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当前位置:金号角网> 金融学院> 金融知识 > 英文财经词汇 > Options & Futures - 期权和期货> Average Rate Option - ARO

恭喜湖南/长沙市【成功】需求金额200万元

恭喜湖南/长沙市【成功】需求金额200万元

恭喜湖南/长沙市【成功】需求金额300万元

恭喜湖南/长沙市【成功】需求金额200万元

恭喜湖南/长沙市【成功】需求金额1000万元

Average Rate Option - ARO

2020-08-14 编辑:网站编辑 有749人参与 发送到手机
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An option used to hedge against fluctuations in exchange rates by averaging the spot rates over the life of the option and comparing that to the strike price of the option. Average rate options are typically purchased for daily, weekly or monthly time periods. Upon maturity, the average of the spot prices is compared to the strike price. If the average rate is less favorable than the strike price, the option issuer will pay the difference. If the average rate is more favorable then the option will expire worthless with no payment being made.


Average rate options are often used by companies that receive payments over time that are denominated in a foreign currency.



For example, a U.S. manufacturer agrees to import materials from a Chinese company for 12 months, and pays the supplier in yuan. The monthly payment is 50,000 yuan. The manufacturer budgets for a particular exchange rate, and purchases an ARO that matures in 12 months to hedge against the exchange rate falling below the budgeted level. At the end of each month, the manufacturer purchases 50,000 yuan on the spot market to pay the supplier. Upon maturity of the ARO, the strike price of the ARO is compared to the average rate that the manufacturer has paid for the purchase of 50,000 yuan. If the average is lower than the strike, the option issuer will pay the manufacturer the difference between the strike price and average price.