4.1.3 Settlement Method for Currency Options

The following table summarizes how currency options with different option and expiration styles are settled:

Table 4-23 Settlement Method for Currency Options

Option Style Expiration Style Exercise Method Settlement on

Plain Vanilla

American, Bermudan or European

Manual or Auto

For American expiration style:

If manually exercised - Any day between earliest exercise date and Contract maturity date (both included), if manually exercised

For auto exercise - On maturity, if the option is in-the-money

For Bermudan expiration style:

If manually exercised - On pre-defined exercise dates or on contract maturity date

For auto exercise - On maturity, if the option is in the money

For European expiration style:

Only on Contract maturity date

In all these cases, payment can be a fixed amount if such is opted for

Binary

American or European

Manual or Auto

For American expiration style:

If manually exercised - Any day between earliest exercise date and Contract maturity date (both included), if manually exercised

For auto exercise - On maturity, if the option is in-the-money.

For European expiration style:

Only on Contract maturity date

Settlement payment is always a fixed amount

Digital

European only

Manual or Auto

Only on Contract maturity date.

Settlement payment is always a fixed amount.

No Touch

European only

Auto only

Only on Contract maturity date.

Settlement payment is always a fixed amount.