Greetings, I have been looking at trading FX Spot Options for a few weeks now and trying to find an Edge. I initially tried buying a Call or Put Option as a means to hedge the downside of a currency trade, with mixed results.
Then I moved on to trading a Covered Call or Covered Put.
What do you think is this:
This is NZDUSD on the H1 Candle. The red Horizontal Line is the Strike Price for the furthest out of the money Put Option and the Vertical Black Line is its Expiry.
If I sold 70 Lots of this put Option at the strike price represented by the red line I would make £2000 from the upfront premium. Considering a leverage of only 1:50, that would be £2000 on an account balance of £100,000, so 2%.
The Expiry is in 1 weeks time roughly. And I am basically betting that the market will not get down to that strike price (red line) before the option expires (black line). In that case I bank the £2k and that's it.
I am wondering if selling far out of the money options could be a relatively hassle free way to make regular fixed income from FX trading in a low risk fashion.