Forex Glossary

A-B-C-D-E-F-G-H-I-J-K-L-M-N-O-P-Q-R-S-T-U-V-W-X-Y-Z

A

Account Balance : Same as balance.
AED : ISO 4217 currency code, Currency used in United Arab Emirates, called Dirhams...
American Option : An option which may be exercised at any time prior to expiration....
AOA : ISO 4217 currency code, Currency used in Angola, called Kwanza.
Ask : The price at which the currency or instrument is offered.
Ask Offer Price : The price at which the market is prepared to sell a specific Curr...
Asset Allocation : Investment practice that distributes funds among different marke...
Association Cambiste International : The international society of foreign exchange ...
At-the-money option : Abbreviated ATM option. An option whose present currency pric...
Atekubi : A bearish two-day candlestick combination. It consists of a blank bar tha...
AUD : ISO 4217 currency code, Currency used in Australia, called Dollars.

All the definitions starting by letter A.

B

BAM : ISO 4217 currency code, Currency used in Bosnia and Herzegovina.
Bank of Italy : Abbreviated BOI. The central bank of Italy.
Bid Price : The price at which an investor can place an order to buy a currency pair;...
Blank opening bozu : A bullish candlestick formation that consists of a long blank ...
BOE : See Bank of England.
Bollinger Band Width : A technical indicator that shows a stock´s volatility ...
Broken Dates or Period : Deals that are undertaken for value dates that are not sta...
Bull Market : A prolonged period of generally rising prices.
Bullish tsutsumi : Engulfing bar. A bullish two-day candlestick combination. It con...
Buy On Margin : The process of buying a currency pair where a client pays cash for ...
Buyer-Taker : The purchaser of an option, whether a CALL or PUT option. The buyer m...

All the definitions starting by letter B.

C

Capital Markets : Markets for medium to long term investment (usually over 1 year)....
Carry : See Interest-Rate Carry.
CFTC : See Commodity Futures Trading Commission.
Chaikin Money Flow : Abbreviated CMF. A technical indicator that combines price and...
Commission : The fee that a broker may charge clients for dealing on their behalf.
Commodity Research Bureau s : Abbreviated CRB. Futures Index Index formed from the ...
Consumer Sentiment : Economical indicator, A survey of consumer attitudes concernin...
Country Risk : Risk associated with a cross-border transaction, including but not l...
Cox pricing model : See Rubinstein pricing model.
Currency Risk : The possibility of an unfavorable change in exchange rates.
Current Account : Economical indicator, A measure of the country´s internatio...

All the definitions starting by letter C.

D

Day Trading : Refers to a style or type of trading where trade positions are opened...
Daylight position limit : The maximum amount of a certain currency a trader is allo...
Deal Ticket : The primary method of recording the basic information relating to a t...
Deficit : Shortfall in the balance of trade, balance of payments, or government bud...
Deflator : Difference between real and nominal Gross National Product, which is equ...
Delta Spread : A ratio spread of options established as a neutral position by using...
Deposit Dealings : Money Market operations.
Descending triple bottom : Bearish point-and-figure chart formation that suggests t...
Details : All the information required to finalize a foreign exchange transaction, ...
Direct dealing : An aggressive approach in which banks contact each other outside t...
Discretionary Account : An account in which the customer permits a trading institut...

All the definitions starting by letter D.

E

Economic exposure : Reflects the impact of foreign exchange changes on the future c...
Economic Indicator : A statistic which indicates current economic growth rates and ...
EEK : ISO 4217 currency code, Currency used in Estonia, called Krooni.
Efficient Market : A market in which the current price reflects all available infor...
Elliott Wave Principle : A system of empirically derived rules for interpreting act...
End Of Day : Traders account for their positions in two ways: accrual or mark-to-ma...
Envelope model : A band created by two winding parallel lines above and below a sho...
Eurodollars : US dollars deposited in a bank (US or non US) located outside the USA...
European Court of Justice : The European Economic Community body in charge of settl...
European-style currency option : An option that may only be exercised on the expira...
Exchange Control : A system of controlling inflows and outflows of foreign exchange...

All the definitions starting by letter E.

F

FASB 8 : See Financial Accounting Standards Board s Statement Number 8.
Fed : The United States Federal Reserve. Federal Deposit Insurance Corporation Memb...
Federal Open Market Committee : Abbreviated FOMC. The committee that sets money sup...
Fibonacci percentage retracements : Price retracements of 0.382 and 0.618, or appro...
Financial Future : A futures contract based on a financial instrument.
FINEX : A currency market that is part of the New York Cotton Exchange (NYCE), the ...
Floor brokers : Any individuals on the exchange floor engaged in executing orders f...
Foreign Exchange Risk : The risk that the exchange rate on a foreign currency will ...
Forward Margins : Discounts or premiums between spot rate and the forward rate for ...
Forward Outright : A commitment to buy or sell a currency for delivery on a specifi...
Fundamental Analysis : Analysis of economic and political information with the obje...

