Advertising

Basket options

• Packages that involve the exchange of more than two currencies against a base currency at expiration. The basket option buyer purchases the right, but not the obligation, to receive designated currencies in exchange for a base currency, either at the prevailing spot market rate or at a prearranged rate of exchange. A basket option is generally used by multinational corporations with multicurrency cash flows since it is generally cheaper to buy an option on a basket of currencies than to buy individual options on each of the currencies that make up the basket.

 
 

Follow this link for all the terms related to option.

 
 Embedded terms in definition
 Buy in
Buy
Cash flow
Cash
Currency
Exchange
Expiration
Market
Multinational corporation
Options
Option
Right
Spot market
The exchange
 
 Related Terms
 

<< Basis swap Basket trades >>

Practical Advice for Everyone on How to Save and Manage Money: No matter how old or young you are, there are some basic things you can do to better manage and protect your money. Here are recommendations from FDIC Consumer News. More...

Instruction does much, but encouragement does everything. Johann Wolfgang Von Goethe

Advertising



Copyright 2009-2017 GVC. All rights reserved.