Nicolas de Breteuil Sales manager at Icy Software
Nicolas de Breteuil Sales manager at Icy Software

FX Option pricing – developing an online capability

Nicolas de Breteuil looks at the benefits of being able to offer an electronic Options trading platform and the sort of functionality it should offer.

Just one month ago, the Bank for International Settlements published its triennial survey, accounting world wide FX options daily averages turnover to USD 117 billion traded in April 2004. A mere 195% increase over the 2001 comparable period. Even though part of the gross is reflected by the USD global weakening, undoubtedly OTC FX options is a growing business.Company globalisation with product prices competition, as well as alternative asset management emergence is giving another dimension to currency options trading. Every risk is assessed, covered and none of the FASB 133 or IAS 39 rules will divert its path. Derivatives knowledge is better spread and shared among the players. The shift from forward rate price to option structures is more obvious. FX options providers have well understood where their interest lies with such a high margin product. Banks are making lots of efforts to support the buy side on FX options trading by supplying accounting methodology and discussion with customers...continued

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