If you buy calls you can buy at the strike en benefit when price rises above the strike and option is in the money.
Is it the same reasoning for interest rate calls, you benefit when interest rate rises ? You got the right to lock in an interest rate as you would be long a FRA.
Thanks.
You are correct with interest rate options but …
An FRA is not an interest option. It is a forward it has payoff for both up and down sides.
UInless you are referring to an option to enter an FRA then that is an option.
A better comparison would be long interest rate call and short interest rate put. Thanks!