Results for tag: "Foreign Exchange Option"

Foreign Exchange Options (FX Options) are derivative financial instruments that allow investors to hedge against foreign exchange rate risk. They are contracts that give the buyer the right, but not the obligation, to buy or sell a specified amount of a foreign currency at a predetermined exchange rate on or before a specified date. FX Options are used by investors to manage their exposure to foreign exchange rate movements, as well as to speculate on the direction of the exchange rate. FX Options are traded over-the-counter (OTC) and are typically traded between banks, financial institutions, and large corporations. The OTC market is highly liquid and allows for customized contracts to be tailored to the needs of the buyer and seller. Some of the major players in the FX Options market include Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, UBS, and Deutsche Bank. Show Less Read more