An option on foreign assets where the writer of the option bears the exchange rate risk against a premium paid by the buyer. As such, the buyer has a guaranteed payoff in domestic currency, rather than in foreign one. There are mainly two types of currency protected options: quanto options and compo options. In the former, the payoff is calculated at a preset domestic/foreign exchange rate. In the latter, the underlying price at expiration date is converted into the domestic currency using the exchange rate at maturity, whilst the exercise price is predetermined in the domestic currency.