FX-LINKED STRUCTURED TIME DEPOSITS VERSUS BARRIER AND STANDARD OPTIONS: A COMPARATIVE STUDY
FX-LINKED STRUCTURED TIME DEPOSITS VERSUS BARRIER AND STANDARD OPTIONS: A COMPARATIVE STUDY

Summary/Abstract: The paper provides a short description of barrier options together with an analysis of their performance compared to the performance of standard options and structured time deposits that incorporate the element of barrier in their construction. The results obtained show that some of considered structured time deposits linked to the foreign exchange rates and standard options could bring some profits unlike the majority of coressponding barrier options. The disadavantage of barrier options is they can stay inactive or a spike in the underlying asset price can cause the option to be knocked-out.

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