In case of currency options , please confirm if following is the correct way of deciding Exercise price :-
1) In case of Put options (Sell) , select the exercise price with Highest Net Receipt ( Exercise price - Premium paid).
2) In case of Call Options (Buy) , select the exercise price with Lowest "Total Payment" (Exercise price + premium paid)
Sir, please help me with query as early as possible.
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Currency Option - Deciding exercise price
sir please reply. I have my exam in next 3 hours.
sorry for the last moment queries. But please help asap
5y ago#2Sorry, but we do not spend all night sitting in front of the computer - we aim always to answer within 24 hours.
There is no such things as a 'best' exercise price - different exercise prices fix different limits, but have different premium costs.
In the exam you are expected to show the results for each of the available exercise prices and then discuss.
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