Currency option

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Currency option

An option to buy or sell a foreign currency.

Currency Option

An option contract in which the underlying asset is a foreign currency. The option gives the holder the right but not the obligation to buy (for a call) or sell (for a put) a set amount of the currency at a certain exchange rate on or before the expiration date. They are largely used when international corporations wish to hedge against the possibility of adverse movements in foreign exchange rates.
References in periodicals archive ?
The trading volume in over the counter foreign currency options (which are not traded on the stock exchange) totaled about $5.
7, few tax practitioners would have suggested that over-the-counter (OTC) foreign currency options on "major" currencies should be accorded Sec.
The court rejected this argument, stating the inclusion of some options but not foreign currency options implied the opposite, that Congress had not intended to include it.
The primary subject matter of this case is hedging foreign currency exchange rate risk using foreign currency options.
Topics stressed are model building, inference, option pricing, and realized variation, including process, exchange rates, volatility modeling, Bayesian analysis, and foreign currency options.
Risk strategies: Monsanto handles market risk related to interest foreign currency rates and commodity prices by engaging in various derivative transactions, including foreign currency forward exchange contracts and foreign currency options
Some of the products available from the Commonwealth Bank include Forward Exchange Contracts, a 24-hour Market Watch service, Foreign Currency Options, or Flexible Forward Contracts.
Our paper shows that Basle's current simplified model for foreign currency options does not systematically relate capital requirements to market risk.
22) In other words, Dunn engaged in foreign currency options in the off-exchange or OTC markets.
TABULAR DATA OMITTED This would be a significant roll-back of the current rules, which permit deferrals of gains and losses on qualifying hedges involving interest rate and commodity futures (SFAS 80) and on purchased foreign currency options (EITF Issue No.
Taxpayers identify transactions as hedges to escape mark-to-market treatment that applies to futures contracts, most exchange options and foreign currency options.
Foreign currency options allow users to gain from fluctuations in exchange rates while limiting the risk of adverse currency movements.

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