An option contract whose underlying is a foreign discount bond (cross currency bond). It is a bond option on a convertible bond where the bond is denominated in a different currency to that of the underlying stock. Parity of the convertible bond will be affected by the exchange rate between the bond and the underlying equity (as opposed to a single currency convertible where parity moves with the underlying share price). The conversion price of the foreign discount bond will be:

Conversion price = face value × exchange rate/ conversion rate

This option is also known as a cross-currency bond option.