What are currency options?

    With Akcenta, you can hedge your company against exchange rate risk for up to 1 year in advance as standard. We will prepare a tailor-made offer for each client.

    A CURRENCY OPTION is a financial instrument for hedging against risks that may arise from potentially negative developments in a currency pair. It also gives clients the possibility of profiting from positive developments in the forex market. When buying CURRENCY OPTIONS, the client has the option to buy or sell the given currency at a pre-agreed exchange rate on a specified future date. To obtain this option, the buyer of the currency option pays the seller a so called option premium.

    What are the advantages of currency options?

    A CURRENCY OPTION allows clients to secure their funds against unfavourable changes to exchange rates, as is the case of a forward transaction. Unlike a forward transaction, the client can choose not to use the option and implement the trade on a given day for a better spot rate than the fixed rate would be. In this way, clients can participate in favourable rate developments.

    • When buying a CURRENCY OPTION, the client is not required to lodge financial collateral. Instead, the buyer pays a non-refundable option premium.
    • When selling a CURRENCY OPTION, the client is required to lodge financial collateral and in this case they collect the premium.

    What are the variations of currency options?

    • Call option - gives the holder the right to purchase the primary currency (the first currency in a currency pair) for the secondary currency (the second currency in a currency pair) at a predetermined rate in future.
    • Put option - gives the holder the right to sell the primary currency for the secondary currency at a predetermined rate in future.
    Variants according to settlementAmerican optionsEuropean options

    Rights of the holder

    the option holder has the right to exercise the option at any time between the date of agreement and the date of expiration.

    the option holder has the right to exercise the option only on the day of expiration.

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    What are the conditions for the currency options?

    By entering into currency derivative transactions, the client assumes some types of risks (market risk – currency and interest rate risks, counterparty risk, liquidity risk, leverage). Everything always depends on the purpose and method of use of the derivative transaction concerned. Before signing a Framework Agreement and closing a transaction or at any time on request, dealers will be glad to explain you the individual types of risks, whether orally or in writing.

    Our exchange rates

    Currency

    Buy

    Sell

    The exchange rates shown are informative in nature; for the most up-to-date rates, please call +420 498 777 800. You can find current exchange rates in our Online Broker anytime.