Pricing currency options

Options and Derivatives
Full-size image (134 K) Options and Derivatives
What is an Option?
An Option grants the buyer the right, but not the obligation to buy or sell the underlying asset at an agreed price (strike) on a set date or within a period of time in the future.
A Call Option grants the buyer the right to buy the asset, and a Put Option grants the right to sell the asset. When you buy a Call on a Currency, you are automatically buying a Put on the other currency in the currency pair, and vice versa.
What is an OTC Trade?
Over the Counter (OTC) products are products that are not traded on an Exchange, instead they are traded between Counterparties. Whereas Exchange Traded products are standardized, OTC products are customizable to suit the needs of the Counterparties.
When can I exercise the Option?
That depends on the style of the Option. We quote European option only. American Options can be exercised on any date up to and including the expiry date. European Options can only be exercised on the expiry date.
How do I exercise an Option, and what happens?
To exercise an Option, you have to inform Monex Investindo Futures that you intend to exercise the Option on that day. On Exercise, the investor will receive a margined Forex position as specified by the

Source: Monex Investindo Futures

Wiley Currency Derivatives: Pricing Theory, Exotic Options, and Hedging Applications (Wiley Series in Financial Engineering)
Book (Wiley)

You might also like:

Lutts Recommends Gold and Emerging-Market Debt, Stocks
Lutts Recommends Gold and Emerging-Market Debt, Stocks
Indexed Annuities - Indices: Domestic & Foreign
Indexed Annuities - Indices: Domestic & Foreign
Pimco Says Brazil Local Debt Among Most Attractive: Video
Pimco Says Brazil Local Debt Among Most Attractive: Video

The dollar is in big trouble...thanks Obama....

2009-08-18 20:57:12 by righteye

Aug. 19 (Bloomberg) -- Pacific Investment Management Co., which runs the world’s biggest bond fund, said the dollar will weaken as the swelling U.S. deficit erodes its status as a reserve currency.
The dollar will drop the most against emerging-market counterparts, Curtis A. Mewbourne, a Pimco portfolio manager, wrote in a report on the company’s Web site.
“Investors should consider whether it makes sense to take advantage of any periods of U.S. dollar strength to diversify their currency exposure,” Mewbourne wrote in his August Emerging Markets Watch report.
The Dollar Index, which tracks the greenback against a basket of currencies, has fallen 12 percent from this year’s high in March. China, the world’s largest holder of foreign- currency reserves, and Russia...

Allianz PIMCO Emerging Markets Bond Fund: erneut mit Wertzuwachs im April …  — Finanzen.net
Frankfurt (www.fondscheck.de) - Der Allianz PIMCO Emerging Markets Bond Fund - A - EUR engagiert sich vorwiegend am Markt für Anleihen aus Schwellenländern, so die Analysten von Allianz Global Investors. Fremdwährungsengagements, die über 20% des …

Emerging Market Bond Funds  — Forbes
Consider the PIMCO Emerging Markets Bond Fund (PEMDX/PEBIX) as an illustration. PEMDX or PEBIX has a turnover rate of 100%. The two different ticker symbols represent two different share classes. PEMDX is the over-the-counter version.

Pricing currency options in the presence of time-varying volatility and non-normalities [An article from: Journal of Multinational Financial Management]
Book (Elsevier)
FED QE3 Coming US Equities Reach 2012 High, China and India Slow Euro Dysfunctional
FED QE3 Coming US Equities Reach 2012 High, China and India Slow Euro Dysfunctional
JPMorgans Lewis Favors High-Yield Emerging Market Debt
JPMorgans Lewis Favors High-Yield Emerging Market Debt
Pimco: Feds Language Critical as `New QE3Gross Says!
Pimco: Feds Language Critical as `New QE3...Gross Says!
Wiley Currency Derivatives: Pricing Theory, Exotic Options, and Hedging Applications (Wiley Series in Financial Engineering)
eBooks (Wiley)

Related posts:

  1. Trading currency options
  2. What are currency options?
  3. Trade currency options
  4. What is a currency option?