Modern, Types: Forward Contracts
Futures contracts are very similar to forward compresses, except they are exchange - traded and so then defined on normalized capital resource.
Fx options are an alternate to forward contracts when hedging an Foreign exchange market exposure cause options allow the company to advantage from favorable Interbank rate moves, while a forward assent locks in the Forex market rate for a future transaction. Of course this "insurance" from the option is not free, while this costs nothing at all to join into a forward trade. When rating foreign exchange options, the underlying is the site or forward foreign interchange rate.