An FX Option gives the buyer the right, but not the obligation, to buy or sell a specific quantity of one foreign currency in exchange for another at a fixed exercise price. They can be either American or European in style. The buyer pays a premium to the option seller.
ICAP’s FX options business results from the integration of the businesses of Tradition-ICAP and Volbroker. Tradition-ICAP was formed in July 2000 by the merger of the OTC Currency Options Divisions of TFS and ICAP plc. This merger created the leading FX options voice broker. Volbroker was created by a bank owned consortium in 2000 and has become the foremost electronic platform for the FX options market.
The integration of Tradition-ICAP and Volbroker has created an interdealer broking consortium which combines the strength of voice brokered liquidity together with the market leading FX options electronic broking platform. Tradition-ICAP is consistently ranked first place in FX options by Risk magazine in a poll of market participants.
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