Options contracts are similar to both futures and forward trading, although once these contracts have been put together, you are obligated to carry out their full duration. A call option gives you the right to buy, a put option gives you the right to sell.
FX options are, for the most part, fundamentally driven by the same factors that drive the underlying currency pairs, such as interest rates, inflation expectations, geopolitics and macroeconomic data such as unemployment, GDP, consumer and business confidence surveys.
There are two styles of options; European and American. The European-style option can only be exercised on the expiry date. The American-style option can be exercised at the strike price, any time before the expiry date.