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Sir,
If UK company owes US firm, means a payment due.
Options are quoted in $/Pound.
Means the UK company will worry $ appreciate against Pound.
So, UK company will buy the put option under the circumstances.
If options are quoted in Pound/$, the UK company will buy the call option.
Is my understanding correct?
It depends on the currency in which the contract size is quoted.
If the contract currency is $’s, then if you will be paying $’s you want a call option (because you want the right to buy $’s at a fixed rate). If you will be receiving $’s you want a put option (because you want the right to sell $’s at a fixed rate).
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