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Rupesh Roshan Singh, Lovely Professional University Unit 8: Currency Futures and Currency Options

Unit 8: Currency Futures and Currency Options Notes

CONTENTS
Objectives
Introduction

8.1 Concept of Futures
8.1.1 Types of Futures Contracts
8.1.2 Pricing of Stock Index Futures

8.2 Mechanism of Futures Trading
8.3 Application of Futures
8.3.1 Options vs. Futures
8.4 Currency Options
8.4.1 Advantages of Currency Options

8.4.2 Trading of Options
8.5 Fundamentals of Currency Options
8.5.1 Option Instruments

8.5.2 Option Categories
8.6 Pricing of Currency Options
8.6.1 Speculating with Currency Options
8.7 Summary
8.8 Keywords

8.9 Review Questions
8.10 Further Readings

Objectives

After studying this unit, you will be able to:
Explain the concepts of futures
Discuss the mechanism of future trading

Elaborate the application of futures
Describe the currency options
Discuss the fundamentals of currency options

Explain the pricing of currency options
Introduction

Foreign currency futures and options are two relatively new instruments that have assumed
increasing importance in the marketplace in recent years. It is important to understand the

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