Profit Guide to Forex
Forex Profit Systems

which is riskier option trading or spot forex trading?

and which one can potentially make you more money (and of course more losses) option trading or spot forex trading?

Public Comments

1. They are very different and each can make you unlimited amounts of money.

You can create positions in options trading that are wildly risky. For instance, shorting a bunch of 15 delta calls doesn't seem especially risky but then you get a big jump in the underlier price and suddenly you have big losses and experience the full impact of negative gamma and vega. That's unlike anything you can do trading spot FX.

On the other hand, you can get some pretty huge leverage trading FX and FX (especially developing market currencies) can have some huge moves. For really big money, FX markets are deeper than options markets so if you are trading multiple billions of real capital, FX is easier to trade.

2. It's certainly dependent on how you trade but Forex trading is basically leverage whereas with option trading, you can actually reduce risk so Forex can be riskier or more succinctly, option trading can be less risky. However I would consider option trading to be more profitable, although it is true that you get more returns with more risk, there is a point where the marginal increase in risk is not warranted by the marginal increase in returns. It's about risk adjusted returns and excessive risk will wipe you out. It's called blowing up or unwinding. Every gambler knows that the sure way to ruin a good bet is to over bet.