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Topic: Foreign exchange option

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	GENESIS FX CONTROLS
		The option is activated (knocked-in) and becomes capable of exercise or terminated (knocked-out) and becomes incapable of exercise as the option is moving out-of-the-money.
		The option is activated (knocked-in) and becomes capable of exercise or terminated (knocked-out) and becomes incapable of exercise as the option is moving further into-the-money.
		The option is cash settled at expiry by comparing the strike price with the average of a pre-determined series of spot rates, observed over the lifetime of the option.
	www.genesisny.net /Genesis/FX.html (3952 words)

	No Title
		In a two-currency market, the foreign exchange option symmetry is formalized in terms of changes of bases in a certain vector lattice of abstract payoffs with the change-of-basis operator being the one-dimensional Kelvin transform.
		In a multiple-currency market, the foreign exchange option symmetry is formalized in terms of differential geometry on graphs, that is, in terms of vector lattice bundles on graphs and connections on these bundles.
		The practical applications of the foreign exchange option symmetry range from the detection of a new type of true arbitrage to the detection of inconsistent models of foreign exchange option markets and the development of algorithms and software to value and analyze portfolios of foreign exchange options.
	www.uwm.edu /~gb/COLLOQUIA/01-10-12/01-10-12.html (263 words)

	The ABCs of the Foreign Exchange Market
		An exchange rate is simply the price of one currency in terms of another, and the market in which foreign currencies are exchanged is called the foreign exchange market.
		Exchange rates are quoted in two ways: the price of a foreign currency in terms of dollars (also called the American or direct terms), or the number of foreign-currency units per per unit of national currency (the British terms).
		Since the exchange rate is removed as an instrument of national macroeconomic policy, the authorities are forced to coordinate their policies on the international level.
	www.sba.oakland.edu /econpage/newsletters/IEL39TX2.HTM (2552 words)

	Fx Currency Option Glossary Forex Option Foreign Exchange Option Options Glossary
		A delta of.5 would indicate that the long option holder is long the equivalent of 1/2 of a futures currency contract.
		In exchange contracts, they are usually quoted in points of currency, whereas in the otc market, vanilla options are usually quoted in percentage of currency and/or volatility terms.
		Options lose value very slowly up until approximately 40 days or so, when the option begins to deteriorate at an increasing rate.
	www.forexdirectory.net /opgloss.html (1170 words)

	CFOS FX Forex Options Broker Online Forex Option Trading Currency Option Broker Platform
		The buyer, or holder, of a currency option has the choice to either sell the currency option contract prior to expiration, or he or she can choose to hold the currency option contract until expiration and exercise his or her right to take a position in the underlying spot currency.
		A change in a forex option's Delta can be influenced by a change in the underlying forex spot rate, a change in volatility, a change in the riskless interest rate of the underlying spot currencies or simply by the passage of time (nearing of the expiration date).
		The Gamma of an option increases as the option matures and decreases with volatility.
	www.cfosfx.com /forex_options_broker_online_trading.htm (4657 words)

	Foreign exchange option - Wikipedia, the free encyclopedia
		In finance, a foreign exchange option (commonly shortened to just FX option) is a derivative where the owner has the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.
		As in the Black-Scholes model for stock options and the Black model for certain interest rate options, the value of a european option on an FX rate is typically calculated by assuming that the rate follows a log-normal process.
		is the foreign currency risk-free interest rate (where domestic currency is the currency in which we obtain the value of the option; the formula also requires that FX rates - both strike and current spot be quoted in terms of "units of domestic currency per unit of foreign currency").
	en.wikipedia.org /wiki/Foreign_exchange_option (464 words)

	Giddy/Dufey: Managing Foreign Exchange Risk
		Exchange rates, interest rates and inflation rates are linked to one another through a classical set of relationships which have import for the nature of corporate foreign exchange risk.
		However, when analyzed carefully, it becomes apparent that the exchange risk results from a financial investment (the foreign currency receivable) or a foreign currency liability (the loan from a supplier) that is purely incidental to the underlying export or import transaction; it could have arisen in and of itself through independent foreign borrowing and lending.
		The importance of market-based forecasts for a determination of the foreign exchange exposure of the firm is that of a benchmark against which the economic consequences of deviations must be measured.
	pages.stern.nyu.edu /~igiddy/fxrisk.html (10983 words)

