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An option which may be exercised at any valid business date throughout the life of the option.

A risk-free type of trading where the same instrument is bought and sold simultaneously in two different markets in order to cash in on the difference in these markets.

An exchange rate system where a country’s exchange rate is “pegged” (i.e. fixed) in relation to another currency. The official rate may be changed from time to time. See peg, and crawling peg.

Total amount of exposure a bank has with a customer for both spot and forward contracts.

The price at which the currency or instrument is offered.

Used in quoting forward 'premium / discount'. 'Five-five around' would mean five points on either side of the present spot value.

An instruction given to a dealer to buy or sell at the best rate that is currently available in the market.

When the forward price is equivalent to the spot price.

A stop-loss order that must be executed at the requested level regardless of market conditions.

A contract where the exercise price is based on the difference between the strike price and the average spot rate over the contract period. Sometimes called an 'Asian option'.