If instead they take the profit in GBP (by selling the USD on the spot market) this amounts to 1. In this case the pre- agreed exchange rate, or strike price, is 2. For example, a GBPUSD contract could give the owner the right to sell ? December 3. The global market for exchange- traded currency options was notionally valued by the Bank for International Settlements at $1. Most trading is over the counter (OTC) and is lightly regulated, but a fraction is traded on exchanges like the International Securities Exchange, Philadelphia Stock Exchange, or the Chicago Mercantile Exchange for options on futures contracts. In finance, a foreign exchange option (commonly shortened to just FX option or currency option) is a derivative financial instrument that gives the right but not the obligation to exchange money denominated in one currency into another currency at a pre- agreed exchange rate on a specified date.
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