	Altria 2005 Annual Report - Financial Review - Management's Discussion and Analysis
		Foreign exchange rates: Altria Group, Inc. uses forward foreign exchange contracts and foreign currency options to mitigate its exposure to changes in exchange rates from third-party and intercompany actual and forecasted transactions.
		Anticipated transactions, foreign currency trade payables and receivables, and net investments in foreign subsidiaries, which the foregoing instruments are intended to hedge, were excluded from the computation.
		The values of foreign currency and commodity options do not change on a one-to-one basis with the underlying currency or commodity, and were valued accordingly in the VAR computation.
	www.altria.com /annualreport/ar2005/2005ar_07_0215.aspx (985 words)

	Giddy: Myths About Foreign Exchange Options (Site not responding. Last check: 2007-09-10)
		Marketers of options often claim that currency options are ideal instruments for hedging uncertain foreign currency cash flows, because the option gives the corporation the right to purchase or sell the foreign currency cash flow if a company wins an offshore contract say, but no obligation to do so if their bid is rejected.
		There is one kind of foreign currency cash flow for which the conventional currency option is perfectly suited: that is the rare exception where the probability of a company's foreign currency receipts or payments depends on the exchange rate.
		The reason is that the gain or loss from an option is a non-linear function of the currency's value, and that the relationship is not stable but varies with anticipated volatility, with time, and with the level of interest rates.
	pages.stern.nyu.edu /~igiddy/options.html (2269 words)

	Put option
		The most widely-known put option is the option to sell stock in a particular company.
		However options are traded on many other quantities both financial, such as interest rates (called an interest rate cap) or foreign exchange rates (see foreign exchange option[?]) and physical such as gold or crude oil.
		The value of a put option is closely related to that of a call option.
	www.ebroadcast.com.au /lookup/encyclopedia/pu/Put.html (350 words)

	HVB~BANK / Foreign exchange (Site not responding. Last check: 2007-09-10)
		Foreign exchange spot – the deal between the bank and the client for buying and sale of the currency at the negotiated rate.
		Foreign exchange forward – the deal which allows the parties to buy and sell the currency in the future at the rate agreed on the deal date.
		Foreign exchange option – the deal under which the buyer having paid to the seller the agreed premium acquires the right (but not an obligation) to buy (call) or sell (put) the currency in the future at the specified price (strike price).
	www.hvb.lt /en/content/viewitem/79 (447 words)

	St.George Bank - Foreign Currency Options
		Foreign Currency Options offer a wide range of methods for limiting the risks associated with foreign exchange exposure.
		Option holders can obtain 'Insurance' against adverse movements in exchange rates while maintaining the ability to profit should the exchange rate move favourably.
		Unlike a Forward Exchange Contract, where each party is always obliged to execute, an option contract enables you to take advantage of favourable exchange rate movements, by enabling you to buy/sell the currency at the prevailing rate of exchange rather than the strike price of the option.
	www.stgeorge.com.au /treasury/fx/options.asp?orc=corporate (688 words)

	Foundations of Foreign Exchange Option Symmetry
		This symmetry holds in a general foreign exchange market environment, and requires no assumptions to be made on the nature of a probability distribution for exchange rates.
		Contents: Foreign Exchange Option Symmetry in a General Market Environment: Introduction; Notations and Results; Applications; Validity of the Symmetry Relationships for European Options; Validity of the Symmetry Relationships for Bermudan and American Options; Validity of the Symmetry Relationships for Barrier Options; Continuous Strike Range Call and Put Options; Conclusion.
		Foreign Exchange Option Symmetry in a Multiple Currency General Market Environment: Introduction; Graph Theoretic Formalism for a Map of the World Foreign Exchange Market; Vector Bundle Formalism for Foreign Exchange Contingent Payoffs; Particular Bases for the Vector Lattice of all Abstract Payoffs; Foreign Exchange Abstract Options.
	www.ieslc.com /ffeos.html (562 words)

