Traders

4574 Words Oct 17th, 2014 19 Pages
FX OPTIONS TRADER HANDBOOK
Understanding the relationship between CME FX Options on Futures and OTC Options.

cmegroup.com/fx

As the world’s leading and most diverse derivatives marketplace, CME Group (cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its trading facilities in New York and Chicago, and is in the process of launching a London-based derivatives exchange. CME Group
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Find out how you can start trading CME FX options today. Contact a CME Group FX team member, or visit cmegroup.com/fxoptions.

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Options Trader Handbook

CME FX options deliver into a futures contract
One option contract delivers into one futures contract, and correspondingly, each option contract has a notional value equivalent to its underlying future and currency denomination. Examples: EUR/USD = €125,000 JPY/USD = ¥12,500,000 GBP/USD = £62,500 CAD/USD = C$100,000 CHF/USD = SF125,000 AUD/USD = A$100,000

There are four futures contracts per year (March, June, September and December — called the March Quarterly Cycle) each with a delivery date set on the third Wednesday of the Quarterly month (referred to as the International Money Market or IMM dates by many forwards traders).

Our FX futures contracts are denominated in foreign currency amounts and quoted in USD terms (except for cross-currency pairs). Thus, a CALL option gives the right to BUY the foreign currency and PUT the right to SELL the foreign currency

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