After studying this chapter, you should be able to:
Describe currency options and understand their relevance.
Identify different forms of options.
Explain the payoff profiles of standard options.
Understand the concept of option value.
Discuss the determinants of currency option price.
Analyse options trading strategies.
Explain the applications of options pricing models.
Discuss option Greeks.
Define options on futures.
Distinguish between forwards and options, and analyse when each of these is appropriate.
Discuss options trading in India.
Options are versatile and flexible hedging tools widely used by traders, investors, and speculators. There are different kinds of options, ...