Forex Glossary

The forex trading world is not easy to master if you don’t understand all the complicated forex terms and jargon. That’s why FP Markets Forex has put together a forex glossary to help you breakthrough all that tough terminology and enjoy a successful trading career.

A

ACCRUAL

This refers to the portion of discounts and premiums used on forward exchange transactions relating to deposit swaps for the period of the deal.

ADJUSTABLE PEG                      

This is the regiment that fixes an exchange rate to that of a stronger currency – such as the euro or US dollar. Known as the pegged rate it is occasionally adjusted in an effort to boost a country’s position. As an example, the Yuan in China is often pegged with the US dollar.

ADJUSTMENT

This is official action usually started by a change in a country’s economic policies meant to correct payment imbalances.

AGGREGATE RISK

Aggregate risk references the amount of exposure that a broker or banker enjoys with a client with regards to foreign exchange contracts.

AGGRESSIVE

This refers to trades or price actions which are carried out with conviction.

ANALYST

A professional who is an expert at analyzing investments is known as an analyst.

APPRECIATION

Products ‘appreciate’ when they strengthen as a reaction to strong market demand.

ARBITRAGE

Arbitrage refers to simultaneous purchases or sales of products in an effort to take fast advantage of slight differentials within the forex markets.

ASIAN CENTRAL BANKS

The monetary authorities and central banks of Asia – they can have a strong influence on the direction of currencies in the short-term.

ASK (OFFER) PRICE

The price at which a market is willing to complete the sale of a product: it is also referred to as an offer.

AT BEST

Instructions to the broker to sell or buy based on the best rate that is available.

AUS 200

The name of the Australian Securities Exchange: it features the leading 200 firms (based on market capitalisation) that are listed within the Australian Stock Exchange.

B

BALANCE OF TRADE

This is the value of the exports from a country after the value of its imports has been deducted.

BAR CHART

A chart featuring four notable points: the opening price, indicated with a horizontal line on the left; the high and low prices, which form a vertical bar; and the closing, which is referenced with a horizontal line on the right of the bar.

BARRIER LEVEL

This is a price of vast importance – if it is reached then a number of events are likely to occur.

BARRIER OPTION

There are many different types of option structures: ranging from no touch to knock-in, double no touch and knock-out. These attach importance to specific types of price trading. For example, with a no-touch barrier there is a defined payout for the option buyer from the seller assuming the strike price has not been touched before its expiry. As such the option seller has an incentive to push prices beyond this level; while the option buyer is encouraged to defend this level.

BASE CURRENCY

This is the first currency listed in a currency pair: it shows how much that currency is worth compared to the second. Generally, the US dollar is used as a base currency in the majority of currency pairs.

BASE RATE

The base rate is the rate at which a central bank lends in a particular country.

BASING

Used for technical analysis, this features a chart showing when supply and demand for products are almost equal. This narrows the trading range and helps to merge resistance and support levels.

BASIS POINT

This is a unit of measurement that describes a minimum chance for a product’s price.

BEARISH MARKET

A bearish market refers to a negative price direction: for example, if you see a description of a “bearish” JYP/USD then it means that the Japanese Yen is likely to be weak compared to the US dollar.

BEARS

This is a term for traders who expect the market to decline and hold short positions.

BID PRICE

A price at which a market is willing to purchase a product – typically they are quoted as bid/ask. The bid refers to the price at which a trader could sell a base currency. It also refers to the price a trader could sell a product.

BID/ASK SPREAD

This refers to the difference between the Ask price and the Bid price.

BIG FIGURE

References the first three digits of a currency quote. This means that if a price has moved by 1.5 big figures, it has really moved by 150 pips.

BIS

Stands for the Bank for International Settlements, which is based in Basel in Switzerland: it is considered to be the central bank for all central banks. It acts as an intermediary for national banks and the market in general and is increasingly active when the central banks increase management of currency reserves.

BLACK BOX

This is a term for technical traders or traders who are model-based and systematic.

BLOW OFF

Effectively the upside version of capitulation: it occurs when shorts cover each remaining short position.

BOC

An acronym for the Bank of Canada: Canada’s central bank.

BOE

An acronym for the Bank of England: the central bank for the United Kingdom.

BOJ

An acronym for the Bank of Japan: the central bank for Japan.

BOND

This is the name for debt that is issued during a specified time.

BOOK

The summary of a desk’s or a trader’s total positions within a professional environment.

