Forex Jargon

Markets have a language all their own and within that language, forex has its own dialect. Here are some terms we commonly use in our commentary. If you would like to see additional terms defined, e-mail sem at forexlive.com

Bank for International Settlements (BIS) an international organization which fosters monetary and financial cooperation and serves as a bank for central banks. The BIS often acts as an agent in the forex market, allowing central banks to mask their identity in an attempt to dampen market impact.

Barrier option: A type of “exotic” option that comes into existence or ceases to exist once a certain price is reached. They are often added to a “vanilla” or typical option to make the premium less expensive. For example, a 1.4000 EUR/USD call purchased when spot is at 1.3500 would be cheaper if there were a “knockout” embedded in the option, for example at 1.3300. If 1.3300 trades before the expiration of the options, the whole structure would be “knocked out” and the seller of the option would be able to pocket the entire premium.


source:http://www.forexlive.com/forex-jargon