1.   Subject to paragraphs 2, 3 and 4 of this Article, institutions shall calculate the indirect exposure value for options referred to in Article 2, point (a), as the sum of the current market value of the option and the amount owed to the counterparty of the option as a result of a potential default of the issuer of the underlying instrument reduced by the amount owed to the institution by that counterparty in that event.

2.   For call options, the indirect exposure value shall be equal to the market value of the option. For a long position in a call option, the indirect exposure value shall be positive while for a short position in a call option, the indirect exposure value shall be negative.

3.   For put options, the indirect exposure value shall be equal to the difference between the market value of the option and its strike price. For a short position in a put option, the indirect exposure value shall be positive while for a long position in a put option, the indirect exposure value shall be negative.

4.   By way of derogation from paragraph 3, for put options that do not have a strike price available at transaction date, but at a later stage, institutions shall use the expected modelled strike price used for the calculation of the fair value of the option.

5.   Where the market value of the option is not available on a given date, institutions shall take the fair value of the option on that date. Where neither the market value nor the fair value of an option are available on a given date, institutions shall take the most recent of the market value or the fair value. Where neither the market value nor the fair value of an option are available at any date, institutions shall take the value at which the option is measured in accordance with the applicable accounting framework.