NISM-Series-I: Currency Derivatives Certification Exam Notes

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  • Premium = Intrinsic Value + Time Value
  • Intrinsic value: The intrinsic value of an option is the difference between spot price and the strike price
  • Intrinsic value ( Call Option) = Max (0, Spot Price - Strike Price)
  • Intrinsic value ( Put Option) = Max (0, Strike Price - Spot Price)
  • Time value - The difference between option premium and intrinsic value is time value of option.
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NISM Currency Derivatives

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