Chapter 7 IBF301 by Vu Thi Thuy Linh https://padlet.com/linhvtths170882/a67efdky0bj3xt3v en-us 2023-10-29 11:37:09 UTC 2023-10-29 12:40:59 UTC hello@padlet.com Future and Options on Foreign Exchange linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767539938 2023-10-29 11:38:39 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767539938 Futures Contracts: Some Preliminaries linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767540131 A futures contract is like a forward contract:

- It specifies that a certain currency will be exchanged for another at a specified time in the future at prices specified today.

A futures contract is different from a forward contract:

- Futures are standardized contracts trading on organized exchanges with daily resettlement through a clearinghouse.

]]> 2023-10-29 11:39:07 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767540131 Currency Futures Markets linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767540277 The Chicago Mercantile Exchange (CME, from 1972) is by far the largest.

Others include:

- The Intercontinental Exchange (ICE) Futures U.S (formerly the New York Board of Trade)

- The Mexican Derivatives Exchange

- The BM&F Exchange in Brazil

- The Budapest Commodity Exchange

- The Derivatives Market Division of the Korean Exchange

]]> 2023-10-29 11:39:26 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767540277 Basic Currency Futures Relationships linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767540390 Open Interest refers to the number of contracts outstanding for a particular delivery month.

Open interest is a good proxy for demand for a contract.

]]> 2023-10-29 11:39:40 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767540390 Options Contracts: Some Preliminaries linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767540466 2023-10-29 11:39:51 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767540466 Currency Options Markets linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767540530

  • Are an option on a currency futures contract.

  • Exercise of a currency futures option results in a long futures position for the holder of a call or the writer of a put.

  • Exercise of a currency futures option results in a short futures position for the seller of a call or the buyer of a put.

  • If the futures position is not offset prior to its expiration, foreign currency will change hands.

    • ]]>     2023-10-29 11:40:01 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767540530     Basic Option-Pricing Relationships at Expiration linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767540630 2023-10-29 11:40:17 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767540630 linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767549967 2023-10-29 12:02:07 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767549967 linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767550072 2023-10-29 12:02:22 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767550072 linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767550155 2023-10-29 12:02:36 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767550155 linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767558577 2023-10-29 12:20:48 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767558577 linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767558904 Calls vs. Puts

    ]]>     2023-10-29 12:21:28 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767558904     linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767559144 Call options gives the holder the right, but not the obligation, to buy a given quantity of some asset at some time in the future, at prices agreed upon today.

    ]]>     2023-10-29 12:22:00 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767559144     linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767559302 Put options gives the holder the right, but not the obligation, to sell a given quantity of some asset at some time in the future, at prices agreed upon today.

    ]]>     2023-10-29 12:22:23 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767559302     linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767560394 2023-10-29 12:24:42 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767560394 linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767560526 2023-10-29 12:25:02 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767560526 American Option Pricing Relationships linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767563757 2023-10-29 12:31:50 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767563757 European Option Pricing Relationships linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767564972 2023-10-29 12:34:36 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767564972 linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767566183 2023-10-29 12:36:15 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767566183 linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767566281 2023-10-29 12:36:27 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767566281 Variables Affect European Option Pricing linhvtths170882 https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767567367 1. The larger (smaller) is St

    2. The smaller (larger) is E

    3. The smaller (larger) is ri

    4. The larger (smaller) is r$

    5. The larger (smaller) r$ is relative to ri

    ]]>     2023-10-29 12:38:55 UTC https://padlet.com/linhvtths170882/a67efdky0bj3xt3v/wish/2767567367