What are some disadvantages of currency options contracts?

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Some of the disadvantages of currency options contracts are:

Subject to time decay. This means that their value decreases as the expiry date approaches.
If the market moves contrary to the forecast, the loss can be very large.
Complexity. Currency options can be complex instruments and may not be suitable for all investors.
There is always a potential counterparty risk when entering into financial contracts of any kind.

Topic: Currency options explained-Types, advantages/disadvantages and example Article

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