Glossary
| Appreciation | The increase in value of one currency when compared to another |
| Ask Price | The lowest price a potential seller is willing to accept |
| Back Office | Operations department in a financial services company |
| Bank Rate | The rate at which the central bank loans money to its banks |
| Base Currency | The first currency appearing in a currency pair quotation |
| Base Rate | The base rate is the interest rate that a central bank will charge to provide money banks |
| Basis Point | Basis point (BPS) is a common unit of measure for interest rates and other percentages in finance |
| Bear | Bears know as (sellers) think things are going to get worse |
| Bear Market | A currency that has experienced a prolonged period of declining prices |
| Bid Figure | First 3 figures in an exchange rate |
| BIS | The Bank for International Settlements located in, Switzerland, is the central bank for central banks |
| Bretton Woods | 1994 international monetary arrangement to establish a currency exchange rate system for economically developed nations (which is no longer in use) |
| Broker | A broker is an person or firm that charges a fee or commission for executing buy and sell orders submitted by an investor |
| Bull | A bull is an investor who thinks the market is going to rise |
| Bull Market | "bull market" is when a financial instrument is trending in an ascending manner |
| Cable | Cable (or the cable) is a foreign exchange expression used for the GBP/USD currency pair rate (British pound priced in US dollars) |
| Central Bank | The bank which is responsible for a country's monetary policy |
| Counter currency | The currency used as the reference or second currency in a currency pair |
| Counterparty | A counterparty is the other party that partakes in a financial transaction |
| Cross Rate | Any currency pair that does not include the US dollar (USD) |
| Currency | Banknotes and coins issued by a country/government which makes up it's physical monetary supply |
| Currency matrix | By using multiple currency pairs to analise the strengths and weaknesses of a currency |
| Currency Basket | A currency basket is a nominated group of currencies in which the weighted average is used as a measurement of the value or the amount of an obligation |
| Deal Date | A settlement date is defined as the exact date a trade is settled |
| Deal Ticket | A deal ticket is a recorded evidence of all the terms, conditions, and necessary information of a trade agreement |
| Dealer | A firm or individual that buys foreign exchange from one group and then sells it to another group |
| Deficit | When a nation imports more goods, services, and capital than it exports |
| Delivery | Delivery is the action of transferring a currency that is the subject of a sales agreement |
| Delivery Date | The final date by which the principal commodity for a futures or forward contract must be delivered for the terms of the contract to be fulfilled |
| EFT | Electronic fund transfer |
| EMS | European Monetary System |
| European Union | The European Union is a political and economic union of 28 member states that are located primarily in Europe |
| Exchange risk | The financial risk of an investment's value changing due to the alterations in currency exchange rates |
| Exotic | A currency that is a sparsely traded and highly illiquid |
| Expiry Date | The final day on which the holder of an option can exercise their right to buy or sell |
| FED | US Federal Reserve |
| Fixed exchange rate | This occurs when the government seeks to keep the value of a currency secured against another currency |
| Flat/Square | A situation where a trader or portfolio has no market exposure |
| FOMC | The Federal Open Market Committee |
| Foreign Exchange | The process to buy/sell currency |
| Forex | Abbreviation of above term |
| Forward contract | Forward contracts are agreements between two parties to exchange two designated currencies at a explicit time in the future |
| Forward Points | Forward points are the basis points that are subtracted from, or added to, the current spot rate to determine exactly what the forward rate will be on the delivery date |
| Forward Rate | The exchange rate at which a bank agrees to exchange one currency for another at a future planned date |
| Front Office | The trading activities carried out by the dealer |
| Fundamental Analysis | Fundamental analysis is a way of identifying the changes in market valuation by analyzing economic, social, and political forces that affects the supply and demand of an asset |
| FX | Shorthand for Foreign exchange |
| GTC | Goods till cancelled |
| Indicative Quote | A forex quote that is informative only - the quoted price may not be available to trade for |
| Inflation | The rise of overall prices of goods and services which is over a certain period in time |
| Interbank Rates | The interbank rate refers to the price at which banks manages wholesale foreign exchange transactions in both the spot and forward market |
