Forex Investment and Currency Trading

The right - but not the obligation - to exchange one currency to another at a set price at a future date

Call Option - the buyer of the option has the right to buy currency at the specified rate, the seller (writer) has the obligation to sell currency if the option is exercised by the buyer.

Put Option - the buyer of the option has the right to sell currency at the specified date, the seller (writer) has the obligation to buy currency if the option is exercised by the buyer.

Ideal for contingent exposures since options are contingent assets or liablilities.

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Cash - i.e. same day - transactions are possible in the Canadian dollar, the Mexican peso and the majors if completed by 9:00am New York time.

Holidays - where there is a holiday in one of the two contries in question, it is normal to value the trade to the next business day when both countries are open.

Forward points can be difficult to calculate around Christmas and New Year because of the large number of holidays around the world.

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