	Foreign exchange market - Wikipedia, the free encyclopedia
		Average daily global turnover in traditional foreign exchange market transactions totalled $2.7 trillion in April 2006 according to IFSL estimates based on semi-annual London, New York, Tokyo and Singapore Foreign Exchange Committee data.
		This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds.
		Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house.
	en.wikipedia.org /wiki/Foreign_exchange_market (3731 words)

	As a shareholder, how much information on the financial risks of the company can I reasonably expect? (Site not responding. Last check: 2007-09-10)
		However, the Company may not hedge certain foreign exchange transaction exposures that are immaterial either in terms of their minimal US dollar value or in terms of their high correlation with the US dollar.
		The Company also sells foreign exchange option contracts [maturity ranging from one to six months], in order to partially finance the purchase of foreign exchange option contracts used to hedge both firmly committed and certain other probable, but not firmly committed transactions.
		The duration of foreign exchange hedging instruments whether for firmly committed transactions or for probable, but not firmly committed transactions, currently does not exceed one year." The deferred gains and losses on the foreign exchange contracts were minimal.
	riskinstitute.ch /Question13.htm (1723 words)

	Foreign Futures and Options
		For information on foreign stock index or sovereign debt products not covered by the Backgrounder and on how to qualify such investments for sale in the United States, contact the Office of General Counsel.
		Foreign brokers in certain jurisdictions can apply to the National Futures Association (NFA) to offer foreign futures and options to U.S. customers under a Rule 30.10 exemption.
		General information on Rule 30.10 and a list of foreign regulatory or self-regulatory authorities that have been granted or have applied for Rule 30.10 relief are provided in the Backgrounder entitled Regulatory and Self-Regulatory Authorities That Have Received Exemptions Under CFTC Rule 30.10.
	www.cftc.gov /dea/deadcioforeignfuturesandoptions.htm (433 words)

	Foreign Exchange Foreign Currency Checks Bank Drafts Forward Contracts Futures
		Foreign Currency Checks (also known as bank drafts) are ideal if your price is agreed upon but the terms call for immediate payment.
		This is because banks have control over exchange rates, and therefore have a tendency to charge you more.
		Our foreign exchange traders are always available to provide sound advice and assistance in conducting your foreign exchange transactions safely and successfully.
	www.cambridgefx.com /online/foreign_exchange.html (571 words)

	Suncorp - Foreign Exchange - over $10,000
		A Forward Exchange Contract (FEC) is a binding agreement between two parties to exchange one currency for another on an agreed date (but not Value Spot) at an agreed rate.
		This gives the buyer the right (but no obligation) to exchange one currency for another at an agreed rate (the strike rate) on an agreed date (the expiry date).
		Foreign Exchange Products are issued by Suncorp-Metway Ltd ABN 66 010 831 722.
	www.suncorp.com.au /suncorp/business/treasury/foreign_exchange.html (236 words)

	How do Options Traders Look at Their Portfolios
		A foreign exchange option is an option on a forward because it gives the holder the right but not the obligation to exchange, in this case, $10 million US dollars for value February 2 at a rate (or strike price) of 1.5010.
		Because a foreign exchange option is an option on a forward, it is sensitive to changes in the interest rate differential, as well.
		When we have two options expiring on the same day with similar but not identical strikes, it can be very challenging to manage the net delta position at expiry if spot is near either of the two strikes.
	www.finpipe.com /look.htm (1147 words)

