Retrieving "Option Premium" from the archives

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1. Currency Risk

   Linked via "option premium"

   Forward Contracts: Agreements to buy or sell a specific amount of currency at a predetermined exchange rate on a specified future date. These lock in the exchange rate, eliminating uncertainty for the covered transaction.
   Futures Contracts: Standardized, exchange-traded forward contracts. While offering high liquidity, they require daily margin calls based on marked-to-market fluctuations, which some [corporate treasuries](/entries/corporate-trea…