The Forex Options Industry is composed of two types of participants and an activity called as trading and Forex call option.
The participants are the Forex Option Buyer and the Forex Option Seller, without these 2, there will be no trading, no business transaction. What does the buyer do? The buyer, also known as the holder, holds foreign currency option contracts, which he can either sell it before it expires, or hold onto it until the time of expiration and takes his place in the core spot of foreign currency market. This act of taking one’s place in the foreign currency market as a result of exercising one’s right to take a position is referred to as being "assigned" or taking "assignment" of a spot position. The buyer and the forex option seller play an important role in the daily forex business operations.
What is trading and what is being traded? Forex option is in the business of trading foreign currencies. What then is a forex call option? It is an exchange call option that gives right to the forex options buyer without any obligation as he decides to buy a particular forex spot agreement, known as the underlying, at a particular price, at a date, which can be before or on the day of the expiration date of the agreement or contract. The buyer then pays the seller for the purchased forex option contract known as a "premium." Thus, in every transaction done for each option, premium is paid by the forex option buyer to the forex option seller. This is how foreign exchange option initially works.
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