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A Currency Options contract gives the investor the right (but not the obligation) to buy or sell a Currency Futures contract on a future date at a fixed price.
Benefits
- Protection against exchange rate fluctuations
- Fix prices for import and export purposes
- Take advantage of price movements in the exchange rate
Who should use this product?
- Hedgers seeking to reduce risk by protecting an existing portfolio against adverse currency movements
- Speculators hoping to make a profit on short-term movements in prices
- Investors looking to enhance the long-term performance of a portfolio of assets.
- Arbitrageurs looking to profit from price differentials of similar products in different markets
How to use this product?
- Call Option gives you the right to buy a Currency Futures Contract at a set price on a future date
- Put Option gives you the right to sell a Currency Futures Contract at a set price on a future date
- Importers will buy Call Options when they expect the Rand to depreciate.
- Exporters will buy Put Options when they expect the Rand to appreciate.
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Learn more about Currency Options |
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