Currency futures and options contracts
Call options give call buyers the right, but not the obligation, to buy the underlying currency at a particular price by a particular date. Call options on foreign currency futures give call buyers the right to a long underlying futures contracts. Those buying put options have the right to sell the underlying currencies at a specific price by a specific date. Most buyers and sellers of foreign currency futures and options do not exercise their rights to buy or sell, but trade out of their contracts at a profit or loss before they expire. speculators hope to profit by buying or selling a foreign currency futures or options contract before a currency rises or falls in value. hedgers buy or sell such contracts to protect their cash market position from fluctuations in currency values. These contracts are traded on securities and commodities exchanges throughout the world, including the chicago mercantile exchange (CME), finex, the Mid-America Commodity Exchange, and the philadelphia stock exchange (PHLX).
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