Currency option implementations in Turkey

Abstract

ABSTRACT The objective of this study is firstly to question the applicability of options to the local markets and secondly to assess taxation and accounting issues through an example structure, U.K., for future implementations in Turkey. Although locally both of the foreign exchange and the money markets are at a development stage, simulation results suggest that any application which would have been realized in 1991 would have resulted in a hedging- wise positive way and that the pricings would have been marketable, ie relatively close to foreign currency-foreign currency options. This conclusion is valid for the ideal case net of any transactional costs and also for the real life case where preavailing transactional taxes are added. VIII