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Hi John,
Sorry to ask the question again after you closed it,i’ve watched your lectures but the confusion was created by the ACCA article in which it states that it will be put option as the contract size is in euro.
Kindly clarify.
And sorry i keep calling you mike by mistake,ive got to stop doing that most of the time im studying from both so sometimes it can get a bit foggy who im asking the question.
Best Regards,
FurqanIt will be a put option.
They are a UK company receiving Euros.
Therefore they will need to sell Euros (to convert to GBP), and so need a put option on Euros.
The contact size is quoted in Euros, so they need to buy a put option because they want the right to sell Euros.
(Had the contract size been quoted in GBP then they would buy a call option because the want the right to buy GBP)
This is exactly as I explain in the lectures 🙂
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