foreign currency option

Foreign currency option

An option that conveys the right (but not the obligation) to buy or sell a specified amount of foreign currency at a specified price within a specified time period.

Foreign Currency Option

An option contract giving the holder the right, but not the obligation, to buy (for a call) or sell (for a put) a futures contract on a certain currency with a given exchange rate on or before the expiration date (depending on the type of option). A foreign currency option effectively gives one the option to lock in an exchange rate on the currency in question if it moves in a favorable direction, while letting the option expire, worthless, if the currency does not move in the desired direction. This helps hedge an investor's foreign exchange risk.

foreign currency option

The right to buy (a call option) or to sell (a put option) a foreign currency futures contract at a fixed price until a specified date.
References in periodicals archive ?
The difference is that the foreign currency option is limited by time, as it does not close the position when the stop-loss price is hit yet still provides financial protection for you.
The petitioner, Michael Napoliello, entered into two pairs of offsetting long and short foreign currency option contracts held by an LLC of which he was the sole member.
K, pound exchange rate and decides to manage that risk by purchasing a foreign currency option directly from a U.
During the fourth quarter of 2002, the company recorded an unrealized loss on derivative instruments relating to foreign currency option contracts expiring in 2003 and entered into prior to year-end 2002.
31) When the district court ruled that Dunn's foreign currency option trades were subject to CFTC regulation, Dunn brought an interlocutory appeal to the Second Circuit.
Thus an unrealized loss existing on the date that a foreign currency option was transferred to a charity was disallowed.
Hantec Investment Holdings Limited provides leveraged foreign trading services in Hong Kong, including spot and forward foreign exchange dealing and over-the-counter foreign currency option trading in major freely convertible currencies.
Notice 2003-81 offsetting foreign currency option contracts: A party claims a loss on the assignment of a Sec.
Both cases involved foreign currency option spreads that the IRS deemed tax-avoidance shams.
Mylan has provided adjusted diluted cash EPS which excludes amortization expense, including that related to the acquisition of Matrix, and a gain on a deal-contingent foreign currency option contract which was entered into in order to mitigate foreign currency risk associated with the Euro-denominated purchase price related to the acquisition of Merck KGaA's generic business ("Merck Generics").
The Foreign Currency Option has been included in other assets at its fair value on December 31, 1998.
Before joining Vie, he was Senior Vice President and General Counsel of the Philadelphia Stock Exchange, advising the Exchange and its member firms of all rules and regulations regarding the Exchange's stock, stock option, index option, and foreign currency option market segments.

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