By Jack Crooks
When you've been around the investment world as long as I have, you've definitely watched your fair share of new investment fads come and go. Few ever seem to live up to the hype.
Now, whenever I hear someone in the investment industry say, "This is going to 'revolutionize' x, y, or z," I instinctively cover my wallet with both hands.
Needless to say, I rarely buy into the hype. But today is different. At 9:30 a.m. this morning, when the opening bell rang at the Philadelphia Stock Exchange, a full lineup of new currency options were opened for business.
And without hesitation, I can say this new development will indeed "revolutionize" this market in a very important way.
Why? The Philadelphia Stock Exchange has created a whole new class of currency options called "World Currency Options (WCO)." In short, these options will mimic exactly the features of a standard stock option.
For the first time, any investor will be able to:
- Easily understand currency options
- Be able to easily trade currency options
- Easily manage currency options
What You Can Expect from These New Revolutionary Offerings
Here are some of the key characteristics and benefits of world currency options that will open the world of currency options to almost every investor:
- Trading of world currency options will be from 9:30 a.m. to 4:00 p.m. EST - the same hours as the stock market...
- The point value of each world currency option will be US$100, the same as a standard stock option, making it easy to calculate costs and profits...
- Expiration dates will be on the same cycle as stock options - the third Friday of the month, making it easy to remember...
- You will be able to trade world currency options from your standard online stock brokerage account - almost everywhere, which should significantly lower the costs of trading currency options...
- Because it will be so easy for retail and institutional investors to use this product, I expect the volume of trading will soar, which should make prices more efficient. In other words, there will be tighter spreads between the bid price and asking price, which will lower your costs and increase your profits...
- Each currency option contract will represent 10,000 units of underlying currency. These are much smaller than existing currency options contracts, which opens up the world of currency trading for those with smaller investment accounts...
What the Guys at "Philly" Have to Say About This
If you ask the guys at the Philadelphia Stock Exchange what they think of their new offering, they will likely say, "Our new World Currency Options are going to revolutionize the market for the average investor. We're standing at the forefront of something really big. And we're proud of this product."
In fact, I've had the opportunity to break bread with the two men, both seasoned veterans, at the Philly Stocks Exchange who are most responsible for bringing World Currency Options to market. And I've heard them say just that.
After doing my homework on this exciting new offering in the currency world, I'm inclined to believe them.