Glossary Index



Start With " A "

The apportionment of premiums and discounts on forward exchange transactions that relate directly to deposit swap (interest arbitrage) deals, over the period of each deal.
The simultaneous purchase or sale of a financial product in order to take advantage of small price differentials between markets.
Traders and/or price action are acting with conviction.
A financial professional who has expertise in evaluating investments and puts together buy, sell and hold recommendations for clients.
A product is said to ‘appreciate’ when it strengthens in price in response to market demand.
The simultaneous purchase or sale of a financial product in order to take advantage of small price differentials between markets.
23:00 – 08:00 GMT.

Start With " B "

The value of a country’s exports minus its imports.
A type of chart which consists of four significant points: the high and the low prices, which form the vertical bar; the opening price, which is marked with a horizontal line to the left of the bar; and the closing price, which is marked with a horizontal line to the right of the bar.
A certain price of great importance included in the structure of a Barrier Option. If a Barrier Level price is reached, the terms of a specific Barrier Option call for a series of events to occur.
Any number of different option structures (such as knock-in, knock-out, no touch, double-no-touch-DNT) that attaches great importance to a specific price trading. In a no-touch barrier, a largely defined payout is awarded to the buyer of the option by the seller if the strike price is not ‘touched’ before expiry. This creates an incentive for the option seller to drive prices through the strike level and creates an incentive for the option buyer to defend the strike level.
The first currency in a currency pair. It shows how much the base currency is worth as measured against the second currency. For example, if the USD/CHF (U.S. Dollar/Swiss Franc) rate equals 1.6215, then one USD is worth CHF 1.6215. In the forex market, the US dollar is normally considered the base currency for quotes, meaning that quotes are expressed as a unit of $1 USD per the other currency quoted in the pair. The primary exceptions to this rule are the British pound, the euro and the Australian dollar.
The lending rate of the central bank of a given country.

Start With " C "

The GBP/USD (Great British Pound/U.S. Dollar) pair. Cable earned its nickname because the rate was originally transmitted to the US via a transatlantic cable beginning in the mid 1800s when the GBP was the currency of international trade.
The Canadian dollar, also known as Loonie or Funds.
A currency trade which exploits the interest rate difference between two countries. By selling a currency with a low rate of interest and buying a currency with a high rate of interest, the trader will receive the interest difference between the two countries while this trade is open.
A trading strategy that captures the difference in the interest rates earned from being long a currency that pays a relatively high interest rate and short another currency that pays a lower interest rate. For example: NZD/JPY (New Zealand Dollar/Japanese Yen) has been a famous carry trade for some time. NZD is the high yielder and JPY is the low yielder. Traders looking to take advantage of this interest rate differential would buy NZD and sell JPY, or be long NZD/JPY. When NZD/JPY begins to downtrend for an extended period of time, most likely due to a change in interest rates, the carry trade is said to be unwinding.
The price of a product for instant delivery; i.e., the price of a product at that moment in time
Abbreviation referring to central banks.

Start With " D "

Speculators who take positions in commodities and then liquidate those positions prior to the close of the same trading day.
A term that denotes a trade done at the current market price. It is a live trade as opposed to an order.
An individual or firm that acts as a principal or counterpart to a transaction. Principals take one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party. In contrast, a broker is an individual or firm that acts as an intermediary, putting together buyers and sellers for a fee or commission.
A trade where both sides make and take actual delivery of the product traded.
The ratio between the change in price of a product and the change in price of its underlying market.
The decrease in value of an asset over time.

Start With " E "

European Central Bank, the central bank for the countries using the euro.
The currency of the Eurozone.
A market that is thought to have traveled too far, too fast.
A share bought in which the buyer forgoes the right to receive the next dividend and instead it is given to the seller.