Currency options, also known as foreign exchange options, is a contract that grants the holder the right, not the obligation, to buy (call) or sell (put) currency at a specified exchange rate during a specified period of time.  It is the “exchange of money denominated in one currency into another currency at a pre-agreed exchange rate.” (www.investopedia.com)   To capture this right, the buyer must pay a premium to the broker, which varies depending on the number of contracts purchased.  Currency options is one of the best ways for corporations or even individual to hedge against uncertain future cash flows in a foreign currency or adverse movements in exchange rates.