Currency Call Option

Currency call option

Contract that gives the holder the right to purchase a specific currency at a specified price (exchange rate) within a specific period of time.

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Currency Call Option

A call option in which the underlying asset is a foreign currency. The option gives the holder the right but not the obligation to buy a set amount of the currency at a certain exchange rate on or before the expiration date. As with other currency options, these are largely used when international corporations wish to hedge against the possibility of adverse movements in foreign exchange rates.