Similar to vanilla calls/puts for foreign exchange, European barrier options in Fairways FX are options to buy or sell a foreign currency at a predetermined strike price (exchange rate) with a barrier at the maturity of the option.
Log In to Fairways FX
- Log in to your Fairways FX account.
- Select an account.
Price a European Barrier Option
- Navigate to Pricing Tools.
- Click Select Pricing Tools > European Barrier Option Pricing.
- Complete the form with all relevant details.
Note: Fields marked with an asterisk * are mandatory.
|
Field |
Description |
|---|---|
|
Market Date |
Date on which the option is priced. |
|
Currency Pair |
Currencies to buy (for a call) or to sell (for a put). |
|
Field |
Description |
|---|---|
|
Type |
Direction of the option. |
|
Strike |
Exchange rate level at which the option can be exercised. This rate is usually compared to the spot rate to determine the moneyness of the option. |
|
Exercise Date |
Start date of the option. |
|
Value Date |
2 calendar days later than the exercise date. |
|
Field |
Description |
|---|---|
|
Notional Amount |
Nominal amount invested in the option. |
|
Currency |
Currency of the notional. The premium is paid or received in this currency. |
|
Field |
Description |
|---|---|
|
Barrier Option Type |
Note: This field only displays if the barrier option is included. Behavior between the spot price and the barrier level:
|
|
Barrier Rate |
Value of the barrier. |
|
Field |
Description |
|---|---|
|
Spot Rate |
Specific rates to price the option. |
|
Forward Points (bp) |
|
|
Volatility |
Note: Click the adjacent last referenced rates in the application to use them.
- Click Validate to price the option.
The pricing results display.
Note: Click +/-5 to simulate different results.
