Forex Realization

Foreign currency options to end if, at the end of foreign currency options, strike price out-of-the-money. "In short, foreign currency option is" out-of-the-money "if the price of the underlying currency spot lower than the foreign currency options, the rate of implementation, or the price of the underlying spot foreign currency is higher than the sale of options, price realization. Once in the foreign currency options are not priced end, foreign currency option contract itself is a good ending and both buyer and seller will not be liable to the other party.

Forex Option Seller - foreign currency option seller may also be referred to as "author" or "power" in foreign currency option contracts. Sellers of foreign currency option contracts are required to provide the major foreign currency spot opposite if the buyer exercises his right. As a reward for the premium paid by the buyer, the seller assumes the risk of negative attitudes that may in the future in a foreign currency in the market.

Initially, foreign currency option seller collects premium paid on foreign currency option buyer (the buyer funds will be transferred directly to the vendor account currency trading). Foreign currency option seller must have the funds in those accounts to cover initial margin requirements. Where the market moves towards profitable for the seller, the seller must post more funding for foreign currency options other than initial margin requirements. However, if the market moves to the unfavorable foreign currency options seller, the seller may need to post additional resources for foreign currency trading account to keep his balance in foreign currency transactions in the margin account maintenance requests.

As a buyer, foreign currency option seller has the option to offset (buy back) the foreign currency option contracts to market opportunities before or the seller can choose to hold foreign currency options contract until the end. If a foreign currency option seller has a contract until the end, one of two scenarios occurred: (1) the seller will have a major spot currency position against foreigners if the buyer exercises the option, or (2) Seller letting foreign currency options are not worth ending (keep all the premium) if the strike price out-of-the-money