ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Business and Employment»
  • Business & Society

3 Reasons You Should Not Buy Iraqi Dinar Options

Updated on December 4, 2014

Iraqi Dinar Options

Iraqi Dinar Options - Buyer Beware
Iraqi Dinar Options - Buyer Beware | Source

Why Buyers Should Steer Clear Of Dinar Options

If you're reading this hub you are probably already familiar with what an Iraqi Dinar option is, however just in case you are not, an option is not buying physical currency but paying a fraction of the purchase price of Dinar to lock in the option to buy a larger quantity of Dinar for the next 30, 60, or 90 days.

Unlike purchasing paper money where you receive physical currency with an option you get nothing unles you excercise the option and purchase the Dinar at full price within the option time period. It should be noted where as a MIllion Dinar is typically about $1,000, in the case of options the option buy price is often substantially higher, sometimes as high as $1500 per Million.

People buy options either because they do not have the cash to buy physical currency or because they would prefer to leverage their money and buy more Dinar on option than they could in physical cash.

Below we are going to address 3 reasons why buyers should steer clear of Iraqi Dinar options...

  1. Your relying on the DInar dealer holding your Dinar for you, personally I would rather be in control of my own Dinar. Secondly your relying on a dealer not selling more options than physical Dinar they have in stock. Several dealers have gotten in trouble for overselling options many times more than what they actually have in physical stock. Should lots of buyers decide to excercise their option it's possible the Dinar dealer will not have enough Dinar to fill all existing option orders.
  2. You can't time markets. Some people have been holding Iraqi Dinar for almost a decade. Many buyers are buying optins thinking the Iraqi Dinar will go up in value during the short window of their option. As the saying goes you can't time markets, the odds of that happening are very low.
  3. Third and lastly if you don't excercise your option you have nothing to show for your money. Someone who bought $100 worth of Dinar a month after a year would have about 1.2 MIllion Dinar. SOmeone who spent $100 on options over the course of the past year would have nothing to show for their money. It should also be noted that the buy price on an option is typically a few hundred dollars higher than buying the Dinar outright so unless the DInar were to experience a big increase in value nobody would ever excercise an option in the first place.


Should you choose to buy options at the very least heavily vet your seller. Be sure to ask and understand all terms of the options contract. Be sure to ask if profits from an option can be used to purchase the option down the road or if you still have to come up with the physical cash. Lastly, be sure to ask if your options seller physically has in their possession Dinar to back all options and if they have had an inependent audit to prove so.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.