BRITISH RETAIL CONSORTIUM SHOP PRICE INDEX

Also known as the BRC for short, the British Retail Consortium measures inflation rates among surveyed retailers, focusing on price changes from goods that are purchased at retail outlets.

BROKER

A firm or an individual acting as an intermediary – the aim is to bring sellers and buyers together based on a fee and commission.

BUCK

This is the market slang for one million units with a currency pair based on the US dollar.

BULLS

The name for traders who expect the market will rise and hold for long positions.

C

CABLE

The pairing of GBP and USD earned the nickname of ‘cable’ because this rate was originally transmitted across to the USA using a transatlantic cable back in the 1800s.

CAD

This is the abbreviation for the Canadian Dollar.

CALL OPTION

A trade that exploits the difference in interest rates between two different countries: so a trader who sells at a low rate of interest and buys at a high rate of interest can receive the difference in interest between the countries.

CANADIAN IVEY PURCHASING MANAGERS INDEX (CIPM)

This is a gauge of Canadian business sentiment taken on a monthly basis courtesy of the Richard Ivey Business School.

CANDLESTICK CHART

This is used to indicate the trading range for a particular day: including the price during the opening of trade and the close of trade – when the open price is higher the rectangle is shaded and when the close price is higher, the area is not shaded.

CAPITULATION

Capitulation is the end of an extreme trade, when traders choose to hold their positions. Typically, this is followed by a reversal.

CARRY TRADE

Carry trades are strategies capturing differences in interest rates gained by being a long currency with a high interest rate and a short with another currency paying a lower rate.

CASH MARKET

This is the market from which derivative contracts are based.

CASH PRICE

This is the particular price of a product at a set moment in time.

CBs

This is the acronym used for central banks.

CENTRAL BANK

An organisation, usually run by the government or at least quasi-governmental, which is in control of the monetary policy of an individual country: such as the Federal Reserve in the USA and the Bundesbank in Germany.

CFDs

An abbreviation for contract for difference, this derivative exposes the change in value of underlying assets: including equities and indexes. Traders can use CFDs to leverage capital and this offers the same benefits as when securities are traded: but without needing to actually own the product.

CHARTIST

A trader that uses graphs and charts and makes interpretations of historical data in order to make predictions about future movements and trends.

CLOSED POSITION

This is exposure with a financial contract that is not in existence any more.

COLLATERAL

This is an asset that is offered to guarantee a performance or to secure a loan.

COMMISSION

This is the fee that is charged in order to buy or sell products.

COMMODITY CURRENCIES

These are currencies that come from economies with a large emphasis on natural resources, including: Russia, Australia, Canada and New Zealand.

COMPONENTS

This refers to the dollar pairs that are used to make up crosses (such as EUR/USD with USD/JPY is the equivalent of the components of EUR/JPY).

CONSOLIDATION

Range bound activity periods that follow extended price moves.

CONTAGION

This refers to the tendency for an economic crisis to move from one market across to another.

CONTRACT

This is the standard unit for forex trading.

CONTRACT NOTE

Confirmation that outlines the firm details of a trade.

CONTROLLED RISK

Positions that have limited risks due to guaranteed stops.

CORPORATE ACTION

Events that change the equity structure of stocks, including: mergers, dividends, splits, acquisitions and spinoffs.

CORPORATES

Corporations in the market for financial management and hedging purposes: they are sometimes price sensitive and interest could be long term.

COUNTRY RISK

The risk that is associated with cross-border transactions.

CPI

Short for Consumer Price Index, this is a measure for inflation.

CROWN CURRENCIES

These are the currencies of the Commonwealth: namely the British Pound, the New Zealand Dollar, the Australian Dollar and the Canadian Dollar.

CURRENCY

The term for any type of money that is issued by a central bank or government and is considered the legal tender and base for trades.

CURRENCY PAIRS

These are two currencies which are used to make up foreign exchange rates.

CURRENCY RISK

This is the probability of a negative change for exchange rates.

D

DAY TRADER

This is a term that refers to speculators who take positions in commodities before liquidating those positions before the close of the trading day.

DAY TRADING

This refers to making a trade that you open and close on the same day.

DEAL

A trade done at the existing market price: this is a live trade rather than an order.

DEALER

Firms or individuals that work as counterparts to a transaction – principals will work on one side and hope to achieve a profit by closing in a later trade with a different party.

DEALING SPREAD

This is the difference between the price of buying and selling a contract.

DEFEND A LEVEL

This is an action taken by a trader to prevent the possibility of products trading at certain prices – this is normally because they have a vested interest in this action.