| Interest Rate Risk | Risk that an investment's value will alter due to a change in the absolute level of interest rates |
| Intervention | Occurs when a central bank buys or sells the country's own currency in the foreign exchange market to influence its value |
| Kiwi | Dealer slang for the New Zealand Dollar |
| Lagging Indicator | The analises of previous trading periods to interpret current patterns |
| Leading Indicator | A leading indicator is a sign to which direction the market is headed |
| Liability | To be able to deliver on future contracts |
| Libor | The London Inter-bank Offered Rate is the average of interest rates estimated by each of the prominent banks in London |
| Limit Order | It is a take-profit order assigned with a bank or brokerage to purchase or sell a set amount of a financial instrument at a specified price or better |
| Long | Refers to a trading style in which the trader will keep hold of to a position for an extended period of time |
| Loonie | Dealer slang for the Canadian Dollar |
| Margin | Margin is a good faith deposit that a trader puts up for collateral to hold open a certain position |
| Margin Call | A request from your broker to put more money in your account if you want to continue to trade |
| Maturity | The expiration or settlement date of a security financial instrument |
| Offer | The selling rate of currency by the dealer |
| OCO | One-cancels-the-other order |
| Open Position | Open position refers to the state of affairs where the trade is still not closed but active |
| OTC | Over-the-counter (OTC) or off-exchange trading is conducted directly between two parties |
| Outright Forward | A forward outright foreign exchange transaction is a trade agreed today that will be settled at an agreed date in the future |
| Overbought | Overbought means an prolonged price move to the upside |
| Oversold | Similar to overbought Oversold to the downside |
| Pip | The smallest amount by which a currency quote can altered |
| Point | Point is the minimum possible price change on the left side of a decimal point |
| Range | A range-bound market is one in which price moves around in between a specific high price and low price |
| Rate | Price of one currency with relation to another |
| Reserve Currency | The reserve currency is frequently used in international transactions, international investments and all aspects of the global economy |
| Resistance | The level of price which the sale is projected to take place |
| Revaluation | Revaluation rates are market currency rates from a specific timeframe that are used as a base value by currency traders to assess whether a profit or a loss has been achieved for the day |
| Rollover | Rollover is the interest paid or earned for retaining a currency spot position overnight |
| Selling Rate | The rate at which corporations will sell that currency |
| Settlement | The exchange of currency for another |
| Settlement Date | The standard settlement timeframe for foreign exchange spot transactions |
| Short | When a currency is sold the seller is, hoping for a decline in the market price |
| Slippage | Slippage is when an order is executed, sometimes without a limit order, or a stop loss occurs at a less favorable rate than originally set in the order |
| Spot | The most common Foreign exchange transaction |
| Spot Price Rate | The price that is currently in the spot market |
| Spread | The difference between ASK and BID is called the spread, referred to the costs of the brokerage service |
| Sterling | British pound |
| Stop Loss Order | Stop-loss orders are created to limit an investor's potential loss on a position in a security trade |
| Support Levels | Forex traders aim to buy at or near areas of significant levels of potential support in an uptrend |
| Swap | Simultaneous purchase and sale of equal amounts of one currency for another with two separate value dates |
| Swissy | Trader Slang for Swiss Franc rate |
| Technical Analysis | Technical analysis is the framework in which forex traders check price movement |
| Technical Correction | A technical correction is a reduction in the market price of an asset or entire market after vast price increases |
| Tick | A tick is the lowest rising or downward movement in the price of a security |
| Trade Date | The day committed to the trade and when it is locked in the exchange rate |
| Trailing Stop Loss | A stop loss order that moves relative to price fluctuations |
| Transaction Date | The exact date when a trade occurs |
| Value Date | A date in the future on which the trade is established |
| Value Spot | Trades that are settled two days from date of contract |
| Volatility | Volatility indicates to the amount of uncertainty involved with the size of changes in a currency exchange rate |
| Whipsaw | A whipsaw refers to a condition of intense market volatility, when rapid growth of a price is followed by a drastic fall (or vice versa) |
| Yard | Dealer slang for one billion dollars |