【正文】
time period. 16 CURRENCY OPTIONS 5. Types of Currency Options: a. American exercise date may occur any time up to the expiration date. b. European exercise date occurs only at the expiration date. 17 CURRENCY OPTIONS 7. Exercise Price a. Sometimes known as the strike price. b. the exchange rate at which the option holder can buy or sell the contracted currency. 18 CURRENCY OPTIONS 8. Status of an option a. Inthemoney Call: Spot strike Put: Spot strike b. Outofthemoney Call: Spot strike Put: Spot strike c. Atthemoney Spot = the strike 19 CURRENCY OPTIONS 9. The premium: the price of an option that the writer charges the buyer. 20 CURRENCY OPTIONS B. When to Use Currency Options 1. For the firm hedging foreign exchange risk a. With sizable unrealized gains. b. With foreign currency flows forthing. 21 CURRENCY OPTIONS 2. For speculators