Range Forward Options
A Range Forward is the simultaneous purchase of a Call (Put) Option and sale of a Put (Call) Option for the same amount and maturity date with a different strike rate.
Using a Range Forward Option strategy provides you with a certain “worst case” global payments rate, as well as a “best case” global payments rate for hedging your foreign exchange exposures. Entering into Range Forwards is an appropriate strategy for companies that can tolerate outcomes within a given range on the underlying currency.
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