A put option is exactly the opposite of a call option. The option holder is hoping the underlying currency spot price is lower than the option strike price so he can sell the currency at the higher strike price and buy it back more cheaply in the market. If the put option is at-the-money (strike price the same as the market spot price) the option holder will let the option expire worthless and lose the premium that was paid.
Definition of an Option
The buyer of an FX alternative has the hold together, on the other hand not the Debt, to shop for or sell the alternative at the agreed strike cost (spot payment of the underlying currency) on or before a particular period (expiration period) in the outlook. The alternative buyer pays the alternative seller a premium for this go.
At- the-Money Call Option
The holder of a ring choice Testament be hoping that before or on the expiration day the bazaar spot price of the underlying currency will be higher than the strike price (in the money) so that the option holder can exercise the option and receive currency cheaper than the market spot price and therefore sell into the market at a profit. If the market spot price is the same as the option strike price on or before the expiration date, the option is considered to be at-the-money and the option holder will let the option expire worthless. The option holder's only cost was then the initial premium.
At-the-Money Put Option
An FX options underlying asset is Non-native currency.An ATM FX alternative is a forex choice which is at-the-money. This essentially way that the strike fee of a phone or lay alternative is the twin as the spot cost of the underlying currency.
