Glossary

A record of all transactions or a special personal account opened with the company by a client. This account is used to offset the obligations of the client and dealer, resulting from the deals concluded under the present agreement.

A full list of completed transactions and non-trading operations of a certain trading account.

A currency is said to ‘appreciate’ when it strengthens in price in response to online forex market demand.

The use of countervailing prices in different markets to profit from small price differentials via the purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market.

Ask is the price at which the market is willing to sell the currency pair. This is the price that is set for the buying of the currency pair by the trader. The amount at which Forex brokers sell a currency.

Any item that carries an economic value. The main forex assets are currencies, CFDs, commodities, stocks, and indices.

The amount of money in an account.

The departments and processes related to the settlement of financial transactions.

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.

The currency in which an investor or issuer maintains his/her book of accounts; the currency against which other currencies are quoted. In the Forex market, the US Dollar is normally considered the “base” currency for quotes, meaning that quotes are expressed as a unit of one USD per the other currency quoted in the pair. The first currency quoted in a pair.

The difference between the spot price and the futures price.

An investor who believes that prices/the markets will decline.

A market distinguished by declining prices.

Bid is the price at which the Forex trading online investors are prepared to buy a certain Forex currency pair for. This is the price that is set for the selling of the trader’s base currency. The amount at which Forex brokers buy a currency.

An individual or firm that acts as an intermediary between buyers and sellers, usually for a fee or commission. A dealer, by contrast, performs the same service but commits capital and takes one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party.

Bonds are tradable instruments (debt securities) which are issued by a borrower to raise capital. They pay either fixed or floating interest, known as the coupon. As interest rates fall, bond prices rise and vice versa.

An investor who believes that prices/the markets will rise.

A market distinguished by rising prices.

This is a pending buy order placed below the market price. For example, if the EUR/USD is quoted at 1.4150/52, then a buy limit order could be placed at 1.4100. In that case, if the EUR/USD ask price reaches 1.4100, then you will be long on the EUR/USD.

This is a pending buy order placed above the market price. For example, if the EUR/USD is quoted at 1.4150/52, an example of a buy stop could be placed at 1.4200. In that case, if the ask price reaches 1.4200, then you will be long on the EUR/USD.

The overnight inter-bank interest rate.

A chart that indicates the trading ranges for the day as well as the opening and closing price. If the close price is lower than the open price, the rectangle is shaded or filled. If the open price is higher than the close price, the rectangle is not filled.

This is the amount (mostly in $ or # of pips) to keep a certain position open.

A financial institution which regulates monetary policy of a country.

Contract for Differences is an agreement between a buyer and a seller to exchange the difference in the current value of a share, currency, commodity or index and its value at the end of the contract.

Price chart, displaying changes in price over time.

A trader who uses charts and technical analysis indicators as tools to forecast market price movements.

Trade settlement process.

Physical or legal party executing operations with the company

The order closing procedure.

is a fixation of profits or losses on an open position; removal of a pending order.

Consists of two opposite trading operations of equal volume (the position opening and closing): buying followed by selling or selling followed by buying.

The fee that a broker may charge clients for a service or trade that is performed.

These are tradable financial instruments whose contracts are based on materials of value that are either extracted from the ground (hard commodities such as gold, natural gas, oil), or are based on agricultural products (corn, coffee, cocoa, wheat).

Centralized Market – A centralized exchange where all orders in the market are routed to, with no other competing exchanges receiving any orders/quotes. As such, all price quotes obtained from that exchange are the same that are given to all participants in that market.

The standard unit of trading on certain exchanges.

Quoted currency which appears second in the currency quote record.

A participant in a financial transaction.

To hedge or close an existing trade.

A currency quote without direct involvement of the USD.

Any form of money issued by a government or central bank and used as legal tender and a basis for trade.

Two indicated currencies which make up a quote at the financial market.

Price rate of one currency against another one.

The risk of incurring losses resulting from an adverse change in exchange rates.

Trading operations to buy/sell one currency for another according to established rules.

Is one of the two components of the balance of payments referring to net revenue on exports minus payments for imports, net revenue on investments and net transfer payments.

Repetition of a certain pattern of price movement at time intervals.

Trader’s order to buy or sell which is valid until the end of the trading day and is cancelled automatically in case of non-performance on the day of issue.

A trader who trades at the market during one day session.

Opening and closing of the same position within one trading day.

Market participant who deals with currency buying and selling on his own account.

Non-cash currency trading.

Amount of money transferred to the trader’s account to cover further operations.

