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Currency options

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Currency options

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • May 23, 2018 at 5:42 am #453479
    richardscully
    Member
    • Topics: 197
    • Replies: 145
    • ☆☆☆

    Dear Sir

    sorry to bother you again

    I understand a call option is the right to buy and a put option is the right to sell.

    I do not understand buying AND selling of a call option and selling AND buying a put option, I thought a call option was buying and a put option was selling.
    It is like a haze and I can sometimes muddle through it correctly and sometimes not (usually in the exam). Is there a hard and fast rule for all of the above

    May 23, 2018 at 8:19 am #453510
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54724
    • ☆☆☆☆☆

    The option is the right to buy or sell at a fixed price on a future date.

    However you have to pay for that right. You buy the option (and pay a premium) and that then entitles you then to buy or sell the share/currency/futures at a fixed price on a future date.

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Viewing 2 posts - 1 through 2 (of 2 total)
  • The topic ‘Currency options’ is closed to new replies.

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