Chapter 02 · Section 2.1

PHLX DM Put

Suppose a PHLX DM put option is exercised. What is the effect of exercise?

a) The put holder receives dollars.
• b) The put writer receives dollars.
  No. If the put holder exercises his right to sell DM at the exchange rate equal to the exercise price, the put writer must pay dollars for those Deutsche Marks.

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