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Re: Currency Options : short NZDUSD means?
Depends who you are talking to - might be worth posting a link to whatever you're reading. But in professional terms shot NZD/USD would usually mean short volatility. That can be acheived by selling calls OR puts. The reason for this becomes clearer if you look at the behaviour of options at or near expiry when you combine them with positions in the underlying instrument.
Example;
Long Call = Long Put + Long underlying.
If you think about it, provided the nominal amounts of the option and the underlying are the same, given the above scenario, regardless of how far below the strike you go, at expiry the profit / loss is the same. This is because any profit from the long put would be offset by an equal loss in the underlying.
Conversly, for expiry above the strike, the higher you are at expiry, the further in profit you are (put is irrelevant, all profit comes from long underlying).
Thus long put + long underlying behaves exactly like long call.
The relationship between put, call and underlying is one that forms a basic cornerstone of options trading. You might want to look up (or google) 'put / call parity' for a better explanation, as I'm quite tired and this may be a little complicated for a newbie, with my poor explanation not helping. But if you've grasped what I'm talking about, you'll hopefully be able to make the leap from understanding this concept to understanding why, if you are long a put, you are to all intents and purposes long a call (in terms of delta, gamma, vol exposure etc). Thus the term long or short 'options' in general. This is also sometimes referred to as long / short 'vol' (volatility) or premium.
Hope this makes sense. Experienced options traders (and I certainly don't claim to be one of those), please feel free to correct the bits I may have got wrong.
GJ
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