A listing of all the financial incomes and outcomes.
All the money in an account.
The jump in the price of a currency due to favorable market conditions.
Making use of countervailing prices in different markets by the buying or selling of an instrument, and then instantly going for an equal and opposite position in a close market in order to make money from the incremental differences in the price.
The price at which someone is willing to sell.
The Australian Dollar.
All the administrative offices supporting the realization of financial transactions and movements.
Balance of Payments
A recording of a nation`s transactions with other countries throughout a certain period of time. Goods, services and flow of capital are also counted.
Balance of Trade
The number calculated by taking out the sum of a country's imports from its exports.
A chart depicting 4 points of importance: the biggest and the lowest prices, making up the vertical bar; the beginning price, which is shown by a small horizontal line on the left side of the bar; and the ending price, shown by a little horizontal line to the right of the bar.
The currency in which a trader keeps his accounts; also it`s the currency against which other currencies are quoted. Normally the USD is the base currency for most trades.
A measurement unit amounting to 1/100 of a percentage point.
A trader who is anticipating the market to go into a negative trend.
A market epitomized by unfavorable trading conditions and lengthy periods of falling prices.
The sum a buyer is ready to pay for an asset.
A financial instrument used in order to raise capital. A bond will earn interest for the one who purchases it at a later point. The price of bonds is negatively correlated to the interest rates.
An individual or company, which serves as a bridge between a buyer and a seller. Usually, the broker is paid a commission for the service.
The acronym for the Central German Bank.
A trader expecting the market to expecting favorable market conditions.
A casual way to refer to the British Pound.
A chart which visualizes the trading range and the starting and ending prices. If the starting price is higher than the ending price, then the rectangle between is shaded. If not, then it`s not shaded.
Markets for average and long-term investments. Normally for period longer than one year.
The government institution in charge of a nation`s currency policies and other monetary related matters. The Federal Reserve serves as a central bank in the US.
An investor who utilizes charts and graphs a lot in order to predict future price trends. Also called a Technical Trader.
The completion of a trade.
Exposures in foreign currencies which are not valid anymore. (Closing a position by selling or buying currency with the goal to offset an equivalent amount of the open position).
The amount paid to a broker for his services.
A document of agreement between two participants in a transaction, specifying the exact terms and conditions.
The standard agreed upon trading agreement.
The other party in a transaction. It could be an individual or an entity.
The exchange rate between two currencies.
Any form of money which is used as basis for economic transaction. It is issued by a nation`s central bank.
The two currencies of a pair. One is the base currency and the other one is expressed in terms of its value against the base currency. An example is the EUR-GBP pair.
The risk of financial loss as a result of market instability and fluctuating exchange rates.
The opening and closing of the same trading position during the same trading session.
An individual or institution serving as a principal or counterparty to a financial agreement for exchange. The principals take a side of a position with the expectations to profit by finishing the position in a trade with a second party. Not to be confused with a broker who acts as an intermediary between a buyer and seller in return of a fee.
A negative funds balance.
The exchange of an asset between two parties.
The borrowing and lending of money. The borrowing/lending rate is also called a deposit rate. Certificates of Deposit can be used as a trading asset.
The deterioration in the value of an asset, usually as a result of worsening economic conditions.
A contract which changes its value depending on the value performance of a related asset.
The devaluation of a currency's value done by the government.
The European Monetary Union Central Bank.
An assessment measurement describing the economic conditions and climate of a country. It`s usually made by a government or a non-government institution. Such indicators are: Gross Domestic Product, Employment Rates, Trade Deficits and Industrial Production.
End of Day
When investors account for their investments. It is done in two ways - accrual and mark-to-market. The accrual method accounts income only when it is realized. It only reflects the profit or loss when the funds were actually transferred. The mark-to-market method accounts for the trader investments at the end of each day, using the closing market indicators.
The currency used in the European Union.
The official date of a transaction.
The Central Bank of the US.
Fixed Exchange Rate
An official exchange rate enforced by a monetary organization for one or more currencies. However, even a fixed exchange rate can have some little price fluctuations.
A trader has a flat book when he doesn`t have any positions or if all his positions are cancelling each other out.
Federal Open Market Committee
The monetary group directing the Federal Reserve.
The purchasing and selling of a currency with the goal of making a profit.
A predetermined exchange rate for a foreign exchange contract which matures at a certain specified date. This is determined by the interest rate difference of the currencies in the transaction.
The units added to or taken out from the exchange rate in order to determine the forward price.
Forward Rate Agreements
Transactions which enable someone to borrow or lend at a previously determined interest rate over a specific time period.
The front office is regularly the official place where the transactions and other business related matters happen.
The examination of economic releases, events and other relevant data with the purpose of better forecasting future price trends.
A contractual agreement for the exchange of an asset at an agreed upon price sometime in the future.
The 5 biggest industrial countries - US, Germany, Japan, France, United Kingdom.
