Hi all,
I’m investigating FX Options as part of my strategy.
I just want to make sure I’m pricing options correctly.
Say AUD/USD IS 67.00 and I want to but a 30 day call option at strike of 68.00. Assume volatility 5, and both interest rates are 1% to make life easy.
Plugging those values into the option calculator gives a result of 0.0681
Does that mean for a Lot of $100k USD the price of the option is 0.0681 X $100k = $6810 USD? This seems expensive! Have I got a decimal point wrong? Or the calculation?
Thanks for your help!