Forward Contract: A forward contract is an agreement to buy or sell a specific amount of a currency at a specified price and future date. It is a common hedging instrument used in the foreign exchange market.
Currency Swap: A currency swap is an agreement between two parties to exchange principal and interest payments on loans denominated in different currencies. It allows for the hedging of foreign exchange risk.
Options Contract: An options contract gives the holder the right, but not the obligation, to buy or sell a specific amount of a currency at a predetermined price within a certain time period. Options can be used as a hedging tool in the foreign exchange market.