TY - JOUR T1 - A Guide to FX Options Quoting Conventions JF - The Journal of Derivatives SP - 58 LP - 68 DO - 10.3905/jod.2010.18.2.058 VL - 18 IS - 2 AU - Dimitri Reiswich AU - Uwe Wystup Y1 - 2010/11/30 UR - https://pm-research.com/content/18/2/58.abstract N2 - Puts and calls on stocks are very familiar. Options on commodities are only a little different. Interest rate derivatives and bond options have some unique features but are also very similar to the others. Foreign exchange is one of the largest and most active financial markets, and put and call contracts in the FX markets appear to be just as plain vanilla as those in the other markets. Not widely recognized among those who are not directly involved in the trade is that although FX calls and puts may look a lot like commodity options, the conventions for quoting prices in the market are very different. For example, prices are not quoted in currency units, but in terms of implied volatilities, and moneyness is expressed in terms of the option’s delta, not as the difference between the option strike and the price of the underlying. In this article, Reiswich and Wystup walk readers through this surprisingly unfamiliar territory and explain how it all works.TOPICS: Options, exchanges/markets/clearinghouses, interest-rate and currency swaps ER -