EUR/USD FX Forwards After The Q1 T-Bill Deluge
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A Currency Options CO Contract is an agreement that currency futures and options pdf investors the right, but not the obligation, to buy or sell a Currency Futures Contract on a future date at a currency futures and options pdf price. COs give investors the right to buy the underlying Currency Future. Put Options give them the right to sell it.
Investors are required to pay a premium for choice of exercising the Option or not. The premium is calculated based on the volatility of the underlying exchange rate. Investors, importers, exporters and travellers can use COs to hedge themselves against movements in the exchange rate. Speculators use COs to make a profit on short-term movements in prices. Arbitrageurs use them to profit from the price differentials of similar products in different markets. Some investors also use COs to enhance the overall performance of a portfolio over the long term.
Register as a client with an authorised JSE Currency Derivatives memberdeposit the required initial margin and sell or currency futures and options pdf according to your needs.
Turn on more accessible mode. Turn off more accessible mode. Currency Options A Currency Options CO Contract is an agreement that gives investors the right, currency futures and options pdf not the obligation, to buy or sell a Currency Futures Contract on a future date at a fixed price. Who is this for? Features Limit losses to the premium paid as investors are not obliged to buy or sell the CO underlying the Option on expiry. Provide protection against exchange rate fluctuations in investment portfolios.
Allow the holder to fix prices for import and export purposes. Allow investors to take advantage of price movements in the exchange rate because they can take a view as to whether the exchange rate will strengthen or weaken. Standardised contracts traded on a regulated exchange eliminate counterparty risk. Investors may lose the currency futures and options pdf paid if they choose not to exercise the Option. This means that investors may be required to make additional payments on a daily basis should their initial margin payment become insufficient because of movements in the underlying currency.
How to get it Register as a client with an authorised JSE Currency Derivatives memberdeposit the required initial margin and sell or buy according to your needs. Qualifying factors No limits apply to individuals, foreigners or corporate entities. South African pension funds, collective investment schemes, financial services providers and insurers are subject to their foreign portfolio allowances.