Market 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 STATEMENT REPORT

Account Statement Reports provide customers with details of all credits, debits, trading confirmations and other activity that occurs in the account over a specified time period.

ACCOUNT VALUE

The current value of a customer's account - changes to the amount of money deposited as a result of profits and losses from existing and closed out positions, credits/ debits from daily rollovers and other charges such as commissions, transfer fees or bank related fees where applicable.

AGGREGATE DEMAND

The total demand for goods and services in the economy. This includes both private and public sector demand within the country and the demand of consumers and firms in other countries.

AGGREGATE RISK

The amount of exposure a customer has to the movement of spot contracts and forward contracts

AGGREGATE SUPPLY

The total supply of goods and services in the economy from domestic sources (including imports) which are available to meet aggregate demand.

APPRECIATION

Describes a currency increasing or strengthening in value relative to another in forex markets.

ARBITRAGE

Forex arbitrage is a risk-free trading strategy, which involves acting on opportunities presented by pricing inefficiencies in the short window they exist - buying and selling of different currency pairs to exploit any pricing inefficiencies. it allows traders to make a profit with no open currency exposure.

ASSET ALLOCATION

Dividing funds amongst different investment opportunities in an attempt to achieve diversification for maximum return.

ASK

The price at which the currency is offered for sale by Tradermade.

"AT BEST"

A specific order given to a dealer to buy or sell at the most desirable price available, and as quickly as possible.

"AT OR BETTER"

A specific order given to a dealer to buy or sell at a specific rate/price or better.

AUSTRALIAN DOLLAR (AUD)

The currency abbreviation for the Australian dollar, the currency for the Commonwealth of Australia. The Australian dollar (AUD) is often presented with the symbol $, A$, or AU$ and is made up of 100 cents. The AUD is also the currency for Pacific Island states of Nauru, Tuvalu and Kiribati.

B

BALANCE OF PAYMENTS

A record of the real economic transactions for a particular country oven a given time period. All countries are either in a balance of payment excess or balance of payment deficit. Prolonged balance of payment deficits could lead to restrictions in capital transfers, and/or a decline in currency values.

BALANCE OF TRADE OR TRADE BALANCE

This is the value of exports less the value of imports for a particular country. A ‘balance of trade deficit’ is when a country imports more than it exports and vice versa for a ‘balance of trade surplus’. If a country is in a state of prolonged trade deficit then the currency versus its trading partners should decline, making the cost of imports more expensive and exports cheaper for the trading partners.

BANK LINE

Line of credit granted by a bank to a customer.

BANKING DAY (OR BUSINESS DAY)

Any day on which commercial banks are open for business in the financial centre of the country whose currency a position is taken.

BANK OF ENGLAND (BOE)

The Bank of England is the central bank for the United Kingdom. It has a wide range of responsibilities –acting as the government's bank and also the lender of last resort, it issues currency and, most importantly, it oversees monetary policy.

BANK OF JAPAN OR BOJ

The central bank of Japan (BOJ).

BASE CURRENCY

This refers to the first currency in a currency pair. In the currency pair GBPUSD, the Base Currency is the GBP.

BASE RATE

A term predominantly used in the United kingdom referring to the rate used by banks to calculate the interest rate charged to borrowers.

BASIS POINT

A value equalling one one-hundredth of a percent (1/100 of 1%), i.e. The difference between 2.75% and 2.76.

BEAR MARKET

The term used to describe a prolonged period of generally falling prices for a particular investment product.

BEAR SQUEEZE

A ‘bear squeeze’ occurs when a central bank buys its own currency to improve its exchange rate, this situation would result in a loss to speculators betting against that currency.

BEAR

An investor who believes that price of an investment product is going to drop. A bear market is a prolonged period of falling stock prices.

BEST-EFFORTS BASIS

When a trader executes an order at the price that is next available, when there is above average order flow.

BID

The price at which a broker offers to buy the currency pair from a customer.

BREAK OR BREAK OUT

Term used to describe a sudden or rapid change in prices outside the usual range.

BROKER

An agent (individual or firm) who executes an investors orders to buy and sell currencies and related instruments either for a commission or on a spread.

BROKERAGE

This is the commission charged by a broker.

BULL MARKET

The term used to describe a market where there is a prolonged period of generally rising prices for a particular investment product.

BULL

An investor who believes that prices of particular investment products are going to rise.

BUNDESBANK

The Central Bank of Germany.

BUY LIMIT

An order which specifies the highest price at which the purchase of the Base Currency in a Currency Pair can be executed. The limit price in a Buy limit order should be lower than the current dealing Ask price.

