Vanilla FX Options

The right (but not a obligation) to buy or sell a specified amount of one currency in exchange for another currency, at a rate agreed when the option is bought (strike rate), on an agreed settlement date.

Offers full protection against unfavourable changes in foreign currency values. You can benefit from a favourable exchange rate movement by transacting at the prevailing spot rate.

Overview

There are two types of Vanilla FX options:

Put option.
Call option.

Benefits

Provides you with protection against the direct impact of unfavourable changes in foreign currency values.
Allows you to determine and budget your cash flows.
Gives you the opportunity to benefit from favourable foreign exchange movements.

The right, but not the obligation, to buy or sell a specified amount of one currency in exchange for another currency at a rate agreed when the option is bought (strike rate), on an agreed settlement date.

Offers full protection against unfavourable changes in foreign currency values. You can benefit from a favourable exchange rate movement by transacting at the prevailing Spot rate.

There are two types of Vanilla Options:

Vanilla Option - Put Option

Vanilla Option - Call Option

For more information, please view our Vanilla Option-FX Option PDS

Put option

The right, but not the obligation, to sell a specified amount of one currency in exchange for another currency at a rate agreed when the option is bought (strike rate), on an agreed settlement date.

Offers full protection against unfavourable changes in foreign currency values. You can benefit from a favourable exchange rate movement by transacting at the prevailing spot rate.

Benefits

Provides you with protection against the direct impact of unfavourable changes in foreign currency values.
Allows you to determine and budget your cash flows.
Gives you the opportunity to benefit from favourable foreign exchange movements.

Points to consider

A premium is payable.
The strike rate may be less favourable than the prevailing spot rate at the time you buy the option.

Who might need it?

If you're an Australian importer, or a business with payments in a foreign currency.
If you're a business borrower with loans quoted in foreign currencies.

Call option

The right, but not the obligation, to buy a specified amount of one currency in exchange for another currency at a rate agreed when the option is bought (strike rate), on an agreed settlement date.

Offers full protection against unfavourable changes in foreign currency values. You can benefit from a favourable exchange rate movement by transacting at the prevailing spot rate.

Benefits

Provides you with protection against the direct impact of unfavourable changes in foreign currency values.
Allows you to determine and budget your cash flows.
Gives you the opportunity to benefit from favourable foreign exchange movements.

Points to consider

A premium is payable.
The strike rate may be less favourable than the prevailing spot rate at the time you buy the option.

Who might need it?

If you're an Australian importer, or a business with payments in a foreign currency.
If you're a business borrower with loans quoted in foreign currencies.

More info

Full Participation FX Solutions Products - Product Disclosure Statement (PDF, 90KB)

Any advice on this webpage does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Before making any decision in relation to this information, you should consider the Product Disclosure Statement available at Financial Markets or by calling 1800 307 827. The products on this webpage are issued by National Australia Bank Limited ABN 12 004 044 937 AFSL 230686.

Please consider our Financial Services Guide.