Chapter 02 · Section 2.1
PHLX DM Call
Suppose a PHLX DM call option is exercised.
What is the effect of exercise?
a) The call holder receives dollars.
b) The call writer receives dollars.
The underlying asset for the PHLX DM currency option is 62,500 Deutsche Marks.
A call option gives the holder the right to buy the underlying. In this case, the underlying asset is DM 62,500, payable in US dollars.