Limit your exposure without closing your position. Forex - limited risk options exclusive to IG clients.
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Trade on the short-term direction of a forex market
Limit your risk when you place the trade
Multi-device platform - desktop, mobile, tablet
Profit potential is not capped
Free live prices, data and expert analysis
Positions stay open if prices move through your caps
Full forex - limited risk options costs and details, including currency pairs, spreads and trading hours.
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Available on FX pairs, Limited Risk Options cap your potential loss with a floor or a ceiling - while your potential profit is not capped - and they keep positions open if prices move through those caps.
Options trades are typically categorised as puts or calls.
You think the dollar will depreciate against the euro, and choose to trade our EUR/USD (Daily) Upside Option contract, which has a floor of 12,500.
The underlying spot rate for EUR/USD is trading at the floor level of 12,500 at 15:00. As you think the rate will be above the offer price of 12,518 at the 23:00 expiry, you buy 2 contracts. Each pip that the price moves is worth $10 per contract.
Your deposit for the trade, which is the maximum amount at risk, is the difference between your entry price and your floor, multiplied by the tick size and the number of contracts traded. In this case the difference between your opening price (12,518) and the floor level (12,500) is 18 pips. Multiply 18 by the number of contracts (2) and the contract value per pip ($10) to calculate your maximum amount of risk.
Deposit (Maximum amount of Risk) = 18 x 2 x $10 = $360 USD.
Profit = 52 x 2 x $10 = $1040
Loss = 18 x 2 x $10 = $360
It’s 08:00 and you expect AUD/USD to appreciate over the day. As you feel this will be an intraday movement, you take a position in the AUD/USD (Daily) Upside Limited Risk Option, with a floor.
The current spot price is quoted by IG at 10,116.2/10,118.2. You purchase 3 contracts in the AUD/USD (Daily) Upside Option (with a floor of 10,020), currently priced at 10,117.7/10,119.7.
Your deposit for the trade, which is the maximum amount at risk, is the difference between your entry price and your floor, multiplied by the tick size and the number of contracts traded.
In this case the difference between your opening price (10,119.7) and your floor level (10,020) is 99.7 pips. Multiply 99.7 by the number of contracts (3) and the contract value per pip ($10) to calculate your maximum risk.
Deposit (Maximum amount of Risk) = 99.7 x 3 x $10 = $2991 USD.
In mid-afternoon, spot AUD/USD has risen to 10152/10154.
Profit = 33.3 x 3 x $10 = $999
Alternatively, after the afternoon rise you assume the price will continue to move in your favour.
Loss = 37.7 x 3 x $10 = $1131