A Currency Options (CO) Contract is an agreement that entitles the investorto buy or sell a Currency Futures Contract on a day in the future at a particular price. CO is a category of Binary Options that allows the investors to purchase theoriginal Currency Future. Put Options entitles them to sell it. Investors have to pay a premium if they do not sell the Option. The premium is consideredon the basis of the unpredictability of the exchange rate.
Who can buy Currency Options?
Arbitrageurs use Cos to profit from movements in price of analogous products in various markets. To stockholders, traders, merchants and tourists COs help to evade the changes in the exchange rate. Thus, investors earn money with COs on short-term differences in prices. Some financiers also grow with COS the general portfolio’s execution over the prolonged periods.