Jump to content
Sign in to follow this  

how to calculate corelation between FX and barrier options prices

Recommended Posts

We know that barrier option move/reflect like fx prices.
Let say we enter EURUSD market in barrier option when fx price is 1.1200
then we want to place a stop in barrier option that would be equivalent as having a stop in fx of lest say 50 pips.
how do we calculate the barrier option price for that stop?

Thank you.

Claude

Share this post


Link to post

The Barrier price is the distance between IG’s underlying price and the knock out level + premium. For example as below, the market is 28725 and the KO is 27000 (which is a difference of 1275). The KO premium is 10, so the price is 1285.

image.png

In your example the barrier price is the 50 points plus whatever the KO premium is. 

If you fill in a deal ticket, the premium and price should auto populate. 

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Member Statistics

    • Total Topics
      8,083
    • Total Posts
      44,663
    • Total Members
      55,707
    Newest Member
    Sharath
    Joined 24/02/20 04:03
  • Posts

    • The zombie apocalypse is spreading, the indices are falling https://uk.reuters.com/article/uk-china-health/concern-over-coronavirus-spread-as-cases-jump-in-south-korea-italy-and-iran-idUKKCN20H03O
    • Hammer time!
    • Hi  u can try looking at videos on You tube regarding Options. there are quite  few there, but don't pay any money to these institiutions. I am sure I have seen in past few Free videos . good luck in your trading . 
×
×