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Selling currency call options

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Reference no: EM132658719

Selling Currency Call Options.

Juan Bulsara sold a call option on Australian dollars (AUD) for USD.02 per unit. The strike price was USD .86 (the exchange rate we use is AUDUSD), and the spot rate at the time the option was exercised was USD .82. Assume Mr. Bulsara did not obtain AUD until the option was exercised. Also, assume that there are 50,000 units in an AUD option. What was Mr. Bulsara's net profit on the call option?

Reference no: EM132658719

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