DISCLAIMER: The definitions in this Glossary are for educational purposes only. They do not replace in any way the definitions used in local and global self-regulatory and regulatory codes and standards. The definitions in this Glossary do not in any way constitute advice. In no event shall Assure Hedge be liable for losses or damages arising from the use of information presented in this Glossary. We make every effort to ensure, but do not guarantee, the accuracy of the information in this Glossary. Information may contain technical inaccuracies or typographical errors. All content and information in this Glossary can be changed or updated without notice. If you find any inaccuracies or omissions in this Glossary, please let us know.

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Discover other concepts in our
currency hedging glossary

Volatility

Volatility is a measure of how much the price of an instrument moves. It is usually expressed as an annualised %. It is often calculated as the standard deviation of the daily moves in price of an asset from its average.

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Knock-in Option

A knock-in option is an option that only comes into force — or knocks in — if the underlying asset reaches a certain price. In foreign exchange, the underlying asset is an exchange rate.

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Arbitrage

Arbitrage simply means exploiting price variations in different markets. In forex trading, this typically entails buying foreign currency – or a derivative such as an option or forward – in one market, and selling it at a profit in another market.

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