A Forex ladder option provides certain extra benefits upon the option holder. Exotic options such as the ladder are a bit more expensive to purchase because they come with a lot of useful additional benefits. Here are the terms and options you must consider:
- pricing (where the main term is a currency pair)
- vanilla call (the option price derives from the combination of its intrinsic value – current price minus strike service price)
- ladder call (it differs from the vanilla call with a couple of intermediate strike prices)
- profit calculation (the price is a locked-in feature of a ladder option)
Remember that the purchaser of this option has the right but no obligation to buy or sell a stated asset.