which is at 3pm in Tokyo. Most in the U.S. are asleep at this time, so it is difficult to take advantage of the options expiry. This is why there is another expiry time, which is 10am in New York.
The New York expiry is the most used because there are more traders in the European and U.S. market sessions. It is also during the overlap when London and New York are open together. When the expiry date gets closer it is time to follow through and either buy the option or let it expire. You would want to learn forex trading options in more detail before you can understand this overall statement. The point is you can hedge with options in the spot market for a different profit choice.
Currency Fixings a part of Learn Forex Trading Lessons
As with expiry options there has to be a time when you can fix them too, thus the currency fixings. Financial centres in the world have fixing times, but again the two to be aware of will be Tokyo and London. The London session is important as we have mentioned, which is perhaps why it is during this session that the fix happens and not with New York. At 4pm London time the U.S. market still has the afternoon to trade on the fixings. It is also this time of day for the London market that sets the rates for financial and commercial transactions.
Remember in other learn forex trading lessons that you have over the counter trades? Over the counter trades need a fixed price because the traveller needs to be charged a certain fee to exchange their currency. Commercial companies also want to have a fixed rate for their trades. The second important session happens at 8:55 am in Tokyo time. This sets up the day for most of the rates given Tokyo’s two hour open after the first financial market in the world.
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