A put option essentially represents two swaps of currencies, one swap at the inception of the loan contract and another swap at a specified date in the future.

Question

Quizplus · Accepted Answer

A put option is a financial contract between two parties where the buyer of the put option has the right, but not the obligation, to sell an underlying asset (such as a stock, currency, or commodity) at a specified price (strike price) within a specified period. It does not involve swaps of currencies.

A Put Option Essentially Represents Two Swaps of Currencies, One