forex options

US exporter will receive

Euros in exchange for goods sold

If the euro weakens vs the $

The exporter will have less $ after converting the euros

A US exporter can protect against the euro weakening vs the dollar by

Buying a put option on euros so they can sell them back at current rate

If a us importer has to pay for goods in euros

They will buy call option on the euros to protect their cost if the euro strengthens

What happens to importer if the euro weakens

Call expires worthless because they can buy the same amount of euros for less dollars

What happens to an exporter if the euro strengthens

They wont need the put option because they would then get more $ for the same amount of euros

When a us company exports product to another country

They get paid in that nations currency

When a us company imports product from another country

The us pays the exporter in their foreign currency

Both importers and exporters in the US

Will have to convert from one nations currency to the others

Exporter

Buy Puts on the forex

Importers

Buy Calls on the forex