Standard Chartered Bank was amongst the first to transact in the currency options market on the National Stock Exchange today. Standard Chartered struck its first transaction at the open of trade, when it dealt an option contract at strike 41.5 for November 2010 maturity.
A currency option is a contract that allows the buyer the right but not the obligation to buy a currency at a pre-set price either on or before a fixed future date. The buyer can execute the option if it is in the buyer’s favour only. The buyer pays a premium for this right.
“The option to trade in currency options further adds to the breadth and depth of the Indian financial markets, by expanding the suite of risk management solutions available to market participants,” said Rohan Naik, trader, foreign exchange, Standard Chartered. “We welcome the move, and will continue to work actively towards the development of the financial markets,” added Naik.
