Financial policy in exports - Covering against currency risks - The currency option

3 important questions on Financial policy in exports - Covering against currency risks - The currency option

What is a option premium?

This is the price that has to be paid in order to have the right to SELL currencies at the exercise price (EP).

Who is a owner or buyer of a currency option?

The one who bought the call or the put contract and, therefore, has a right to buy or to sell.

Who is the writer of the currency option?

The one who has created the right to buy or sell . The writer receives a premium for writing an option.

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