BUY STOP

A Buy Stop is an instruction to purchase a security ABOVE the current dealing Ask price and is not activated until the market Ask price is at or above the Stop Price. Once the price hits that point, the buy stop becomes a market order, fillable at the next available price. The buy stop order can serve a variety of purposes with the underlying assumption that a share price that climbs to a certain height will continue to rise.

C

CABLE

The term used in the forex market for the US Dollar/British Pound rate.

CANADIAN DOLLAR (CAD)

The currency abbreviation for the Canadian dollar (CAD) - made up of 100 ‘cents’ and often presented with the dollar sign as C$ to allow it to be distinguished from other dollar currencies, such as the U.S. dollar (USD). CAD is a benchmark currency, i.e. many central banks across the globe keep Canadian dollars as a reserve currency.

CARRY

This is a strategy whereby a high-yielding currency funds the trade with a low-yielding currency.

CASH DELIVERY

This normally refers to an exchange transaction that is contracted for same day settlement.

CASH ON DEPOSIT

In the case of forex this refers to the cash deposited into a trading account., plus or minus the realized closed position P/L and other debits or credits such as rollovers, and commission.

CENTRAL BANK

A bank, which is responsible for controlling a country's or region's monetary policy. In the US it is the Federal Reserve, In Europe it is The Central Bank of Europe, in England it is the Bank of England and in Japan it is The Central Bank of Japan.

CENTRAL BANK INTERVENTION

The act by which a central bank enters the spot foreign exchange market and attempts to influence unbalanced supply and demand forces through the direct purchase/sale of foreign exchange.

CHARTING APPLICATION

An application that allows a trader to view historical market data. Many forex brokers will provide a free charting application but many are poor quality with limited functionality.

CHARTIST

An individual t who uses technical analysis of charts and graphs of historical data to interpret and predict market movements.

CHINA RETAIL SALES

This report is released once a month and is an economic indicator which is potentially market moving - it measures the sale of retail goods in China over a given time period.

CLOSED POSITION

A closed position is one that has been terminated by either buying or selling, offsetting a previously open position to have no commitment.

CME

Chicago Mercantile Exchange (CME)

COMMISSION

The amount that a broker may charge clients for dealing on their behalf.

COMMODITY FUTURES TRADING COMMISSION ("CFTC")

A federal agency in the USA, which regulates commodity futures and options, foreign exchange and swaps.

CONFIRMATION

A notice that describes all the relevant details of a FX transaction.

CONSUMER PRICE INDEX

A monthly type of cost-of-living index. The CPI measures the change in price of a basket of consumer goods and services,including food, clothing, and transport. Countries vary in their approach to rents and mortgages.

CONVERSION RATE

This rate represents the relative value between two currencies. As this rate changes, one country's money can become weaker or stronger against other currencies.

CORRESPONDENT BANK

A bank that provides services on behalf of another financial institution which has no branch in the relevant center - it can facilitate wire transfers, conduct business transactions, accept deposits, and gather documents on their behalf.

COUNTER CURRENCY

This refers to the second currency in a currency pair, e.g. EUR/USD, the Counter Currency is the USD.

COUNTERPARTY

The opposite party in a currency transaction. If you are the seller, the counterparty is the buyer and vice versa.

COUNTRY RISK

This refers to the probability that changes in the business environment in another country where you are doing business may adversely impact your operations or payment for imports. This involves examination of the economic, political and geographical factors of a particular country.

COVER

The act of performing a number of actions that reduce an investor's exposure.

CREDIT RISK

The risk that a counterparty fails to make payment or perform on a transaction prior to or upon settlement.

CROSS CURRENCY CONTRACT

A contract in which one party borrows one currency from another party and simultaneously lends the same value, at current spot rates, of a second currency to that party. The currencies exchanged are not the US Dollar.

CURRENCY

A Foreign currency or US Dollar.

CURRENCY PAIR

The two currencies involved in a foreign exchange transaction.

D

DAILY CUT-OFF (OR CLOSE OF BUSINESS DAY)

The time designed by the broker as the end of the Business Day. Any Contract entered into after this point will be marked as executed on the next Business Day.

DAILY PERCENTAGE CHANGE

The percentage difference between the last price(current) and today's open price.

DAY ORDER

An order that if not executed on the specified day is automatically cancelled.

DAY TRADER

A day trader is defined as someone who buys and sells in FX within a single trading day - positions are liquidated prior to the close of the same trading day.

DEAL BLOTTER

A trader’s record of all the deals that were executed over the trading day – this contains information pertinent to the transactions for the day and also serves as an audit trail. It is also useful to review if a particular trading strategy was successful.

DEAL DATE

The date on which a transaction is agreed upon.

DEAL TICKET

Also called a Trading ticket – it is the record of all the details that are associated with a specific trade. Information recorded includes the time of the transaction, the quantity traded, the names of the parties involved in the trade and also the price at which the transaction took place.

