The primary advantage of currency options over forward and futures contracts is that they provide a right rather than an obligation to purchase or sell a particular currency at a specified price within a given period.

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Currency options grant the holder the right, but not the obligation, to buy or sell a currency at a specified exchange rate during a specified period, offering more flexibility compared to forwards and futures, which obligate the parties to execute the contract.

The Primary Advantage of Currency Options Over Forward and Futures