Forex Terms A

Accumulation swing index (ASI). Oscillator based on the swing index (SI.) A buying signal is generated when the daily high exceeds the previous SI significant high, and a selling signal occurs when the daily low dips under the significant SI low.

American style currency option. Option that may be exercised at any valid business date throughout the life of the option.

Arbitrage. A risk-free type of trading in which the same instrument is bought and sold simultaneously in two different markets in order to cash in on the divergence between the two markets.

Ascending triangle. A triangle continuation formation with a flat upper trend-line and a bottom sloping upward trend-line.

Ascending triple top. A bullish point-and-figure chart formation that suggests that the currency is likely to break a resistance line the third time it reaches it. Each new top is higher than the previous one.

Atekubi. A bearish two-day candlestick combination. It consists of a blank bar that closes at the daily high. The current closing price equals the previous day's low. The original day's range is a long black bar.

At par forward spread. Forward price is zero; therefore, the spot price is similar to the forward price. It reflects the fact that the foreign interest rate is similar to the U.S. interest rate for that particular period.

At-the-money (ATM) option. Option whose present currency price is approximately equal to the strike price.

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

Average options. Options that refer to the average rate of the underlying currency that existed during the life of the option. This rate becomes the strike in the case of the average strike options; or it becomes the underlying, determining the intrinsic value when compared to a predetermined fixed strike in the case of average rate options. Average options can be based on the spot rate (spot style) or on the forward underlying the option (forward style.) The average can be calculated arithmetically or geometrically, and the rates can be tabulated with a variety of frequencies.

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