DEFICIT

Deficit refers to a negative balance of payments or trades.

DELIVERY

This is a trade in which both sides will make, as well as take, delivery of each product traded.

DEPRECIATION

The word used to refer to the decrease in value of an asset.

DERIVATIVE

Financial contracts with values based on the values of underlying assets. Typically these include commodities, currencies, equities and indices.

DEVALUATION

This is when a currency is allowed to weaken because of official actions.

DISCOUNT RATE

An interest rate charged to an institution to allow it to borrow short-term funds from the Federal Reserve Bank.

DIVERGENCE

A situation where momentum and price go in opposite directions: for example when prices rise and momentum falls. This can be considered both positive and negative.

DIVIDEND

This is the amount that a company earns and is distributed among its shareholders.

E

ECB

The abbreviation used for the European Central Bank, which is the central bank for countries that use the Euro as their currency.

ECONOMIC INDICATOR

A statistic issued by governments to highlight current stability and economic growth. Normally this is based on gross domestic product, employment rates, retail sales and inflation.

END OF DAY ORDER

This is an order for a purchase or sale at a specific price which will remain open until the end of the trading day.

EURO

This is the currency of the Euro zone.

EUROPEAN MONETARY UNION

Often abbreviated to the EMU, the European Monetary Union aims to link fiscal policies with economic policies across the member states of the European Union.

EUROZONE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD)

This is a monthly index used to measure economic health following 10 indicators including housing permits, interest rate spreads, new orders, average weekly hours and stock prices.

EXPORTERS

These are corporations that sell their goods internationally.

F

FACTORY ORDERS

This indicates the dollar level for non-durable and durable goods: it is more detailed than the durable report which is usually released earlier.

FAIR VALUE

It covers the difference between the underlying cash market price and the price of a derivative contract.

FED

This is a short name for the Federal Reserve Bank, which is the central bank in the USA.

FED OFFICIALS

It is a name for members of the governor board at the Federal Reserve as well as the Federal Reserve Bank Presidents.

FILL

This is a name for when an order is fully executed.

FILL OR KILL

This is an order that would be cancelled if it is not filled in its entirety.

FIRST IN, FIRST OUT (FIFO)

Positions opened within a currency pair will be liquidated based on the order in which they were opened.

FIX

This refers to one of five times during a forex trading day when a large level of currency is bought or sold in order to meet the orders of commercial customers. These times are usually based on market volatility with regular fixes at 5am in Frankfurt, 6am in London, 10am at the World Market House Company, 11am at the World Market House Company, 8:20am at the IMM and 8:15am at the ECB.

FOMC

The acronym for the Federal Open Market Committee: this is the committee that sets the policies of the US Federal Reserve.

FOREIGN EXCHANGE (FOREX, FX)

The buying and selling of a currency: this is usually referred to as the FX or forex market.

FORWARD POINTS

The name for pips which are added to or taken away from an existing exchange rate in order to work out the forward price.

FRA40

This is the index of the leading 40 companies that are listed on the stock exchange in France.

FTSE100

This is the name of the 100 index in the UK.

FUNDS

Usually used for hedge funds which are active in the market: but is also a name for the pairing of the US Dollar and the Canadian Dollar.

FUTURE

Two parties agree to execute a transaction at a certain time in the future after agreeing a price in the present.

G

G7

The group of seven nations: Canada, Italy, France, United States, Japan, Germany and the UK.

G8

This includes the seven nations of the G7, plus Russia.

GAP/GAPPING

Quick market moves that see prices jump several levels without trades. They typically follow major news announcements and the release of economic data.

GEARING

Also referred to as a margin or leverage, gearing is articulated as a fraction or percentage and indicates the trading of a notional value that surpasses the amount of capital a trader needs to keep in their trading account.

GER30

This is the index of the top 30 companies which are listed within the German stock exchange.

GMT

The abbreviation for Greenwich Mean Time, a time zone which does not alter during the year.

GOING LONG

Purchase of stock, currency or commodity for speculation or investment.

GOING SHORT

Refers to the sale of a product or currency that is not owned by the seller with the expectation that prices will decrease.

GOLD

Generally, gold will move in the opposite direction of the US dollar.

GREENBACK

This is the nickname given to the US dollar.

GROSS DOMESTIC PRODUCT (GDP)

This represents the value in total of a country’s output: including its income and expenditure. However, it only refers to the output within its physical borders.

GROSS NATIONAL PRODUCT

Adds income earned from working abroad and investment to Gross Domestic Product.

