suppose x need to pay JY 500000 on 30 th june and he want to cover risk.
spot (JY/INR)
1.9516/1.9711
Forex currency option
Strike price JY 2.125
Call option JY .047
PUT option JY. .098
Doubt: he should enter call option or put option?
thanks in advance
X will have the fear of Increasing in JY or decreasing in INR
he will take put option in INR (as rate is quoted in INR/JY only)
if on Settlement date INR decreases or JY increases
He will use his put option and net settle the Transaction with more INR
which will be used for paying extra JY
CAclubindia
