最新multinational financial management（跨国公司财务）ch08 options contracts and currency futures(共23张ppt课件).pptx

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1、CHAPTER 8Options Contracts and Currency Futures 第一页，共二十三页。PART IFutures Contracts第二页，共二十三页。FUTURES CONTRACTSI.CURRENCY FUTURESA. Market History: 1. Backgrounda. Long historyb. Extremely volatile due to theirinformation driven naturec.The market plays a Price Discovery Role for other financial market

2、s such as the cash markets第三页，共二十三页。FUTURES CONTRACTSB. International Monetary Market (IMM) 1972: opened by the Chicago Mercantile Exchange Purpose: to provide a stable market for the exchange of currency futures. 第四页，共二十三页。FUTURES CONTRACTS2. IMM providesa.an outlet for hedging currencyrisk with fu

3、tures contracts.Definition of a Futures Contract:contracts written requiring a standard quantity of an available currency at a fixed exchange rate at a set delivery date.第五页，共二十三页。FUTURES CONTRACTSb. Available Futures Contracts Currency/ Contract Size:1.) British pound/ 62,5002.) Canadian dollar /10

4、0,0003.) Euro / 125,0004.) Swiss franc / 125,0005.) Japanese yen / 12.5 million6.) Mexican peso / 500,0007.) Australian dollar / 100,000第六页，共二十三页。FUTURES CONTRACTSc. Transaction costs:in the form of a commission payment to a floor traderd. Leverage is high1.)Initial margin required isrelatively low

5、(less than 2% ofcontract value).第七页，共二十三页。FUTURES CONTRACTS: SAFEGUARDSe. Maximum price movement rules:Contracts set daily to a pricelimit that restricts maximum daily upward and downward movements.第八页，共二十三页。FUTURES CONTRACTS: SAFEGUARDSf. Maintenance Margins:When the account balance falls below the

6、 maintenance margin, a margin call may be necessary to maintain the minimum balance.第九页，共二十三页。FUTURES CONTRACTSg. Global futures exchanges:1.)I.M.M. International Monetary Market2.)L.I.F.F.E.London International Financial Futures Exchange3.)C.B.O.T. Chicago Board of Trade4.) S.I.M.E.X.Singapore Inte

7、rnationalMonetary Exchange5.)D.T.B. Deutsche Termin Bourse6.)H.K.F.E. Hong Kong Futures Exchange第十页，共二十三页。FUTURES CONTRACTSB. Forward vs. Futures ContractsBasic differences:1. Trading Locations6. Quotes2. Regulation7. Margins3. Frequency of 8. Credit risk delivery 4. Size of contract 5. Transaction

8、Costs第十一页，共二十三页。FUTURES CONTRACTSAdvantages of futures:1.) Easy liquidation2.) Well- organized and stable market.Disadvantages of futures:1.) Limited to 7currencies2.) Limited dates of delivery3.) Rigid contractsizes.第十二页，共二十三页。PART IICurrency Options第十三页，共二十三页。CURRENCY OPTIONSI. OPTIONSA. Currency

9、options 1.offer another method to hedge exchange rate risk.2.first offered on PhiladelphiaExchange (PHLX).第十四页，共二十三页。3. HOW CURRENCY OPTIONS ARE PURCHASEDBuyers Sellers=WritersBuySellBuySellCALLPUTPremium第十五页，共二十三页。CURRENCY OPTIONS4. Definition:a contract from a writer ( the seller) that gives the r

10、ight not the obligation to the holder (the buyer) to buy or sell a standard amount of an available currency at a fixed exchange rate for a fixed time period.第十六页，共二十三页。CURRENCY OPTIONS5. Expiration Dates of Currency Options:a.Americanexercise date may occur anytime up to the expiration date.b.Europe

11、anexercise date occurs only at theexpiration date and not before.第十七页，共二十三页。6. What is the premium? the price of an option that the writer charges the buyer.第十八页，共二十三页。CURRENCY OPTIONS7.Exercise Pricea. Sometimes known as thestrike price.b.The exchange rate at which the option holder can buy or sell

12、 the contracted currency.第十九页，共二十三页。CURRENCY OPTIONSc. Types of Currency Options:1.)Calls give the owner the right to buy the currency2.)Puts give the owner the right to sell the currency第二十页，共二十三页。CURRENCY OPTIONS8. Status of an optiona.In-the-moneyCall: Spot strikePut: Spot strikeb.Out-of-the-mone

13、yCall: Spot strikec.At-the-moneySpot = the strike第二十一页，共二十三页。CURRENCY OPTIONS9. Why Use Currency Options?1.For the firm hedging foreignexchange risk when a future event is very uncertain.2.For speculatorswho profit from favorable exchange rate changes.第二十二页，共二十三页。内容(nirng)总结CHAPTER 8。g.Global futures exchanges:。4.) S.I.M.E.X.Singapore International。a.In-the-money。b.Out-of-the-money。c.At-the-money。2.For speculators第二十三页，共二十三页。