August 01, 2005 10:43 AM US Eastern Timezone
OANDA's BoxOption Opens a New Era in Currency Options Trading
NEW YORK--(BUSINESS WIRE)--Aug. 1, 2005--OANDA:
-- First of its kind: intra-day, customer-defined currency options.
-- Breaks from limitations and complexities traditionally associated with options trading
-- For FX market investment, as well as hedging currency risk and currency positions
-- Fully integrated into OANDA's fxTrade platform
OANDA, a pioneering currency trading and information company, today announced the launch of a new product called OANDA BoxOption. BoxOption breaks away from the limitations and complexities traditionally associated with options trading, supporting intraday currency options and allowing the customer to define their own options on a graphical user interface in any granularity and for any time frame as short as 5 minutes.
BoxOption is an exotic cross between a binary option and a corridor option. Traders use a computer cursor to draw boxes around expected future price targets or resistance or support levels in an intuitive way on a graphical user interface, request an instant price quote from OANDA, and then buy the option at their discretion. Both hit-boxes and miss-boxes are supported. After purchasing the option, customers can observe the exchange rate progression in real time.
The customer's return is determined by the size and position of the box - the lower the probability the box will be hit (or missed), the higher the return. If the exchange rate crosses a hit-box, the customer receives the fixed return for each $1 invested. There is no return if the exchange rate "misses" the hit-box. Conversely, if the exchange rate misses a miss-box then the customer receives the return. Unexpired BoxOptions can be sold back to OANDA at the displayed resale value."This is the first and only product of its kind in the financial marketplace," said Michael Stumm, president of OANDA. "BoxOption provides both professional and private investors with a powerful new derivative for which they can do any number of things, from hedging exchange rate risk and currency positions, to direct investing in the movement of the currency markets."
The global currency markets have a daily turnover of 1.9 trillion USD. Approximately 90 percent of this volume is intra-day with traders opening and closing their positions within the same day. BoxOption enables intra-day traders to hedge their risk. The maximum loss for the trader is the price of the box with a predetermined return in case of a hit or miss. BoxOption can be bought in periods ranging from as short as 5 minutes to up to 50 days and is currently available at boxoption.oanda.com.
OANDA Corporation is a pioneer in Internet-based currency trading and a global leader in currency localization and information services. With one of the world's largest historical high frequency, filtered currency databases, OANDA was the first to offer a broad range of currency exchange rate information free of charge to the general public over the Web in 1995. Today it services over a million queries a day. OANDA became an Internet-based business-to-business application provider (ASP) in 1997 and currently services over 75,000 ASP clients globally. With FXTrade, OANDA was one of the first to bring a fully automated currency trading system to the Web in early 2001. The OANDA FXTrade system offers retail and institutional clients a cutting-edge platform that provides competitive, real-time access to the foreign exchange market. For more information about OANDA and its services, please visit www.oanda.com.
OANDA is a registered Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) and is a member of the National Futures Association (NFA). Each BoxOption contract represents an individual agreement between the customer and OANDACorporation and can not be exchanged or traded independently. BoxOption, FXTrade and OANDA are trademarks of OANDA Corporation.