Hi, I am a bit unsure about CALL or PUT Am I understanding correctly? 1. For OTC, in example 1, we receive USD which is the counter currency rather than the base currency---sell USD, therefore, we buy the PUT option 2. For traded option, as it is not tailored as OTC. In example 3(the next video), We look at the Contract currency GEP, in this scenario, we need sell GEP and buy USD as we need to pay supplier in USD. --- we sell GEP, therefore, we buy the PUT option
Just remember that if you are selling contract currency, you will need a put option. And if you are buying the contract currency you will be needing a call option. This is the same rule as with trading futures.
Hi,
I am a bit unsure about CALL or PUT
Am I understanding correctly?
1. For OTC, in example 1, we receive USD which is the counter currency rather than the base currency---sell USD, therefore, we buy the PUT option
2. For traded option, as it is not tailored as OTC. In example 3(the next video), We look at the Contract currency GEP, in this scenario, we need sell GEP and buy USD as we need to pay supplier in USD. --- we sell GEP, therefore, we buy the PUT option
Just remember that if you are selling contract currency, you will need a put option. And if you are buying the contract currency you will be needing a call option. This is the same rule as with trading futures.