Also known as the offer, it's the price a seller is willing to sell at.
The currency used as the base to quote a pair. For instance in the EURUSD pair, the EUR is the base currency, in the USDJPY, the USD is the base.
Someone who believes the prices/market will decline.
A market in which prices decline sharply against a background of widespread pessimism (opposite of Bull Market).
The price at which a trader will buy a currency.
An agent who handles investors' orders to buy and sell currency.
A market characterised by rising prices.
Dealers slang for the Sterling/US Dollar exchange rate.
The overnight interbank interest rate.
The market for the purchase and sale of physical currencies.
The institution that manages a country's monetary policy.
The customer or bank with whom a deal is made. The term is also used in interest and currency swaps markets to refer to a participant in a swap exchange.
An exchange rate between two currencies, usually constructed from the individual exchange rates of the two currencies, measured against the United States dollar.
Option contract which gives the right to buy or sell a currency with another currency at a specified exchange rate during a specified period.
Refers to opening and closing the same position or positions within one day.
Federal Reserve (Fed)
The Central Bank of the United States.
Flat / Square
To be neither long nor short is the same as to be flat or square. One would have a flat book if he has no positions or if all the positions cancel each other out.
Floating Rate Interest
As opposed to a fixed rate, the interest rate on this type of deal will fluctuate with market rates or benchmark rates.
Foreign Exchange Swap
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 and again at a date further in the future at a rate agreed at the time of the contract.
A forward is an agreement with us to exchange one currency for another on an agreed date in the future, at an agreed exchange rate.
Analysis of economic and political data with the goal of determining future movements in a financial market.
"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.
The practice of undertaking one investment activity in order to protect against loss in another, e.g. selling short to nullify a previous purchase, or buying long to offset a previous short sale. While hedges reduce potential losses, they also tend to reduce potential profits.
Usually the highest traded price and the lowest traded price for the underlying instrument for the current trading day.
The required initial deposit of collateral to enter into a position as a guarantee of future performance.
The foreign exchange rates at which large international banks quote other large international banks.
An order to buy at or below a specified price or to sell at or above a specified price.
A market position where the client has bought a currency he/she previously did not hold/ own.
The amount a customer must deposit as collateral to cover any potential losses from adverse movements in prices.
A demand for additional funds. A requirement by a clearing house that a clearing member brings margin deposits up to a required minimum level to cover an adverse movement in price in the market.
The price, or rate, that a willing seller is prepared to sell at.
One Cancels Other Order (O.C.O. Order)
A contingent order where the execution of one part of the order automatically cancels the other part.
Over The Counter (OTC)
Used to describe any transaction that is not conducted over an exchange.
Pip (or Points)
The term used in currency market to represent the smallest incremental move an exchange rate can make. For example 0.0001 in the case of EUR/USD, GBD/USD, USD/CHF, NZD/USD and .01 in the case of USD/JPY.
A price level at which you would expect selling to take place.
Where the settlement of a deal is rolled forward to another value date
For spot foreign exchange trades it is the actual physical exchange of one currency for another.
To go 'short' is to have sold an instrument without actually owning it, and to hold a short position with expectations that the price will decline so it can be bought back in the future at a profit.
A transaction that occurs immediately, but for foreign exchange transactions the funds will usually change hands within two days after deal is struck.
The difference between the bid and offer (ask) prices; used to measure market liquidity. Narrower spreads usually signify high liquidity.
Stop Loss Order
An order to buy or sell at the market when a particular price is reached.
A price level at which you would expect buying to take place.
An effort to forecast future market activity by analyzing market data such as charts, price trends, and volume.
Both a bid and offer are quoted.