Currency Option


A currency option is a contract between the option writer and its holder allowing the latter to buy or sell a certain currency at a certain exchange rate during a certain period.

Currency options include two main categories: traditional options and SPOT (Single Payment Option Trading).

Traditional options, the more common currency option category, allow the option holder to buy a currency pair at fixed price on a certain date. These contracts usually include a cull/put rule. Traditional currency options are traded [over-the-counter] with no centralized exchange market. SPOT, acronyms of Single Payment Option Trading also known as binary option, lets the trader to set the entire scenario that if met will bestow the trader with the payout, and the payout percentage as well.

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