Option Long Journal

PURPOSE

To show illustration of option long journal.

OVERVIEW

TRANSACTION DETAILS

Accounting Base Ccy
Trade ID
Trade Date
Expiry Date
Value Date
Transaction
Option Type
Style
On Currency
Principal
Against Currency
Strike Price
Premium Paid
Volatility
USD
OPT1001
25-Mar-03
3-Apr-03
3-Apr-06
Buy
Put
European
IDR
1,000,000,000.00
USD
9,175.000000
523.23
5.000000%

SUMMARY OF JOURNALS

IDDateDescription
J125-Mar-03On Inception of the Options
J231-Mar-03Month end revaluation
J31-Apr-03Reversal of Month end revaluation
J43-Apr-03On Net Settlement of Options
J53-Apr-03On Exercise of the options (Alternative to J4)
J63-Apr-03On lapse (Alternative to J4)

J1                  On Inception of the Options

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
OPT100125-Mar-03PFX Option Premium ExpenseUSD523.231.000000USD523.23J1a
OPT100125-Mar-03BCash at BankUSD-523.231.000000USD-523.23J1b

J2                  Month end revaluation

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
OPT100131-Mar-03BRevaluation - OptionsUSD712.781.000000USD712.78J2a
OPT100131-Mar-03PUnrealised Gains - OptionsUSD-712.781.000000USD-712.78J2b

Note J2a:           Assume the MTM on 31-Mar is USD 712.78

J3                  Reversal of Month end revaluation

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
OPT10011-Apr-03BRevaluation - OptionsUSD-712.781.000000USD-712.78J3a
OPT10011-Apr-03PUnrealised Gains - OptionsUSD712.781.000000USD712.78J3b

J4                  On Net Settlement of Options

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
OPT10013-Apr-03BCash at BankUSD814.231.000000USD814.23J4a
OPT10013-Apr-03PRealised Gains - OptionsUSD-814.231.000000USD-814.23J4b

Note J4a:           Assume the net settled amount is USD 814.23. The system books the following journal on settlement.

J5                  On Exercise of the options (Alternative to J4)

Note J5:            On exercise of the Options, the system books a FX Outright trade at the contract rate equal to the Options strike price. Thereafter, there is no further journals for the Options contract. The FX trade is dealt in accordance with all other FX Outright trades. See FX Outright trade journals.

J6                  On lapse (Alternative to J4)

Note J6:            On lapse of the Options, no journals will be generated for the Options.

EXCHANGE RATES

FREQUENTLY ASKED QUESTIONS

RELATED INFORMATION

CHANGE HISTORY

DateByChanges
22-Feb-2008CSCreation.
14-Jun-2016RJReformatted.
24-Apr-2020LTRe-formatting.
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