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in relation to options in the currency and interest i have understood when to buy a call and when to buy a put, sell a call and put, and all the rest of the points … i have, however, not understood when to exercise the options and when not too and what difference it will make on the answers…….. the whole concept eludes me and it would we very kind of you if you would explain it to me in a simple way……..i read the bpp book, but its all to complicated in it…….any relevant website would be amazing…..thank you
The beauty of options is that when it comes to the date of the transaction then you have the choice of using the option or not using it.
So……suppose you have the option to exchange money at a fixed exchange rate. When it comes time to exchange the money then you can either use this fixed rate, or you can convert at whatever the spot rate happens to be. It is your choice and so you do whatever is best for you.
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