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There are two types of currency options: calls and puts. Buying a call option gives the holder the right to buy a currency pair for the strike price on or before the expiry date, and buying a put option gives the holder the right to sell a currency pair for the strike price on or before the expiry date.

Broadly speaking, forward contracts are contractual agreements between two parties to exchange a pair of currencies at a specific time in the future. These transactions typically take place on a date after the date that the spot contract settles and are used to protect the buyer from fluctuations in currency prices.

Buying and selling currency can be very profitable for active traders because of low trading costs, diverse markets, and the availability of high leverage. Exchanging currency is not a good way for passive investors to make money.

Currency Contract means any futures contract or option thereon providing for the delivery or receipt at a future date of a specified amount of a traded currency at a specified price and delivery point, or any other futures contract or option thereon approved for trading for U.S. persons.

Process to start currency exchange business in India Get Company Registration. Company Registration is the primary step to start currency exchange business in India.Apply for FFMC Registration.Get Trademark Registration.Apply for Shop Establishment Registration.GST Registration.

Use: Forward exchange contracts are used by market participants to lock in an exchange rate on a specific date. An Outright Forward is a binding obligation for a physical exchange of funds at a future date at an agreed on rate. There is no payment upfront.

An exchange rate is just a price: the price of one country's currency in terms of another country's currency. So if the exchange rate from UK pounds to US dollars is 1.35, then £1 will buy you $1.35. Sometimes you will hear that the pound has got stronger or 'appreciated'.