Log in Sign up.

How can we help? What is your email?

Upgrade to remove ads. S business and trading markets. Options on Foreign Currencies.

NASDAQ FX Options Product Specifications

Australian dollar, Canadian dollar, British pound, Swiss franc, Euro Contract size: Japanese yen Contract size: Trades Settle Next Business Day. Exercise Settlement in Cash. All options are exchange traded - stock options, index options, foreign currency options and debt options.

However, the trading of foreign currencies themselves takes place over-the-counter in the "interbank" market. Settlement Type for Foreign Currency Option Trading. Trades of foreign currency options settle either cash same day or regular way next business day. Do not confuse this with trades of foreign currencies. Trades of foreign currencies settle either "spot" 1 or 2 business day settlement - the more actively traded currencies settle in 1 day; less actively traded currencies settle in 2 days or forward a mutually agreed date in the future.

Foreign Currency Option Contracts Issued and Guaranteed. A contract trades "at parity" when the premium equals intrinsic value.

Nasdaq FX Options - Nasdaq

Canadian Dollar Oct 81 Call 3 when the Canadian Dollar closes at 84 The CD Oct 81 Call has intrinsic value of 3 since the market is Since the premium is 3, the contract is at parity. Foreign Currency Options Expiration.

Foreign currency options, which are traded on the PHLX, have the same expiration as all of the other listed options - the Saturday following the Third Friday of the month at Hedging Using Foreign Currency Options.

Foreign currency options would be used by a corporation to hedge exposure to currency exchange risk. This would be applicable to companies that import or export goods; or companies that have multi-national operations. For example, an exporter that will be paid in Japanese Yen when goods are delivered can hedge the risk of a fall in the Yen by purchasing Yen puts.

As another example, a U. Again, to hedge, the U. Companies whose business occurs entirely in the United States would not be exposed to such risks - and would include utilities, sewage disposal firms, and railroads. Tool and Die companies export a large portion of their output, and would be concerned with currency exchange risk.