Reciept of 80 m euros. Home currency is yen , foreign currency is euros.
As per my knowledge rule is receipt of foreign currency means we have to buy home currency ie call options. So why are they taking put options . Im confused pls help sir
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WASHI CO (SEP 18)
4y ago#1It is not a question as to which is the home currency, it depends on which currency the options are quoted in.
Here the contracts are quoted in EUR and so they are EUR options. The are receiving Euros and so need to sell Euros. Therefore they need a put option in EUR options.
Thank you so much sir :)
Also does same type of rule apply to futures also?
4y ago#4Yes it does (and I do explain this in my free lectures).
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