An option valuation model which is used for pricing foreign currency options. It is similar in form to the Black-Scholes model. However, it takes into account separate factors for foreign and domestic interest rates. This model was initially developed in 1993 by Mark Garmen and Steven Kohlhagen in their article entitled “Foreign Currency Option Values”.

This model is also called Biger-and-Hull Model since Nahum Biger and John Hull also introduced the same structure at the same time.