Trading and processing OTC options enables you to control liquidity in your company and recognize, analyze, and hedge currency risks.

You can assign OTC options to forex trading and to derivatives, and enter them in both areas accordingly. You enter them in the Derivatives area in the same way as you enter other option types, which enables you to branch from the options data to the separate entry screens of the underlying transactions.

Before you can use Transaction Management, you are required to enter master data. You must:

You must also make the following settings in Customizing:

• Define the product type (if you do not wish to use the standard product types, you can define these individually). You create and administer your financial transactions and manage your positions on the basis of the product types. Example of a product type: Forex.
• Define the transaction type. The financial transaction type determines the types of transactions that can be carried out with a certain product type and controls the transaction and position management process. Example: Purchase.
• Define the flow type. Flow types describe the different changes to the payment flows. Example: Sale of forex.
• You must assign flow types to transaction types.

For more information, see the corresponding unit in the Implementation Guide (IMG).

You are then able to define financial transactions in the system.