Currency Option
/ˈkʌrənsi ˈɒpʃən/
Definitions
- (n.) A financial derivative contract granting the right, but not the obligation, to exchange one currency for another at a predetermined rate on or before a specified date.
The investor purchased a currency option to hedge against exchange rate fluctuations.
Forms
- currency option
- currency options
Related terms
See also
Commentary
Currency options are widely used in international trade and finance for risk management and speculative purposes; precise terms must specify exercise style and settlement to avoid ambiguity.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.