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The current spot rate of Singapore dollar (SGD) is 0.50 USD/SGD. You bought a six-month European put option on SGD which has strike price of
The current spot rate of Singapore dollar (SGD) is 0.50 USD/SGD. You bought a six-month European put option on SGD which has strike price of 0.55 USD/SGD and a premium 0.01 USD/SGD. Each put option contract trades 1,000,000 Singapore Dollars. Calculate your gain/loss in the put option contract if the market exchange rate turns out to be 0.52 USD/SGD on the contract maturity date.
A. 20,000 USD gain.
B. 10,000 USD loss.
C. 40,000 USD gain.
D. 10,000 USD gain.
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