In the simplified approach, positions for the options and the associated underlying (hedges), cash or forward, are entirely omitted from the calculation of capital charges by the standardised methodology and are, instead, 'carved out' and subject to separately calculated capital charges that incorporate both general market risk and specific risk. The capital charges thus generated are then added to the capital charges for the relevant risk Category, i.e., interest rate related instruments, equities, foreign exchange and commodities as described in Chapters CA-4, CA-5, CA-6 and CA-7 respectively.