Date on which a transaction is agreed upon.

A FX trade where both sides make and take actual delivery of the currencies traded.

A contract that changes in value in relation to the price movements of a related or underlying security, future or other physical instrument. An Option is the most common derivative instrument.

A negative balance of trade or payments.

The deliberate downward adjustment of a currency’s price, normally by official announcement.

An automated script which is used by the trading platform software to manage positions and orders automatically without (or with little) manual control.

An order to buy or sell at a specified price. This order remains open until the end of the trading day.

E-payment is a subset of an e-commerce transaction, including electronic payment for buying and selling goods or services offered via the Internet. The most common types of e-payment are credit cards, debit cards and prepaid cards.

Client’s balance ( +/- ) profit or loss.

The process of completing an order or deal.

Dealer’s slang to indicate basic figures of the exchange rate value or 100 points of the exchange rate movement.

Is a pattern on a technical analysis chart indicating situation when currency price goes up significantly, and after that moves in a narrow range for some time, and then falls rapidly.

Is a price which moves with no rises or falls.

Amount of profit or loss on currently opened positions which is not fixed and is subject to change.

Transaction which involves the actual exchange of two currencies (principal amount only) on a specific date at a rate agreed at the time of the conclusion of the contract (short leg), at a date further in the future at a rate agreed at the time of the contract (the long leg), in reality this is a combination of a spot and an opposite forward deal.

Financial market where buyers and sellers carry out currency buying/selling transactions.

A deal trade that is executed today for a period longer than two working days (spot value). The forward rate is made up of the spot rate plus or minus the interest rate differentials between the two currencies over time. The interest rate differentials are often known as a premium or discount.

Discounts or premiums between spot rate and the forward rate for a currency, normally quoted in points (pips).

The pips added to or subtracted from the current exchange rate to calculate a forward price.

Trader’s funds on the deposit which are not used as a pledge to open positions.

Sales and corporate finance personnel at a financial institution.

An assessment as a strategy or macro. Currencies are traded using factors with exception to the action of the price. These factors are inclusive of the country’s state (of that particular currency), policies, and certain additional fundamental factors.

A method of trading financial instruments, currencies or commodities for a specific price at a specific date in the future. Unlike options, futures entail the obligation (not the option) to buy or sell instruments at a later date. They can be used to both protect and speculate against the future value of the underlying product.

A break between prices on a chart that occurs when the price makes a sharp move up or down with no trading occurring in between. Gaps can be created by factors such as regular buying or selling pressure, earnings announcements, and a change in an analyst’s outlook, during an adverse development of a financial / economic issue or any other type of news release. Forex gaps can possibly happen at any time of the day as long as there is a disconnection of the price of the currency pair.

The purchase of a stock, commodity, or currency for investment or speculation.

The selling of a currency or instrument not owned by the forex seller.

A graphic display or a technical configuration over a predefined period. A daily graph created information over a period of months or years. A weekly graph creates information for years, and an inter-daily graph represents the trading movements for that day.

Fixed margin within which exchange rates are allowed to fluctuate.

A series of positions and open orders built with a predetermined spread defined by the trader.

“Good Till Cancelled”. An order left with a Dealer to buy or sell at a fixed price. The order remains in place until it is cancelled by the client.

Any one of the major world currencies that is well traded and easily converted into other currencies.

It allows you to trade the opposite direction of your initial trade without having to close that initial trade.

A hedged margin means holding an equal volume of trade on the buy and sell side of an active position simultaneously. This means that if a trader holds 0.5 lots on a long order on EURUSD and also holds 0.5 lots on a short order on EURUSD, the net gain/loss is neutralized until the trader closes one of the positions. This works well as a hedging strategy on well funded accounts. It is used when the trader is suddenly unsure of the outcome of a trade and has no time to utilize a proper hedge on another market.

Usually the highest traded price and the lowest traded price for the underlying instrument for the current trading day.

Data which gives information on the general state of economy or financial markets.

Rise of the general level of prices.

Value of initial deposit which shall be invested as a guarantee for transactions in the future.

Technology of instant transactions execution when streaming quotes are available in the online mode.

This is a financial market that features strictly bank to bank trading of currencies, money market and other financial instruments. In other words, this is the banks’ market. No other class of investor can trade here. An example of an interbank market is the interbank currency auction where central banks sell foreign exchange to commercial banks, who now provide same for customers who need them.

The foreign exchange rates at which large international banks quote other large international banks.

Is the payment for using the money borrowed as a loan.

