NDO = Non-Deliverable Option

A NDO is a financial derivative where, if exercised, settlement is not made through the actual delivery of the underlying currencies. Instead, the contract is settled by taking the difference between the agreed strike rate and a specified "fixing rate" to determine the net settlement amount, typically in U.S. Dollars. This type of option is commonly used in foreign exchange markets involving currencies that have restrictions on convertibility or capital controls, similar to non-deliverable forwards (NDFs).