4 Yield Foreign Options Flashcards
1
Q
Yeild Based Options
Buy
Sell
A
protection
increase income
2
Q
bearish on prices
? on yeilds
A
bullish
3
Q
currancies
US up then others are
US down then others are
A
down
up
4
Q
American EPIC
A
American Exporters buy puts
American Importers buy calls
5
Q
Calculate the price for call
Canadian dollar (50,000) Oct 75 call @ .60
A
6
Q
Japanese Yen
quoted as ?? of American
.52 = ?
A
hundredths of American
put 2 zeros in front
.52 = .0052
7
Q
Index Option
A
no stock trades hands based on cash
8
Q
Index Option
investor buys 1 SPX Mar 600 call @ 9
when index at 590
what is gain or loss when exercised w/
SPX closing @ 612
A
- 9
+ 12
= +3 x 100 = $300 gain
9
Q
broad based indes
narrow based index
A
no focus on paticular industry (ie Dow)
industry specific (ie Utility index)
