Many traders use forex options to express specific views on positions and potentially diversify their portfolios. Options trading adds leverage and can support trading with defined risk parameters.
The best forex options brokers offer traders a choice of currency pairs and a platform that facilitates quick and easy trades. They also supply training materials and research and analysis tools to help traders to make informed decisions.
Compare Forex Options Brokers
| Best For | Leveraged Trading | Multi-Asset Traders | Forex and Investing App |
| Rating | 4.5 | 5 | 5 |
| Read Review | Plus500 Forex Review | Saxo Review | TD Ameritrade Review |
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Best Brokers for Forex Options
Here are the best brokers for forex options.
Best Overall: Plus500
Plus500 has the platform that advanced traders need when they want to get into the forex and options markets. You can practice on this platform with paper trading, but remember that it is designed for advanced investors who know the markets very well. You can even manage large portfolios here. Fees are low and your minimum investment is only $100 when you want to build a new forex options portfolio.
Best for Excellent Market Analysis: Saxo
Trading since 1992, Saxo offers traders all they need to make informed decisions. This European company is renowned for its forex platform, offering trades in options and spot contracts.
Over 180 forex pairs offer every trader a broad assortment of choices. No commissions and highly competitive spreads keep fees low. Saxo’s mobile app, SaxoTraderGO is mirrored on the desktop version, with all functionalities intact. It offers in-depth analysis and market research tools and charts.
Best for Intermediate and Advanced Traders: Charles Schwab
- Best For:Forex and Investing AppVIEW PROS & CONS:securely through TD Ameritrade's website
Charles Schwab has been active in the industry for almost 50 years. Traders can choose from 70 forex pairs, trading through the proprietary thinkorswim® platform with its excellent analysis and charting features. There are no data or platform fees. Options contract costs are similar to most competing products.
Opening an account is easy. It’s all done online, and you could start trading on the same day. Charles Schwab ensures that new account specialists and customer service support are available 24/7 to help you to open your account.
Best for U.S. Forex Traders: Interactive Brokers
- Best For:Professional TradersVIEW PROS & CONS:Securely through Interactive Brokers’ website
In business since 1977, Interactive Brokers is a multinational broker based in the U.S. With over 100 currency pairs on offer, Interactive Brokers also boasts one of the best software applications in the industry. Trader Workstation mirrors the mobile app functionality and offers traders of every level all they need to trade.
Resources include charting, advanced market analysis tools and an excellent learning library. With all its advanced functions, navigating the platform takes some getting used to.
Interactive Brokers charge competitive spreads and no commission.
Best for Copy Trading: AvaTrade
- Best For:Non U.S. Forex & CFD TradersVIEW PROS & CONS:securely through AvaTrade's website
Founded in 2006, the award-winning platform AvaTrade offers traders a diverse range of assets, including more than 50 currency pairs. The broker has an in-house platform and supports several others, including MT4 and automated trading software for copy trading. The AvaTrade Web Trader platforms have 90 indicators and three chart formats for customizable platform options.
AvaTrade offers users a wide range of educational support and has a website called SharpTrader dedicated to trader education and training.
How Do Forex Options Work?
Forex options are derivative contracts that give traders the right to buy or sell currencies at an agreed price (strike price) on an agreed date. They allow traders to speculate on or hedge against future movements in currency exchange rates. When you buy a forex option, you plan to buy one currency and sell another, believing the relative price will change by the expiry date.
As a buyer of an option, you have the right but no obligation to buy or sell the underlying assets. If you are a seller, you may be assigned an obligation to buy or sell the underlying forex.
The two main types of options are call options and put options. Buy options give the holder the right to buy the underlying asset at an agreed price on an agreed date. A put option allows the holder to sell an asset at a specified price at an agreed time.
Traders pay an upfront cost known as the option premium to get the option. The current exchange rate, time to expiration, volatility and interest rates affect the price.
The profit or loss from a forex option depends on several factors, including the option premium, the spot exchange rate when the option is exercised and any transaction costs. If the option expires out-of-the-money (meaning it is not profitable) the buyer of the option loses the option premium paid.
Diversify Your Investments with Forex Options
Forex options have become popular as hedge and speculation tools. As a forex options trader, you need a broker that will give you the best chance of making a profit from forex options. The best forex options brokers give users access to several currencies and the tools to make educated trading decisions. They also provide an intuitive and responsive trading platform.
Frequently Asked Questions
Can you buy options on Forex?
Yes, you can buy options on forex.
How much do FX options traders make?
How much FX options traders make will depend on how good they are at trading. Most will earn several thousand dollars a month.
Can I trade options on MT4?
Yes, you can trade options on MT4 if you collaborate with a broker that supports the platform.
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About Anna Yen
Anna Yen, CFA is an investment writer with over two decades of professional finance and writing experience in roles within JPMorgan and UBS derivatives, asset management, crypto, and Family Money Map. She specializes in writing about investment topics ranging from traditional asset classes and derivatives to alternatives like cryptocurrency and real estate. Her work has been published on sites like Quicken and the crypto exchange Bybit.
