Foreign exchange option, also known as currency option, refers to the option that the buyer of a contract obtains to buy or sell a certain amount of foreign exchange assets at the specified exchange rate on a future agreed date or within a certain period after paying a certain option fee to the seller. Foreign exchange option is a kind of option. Compared with stock options, index options and other options, foreign exchange options buy and sell foreign exchange, that is, the option buyer obtains a right after paying the corresponding option fee to the option seller, that is, the option buyer has the right to buy and sell the currency agreed by the seller at the exchange rate and amount agreed by both parties in advance on the agreed expiration date, and the buyer with the right also has the right not to execute the above-mentioned sales contract.

Foreign exchange option trading is a trading method, which is the development and supplement of several original foreign exchange hedging methods. It not only provides customers with ways to preserve foreign exchange, but also provides them with opportunities to profit from exchange rate changes, so it has great flexibility. The transaction of foreign exchange options is actually a right transaction. After paying a certain amount of option fee, the right buyer has the right to buy or sell the foreign currency of the agreed amount from the right seller at the agreed exchange rate in a certain period of time in the future, and the right buyer also has the right not to carry out the above business.