Is a sum of money which is credited or paid to a lender by a borrower for the use of money. It’s calculated as the ratio of the payment for the use of money to the credit total amount. For instance, if a lender (bank) requires a client to pay $90 a year for the credit of $1000, the interest rate will make 9% (90/1000 * 100%). The interest rate can vary as a result of inflation or change of The Federal Reserve’s policy.

A holder of financial resources on whose behalf currency transactions are conducted at the currency market.

Dealer’s slang for New Zealand Dollar.

Index of the leading macroeconomic indicators.

Leverage is a loan that is provided by an investor by the broker that is handling the dealers Forex account. Usually the amount of leverage provided is either 1:50, 1:100 or 1:200, depending on the broker and the size of the investment. To trade $100,000 worth of currency with a margin of 1%, the investor will only have to deposit $1000 into their margin account. This is a leverage of 1:100.

Trader’s order to open short or long position when the price reaches the target level.

These are the price levels at which a trader has set a take profit target and stop loss for his forex trades respectively. Some trading platforms require the trader to set the profit and stop loss targets using a Limit and Stop order, and the price levels that are chosen for these targets are known as limit and stop levels.

Closure of a trader’s open currency position.

Is the ability to easily sell or buy security or currency.

Currency which can be bought or sold without restrictions at the world financial market.

Buy and sell positions on the same asset with the same trading volume. Locking of positions is an emergency hedging action taken to prevent further increase of a floating loss in a trade that has moved adversely to a trader’s position. If a trade in one direction is going bad and there is a likelihood it may continue for some time, the trader may decide to place another trade in the opposite direction to curtail further losses and buy time to evaluate the positions.

Is currency purchase, when “buy” position is opened.

Reduction in deposit amount due to losses.

The smallest indivisible volume of a selling/buying transaction, at the currency market.

A quantity base currency in one lot, that is specified in the contract.

Is an insurance deposit which provides cover of possible losses of a marginal trade, and is used as a pledge.

A message from a dealing centre to a trader saying that it is necessary to increase funds on marginal account.

An indicator showing the state of a trader’s trading account.

This is the price level that an asset will get to before the broker issues an instruction to the trader to add more funds to his account or risk closure of all open positions. Before signing up for a leveraged trading account such as is obtainable in the forex market, the trader has to agree that a particular price level will be used in the calculation of when a position is closed to protect the broker’s equity in a bad trade. This is the margin call level.

Is currency trading supported by the margin pledge.

A large bank or financial company which has significant share of market operations and which exerts influence on the current level of currency rates.

Order to buy or sell a lot for a current market price.

The date for settlement or expiry of a financial instrument.

Total amount of currency for all open positions held by a trader.

The difference between the company’s income and expenses after tax.

Depositing or withdrawing funds from a trading account, or extending credit.

The quoted price at which a currency can be bought. Also referred as the ‘Ask’.

A contingent order in which the execution of one part of the order automatically cancels the other part.

Any transaction that has not been closed out by a corresponding opposite transaction.

An instruction from a client to a broker to trade. An order can be placed at a specific price or at the market price. It can be good until filled or until close of business.

Any transaction that is not conducted over an exchange.

A trade that remains open until the next business day.

The forex quoting convention of matching one currency against the other.

The client instructs the dealer to buy or sell once the price reaches the order level.

The smallest incremental move an exchange rate can make. Depending on context, this is normally one basis point (0.0001 in the case of EUR/USD, GBP/USD and USD/CHF; and 0.01 in the case of USD/JPY).

A trading viewpoint expressed by buying or selling. Can also refer to the amount of a currency either owned or owed by an investor.

Determines the amount at which future prices will surpass spot prices.

Price feed is a sequence of price quotations that arrives to the trading platform in regard to each

financial instrument, in each currency pair. The feed (the sequence of quotations) is considered to be a change of price over time.

Condition in which every market participant has equal access to the description of quotes.

A positive financial gain from trading operations.

Pullback or correction – is a directed correctional counter-trend movement of the exchange rate, that appears after the trend’s impulse has ceased to exist. The strength and the depth of a pullback is measured in correction levels by using Fibonacci’s numbers – 61,8%, 50%, 38,2%. It is very hard to determine whether you are dealing with a pullback or a change in the trend, until the pullback has ended.

The price of one currency, indicated in the units of another currency.

An indicative market price, depending on the market may be either an indicative price not for trading or a tradable price.

The second currency in a currency pair is referred to as the quote currency. For example, in a USD/JPY currency pair, the Japanese yen is the quote currency. This is also referred to as the secondary currency or the counter currency.

