3a. Assume that you had speculated the day of DC1 by purchasing call options that specify 1 million units of the foreign currency. You then disposed of your contract the day of DC2 or exercised them if it was reasonable to do so. What would be your profit or loss after considering the premium you paid for the call options? Calculate your results for the OTM, ATM and ITM options.

Please report the profit/loss before and after commissions.

3b. Assume that you had speculated the day of DC1 by selling call options that specify 1 million units of the foreign currency. If calls are expiring, the counter-party on your contract exercised the contract the day of DC2 if it was feasible to do so. If calls have time value you would have to cancel them at market prices. What would be your profit or loss after considering the premium you received from selling the call options? Calculate your results for the OTM, ATM and ITM options. Please report the profit/loss before and after commissions.

DC1: