Total amount of exposure a bank has with a customer for both spot and forward contracts.
An option which may be exercised at any valid business date throughout the life of the option.
Describes a currency strengthening in response to market demand rather than by official action.
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.
Used in quoting forward "premium / discount".
Ask is the lowest price acceptable to the buyer.
In the context of foreign exchange it is the right to receive from a counterparty an amount of currency either in respect of a balance sheet asset (e.g. a loan) or at a specified future date in respect of an unmatched forward or spot deal.
An instruction given to a dealer to buy or sell at the best rate that is currently available in the market.
At or Better
An order to deal at a specific rate or better.
At Par Forward Spread
When the forward price is equivalent to the spot price.
At the Price Stop-Loss Order
A stop-loss order that must be executed at the requested level regardless of market conditions.
An option whose strike/exercise price is equal to or near the current market price of the underlying instrument.
Sale of an item to the highest bidder. (1) A method commonly used in exchange control regimes for the allocation of foreign exchange. (2) A method for allocating government paper, such as US Treasury Bills. Small investors are given preferential access to the bills. The average issuing price is then computed on the basis of the competitive bids accepted. In some circumstances for government auctions it is the yield rather than the price which is bid.
Average Rate Option
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".