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In a real estate context, an option fee is money paid by a Buyer to a Seller for the option to terminate a real estate contract. Option fee funds should not be confused with earnest money.

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For this right, a premium is paid to the seller. Currency options are one of the most common ways for corporations, individuals or financial institutions to hedge against adverse movements in exchange rates. Key Takeaways Currency options give investors the right, but not the obligation, to buy or sell a particular currency at a pre-specific exchange rate before the option expires.

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