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currency option

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › currency option

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
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    Posts
  • November 14, 2020 at 1:35 am #594952
    adamliew
    Member
    • Topics: 20
    • Replies: 11
    • ☆

    John,

    in trade option, from the table, that are few available exercise price to choose, however, how and which exercise price will chosen, i know if the exercise price which is favourable, but sometimes, when i doing the question, i am difficult to choose which exercise need to be use.
    i know calculate the option contract number, which call or put, but when come to the which exercise price, it is harder, because sometimes the question is home currency same or home currency different, and receipt or payment make it confuse me alot when choose the exercise price.

    November 14, 2020 at 10:23 am #594979
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54655
    • ☆☆☆☆☆

    There is no ‘best’ exercise price either in real life or in the exam.

    Ideally in the exam you should show the result using each of the exercise prices available (and usually these days there are only 2).

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