Options and Derivatives

Options and Derivatives
What is an Option?

An Option grants the buyer the right, but not the obligation to buy or sell the underlying asset at an agreed price (strike) on a set date or within a period of time in the future.

A Call Option grants the buyer the right to buy the asset, and a Put Option grants the right to sell the asset. When you buy a Call on a Currency, you are automatically buying a Put on the other currency in the currency pair, and vice versa.

What is an OTC Trade?

Over the Counter (OTC) products are products that are not traded on an Exchange, instead they are traded between Counterparties. Whereas Exchange Traded products are standardized, OTC products are customizable to suit the needs of the Counterparties.

When can I exercise the Option?

That depends on the style of the Option. We quote European option only. American Options can be exercised on any date up to and including the expiry date. European Options can only be exercised on the expiry date.

How do I exercise an Option, and what happens?

To exercise an Option, you have to inform Monex Investindo Futures that you intend to exercise the Option on that day. On Exercise, the investor will receive a margined Forex position as specified by the Option contract.

If you do not have sufficient margin in your account to satisfy the new position or if you so wish, it will be sold immediately at current market price and the resulting profit will be deposited in your margin account.

Note: Currently we accept only cash settlement.

How much do I pay for an Option?

We show their prices as a percentage of the base currency. So if you wish to buy a $1,000,000 USDCHF Put and we quote you 0.6%, it will cost you $6,000.

how do we calculate the Option price?

We uses our own pricing models, the industry standard for pricing currency Options. The price of the Option is based on the intrinsic value of the Option and the time value.

The intrinsic value is simply how much the Option is currently in the money. The time value is based on the time remaining to expiry, the prevailing interest rates and the expected or implied volatility of the market.

Can I sell an Option?

You can sell all kind of OTC Option to us and received a premium but please be informed that you are incurring a big unlimited risk, should the positions goes against you. Please check with our professional derivative experts.

What do I do now?

For further enquiries of option trading contact

Email : f3ndy.fx@gmail.com
Phone Number : +6221-99006922