Step 1: In the Position Name text box, type the appropriate name of your foreign exchange option.
Step 2: In the Comment text box, type any additional notes about the transaction.
Step 3: In the Counterparty menu, type in the Counterparty with whom you are entering the FX option. You can also click from the list if a counterparty entry already exists.
Step 4: In the Seniority Level menu, click the appropriate Seniority Level, or payment order of the FX option.
Step 5: In the Settlement Date menu, click click through the online calendar to set the date when the FX option can be exercised. Click the last date (for American style), or only day (for European style). This is a required command.
Step 6: In the Strike Rate menu, type the stated price at which the currency underlying your position may be purchased call or sold put upon exercise of the FX option contract. The text box automatically extends your entry to six decimal places. This is a required command.
Step 7: In the Contract Size text box, type the dollar amount in your position's currency that represents the contract size of the FX option. This is a required command.
Step 8: In the Discount Curve menu, click the appropriate curve, selecting interbank or treasury for the desired currency. This is a required command.
Step 9: In the Buy Currency menu, click the appropriate currency. This is a required command.
Step 10: In the Sell Currency menu, click the appropriate currency. This is a required command.
Step 11: In the Long/Short menu, click to define whether you are a long or short on the contract. This is a required command.
Step 12: In the Option Type menu, click either American exercise by settlement date or European exercise on settlement date as the style of FX option. This is a required command.
Step 13: In the Call/Put menu, click Put if your position is an option to sell or click Call if your position is an option to buy. This is a required command.
Step 14: In the Use Flat Volatility check box, check the box if you will use the same volatility to value the FX option during scenario and time simulation rather than use a volatiltiy curve, which will give varied implied volatility. Then type in a volatility percentage in the adjacent text box. The text box automatically extends your entry to six decimal places.