PROBLEM OF FORWARD CONTRACT

1
CURRENCY OPTION DERIVATIVE

• PROBLEM OF FORWARD CONTRACT
• DEFINITION OF OPTION CONTRACT BENEFIT OVER
  FORWARD CONTRACT
• OPTION TERMINOLOGIES
• - CALL OPTION
• - PUT OPTION
• - BUYER SELLER OF OPTION
• - PUT OPTION
• - AMERICAN EUROPEAN OPTION

2
CURRENCY OPTION DERIVATIVE

• - VALUE OF OPTION AT MONEY, IN MONEY OUT
  MONEY
• - PROFIT PROFILE OF CALL PUT OPTION
• USD/INR EXCHANGE TRADED OPTION CONTRACT CURRENCY
  AMOUNT, CONTRACTS MATURITIES, RATES
  SETTLEMENT
• HEDGING WITH OPTION EXPORT IMPORT TRANSACTIONS
• SPECULATION WITH OPTIONS

3
CURRENCY OPTION DERIVATIVE

• - STRATEGIES WITH OPTIONS
• - ZERO COST OPTION
• - BARRIER OPTION
• - STRADLES (BUY CALL PUT AT SAME RATE)
• - STRANGLE (BUY CALL PUT AT DIFFERENT RATES)
• - SPREADS (TWO OR MORE OPTION OF SAME TYPE)