A financial derivative which an issuer sells to investors and is obliged whereby to sell shares of a specific stock or security at a preset strike price. The buying investors are also under obligation to purchase the underlying. Therefore, such contracts, also known as accumulators or forward accumulators, don’t give the option to either party to refrain from exercising. The strike price is typically settled on a periodical basis, and hence the investors are said to be accumulating holdings in the underlying stock over time to maturity.

Investors buy accumulators on the expectation that a certain stock will trade within a specific price range during the term of the contract. This range is bound by the strike price and a barrier price (usually a knock-out that triggers termination if the underlying price goes above a threshold. On the other side, the issuer sells an accumulator in the hope that the underlying will drop below the strike price.