Exotic Financial Options

exotic options explained

What are exotic options?

The OTC markets (Over The Counter) are a constant source of financial innovations that are trying to adapt the characteristics of the different instruments to the specific needs of hedge of different economic agents such as traders. In the case of financial options, one of the most interesting innovations that have emerged in recent years is the exotic type, which can be subdivided into four types:

  • Compound options or options on options.
  • Options with dependent value on the historical evolution of the underlying asset (path-dependents).
  • Conditional Options.
  • Options based on several underlying assets.

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Forex OTC Options with AvaOptions of Avatrade

The Forex and CFD broker AvaTrade offers its customers the first online (web based) platform designed exclusively to trade with OTC (Over The Counter) Vanilla options based on currency pairs (Forex).

This platform, known as AvaOptions, offers new ways of trading that are simply not possible through normal spot Forex market. Whether the investor is interested in covering (hedging) the open Spot Forex positions or benefit with the unlimited profit potential with limited risk offered by options, AvaOptions has all the tools and features that the trader may need.

AvaOptions has a powerful and intuitive interface, which offers the possibility to trade with a wide range of Vanilla currency options, which allows the traders to diversify their operations in the Forex market. With this application, the trader can trade with options based on more than 30 currency pairs in a wide range of maturities, for which it has several user-friendly tools to implement any trading strategy with options.

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EasyMarkets offers Forex Vanilla options

The Forex broker EasyMarkets (regulated by CySEC and ASIC) offers its customers the ability to trade Forex Vanilla options, ie traditional options contracts based on the main currency pairs. In this case, these are OTC options contracts (Over-The-Counter), which provide many advantages to the trader, thanks largely to the trading platform of EasyMarkets, which is an intuitive and easy to use application even for traders with little experience in trading in these derivatives.