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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Options and Calls
sir if we were to say what is the payoff from a hedging strategy for a call or an option, what would that mean and do we calculate profit, can u give small example clearing up both
A call is an option!!!!
A call option is the right to buy at a fixed rate, whereas a put option is the right to sell at a fixed rate.
A call is not something that exists on its own – again it is a call option.
I really do suggest that you watch my free lectures on foreign exchange risk management and on interest rate risk management, where I explain the nature of (and the use of) options in detail, with examples. I am certainly not going to type out all of my lectures here – it would not be possible 🙂