All the definitions starting by letter F.

G

Gann percentage retracements : The Gann theory focuses mostly on the eighths, along...
Gap : A mismatch between maturities and cash flows in a bank or individual dealers ...
GBP : ISO 4217 currency code, Currency used in United Kingdom, called Pounds.
GGP : ISO 4217 currency code, Currency used in Guernsey, called Pounds.
GHC : ISO 4217 currency code, Currency used in Ghana, called Cedis.
GNP Deflator : Removes inflation from the GNP figure. Usually expressed as a percen...
Going Long : The purchase of a stock or commodity for investment or speculation.
Gold Standard : A monetary system that backs its currency with a reserve of gold, a...
Good Until Canceled : An instruction to a broker that unlike normal practice the or...
Good Until Friday : The GTF Order is valid until Friday, at the Market closure.
Gross National Product Deflator : See Gross National Product Implicit Deflator.

All the definitions starting by letter G.

H

Hammer : A candlestick with a long lower shadow and small real body. The shadow sho...
hammer at the bottom : See Karakasa.
hangman at the top : See Karakasa.
High-Low : Usually the highest traded price and the lowest traded price for the und...
Historical Volatility : The annualized standard deviation of percentage changes in ...
Hit the Bid : Acceptance of purchasing at the offer or selling at the bid.
HNL : ISO 4217 currency code, Currency used in Honduras, called Lempiras.
Hoshi : See Hoshi star.
Hoshi star : A "wait-and see" two-day candlestick combination. It consist...
Households survey : Consists of the unemployment rate, the overall labor force, and...
HUF : ISO 4217 currency code, Currency used in Hungary, called Forint.

All the definitions starting by letter H.

I

Illiquid Markets : The ability of a market to buy and sell at ease with no impact o...
Implied Volatility : A measurement of the market´s expected price range of th...
Indicative Quote : A market-maker´s price which is not firm.
Initiation margin : A margin paid by the trading party in order to trade currency f...
INR : ISO 4217 currency code, Currency used in India, called Rupees.
Interest-Rate Carry : The income or cost associated with keeping a foreign exchange...
International Fisher effect : Theory holding that investors will hold assets denomi...
Intrinsic Value : The amount by which an option is In-the-money. The intrinsic valu...
IRR : ISO 4217 currency code, Currency used in Iran, called Rials.
ISM : See Institute for Supply Management.
ITM : See In-the-money.

All the definitions starting by letter I.

J

J-Curve theory : Devaluation of a currency will trigger export gains in the long te...
JEP : ISO 4217 currency code, Currency used in Jersey, called Pounds.
Jittai Body of the candlestick : (See Candlestick chart.)
JMD : ISO 4217 currency code, Currency used in Jamaica, called Dollars.
Jobber : A trader who trades for small, short-term profits during the course of a t...
Jobless Claims : Economical indicator, A weekly compilation of the number of indivi...
JOD : ISO 4217 currency code, Currency used in Jordan, called Dinars.
Journal of Commerce Index : Index that consists of the prices of 18 industrial mate...
JPY : ISO 4217 currency code, Currency used in Japan, called Yen.

All the definitions starting by letter J.

K

Karakasa : See Karakasa (hangman at the top, hammer at the bottom).
Kenuki : A "wait-and-see" two-day candlestick combination. It consists of...
Key reversal day : The daily price range on the bar chart of the reversal day fully...
KGS : ISO 4217 currency code, Currency used in Kyrgyzstan, called Soms.
Kirikomi : A bullish two-day candlestick combination. It consists of a blank marubo...
KMF : ISO 4217 currency code, Currency used in Comoros, called Francs.
Knock In : A process where a barrier option (European) becomes active as the underl...
Knock Out : Has a corresponding meaning although the option may permanently cease t...
KRW : ISO 4217 currency code, Currency used in Korea (South), called Won.
KWD : ISO 4217 currency code, Currency used in Kuwait, called Dinars.
KZT : ISO 4217 currency code, Currency used in Kazakhstan, called Tenge.

All the definitions starting by letter K.

L

Last Trading Day : The day on which trading ceases for an expiring contract.
LIBOR : The London Interbank Offered Rate.
Lines : An arrangement by which a bank agrees to lend to the line holder during som...
Liquid Assets : Assets that can be easily converted into cash. Examples: money mark...
Liquidation : Any transaction that offsets or closes out a previously established p...
Liquidity : The ability of a market to accept large transactions.
Long Hedge : The purchase of futures contracts for price protection purposes, as a ...
Long legged shadows doji : A reversal candlestick formation that consists of a bar ...
Long strangle : A compound option that consists of a long CALL and a long PUT on th...
Lot : A unit to measure the amount of the deal. The value of the deal always corres...
LTL : ISO 4217 currency code, Currency used in Lithuania, called Litai.

