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Re: Mark to Market for Option Premium

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Here I have a confusion. We need to do MTM for the premium.

 

When we buy Option (example call option) there has two element in it.

 

- Strike Price (which we give in FWZZ - Future Class creation)

- Option Premium.

 

Now suppose, I am buying 100 units of American Option with strike price 100$ per unit and premium which i need to pay is 1$ per unit.

 

So FTR CREATE will have 100units in "number of units" field and 1$ in Price (Un Quot) field. I should not enter strike price again in FTR_CREATE.

 

Once we enter units and premium in FTR_CREATE and save the transaction, I can put market price of the premium in FW17.

 

Is my understanding correct?


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