volatility smile
The upwardly curved shape typically seen when the strike prices for an option series are plotted on the X axis versus their implied volatility on the Y axis. In the forex market, out of the money options tend to be offered at higher volatilities compared with at the money options in order to compensate for inadequacies in the option pricing model in accounting for extreme exchange rate movements.
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required rate of return
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straight through processing (STP)
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