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| A Currency Options Primer |
A quick and concise guide to currency options An
understanding of currency options is essential for those working in investment
and foreign exchange. A Currency Options Primer sets out to give readers a
clear guide to how the currency option market functions, offering practical
advice on mastering the necessary components and concepts for fully
understanding the workings of this market.
Table of Content
1 Introduction.
2 The Foreign Exchange Market.
3 A Brief History of the Market.
4 Market Overview.
6 Roles Played.
7 Purposes.
8 Applications of Currency Options.
9 Users of Currency Options.
10 Definitions and Terminology.
10.1 Call
option.
10.2 Put
option.
10.3
Parties and the risks involved.
10.4
Currency option risk/reward perception.
10.5
Currency or dollar call or put option?
10.6
Strike price and strike selection.
10.7
Exercising options.
10.8
American and European style options.
10.9 In-,
at- or out-of-the-money.
10.10 The
premium.
10.11
Volatility.
10.12
Break-even.
11 The Currency Option Concept.
12 The Currency Options Market.
13 Option Pricing Theories.
13.1 Basic properties.
13.2 Theoretical valuation.
13.3 Black-Scholes model.
13.4 Examples of other models.
13.5 Pricing without a computer model.13.6
Educated guess.
13.7 The price of an option.
13.8 Option premium profile.
13.9 Time value and intrinsic value.1
3.10 Time to expiry.
13.11 Volatility.
13.12 Strike price and forward rates.
13.13 Interest rates.
13.14 American vs European.
13.15 Concluding remarks.
14 The Greeks.