GUARANTEED ORDER

This is an order type meant to protect traders from market gapping.

GUARANTEED STOP

This is a stop-loss order which will guarantee to close a position at the level the trader dictates. This means that if the market moves your close position is still guaranteed.

H

HEDGE

This is a position, or potentially a combination of several positions, which will reduce the risk of a trader’s primary position.

HK40/HKHI

This is the acronym used for the Hong Kong Hang Seng Index.

I

ILLIQUID

This is a word used for the times when there is little volume that is being traded within the market.

IMM

An abbreviation for the International Monetary Market.

IMM FUTURES

Based on leading currencies competing with the US Dollar, IMM Futures is a futures contract traded in Chicago.

INFLATION

This refers to the economic condition in which the prices for consumer goods increases, therefore reducing purchase power.

IPO

An abbreviation for Initial Public Offering – which is a company’s initial offer to the public for its stock.

INTERBANK RATES

These are the foreign exchange rates that international banks quote to one another.

INTEREST RATE DIFFERENTIAL

This is the difference in interest rates between currency pairs.

INTERVENTION

When a central bank takes action to affect its currency’s value, this is referred to as intervention.

INTRODUCING BROKER

The name given to a corporate entity or person that brings accounts to brokers and receives a fee for these introductions.

ISM MANUFACTURING INDEX

This is an index assessing the US manufacturing sector by taking a survey of executives regarding inventories, deliveries, employment, new orders and future production.

ISM NON-MANUFACTURING

This index surveys sector firms regarding their outlook.

J

JAPANESE ECONOMY WATCHERS SURVEY

This is a survey of businesses that service consumers directly to assess their mood and signal sentiment.

JAPANESE MACHINE TOOL ORDERS

Looks at the total value of orders placed with machine tool manufacturers. This is seen as important as they indicate demand among companies which manufacture machines.

K

KEEP THE POWDER DRY

A message suggesting that trades should be limited because of the trading conditions: such as if the markets are narrow or choppy.

KIWI

This is the nickname given to the NZD/USD currency pair.

KNOCK-INS

These are used to reduce costs of premiums. They can often start hedging activities.

KNOCK-OUTS

An option that will nullify an option that has previously been bought – when it is traded, it means that the underlying option will not exist and hedging has to be unwound.

L

LAST DEALING DAY

This is the last day that you can trade a specific product.

LEVERAGE

Also known as a margin this represents the fractional increase or percentage available to trade from the capital that is available.

LIABILITY

The potential loss, financial obligation or debt.

LIBOR

Standing for the London Inter-Bank Offered Rate, the LIBOR is a base rate that is used for international lending.

LIMITS/LIMIT ORDER

This is an order with the intention of buying at lower levels compared to the market rate or selling at higher levels compared to the current market.

LIQUID MARKET

Any market with a high level of sellers and buyers: enough for prices to move smoothly.

LIQUIDATION

This is when an existing position is closed because offsetting transactions are being executed.

LONG POSITION

A position which will appreciate in value when the market price increases – when base currency pairs are bought, the position is reported to be long.

LOT

This is a unit that is used to measure the amount of the deal.

M

MACRO

Macro refers to the longest term trader who will base their decisions on fundamental analysis. Typically, a macro trader can hold a position from six months to several years.

MANUFACTURING PRODUCTION

This is a measure of the total output of industrial production figures. It measures 13 subsectors which are directly related to manufacturing.

MARGIN

This is the collateral an investor should deposit in order to retain a position.

MARGIN CALL

This is a request being made from a dealer or broker for further funds or collateral when a position moves against the client.

MARKET CAPITALISATION

This refers to the share price multiplied by share numbers to reveal the total value of listed companies.

MARKET RISK

This refers to changes in the market and exposure to these changes.

MARK-TO-MARKET

A market process of re-evaluation of opening positions based on existing market prices.

MEDLEY REPORT

A reference to Medley Global Advisors: this is a market consultancy firm which has close contracts with government officials and central banks. Its reports often influence the movements of the forex trading markets as they are based on inside information.

MoM

This is an abbreviation, standing for month over month.

MONETARY EASING

The process of loosening monetary constraints: this could include deposit ratios, money supply or changing interest rates.

N

NET POSITION

Refers to the amount of currency which is sold or bought and has not been offset by opposing transactions.

NYA.X

A symbol used for the NYSE Composite Index.

O

OFFER

Also referred to as the Ask price, this is the price a market is willing to sell a product. Typically prices are quoted as Bid/Offer – with the offer price also known as the Ask price.

