Isda introduces new definitions for FX and currency options

The appendix will augment the current framework by introducing common reference terms for options buyers and sellers with reference to knock-out, knock-in, double knock-out, double knock-in, no-touch binary, one-touch binary, double no-touch binary and double one-touch binary transactions.

To-date, market participants have been left to amend the 1998 framework to define the event and barrier particulars for each of these options. But the new supplement introduced yesterday is designed to increase the efficiency that deals are done by standardising the approach, cutting down on disagreements and the time taken to close deals.

“The 2005 supplement sets forth common reference terms for a growing sector of the foreign exchange market-place and should offer the benefits of efficient documentation processes and enhanced legal certainty to market participants,” said Isda in a statement.

Isda has been playing catch-up with the markets for some time now, as new products require further clarification and revamps of old frameworks. The association is also expected to introduce further documentation templates for credit default swap options referenced to asset-backed securities early next year.

Foreign exchange derivatives contracts have grown by almost half in the past two years, and currently account for over $31 trillion in notional value.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here