Currency put options example x and y


For this right, a premium is paid to the seller, the amount of which varies depending on the number of contracts if the option is bought on an exchange, or on optiond nominal amount of the option if it is done on the over-the-counter market. Please help improve this article by adding citations to reliable sources. Foreign exchange options are a relative unknown in the retail currency world. Currency put options, like other put options, are considered bearish, and indicate a belief on the part of the investor that the currency will decline in value.

By purchasing a currency put option, an investor can ensure a guaranteed return on their currency investment even if the value of the currency falls sharply during the duration of the currency put option contract. Therefore, you become the buyer of currency and have no option. The buyer of otpions put option has the right to sell currency to you. Kalons, Inc. is a U.S.-based MNC that frequently imports raw materials from Dxample.

Kalons is typically invoiced for these goods in Canadian dollars and is concerned that the Canadian dollar will appreciate in cirrency near future.




Example x put options currency y and

Currency put options example x and y