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Premia

AFM

Applicable CBBBC on customer (company) because we are purchaser / seller of options.. Premia = CBBC ON COMPANY [Video Time Stamp: 00:01] Video Details ------------- Advanced Financial Management - AFM Foreign Exchange Exposure and Risk Management #128. Illustration # 76

Vinod Kumawat

CA Final

★ 2K+

17-Apr-26 10:56

119

Answers (3)

I use formula BBBBC Banker bids to buy the base currency I am not sure what you are referring to when you say CBBBC? Kindly elaborate

Sriram Somayajula

Admin

17-Apr-26 12:42

When it is relating to select option premia Assuming we need to pay in USD GBP-USD Means here the company will sell GBP In option we have local currency in hand so we buy USD because we need to settled in USD. So put option. Here company is selling currency GBP at put option (sell) So premia will be based on put option and in term of local currency But premia on spot day so rate will be GBP sell means bank buy GBP , here base was GBP so bid rate applicable. Sorry confused that time.

Thread Starter

Vinod Kumawat

CA Final

★ 2K+

17-Apr-26 13:04

Thread Starter

Vinod Kumawat

When it is relating to select option premia Assuming we need to pay in USD GBP-USD Means here the company will sell GBP In option we have local currency in hand so we buy USD because we need to settled in USD. So put option. Here company is selling currency GBP at put option (sell) So premia will be based on put option and in term of local currency But premia on spot day so rate will be GBP sell means bank buy GBP , here base was GBP so bid rate applicable. Sorry confused that time.

yes

Sriram Somayajula

Admin

17-Apr-26 13:39

Premia

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