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 ?
I had flagged the Turkish lira as a strategic short when skews in London foreign exchange option markets suggested that the smart money was bailing out of the lira.
Alternatively, they can select a foreign exchange option that allows them to guarantee themselves a minimum exchange rate whilst benefiting from any improvements.
A foreign exchange option is a contract that allows the holder to purchase or sell a designated quantity of foreign currency at a specified price or exchange rate up to a specified date.
RMB/foreign exchange options trading means RMB/foreign exchange option contracts entered into between banks and customers, where the buyer has the right to deal in foreign exchange options in the agreed currency and direction and at the agreed price and amount to the other party in a certain period in future or at a specified time, by paying an option premium.
SD-CM will also enable the pricing and risk management of commodity options in any base currency through a link to SD-FX(TM), the foreign exchange option market's benchmark pricing system.
The official is accused of manipulating foreign exchange options in advance of an exceptionally large trade by the Palo Alto, California-based Hewlett-Packard Company (HP) in 2011.
Moreover, in the foreign exchange options market, the volatility priced into put and call option premia had become more balanced compared with end-March and with one year before.
His team works with clients to design effective hedging strategies, utilizing foreign exchange options and cross-currency swaps.
From that point you can build a hedging strategy that combines forward foreign exchange contracts and foreign exchange options to provide surety, but also allow flexibility to benefit from future foreign exchange moves.
M2 EQUITYBITES-September 8, 2014--CME Group sets record for foreign exchange options trading
BANKING AND CREDIT NEWS-September 8, 2014--CME Group sets record for foreign exchange options trading
The bourse plans to introduce index options in the second quarter of 2013 and foreign exchange options will start trading in 2013, Yilmaz said.

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