||Foreign Exchange Derivative Contracts - BoughtOptionPositions
This is the value, as at the relevant date, of foreign exchange (including gold) options the entity has purchased, as determined in accordance with relevant prudential standards.A bought option includes both put and call options that have been purchased by an entity. It provides the purchasing entity with the right but not the obligation to buy or sell a specific amount of the underlying asset at a pre-agreed price, on or before a specific future date.A foreign exchange contract is any contract that transfers the exchange rate risk of an underlying asset from one party to another.A gold contract is any contract that transfers the gold price risk associated with an underlying asset from one party to another.
While not intended as an exhaustive list, Foreign Exchange derivative contracts and Gold derivative contracts may include the following:
- cross currency swaps (including cross currency interest rate swaps);
- forward foreign exchange contracts;
- currency futures;
- currency options purchased;
- hedge contracts; and
- any other instruments of a similar nature.
Outstanding spot transactions should be treated as forward foreign exchange contracts.
Netting should not be applied when reporting amounts within the Statement of Derivative Activity.