Limit your potential risk but not your potential profitOnly available to our Singapore clients, Limited Risk Options are a new way of taking a position on forex pairs such as EUR/USD.
They have either a predetermined ceiling or floor built in to limit your risk to a value known upfront. You choose your floor or ceiling from a list of available levels when you open the trade. There is no added cost for this; it is built into the price of the product.
As the products have either a ceiling (for a sell position) or a floor (for a buy position), they let you cap your potential loss but not your potential profit, controlling your risk in a manner similar to using Stop orders. Unlike Stop orders, the floor or ceiling on a Limited Risk Option cannot be changed on open positions.
Keep your positions openAnother key difference between these products and traditional Stops on other products is that a market trading through a floor or ceiling on a Limited Risk Option won’t stop out your position.
Rather, it remains open until you close it, or until it expires at 11pm that night, Singapore time.
This means that even if the price moves against you and breaks through your floor or ceiling, your position will stay open and benefit from any subsequent change in the market there might be in your favour, until 11pm that night.
Regardless of price movements, you are free to close your position at any time up until one minute prior to expiry.