Currency options

A currency option is a contract which grants the holder the right, but not the obligation, to buy (Call Option) or sell (Put Option) a specific amount of one currency against payment of the agreed amount in another currency with settlement at a predetermined time in the future. For this right, a premium is paid to the broker.

Rights and obligations

  • The buyer of a Call Option acquires the right to buy the agreed volume of a given currency for the agreed strike price on the date of settlement.
  • The seller of a Call Option is obliged to sell, at the buyer’s demand (right exercised by the buyer), the agreed volume of said currency for the agreed strike price on the date of settlement.
  • The buyer of a Put Option acquires the right to sell the agreed volume of said currency for the agreed strike price on the date of settlement.
  • The seller of a Put Option is obliged to buy, at the buyer’s demand (right exercised by the buyer), the agreed volume of said currency for the agreed strike price on the date of settlement.

Product features

The buyer of the option has an unlimited opportunity to participate in the favourable market development.

A premium is paid by the buyer for the above option.

Product variants

  • European style - the option (right) may only be exercised on one specific day.
  • American style - the option (right) may be exercised at any time from the arrangement of the deal until the expiration date of the option. In such case, the deal is normally settled 2 banking days after exercise of the option.
  • Option strategies occur when 2 or more options are combined. The goal is to minimise costs and keep the benefits of options. The client normally buys one or more options and, concurrently, sells one or more options.