Currency Options Explained

A clear, practical guide to currency options, from two professionals who traded and sold them for a living.

Currency options are among the most useful tools in finance. Companies use them to protect profits from exchange rate swings, fund managers use them to hedge international portfolios and traders use them to take positions with limited, known risk. Yet most books on the subject are either too mathematical for practitioners or too simple to be of real use.
Currency Options Explained bridges that gap. In ten chapters, Jay and Julie Hawk explain how currency options work, how they are priced and how to use them, with every example calculated using the industry standard Garman Kohlhagen model at current EUR/USD market levels.
Inside you will learn:

• How the global currency options market works today, from bank trading desks to listed options at CME Group
• The difference between vanilla calls and puts and exotic options such as knock outs, binaries and average rate options
• How options are priced, what drives volatility and how to read the volatility smile
• More than 25 trading strategies, from simple calls and puts to spreads, straddles, butterflies and risk reversals
• How importers, exporters and investors hedge currency risk with collars, range forwards and participating forwards
• How professionals measure and manage risk with delta, gamma, theta and vega
• How to get a fair price and avoid costly errors when you trade