(Bloomberg) -- The dollar's gains are stalling at
about 124 yen because of selling to protect options that would
become worthless should the currency rise further, according to
Sumitomo Trust & Banking Co.
Options grant holder the right to buy or sell a currency at
a set price on a fixed date. An option ceases to exist should
the underlying currency rise or fall to a knock-out trigger.
Traders use knock-outs to reduce the premium paid for options.
The dollar has traded just below 124 yen for the past week but
hasn't risen above that level.
Read more at Bloomberg Currencies News
about 124 yen because of selling to protect options that would
become worthless should the currency rise further, according to
Sumitomo Trust & Banking Co.
Options grant holder the right to buy or sell a currency at
a set price on a fixed date. An option ceases to exist should
the underlying currency rise or fall to a knock-out trigger.
Traders use knock-outs to reduce the premium paid for options.
The dollar has traded just below 124 yen for the past week but
hasn't risen above that level.
Read more at Bloomberg Currencies News
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