All the definitions starting by letter L.

M

M3 : In the UK it is M1 plus public and private sector time deposits and sight depo...
MACD : See Moving Average Convergence-Divergence.
Margin : (1) Difference between the buying and selling rates, also used to indicate...
Margin Call : A demand for additional funds to be deposited in a margin account to ...
Marginal Risk : The risk that a customer goes bankrupt after entering into a forwar...
Mark Up : Premium.
MATIF : See Marche a Terme International de France.
Milliard : European term for 1,000 million.
Money Flow Index : Abbreviated MFI. A technical indicator that attempts to show the...
Money Markets : Refers to investments that are short-term (i.e. under one year) and...
Moving averages oscillator : An oscillator in which the values of two consecutive m...

All the definitions starting by letter M.

N

NAD : ISO 4217 currency code, Currency used in Namibia, called Dollars.
Naked intervention : See Naked intervention (unsterilized intervention).
NAPM : See National Association of Purchasing Managers Index.
National Association of Purchasing Managers Index : Abbreviated NAPM. A survey of 2...
National Futures Association : Abbreviated NFA. A self-regulatory organization that...
Nearby Month : The nearest actively traded delivery month, a.k.a. current delivery ...
Netting : A process that enables institutions to settle only their net positions wi...
NFA : See National Futures Association.
NGN : ISO 4217 currency code, Currency used in Nigeria, called Nairas.
Note : A financial instrument consisting of a promise to pay rather than an order t...
NPR : ISO 4217 currency code, Currency used in Nepal, called Nepal Rupees.

All the definitions starting by letter N.

O

OBV : See On Balance Volume.
OECD : See Organization for Economic Cooperation and Development.
Off-Shore : The operations of a financial institution which although physically loc...
Offered Market : Temporary situation where offers exceed bid.
Open Interest : The total number of outstanding option or futures contracts that ha...
Open Market Investment Committee : Abbreviated OMIC. Committee established in 1923 ...
Option : A contract conferring the right but not the obligation to buy (CALL) or to...
Option Class : All options of the same type - calls or puts - listed on the same un...
Options : An agreement that allows the holder to have the option to buy/sell a spec...
Over the Counter : Abbreviated OTC. The term used to describe futures and options n...
Overnight position limit : A position kept overnight by traders.

All the definitions starting by letter O.

P

Pagoda : See Gravestone doji.
Personal Income : Economical indicator, Personal income is the dollar value of inco...
PGK : ISO 4217 currency code, Currency used in Papua New Guinea, called Kina.
PHLX : See Philadelphia Stock Exchange.
Political Risk : Exposure to changes in governmental policy which will have an adve...
Position : The netted total commitments in a given currency. A position can be eith...
Position Squaring : See Close a Position.
PPP : See Purchasing power parity.
Premium forward spread : Forward price that is added to a spot price to calculate a...
Producer Price Indices : See Wholesale Price Indices.
Put-call-forward exchange parity theory : Abbreviated PCFP theory. A relationship b...

All the definitions starting by letter P.

Q

QAR : ISO 4217 currency code, Currency used in Qatar, called Rials.
Quota : (1) A limit on imports or exports. (2) A country´s subscription to th...
Quote : An indicative price. The price quoted for information purposes but not to d...

All the definitions starting by letter Q.

R

Ratio PUT spread : A compound option strategy that consists of a number of long put...
Ratio Spread : Buying a specific quantity of options and selling a larger quantity ...
Regulation : Q Regulation passed by the Federal Reserve that prohibited payment of ...
Reinvestment Rate : The rate at which interest earned on a loan can be reinvested. ...
Resistance level : The peaks representing the price level at which supply exceeds d...
Revaluation Rate : The rate for any period or currency which is used to revalue a p...
Reversal patterns : Patterns that occur at the end of the trend, signaling the tren...
Risk : See Foreign Exchange Risk.
ROL : ISO 4217 currency code, Currency used in Romania, called Lei. [no longer in u...
Roll : See Premium.
Rollover : An overnight swap, specifically the next business day against the follow...

All the definitions starting by letter R.

S

Saucer : See Rounded top.
Settlement Risk : Risk associated with the non settlement of the transaction by the...
SGD : ISO 4217 currency code, Currency used in Singapore, called Dollars.
Shorts : See Short Forward Date-Rate.
spike : See V-formation.
Spot Rate : The price at which the currency is currently trading in the spot market...
StochRSI : A technical indicator that helps traders see what the RSI indicator is d...
Swap Rate : See Forward Margin.
Swing Index : Abbrieviated SI. A momentum oscillator that is plotted on a scale of ...
Synthetic CALL option : A combination of a long currency and a long currency put. S...
SYP : ISO 4217 currency code, Currency used in Syria, called Pounds.

