INTERNATIONAL

FINANCE
MSC. HOANG TRUNG NGHIA

Chapter 2:
International
Financial Markets
1 2
3 4
 INTERNATIONAL
STOCK MARKETS
- The international stock market is the place
where international capital mobilization takes
place by issuing shares and the transfer of
stock ownership among international
investors
- Characteristics:
• International stock market has high
liquidity
• More and more stocks are registered on
many exchanges
• The less the national market focuses on
some types of stocks, the more
opportunities for international investors to
diversify their international portfolios
Return
4

Return
 Currency options

OPTIONS
MARKET
Straddle
page 9
 .Currency options
A foreign currency option is a contract giving the purchaser of the option the right to buy
or sell a given amount of currency at a fixed price per unit for a specified time period.

Buyer has right to

purchase currency
Call

Put - Buyer has right to

sell currency
American
options

European
options
 EXAMPLE
Mr. Rawlings has a call
option to buy 500 Pynpinie
shares at $23 a share
page 12
 13

Example
Ms Farley has a put
option to sell 350
Pynpinie shares at
$35 a share
Straddle
 One possible speculative
Straddle strategy for volatile currencies is
to purchase both a put option
and a call option at the same
exercise price.

By purchasing both options, the

speculator may gain if the
currency moves substantially in
either direction, or if it moves in
one direction followed by the
other.
THANKS FOR WATCHING