Do currency options work differently than stock options?
September 8th, 2010
I’ve traded options before with US stocks and I understand that if I buy 1 contract for 100 shares priced at $.50 they are going to charge me plus commission. Is that basically the same for forex? For example, I was looking at options on CME for EUR. One contract covers 125,000 of Euros. If I buy one contract at a price of .0010 do they charge my account 5 plus commission? Is that the most that I can lose on that position or am I somehow leveraged 50:1 like a regular forex trade and I can lose a lot more than 5?