Raiffeisen Bank 

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Infoline: 800 900 900

Asian option

An Asian option is an option where the strike option is compared with the arithmetic average of the values of the underlying asset

Advantages

  • Speed of communication
    • Trades may be made through direct telephone communication with employees of the Treasury section.
  • The basic difference from a classic option is that in classic options the value of the strike option is compared with the current value of the underlying asset and in an Asian option the value of the strike option is compared with the predefined average value of the underlying assess
  • The buyer of the option pays the seller an option premium
  • The underlying asset may be an exchange rate, stock price, stock index value, or commodity value
  • Comfort
    • Communication by telephone
    • The treasury department also offers services for monitoring desired exchange rate levels, executing orders at specified exchange rate levels, including the ability to give orders overnight.

Conditions

Conclusion of a TMA contract (Treasury Master Agreement)

 

Example

  • Classic option - the client has the right to buy EUR for CZK in one month at an exchange rate of 26.000
    • If in 1 month the exchange rate is higher than 26.000, the client will exercise the option.
  • Asian option - the client has the right to buy EUR for CZK in 1 month at an exchange rate of 26.000 averaged daily
    • If the arithmetic average of the daily values for the EUR/CZK exchange rate is higher than 26.000, the client will exercise the option.

 


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