If we buy call and put options at the same time for ex. K=100 rate then we win on the option in any case of rate changes. The question is only the following: will we win at least the same money that we spent creating the position? It can be realized if the rate goes above 115 (in this case we win enough on the call option) or if it falls under 85 (then the profit coming of the put option is enough to cover the costs).
We don't know in which direction the rate will change but it is sure that the change will be great. The market participants call it call option and put option fork position. They also say that somebody who creates fork position buys the volatility. It means that he wins if the expected volatility really grows. In this case he doesn't even have to wait for the expiration. He can profit from selling his fork position on the options market if, meanwhile, the market prizes the option with higher expected volatility.
The value of the fork position is the gage of the volatility expected by the market participants. This is the seismograph that shows how big excursions are the participants expected on the exchange market, on the stock market and in case of the interest rates.
The options are those financial products that their pricing formula separately indicates the influence of the volatility. If there is no options market then we have no information on the expectations about the rate of insecurity.
The insecurity, the rate of this dipolar excursion has a meaningful role in every stage of life. In the bakery, if the demand is very volatile it is followed by two effects: we cannot buy enough bread or the baker cannot sell all of his products. If the weatherman forecasts a little fall in the temperature then we take an extra pullover more. But if he forecasts very changeable weather then we should take large suitcases. We should prepare ourselves for cold and warm weather, as well. More changeable the weather is foreseen to be the more likely it is that we have to bring an overcoat and sun oil on the trip.
If we expect that the exchange rate won't really change then, in spite of buying, we will sell the previous position (i.e. the volatility). In this case, we collect the 6+9 dollar and we strongly believe that the rates will be between 115 and 85 when the option expires. Preferably, the exchange rate will be 100.
The volatility trade is a very different broker philosophy from the traditional hausse strategy, which speculates on prices rising, and from the baisse strategy, which speculates on price s falling.
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