	Altria 2004 Annual Report - Note 18
		Altria Group, Inc. uses forward foreign exchange contracts and foreign currency options to mitigate its exposure to changes in exchange rates from third-party and intercompany actual and forecasted transactions.
		Included in the foreign currency aggregate notional amounts at December 31, 2004 and 2003, were $0.4 billion and $3.4 billion, respectively, of equal and offsetting foreign currency positions, which do not qualify as hedges and that will not result in any significant gain or loss.
		The unrealized gain (loss) relating to foreign currency swap agreements that do not qualify for hedge accounting treatment under U.S. GAAP was insignificant as of December 31, 2004 and 2003.
	www.altria.com /AnnualReport/ar2004/2004ar_06_0818.aspx (1054 words)

	TD Commercial Banking - Foreign Exchange - Foreign Currency Option
		It is a "hedging tool" that lets you exchange one currency for another on a given date, at a prearranged exchange rate (strike price), without obliging you to do so.
		You would purchase this option if you are concerned about an increase in the value of the Canadian dollar.
		As with any insurance, buying an option involves an up-front cost or "premium." This is determined by the strike price, the expiry date and the volatility of the specified currency at time of purchase.
	www.tdcommercialbanking.com /foreignx/products/foreign_c.jsp (578 words)

	SSRN-Foreign Exchange Option and Returns Based Correlation Forecasts: Evaluation and two Applications by Olli Castren, ...
		We compare option-implied correlation forecasts from a dataset consisting of over 10 years of daily data on over-the-counter (OTC) currency option prices to a set of return-based correlation measures and assess the relative quality of the correlation forecasts.
		We find that while the predictive power of implied correlation is not always superior to that of returns based correlations measures, it tends to provide the most consistent results across currencies.
		We then apply the correlation forecasts to two policyrelevant topics, to produce scenario analyses for the euro effective exchange rate index, and to analyse the impact on cross-currency co-movement of interventions on the JPY/USD exchange rate.
	papers.ssrn.com /sol3/papers.cfm?abstract_id=668247 (307 words)

	Currency Option and Foreign Exchange Resources (Site not responding. Last check: 2007-09-10)
		The Currency Library contains currency option and many other foreign exchange resources, including, charts, news, real-time quotes and analysis.
		The Market Reports are an ever-expanding group of reports that analyze the foreign exchange and interest rate markets.
		We maintain daily-updating inventories of content focusing on the foreign exchange, interest rate and index markets and this material is available to financial service firms, financial publishers and websites through partnership programs, which are explained in more detail below.
	www.thefinancials.com /currencies/WPAV-Currency-Option.html (321 words)

	London head-hunters stalk the best at wounded NAB - BusinessNews - www.smh.com.au
		Among the losses are believed to be the head of foreign exchange, the head of interbank foreign exchange sales, the head of risk management services, the head of European derivative marketing, the head of fixed-income sales (Europe) and global head of credit derivatives.
		Others believed to have left the London office include the head of foreign exchange forwards, the head of interbank foreign-exchange sales for Europe and Asia, the senior foreign exchange option structurer for Europe and North America, the foreign exchange option structurer, the senior foreign-exchange proprietary trader and senior foreign- exchange market strategist.
		Earlier this week it was revealed that the global foreign exchange division head, Peter Cunningham, had resigned.
	www.smh.com.au /articles/2004/03/18/1079199365511.html (500 words)

	FEA - Financial Analytics - Foreign Exchange
		The foreign exchange option market is one of the most active and advanced.
		Many corporate treasuries enter into both plain vanilla and exotic FX option instruments for precise hedging of their exposures.
		One of the main challenges faced by corporate treasuries is acquiring the in-house capability to mark-to-market their positions instead of having to rely on mark-to-market numbers provided by their dealers.
	www.fea.com /industries/financial/fx.asp (180 words)

	- Basics of foreign exchange option (Site not responding. Last check: 2007-09-10)
		A non-webster explanation, a broker is an individual or a company who carry out the requests according the investor's decisions.
		The most commonly know ways of Foreign exchange analysis - the technical side and the fundamental side.
		Of course, governments can try to control the price of their currency by placing a lot of currency in the market so that prices decrease or even buying extremely large amounts since this would result in rising currency prices.
	www.forex-made-ez.com /Basics-of--foreign-exchange-option.htm (249 words)

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