Chapter 02 · Section 2.1

PHLX DM Options

Suppose Victor, our investor, decided to buy 3 PHLX DM Option Contracts.
He had not had a Deutsche Mark position before.
Note:

• PHLX is the symbol for the Philadelphia Stock Exchange.
• 1 PHLX DM option contract covers DM 62,500.
• The PHLX DM option contract has a monthly expiration cycle one can buy a DM options contract for every month of the year.

a) He is long DM 187,500.
b) He is short DM 187,500.
c) He is long 3 PHLX DM options.
• d) He is short 3 PHLX DM options.
  No. Victor bought 3 options and had not had a position before. Therefore, he is not short.

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