A type of future with expiry dates every three months (once per quarter).

A report published by public companies once every three months, which includes data on the company’s financial situation, such as gains / losses. The statement includes a review of the company’s business situation and the recent and/or future developments.

Difference between two prices.

Price of one currency relative to another.

This type of trade involves the sale and later re-purchase of an instrument, at a specified time and date, and occurs in the short-term money market.

This is a phenomenon that occurs when prices have moved between the time that they are displayed and the time the trader clicks on the order execution button on his platform. The trade is not executed; rather the trader is asked to either accept the new price for his order to be executed, or the order execution is cancelled if no action is taken in a matter of seconds.

A term used in technical analysis indicating a specific price level above which a currency is unable to cross. Recurring failure for the price to move above that point produces a pattern that can usually be shaped by a straight line.

The identification of a potential loss and the handling of the risk usually under strict guidelines.

An asset or liability, which is exposed to fluctuations in value through changes in exchange rates or interest rates.

The interest rate variation between the two currencies when the settlement of a deal is rolled forward to a different date.

Is the method of short-term trading that suggests a large number of positions opened during a trading day fixing small amounts of profit or loss.

The finalizing of a transaction.

An investment position that results from short selling.

To sell an instrument without actually owning it in hopes that the price will decline so it can be bought back in the future at a profit.

The difference between the price displayed on a financial instrument and the actual price when a trade is entered on the trading platform.

Significant difference between subsequent quote and its previous value.

The difference between the bid and offer (ask) prices, which is used to measure market liquidity. Narrower spreads usually signify high liquidity.

A transaction that occurs immediately. The funds will usually change hands within two days after deal is struck.

The current market price.

Order to close positions to limit losses.

Currency buy or sell order when a specified price level is reached.

Stop Out level is a level at which all traders’ orders will be closed due to critically low equity level to prevent further balance drown down. Stop Out will be executed at current market price of opened orders when the margin level is lower then Stop out level.

A term used in technical analysis indicating a specific price level below which a currency is unable to cross. Recurring failure for the price to move below that point produces a pattern that can be displayed using an approximate straight line.

The temporary holding of a security that is then exchanged after a fixed period of time. To calculate the swap, find the interest rate differential between the two currencies. The value may be used for speculative purposes to exploit anticipated movement in the interest rates.

Take Profit is designed to close a position by reaching the targeted profit level and is set at a price better than the price of position opening or the price of pending order execution.

Is a method of forecasting future price direction with the help of price charts examination.

Minimum one time change of a trading tool price, in the financial markets.

Price chart built on the ticks values.

A set of software and hardware supporting trading in the market.

A trailing stop allows a trade to continue to gain in value when the market price moves in a favorable direction, but automatically closes the trade if the market price suddenly moves in an unfavorable direction by a specified distance. Placing contingent orders may not necessarily limit your losses.

An operation of opening and closing of a currency position.

The total money value of all executed transactions in a given time period; volume.

New price quote which is higher than previous price.

Ascending price trend, “bullish” trend.

Is a part of deposit not involved in trading which can be used to open new positions (orders). It is denoted as “Free” in the trading platform.

Is the blocked part of the deposit, which is used to cover potential losses on open orders. In the trading platform it is displayed in the Margin field.

A knockout (i.e. nullified) option that gets cancelled once the price of the commodity or underlying instrument rises above a pre-determined level.

Refers to movements on a market’s price chart where every successive peak or trough is higher, or lower, than the preceding one.

The date when transaction terms are implemented.

A measure of risk, usually a statistical indicator, which characterize the degree of an asset price changeability.

The value of securities traded during a specific period.

Index is a macro-economic index of data on wages.

Chart formation that shows a narrowing price range over time, where price highs in an ascending wedge decrease incrementally, or in a descending wedge, price declines are incrementally smaller. Ascending wedges typically conclude with a downside breakout and descending wedges typically terminate with upside breakouts.

Wire transfer is an electronic payment service for transferring funds between two accounts by electronic means.

Symbol for Silver Index.

Symbol for Gold Index.

Symbol for AMEX Composite Index.

means a billion US Dollars, in dealer’s slang.

The return from bonds.

Also called yield ratio, it compares the dividend yield (ratio of annualized dividends to the price of a share) on equities with the yield on long-term government bonds. It helps assess if equities are under- or over-priced as compared with government bonds.

Short form for zero balance account. It is a checking account with zero balance maintained by funds transfers from a master account in amounts only large enough to cover checks presented.