After reading few pdf books and listening to some explanations I got so confused about fx options. So, I would kindly ask all good people to try to make this little clearer for me. I'll give an example and you just say if I got it right or not. Current fx spot rate for gbp/jpj is, let's say, 223.00. I buy call (100.000 units) and set my strike price at 223.00. Option lasts for 1 month. I pay premium of, let's say 1.00. So currently, what I see is that after one month from the date I purchased an option I will be able to buy back 100.000 units at the strike price (in this case 223.00). Let's now say that price has changed and the rate for gbp/jpj is 225.00 at the moment when it expires. That means that I just got 100 pips of profit (225.00 - 223.00 - 1.00 = 1.00 = 100 pips). That's roughly about $860 now. But if price of option, when it expired was 224.00 I would be at the break even point. Another scenario. Price has gone down to 220.00. That would mean that I have not lost anything except my premium (1.00).