Options can provide a variety of solutions to a company exposed to fluctuating FX market prices. To fully appreciate their flexibility as hedging instruments it's vital to understand their pricing mechanics and the terminology associated to them. In this course you can learn the fundamentals of the vanilla building blocks and go beyond the theoretical content to develop a deeper appreciation for these exciting hedging alternatives.
Appreciate the value of options as hedging tools.
Demystify the terminology associated to options.
Understand the pricing mechanics that drive option premiums.
Consider your business objectives when deciding on the right option for you.
Achieve an understanding of the pay-off profiles of zero cost structures.
Comprehend the potential mark to market benefits of options
Some "Need-to-knows"
Welcome and Learning Outcomes 💡
Hedging FX Risks....Let's Set the Scene
Risk Management Framework
Summary Slides
Test Your Knowledge
Options and Forwards are Derivatives
Oh My! The Jargon!👌
Stepping Through the Terminology
The Strike and its Nicknames
Options Jargon Buster #1
Options Jargon Buster #2
Summary Slides
Test Your Knowledge
Premiums... What Influences The Price?
Option premiums
Intrinsic Value
Time Value: Pricing ITM Calls
Time Value: Pricing OTM Calls
Time Value: Pricing ATM Calls
Time Value: Puts
Time Value from a Delta Hedging Point of View
A Summary on Time Value and Premiums
Call Premium Examples (Slider)
Put Premium Examples (Slider)
Jargon Buster #3
Summary Slides
Test Your Knowledge
Choosing The Strike?
Break -Evens and Worst-Case Rates
Solution Drivers
Summary Slides
Test Your Knowledge
Buying AND Selling Options
Zero Net Premium.... Where'd my participation go?
Best of Both Worlds?
Move the Strike Again!
But Wait...There's More 😁
Test Your Knowledge
Summary Slides