OFFERED

When a market is trading ‘offered’, a pair attracts heavy interest and offers.

ONE CANCELS THE OTHER ORDER (OCO)

This is a designation referring to two orders: meaning that when one of two orders is executed, another will be cancelled automatically.

ONE TOUCH

This pays a fixed amount to the holder whenever the market comes to the predetermined barrier level.

OPEN ORDER

This is an order that is cancelled whenever the market makes a move to its designated price.

ORDER

This is an instruction to complete a trade execution.

OVER THE COUNTER (OTC)

This is a term used to describe transactions that are not conducted with an exchange.

P

PAID

This is a reference to the offer side of the market deal.

PAIR

This is the process in forex trading of matching one currency with another.

PATIENT

Typically this means waiting for certain levels or events to occur before entering a position on the market.

PEGGED

This is a case where a country’s currency value is tied with that of another country’s currency.

PERSONAL INCOME

Refers to an individual’s total annual earnings.

PIPS

Pips are the smallest unit for pricing within any foreign currency. They refer to digits that are either subtracted from or added to the fourth decimal place.

POLITICAL RISK

The likelihood that changes in a government’s policy will influence the movement of the forex market.

PORTFOLIO

This refers to investments that are owned by an entity.

PREMIUM

This is the amount that a forward or future price increases beyond the spot price.

PRICE TRANSPARENCY

These are quotes that are available for every market participant.

PROFITS

This is the difference between the cost and sale price when the sale price is higher.

PULLBACK

This is a common trend in the forex markets in which a market retraces its gains before continuing again in the same direction.

PURCHASING MANAGERS INDEX (PMI)

This economic indicator looks at the performance of manufacturing companies within a country.

PURCHASING MANAGERS INDEX SERVICES

Looks at the outlook for purchasing managers within the service sector – readings that are taken above 50 are generally seen to be indicative of expansion, while readings below 50 are signs of contraction.

PUT OPTION

This is a product that gives the owner a right to sell at a specific price: there is no obligation, however.

Q

QUOTE

A market price used generally just for information purposes.

QUANTITATIVE EASING

The choice of a central bank to push money into its economy with the goal of stimulating market growth.

QUARTERLY CFDs

This is a future that expires once every quarter… so every three months.

R

RALLY

This refers to a market making a rapid recovery following a period of decline.

RANGE

When a price trades typically within a defined high and low point. It is not usual for it to break these boundaries.

RATE

This is the price of one currency compared to another: the rate is typically used for the purposes of dealing.

RBA

An acronym for the Reserve Bank of Australia: Australia’s central bank.

RBNZ

An acronym for the Reserve Bank of New Zealand: New Zealand’s central bank.

REAL MONEY

This refers to traders with significant size, such as asset managers, insurance companies and pension funds. They are seen as real indicators of the long-term market.

RESISTANCE LEVEL

This is the opposite of support and a price that will usually act as a ceiling for a currency.

RETAIL INVESTOR

Refers to someone who invests money from their personal wealth and not from an institution.

RETAIL SALES

This measures retail sales of services and goods that are sold by retailers – sampling different sizes and types.

REVALUATION

Indicates when a pegged currency can rise or strengthen based on official actions.

RISK

This is exposure to uncertain change and usually carries negative connotations.

RISK MANAGEMENT

Financial analysis and trading techniques used to control or reduce exposure to certain types of risk.

ROLLOVER

When an open position for the value date closes at the same time as the opening position for the next day’s value.

ROUND TRIP

A trade which is opened and closed with an opposite but equal deal.

RUT

The symbol used for the Russell 2,000 Index.

S

SEC

An acronym standing for the Securities and Exchange Commission.

SECTOR

Refers to a group of securities which all operate within a similar industry.

SELL

When you take a short position while anticipating that the forex market will go down.

SETTLEMENT

A process when a trade is put into the books, while recording the various counterparts of the transaction.

SHGA.X

This is the symbol for the Shanghai A Index.

SHORT POSITION

This is an investment position that will benefit from declines within the market price.

SHORT COVERING

Following declines, traders often go short to begin buying back.

SHORTS

Traders who are bearish about the market and have sold products.

SIMPLE MOVING AVERAGE (SMA)

A pre-defined set of price bars.

SLIPPAGE

This refers to the difference between a price requested and a price obtained due to changes in market conditions.

SLIPPERY

The idea that the market may be prone to quick movements.

SNB

An abbreviation referring to the Swiss National Bank.

