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.
The underlying asset for the PHLX DM currency option is 62,500 Deutsche Marks.
A put option gives the holder the right to sell the underlying. In this case, the underlying asset is DM 62,500, payable in US dollars.