All the definitions starting by letter S.

T

Thin Market : A market in which trading volume is low and in which consequently bid...
Three Buddha top formation : A reversal candlestick combination. It consists of a h...
Three parallel bars : See Sanpei.
Threshold of divergence : A safety feature for the EMS that creates an emergency ex...
Time premium : See Time value.
Tranche : A portion of, specifically used for borrowings from the IMF.
Translation exposure : The risk of change of the consolidated corporate earnings as...
Triangle : A continuation formation that resembles the outline of apennant, but wit...
TRIX Index : An oscillator that consists of a one-day ROC calculation of a triple e...
Turnover : The total money value of currency contracts traded is calculated by mult...
Two-Way Quotation : When a dealer quotes both buying and selling rates for foreign ...

All the definitions starting by letter T.

U

UAH : ISO 4217 currency code, Currency used in Ukraine, called Hryvnia.
Ultimo : Continental term for month or year end.
Under Reference Order : Before finalizing a transaction all the details should be s...
Unit : See Contract.
Up Tick : A transaction executed at a price greater than the previous transaction.
Uptick : a new price quote at a price higher than the preceding quote.
Upward breakout of a bearish resistance line : Bullish point-and-figurechart format...
Upward breakout of a bullish resistance line : Bullish point-and-figure chart forma...
US Prime Rate : The interest rate at which US banks will lend to their prime corpor...
USD : ISO 4217 currency code, Currency used in United States of America, called Dol...
UYU : ISO 4217 currency code, Currency used in Uruguay, called Pesos.

All the definitions starting by letter U.

V

Valeur Compensee : Payments are said to be " valeur compensee" when payment by one ...
Value Today : Transaction executed for same day settlement; sometimes also referred...
VEB : ISO 4217 currency code, Currency used in Venezuela, called Bolivares.
Vega : Expresses the price change of an option for a one per cent change in the imp...
Velocity of money : The rate at which money is turning over on an annual basis to f...
Vertical bear PUT spread : A compound option strategy of buying two options with a ...
Vertical Bear Spread : See Vertical Bull Spread.
Vertical bull PUT spread : A compound option strategy of buying two options with a ...
Volatility : A measure of the amount by which an asset price is expected to fluctua...
Vostro account : A vostro account from the point of view of the counterparty.
VUV : ISO 4217 currency code, Currency used in Vanuatu, called Vatu.

All the definitions starting by letter V.

W

Warrant : Warrants are a form of traded option. They are the right to purchase shar...
Wedge : A continuation formation that resembles the outline of a pennant, but witho...
Whipsaw : Slang for a condition of a highly volatile market where a sharp price mov...
Wholesale Price Index : It measures changes in prices in the manufacturing and dist...
Williams %R : A popular technical indicator that uses Stochastics to determine overb...
Working Balance : Discretionary element in the monetary reserves of a central bank.
Working Day : A day on which the banks in a currency´s principal financial ce...
World Bank : A bank made up of members of the IMF whose aim is to assist in the dev...
WST : ISO 4217 currency code, Currency used in Samoa, called Tala.

All the definitions starting by letter W.

X

XAF : ISO 4217 currency code, Currency used in Communauté Financière ...
XAG : ISO 4217 currency code, Currency used in Silver, called Ounces.
XAU : ISO 4217 currency code, Currency used in Gold, called Ounces.
XCD : ISO 4217 currency code, Currency used in East Caribbean Dollars.
XDR : ISO 4217 currency code, Currency used in International Monetary Fund (IMF) Sp...
XOF : ISO 4217 currency code, Currency used in Communauté Financière ...
XPD : ISO 4217 currency code, Currency used in Palladium Ounces.
XPF : ISO 4217 currency code, Currency used in Comptoirs Français du Pacifiq...
XPT : ISO 4217 currency code, Currency used in Platinum, called Ounces.

All the definitions starting by letter X.

Y

Yard : Slang for milliard, one thousand million.
YEN : See JPY.
YER : ISO 4217 currency code, Currency used in Yemen, called Rials.
Yield Curve : The graph showing changes in yield on instruments depending on time t...

All the definitions starting by letter Y.

Z

ZAR : ISO 4217 currency code, Currency used in South Africa, called Rand.
Zero Coupon Bond : A bond that pays no interest. The bond is initially offered at a...
ZEW : Economical indicator, The ZEW works in the field of user-related empirical ec...
ZigZag : A price overlay that shows filtered price movements that are greater than ...
ZMK : ISO 4217 currency code, Currency used in Zambia, called Kwacha.
ZWD : ISO 4217 currency code, Currency used in Zimbabwe, called Zimbabwe Dollars.

All the definitions starting by letter Z.