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Currency Option
To its holder, the purchaser, a currency option represents the right to buy or sell a certain amount of underlying currency at a specific price until a certain date. To its writer, the seller, an option represents the obligation to sell or buy a certain amount of underlying currency at a specific price until a specific date. The currency option differs from a forward or a futures purchase or sale because the forward or futures carries an obligation to buy or sell the currency.
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Currency Option