Forward Market

• The term Eurocurrency refers to foreign currency deposits held in banks outside their country of origin.

• A horizontal spread is a simultaneous long and short position in derivatives for the same underlying asset and strike price, but with different expiration dates.

• The Witching Hour is the last hour of trading before options or other derivatives contracts expire.

• An American option is a type of option contract that allows holders to exercise their rights at any time up to and including the expiration date.

A cession is a transfer of rights or property from one person to another.#

• In the money (ATM) are calls and puts where the exercise price is equal to or very close to the current market price of the underlying security.

• Barrier options are a type of exotic option in which the payoff depends on whether the option reaches or exceeds a predetermined barrier price.

• Bear call spreads are formed by buying two call options, one long and one short, with different strike prices but the same expiration date.

• Boundary conditions were used to establish the minimum and maximum possible values of call and put options prior to the introduction of binomial tree and Black-Scholes pricing models.

• A box spread is an option arbitrage strategy that combines buying a bullish call spread with a corresponding bearish put spread.

• A bull call spread is an option strategy used when a trader bets that a stock will have a limited increase in value.

• A bull spread is an optimistic option strategy used when an investor expects a moderate increase in the price of the underlying asset.

• A buy order to open is commonly used by traders to open positions on a given option or stock.

• A call can refer to either a call auction or a call option.

• The credit spread reflects the difference in yield between treasury and corporate bonds with the same maturity.

• A currency carry trade is a strategy in which a high-yielding currency finances the trade of a low-yielding currency.

• Currency exchange is a business that allows customers to exchange one currency for another.

• A currency swap involves the exchange of interest - and sometimes principal - in one currency for the same thing in another currency.

• Deep-in-the-money options have strike prices that are significantly above or below the market price of the underlying asset and thus contain mostly intrinsic value.

• Delta expresses the amount of change in the price of a derivative instrument depending on the price of the underlying security (for example, shares).

• Delta hedging is an options strategy that aims to be directional neutral by establishing compensating long and short positions in the same underlying asset.

• The name defines the monetary unit in which assets, securities and transactions are valued.

• Direct quotation is a quotation of a currency pair in which a foreign currency is expressed per unit of national currency.

• ECN Brokers facilitate transactions that take place on Electronic Communications Networks (ECNs).

• Early exercise is the process of buying or selling shares in accordance with the terms of an option contract before the option expires.