The 7 biggest industrial countries in the world - US, Germany, Japan, France, United Kingdom, Canada, Italy.
Gross Domestic Product
The total amount of a nation`s output, income and production manufactured within its legal borders.
Gross National Product
The sum of everything earned or made by a country`s legal citizens, even if it`s not within the country`s physical borders.
An order for a Dealer to purchase or sell at a predetermined price. It remains active until accomplished or revoked.
A position or a number of positions whose aim is to prevent any major losses in case of unforeseen events.
The biggest and lowest daily values of a given trading asset.
International Monetary Fund
A global organization with 184 member countries. It was created with the purpose of stimulating international monetary cooperation and stability.
An economic situation described by increasing prices of consumer goods and a following the decrease of purchasing power.
The initial deposit of collateral used as a warranty in order to enter into a position.
The Foreign Exchange rates at which big global banks quote other large global banks.
An intentional change to the rate of a currency by the central bank.
An unofficial word for the currency of New Zealand.
Economic indicators which help determine future economic trends (Unemployment, Consumer Price Index, Producer Price Index, Retail Sales, Personal Income, Prime Rate, Discount Rate, and Federal Funds Rate).
The ratio of the security deposit quoted in a transaction (sometimes called margin).
An order which puts a ceiling and floor to the price in a transaction.
Ending an existing position by opening an offsetting one.
The market`s potential for tolerating large transactions with little or no impact on the general price level.
It enables buying more of an asset than it is available on the market. If the market prices increase, there is also a jump in the value of the asset.
A position which goes up in value parallel to the increase in market value (when the base currency in a pair is purchase it is said that the position is long).
The one dollar Canadian coin.
A unit used for determining the proportions of a deal.
It refers to how much equity an investor needs to collateralize a position.
A dealer who quotes both the bidding and asking prices and is in a position to make a two-sided market deal for any asset.
An order to buy or sell at the most lucrative price when the order gets to the market.
Short-term investments made by banks and other financial organizations. Some examples include: Deposits, Certificates of Deposit, Repurchase Agreements, Overnight Index Swaps and Commercial Paper. This type of investment is said to be safe and liquid.
Monetary Policy Committee
A central bank committee whose purpose is to take care of monetary policy problems and difficulties.
An order which is carried out when a market reaches its designated level; normally related to Good-Till-Cancelled Orders.
An active trade which hasn`t been profitable or losing yet and has not been offset by an equal or offsetting deal.
An agreement which enables the owner to buy or sell an asset at an agreed upon price a specific timeframe. (There are two option types – call and put; a call lets the holder buy while a put lets him sell).
An order is a confirmation issued from a customer to a broker, empowering him to make a trade. An order can be issued at a specific price or at the market level. Also, it can be active until filed or until the end of the day.
A trade which stays open until the next trading day comes.
The most minimal possible movement of the exchange rate.
An investment term referring to a trader`s readiness to buy or sell. It can refer to how much currency the trader owns or owes.
The amount of points added to the spot price in order to calculate a forward`s or a future`s price.
The real profit or loss resulting from investment on Closed Positions, plus the theoretical unrealized profit or loss on any Open Positions that have been Mark-to-Market.
A ranging market price, portraying the largest bid or lowest ask price quotable on a security at any point in time.
A steady settlement of the price after a prolonged period of downward moving market trends.
The difference between the highest and lowest values of a futures contract recorded on a specific day.
The value of a currency in terms of another currency.
A deal about the selling and re-purchasing of the same asset, at a predetermined time in the future. The kind of transaction happens on the short-term money market.
A technical analysis term about the price which a currency cannot go beyond. Repeated and failed attempts for the price to go higher will in most cases create a pattern in the shape of a straight line.
Diminishing the amount risk by utilizing financial analysis and other trading methods.
Moving the closure of a deal to another value date.
The swapping of consideration for financial instruments as soon as a transaction is over. (The settlement of a currency trade doesn`t actually have to involve the physical exchange of two currencies).
Going `short` means selling an asset which you don`t actually owe, with expectations that its value will decline so that it could be bought back at a better price.
An investment position which makes money when there is a negative market movement (also when the base currency in a pair is sold, the position is said to be short).
A transaction that is made instantly, but the money will be transferred in two days.
The current market price.
The value difference between the bid and the offer. It`s used for the evaluation market liquidity (smaller spreads usually signal for high liquidity).
Stop Loss Order
An order to buy or sell at a specified.
A technique for seeing a specific price top and bottom at which the exchange rate will get settled automatically.
The instant sale and buying of equal amount of currency at a forward exchange rate.
The detailed analysis of market trends and economic news, along with historical prices and averages. The goal is to gain insight into future price movements.
The smallest movement the price can make. Both positive and negative.
Two Way Price
The bid and ask rate quoted for a Forex investment.
The point in time when the parties of a transaction should fulfil their end of the deal.
An indicator of a market or a security's price changes over time. It is calculated with the standard deviation.
The amount of securities bought and sold within a certain timeframe.