SPOT MARKET

Markets where products are traded at a market price for an immediate exchange.

SPOT PRICE

Refers to the current market price.

SPOT TRADE

Sales or purchases of a product for immediate delivery.

STERLING

The currency used in the UK: also known as the British Pound.

STOCK EXCHANGE

The market where the trade of securities takes place.

STOP LOSS HUNTING

When a market looks to be reaching a particular level it is said to be heavy with stops. When stops are triggered the price often jumps.

STOP ORDER

This is an order to sell or buy when a certain price is reached. At this point, the stop point becomes a market order and will be executed at the best price available.

STOP ENTRY ORDER

This is an order to buy above the existing price or sell below the current price.

STOP LOSS ORDER

An important risk management tool to close long positions below the current market price and close short positions above the market price. This limits the potential downside in the case that the market moves in a direction you did not want.

STOPS BUILDING

A reference to stop loss orders accumulating above the market.

SUPPORT

The price which will act as a floor for future or past price movements.

SWAP

The simultaneous purchase and sale of the same amount of currency with a forward exchange rate.

SWISSIE

This is the name for the combination of the US dollar and the Swiss Franc.

T

T/P

A reference to limit orders that are sold above the level at which they were bought – or a buy back below the level that it was sold. This is known as take profit.

TAKEOVER

When a company takes control of another by purchasing its stock.

TECHNICAL ANALYSIS

Studies of price patterns and charts looking for clues as to the future direction of the market.

TICK

The minimum change in price: either up or down.

TRADE BALANCE

This looks at the difference in value of exported and imported services and goods. Currencies tend to weaken when imports surpass exports; and strengthen when exports surpass imports.

TRADING BID

When bids keep entering the market and prices are pushed up, the pair acts stronger or moves higher.

TRADING RANGE

This is the range between the lowest and highest price of a stock and is usually referenced to a particular period of time.

TRAILING STOP

This allows trades to continue to increase in value when market prices move in a direction you want.

TRANSACTION COST

The particular cost of selling or buying a financial product.

TREND

Movement in price that leads to net changes in value.

TURNOVER

This is the total volume or value of money across all executed transactions for a certain period of time.

U

UGLY

Refers to an unforgiving market with fast movements.

UK100

The name given to the FTSE100 Index.

UK AVERAGE EARNINGS

The average wage, including or excluding bonuses, which are paid to employees in the UK.

UK CLAIMANT COUNT RATE

The number of people claiming unemployment benefits within the UK.

UK HBOS HOUSE PRICE INDEX

The level of house prices in the UK as an indication of the strength of the real estate sector and its influence on overall economic outlook.

UK JOBLESS CLAIMS CHANGE

This tracks the change in the number of people claiming unemployment benefits in the UK during the previous month.

UK PRODUCERS PRICE INDEX INPUT

Measures inflation according to manufacturers: when they attempt to buy services and materials.

UK PRODUCERS PRICE INDEX OUTPUT

A measure of the inflation experienced by manufacturers when they sell their goods and services.

UNEMPLOYMENT RATE

A measurement of the total workforce unemployed and looking for employment.

UPTICK

A price quote that is higher than the previous quote.

US30

A short name for the Dow Jones Index.

US OIL

A name given to WTI crude oil.

US PRIME RATE

The interest rate at which a US bank will lend to corporate customers.

V

VALUE DATE

Sometimes referred to as the maturity date, this is when counterparts in a financial transaction agree to the settlement of their obligations.

VARIATION MARGIN

These are funds that traders need to hold in order to cope with market fluctuations.

VIX

Also known as the Volatility Index, it is a widely used measure of market risk.

VOLATILITY

A reference to active markets that offer trade opportunities in the present climate.

W

WEDGE CHART PATTERN

A chart formation that indicates when a price range narrows over time – an ascending wedge indicates price highs; and a descending wedge indicates price declines.

WHIPSAW

This is a slang term used for volatile markets.

WHOLESALE PRICES

A measurement of the change in prices that retailers pay for finished goods.

WORKING ORDER

This is when a limit order has been requested but has not been filled.

WSJ

An abbreviation for the highly respected Wall Street Journal publication.

X

XAG/USD

This is a symbol used for the silver index.

XAU/USD

A symbol used for the gold index.

XAX.X

A symbol that is used for the AMEX Composite Index.

Y

YARD

A reference to a billion units.

YEN

The basic currency of Japan.

YIELD

A reference to the percentage return from an investment.

YoY

A short abbreviation for Year over Year.

YUAN

The basic currency of China.

 

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