Forex Vs. Options

Options are financial instruments that convey the right, but not the obligation, to engage in a future transaction on some underlying security. For example, buying a call option provides the right to buy a specified quantity of a security at a set strike price at some time on or before expiration, while buying a put option provides the right to sell. Upon the option holder's choice to exercise the option, the party who sold, or wrote, the option must fulfill the terms of the contract.

Types of options:

Exchange traded options (also called "listed options") is a class of exchange traded derivatives. Exchange traded options have standardized contracts, and are settled through a clearing house with fulfillment guaranteed by the credit of the exchange. Since the contracts are standardized, accurate pricing models are often available. Exchange traded options include:

1. Stock Options.
2. Commodity Options.
3. Bond options and other interest rate options.
4. Index (equity) Options.
5. Options on futures contracts.

Over-the-counter, or OTC options are traded between two private parties, and are not listed on an exchange. The terms of an OTC option are unrestricted and may be individually tailored to meet any business need. In general, at least one of the counterparties to an OTC option is a well-capitalized institution. Option types commonly traded over the counter include:

1) Interest rate options.
2) Currency cross rate options.
3) Options on swaps or swaptions.

Employee stock options are issued by a company to its employees as compensation.

Money Manager

Elevate the quality of your trading, Money managers trading pooled or individual client funds benefit from Sigma’s trading and administrative tools and services.

With preferential rating access to Sigma’s research staff, sophisticated trading platform and reporting tools, Sigma’s money manager solution is one of the most competitive in the marketplace.

Sigma provides a dedicated team of account management specialists to provide ongoing back-office support, and help reduce your administrative responsibilities.

• The Basic Theories

Purchasing Power Parity

The PPP theory states that exchange rates are determined by the relative prices of similar baskets of goods. Changes in inflation rates are expected to be offset by equal but opposite changes in the exchange rate. Take the classic example of hamburgers. If the burger costs $2.00 in the US and £1.00 in the UK, then according to PPP, the £-$ exchange rate must be 2 dollars per one British pound.

If the prevailing market exchange rate is $1.7 per British pound, then the pound is said to be undervalued and the dollar overvalued. The theory then postulates that the two currencies will eventually move towards the 2:1 relation.

PPP's major weakness is that it assumes goods are easily tradable, with no costs to trade such as tariffs, quotas or taxes. Another weakness is that it applies only for goods and ignores services, where room for differences in value is significant. Furthermore, there are several factors besides inflation and interest rate differentials impacting exchange rates, such as economic releases/reports, asset markets and political developments. There was little empirical evidence of the effectiveness of PPP prior to the 1990s. Thereafter, PPP was seen to have worked only in the long term (3-5 years) when prices eventually correct towards parity.

• Stop Order Execution

Volatile market conditions can result in prices gapping, which may prevent the execution of stop orders (sell stop, buy stop, stop loss) at the price you initially requested. However, our dealers strive to execute all stop orders at the price, or failing that, at the best attainable rate the market allows.

• Lot Types

Sigma Forex has generated an ultimate account type that allow you to trade Standard, Mini and Micro lot in the same account which is Sigma Account to make it more simple and easy for traders.

• Multi Currency Denomination

Sigma offers the ability to set-up accounts denominated in the following currencies:

• United States dollar (USD)
• Euro (EUR)
• Great Britain pound (GBP)
• Australian dollar (AUD)
• Swiss Frank (CHF)

There is no minimum deposit for opening an account, in order to review the spreads, pip value & margin requirement choose the required pair, leverage & the lot type.

Forex Vs. Futures:

Futures is Exchange traded contracts are not issued like securities, but they are "created" when one party buys (goes long) a contract from another party (who goes short). In the beginning there are no contracts, so the number of long contracts must equal the number of short contracts. This always goes through the exchange, which means that the exchange is the counter party for all trades. However, the exchange does not take any net positions. In this way clients do not know with whom they have ultimately traded. Compare this with securities, in which an issuer issues the security. After that, it is a legal entity that is traded independently of the issuer. Even if the issuer buys back some securities, they still exist. Only if they are legally canceled can they disappear.

White Label

Forex White Label Program

As your partner, our goal is to support you through the planning and launch phases and beyond to ensure a mutually successful and long-term business relationship
Establish your brand in the Forex Brokerage industry.

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Take Bonus

Due to increasing demand on our enhanced live accounts, SigmaForex.com is extending its live accounts bonus program till 31 December 2008

Don not waste your chance!

SigmaForex.com is pleased to have you as a loyal client, and we would like to thank you for your continued support and interest in our trading programs.

As appreciation and gratitude we are offering you a chance to join our bonus program and have up to 5% bonus credit on your deposit.
All current and new clients are eligible to participate in this program. Qualifying clients earn up to 5% bonus credit on all new deposits received and credited to the account before the close of business day 31 December 2008.

The bonus credit to the account is effective when the new deposit is credited and is subject to the client opening at least 100 lots and closing the trades on or before the close of business day 31 December 2008.

If you have any questions, please feel free to contact our customers care department at

SigmaForex.com, in its sole discretion, will determine if a client's deposit and trading activity entitles it to retain the bonus credit.

Good luck

• Open Live Account

Sigma devotes serious effort to serve the emerging retail segment of the Forex community. Its commitment to providing an excellent customer service, innovative currency trading technology, and dealing practices, establishes Sigma as a notable force that traders look forward to for an advanced Forex charting, Forex news, and fund safety.

Customers funds deposited with Sigma, are held and maintained separately in separated trading accounts at our partner banks. Sigma also provides its customers a variety of account plans, and services to choose from when creating or adjusting a profile.

The professionals at Sigma are dedicated to providing the guidance you need to accomplish your investment objectives.

• Asset Market Model

The explosion in trading of financial assets (stocks and bonds) has reshaped the way analysts and traders look at currencies. Economic variables such as growth, inflation, and productivity are no longer the only drivers of currency movements. The proportion of foreign exchange transactions stemming from cross border-trading of financial assets has dwarfed the extent of currency transactions generated from trading in goods and services. The asset market approach views currencies as asset prices traded in an efficient financial market. Consequently, currencies are increasingly demonstrating a strong correlation with asset markets, particularly equities.

• Understanding Technical Analysis

The two primary approaches of analyzing currency markets are fundamental analysis and technical analysis. Fundamentals focus on financial and economic theories, as well as political developments to determine forces of supply and demand. One clear point of distinction between fundamentals and technicals is that fundamental analysis studies the causes of market movements, while technical analysis studies the effects of market movements.

Technical analysis examines past price and volume data to forecast future price movements. This type of analysis focuses on the formation of charts and formulae to capture major and minor trends, identify buying/selling opportunities, and assessing the extent of market turnarounds. Depending upon your time horizon, you could use technical analysis on an intraday basis (5-minute, 15 minute, hourly), weekly or monthly basis.

Sigma devotes serious effort to serve the emerging retail segment of the Forex community. Its commitment to providing an excellent customer service, innovative currency trading technology, and dealing practices, establishes Sigma as a notable force that traders look forward to for an advanced Forex charting, Forex news, and fund safety.

Customers funds deposited with Sigma, are held and maintained separately in separated trading accounts at our partner banks. Sigma also provides its customers a variety of account plans, and services to choose from when creating or adjusting a profile.

The professionals at Sigma are dedicated to providing the guidance you need to accomplish your investment objectives.