Question about foreign currency contracts
Hey everyone,
I had a question regarding foreign currency contracts.
My book is a bit confusing regarding the structure of currency contracts so I thought I'd ask the community a simple question:
So on the PHLX, the contract size is 10k units of currency except for japanese Yen which cover 1,000,000. This contract size is different from the multiplier which is still 100? Does multiplier only refer to the option premium? Is there a logical reason why the contract size is 10k?
How does one read this:
1 PHLX XDE (Euro) Nov 145 Call @ 2.10
Every contract allows you to buy 10k euros at a price of 145 cents per euro? If options contracts were exercise-able (they're not, they are US dollar cash settled), the option would be worth 14500 dollars?
Why are these contracts worth 10k and not just 100 like equity options contracts? What does a Japanese PHLX option look like?