Why Is a Currency Put or Call Not Profitable to Exercise

question 21

Multiple Choice

Why is a currency put or call not profitable to exercise when it is "at the money"?

• A) because the spot equals the price but the premium is not recovered if it is exercised resulting in a loss
• B) When an option is "at the money," the Exchange will charge a higher fee.
• C) When it is "at the money," the Exchange shuts down trading of the option contract.
• D) The Exchange will use mark to market accounting to record a loss.

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Definitions:

Binary Opposition

A conceptual framework involving two mutually exclusive categories, such as good and evil or male and female, used to analyze cultural narratives and values.

Nature And Nurture

A debate concerning the relative contributions of genetic inheritance (nature) and environmental factors (nurture) to human development.

Cultural Ritual

A set of ceremonial acts or practices that are performed within a particular cultural or social context, often rooted in tradition.

Myth

A traditional story, especially one concerning the early history of a people or explaining a natural or social phenomenon, and typically involving supernatural beings or events.