DEALER

A firm or individual that buys forex from one party and then sells it onto another. The dealer makes the difference between the buying and selling prices, or the spread. Dealers trade for their own account and risk.

DEFAULT

Generally speaking this refers to a breach of contract.

DEMO TRADING PLATFORM

A demo trading platforms allow new traders to get used to the trading without any risk. The platform does not execute live deals or contracts, profit or loss on this platform do not are indicative only.

DEPRECIATION

A decline in the value of a currency due to market forces.

DEPTH OF MARKET

’DOM’ data shows the number of open buy and sell orders for a currency at different prices. It is also referred to as the ‘order book’, since it shows pending orders.

DETAILS

All the information required to finalise a forex transaction, i.e. name, rate, and dates.

DEVALUATION

Currency devaluation is a deliberate downward adjustment of the value of a country's currency against another currency. After devaluations, the same amount of a foreign currency buys greater quantities of the country's currency than before the devaluation – they are normally initiated by a formal announcement by a country

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DISCRETIONARY INCOME

A person’s income net of tax and fixed personal spending commitments – i.e. available money they have to spend on non-essential items such as luxury goods, holidays and other non -essential goods and services.

DM, DMARK

Deutsche Mark (DM)

(DOLLAR) MOVING AVERAGE

An indicator frequently used in FX technical analysis showing the average value of a price over a set time period. These averages are generally used to measure momentum and identify areas of possible support and resistance.

DOMESTIC RATES

This refers to the interest rates which are applicable to deposits in the country of origin.

DOWN TICK

A downtick is a measure of a downward price movement and is a natural part of market fluctuations. It can have a number of causes, including an increase in supply over demand for a given stock.

E

EASING

A reduction of interest rates by the central bank, this effect of this is to increase the domestic money supply

ECONOMIC CALENDAR

The economic calendar refers to the dates of significant releases or events that may affect movement of individual security prices or markets as a whole. Forex traders use the economic calendar to track the release, forecast and results of potentially market moving economic indicators.

ECU

European Currency Unit.

EITHER WAY MARKET

In the interbank Eurodollar deposit market, an either-way market is one where both bid and offer rates for a particular period are the same.

EURO

The exchange currency of the European Union.

EURO RATES

The interest rates quoted for Euro-currencies over a specific period.

EUROCURRENCY

Originally, the term for a deposit made outside one's own home country, but denominated in the home country currency.This terminology is confusing since the European Currency unit, is also called the Euro.

EURODOLLARS

US dollars deposited in a bank (US or non US) which is located outside the USA.

EUROPEAN CENTRAL BANK (ECB)

The central bank for the eurozone formed in Germany in 1998 prior to the introduction of the euro in 1999. It issues the euro and sets monetary policy, by setting key interest rates. The ECB is independent of all other government bodies of the European Union and its member states,but works with the other national banks of each of the EU members to formulate monetary policy that helps maintain price stability in the European Union.

EUROPEAN UNION

The group formerly referred to as the European Community.

EXCESS MARGIN DEPOSITS

Money deposited with broker that is not allocated for margin against an existing open position.

EXCHANGE

A place where instruments are traded and often regulated. E.g. the New York Stock Exchange, the Chicago Board of Trade. Most countries have a main exchange and many also have smaller, regional exchanges.

EXCHANGE CONTROL

Government restrictions on the purchase of foreign currencies by domestic citizens or on the purchase of the local domestic currency by foreigners. –control devices include licensing multiple currencies, quotas, auctions, limits, levies and surcharges.

EXISTING HOME SALES

This is an economic indicator of both the number and prices of existing single-family homes, condos and co-op sales over a one-month period. It is considered an economic indicator of the availability and affordability of mortgages and real estate in the United States. The report is released monthly by the U.S. National Association of Realtors. It is a lagging indicator since it tends to react after a change in mortgage rates.

EXOTIC

This term refers to a less broadly traded currency.

F

FAST MARKET

An exchange or financial market undergoing an extreme amount of volatility . The rapid movement of prices or rates in market caused by disequilibria in supply and demand conditions from buyers and/or sellers. In a fast market rates or prices may not be available to customers until an orderly market resumes.

FED FUND RATE

The short term (overnight) rate pegged by the Federal Reserve Bank used to conduct monetary policy and money supply in the United States economy. The Fed funds rate often points to the direction of US interest rates. It is considered the most sensitive indicator of the direction of interest rates, since it is set daily unlike the prime rate and the discount rate.

FED FUNDS

Cash balances held by banks with their local Federal Reserve Bank. Federal funds are available for lending to other banks on an overnight basis.

FED

The United States Federal Reserve Bank.

FEDERAL OPEN MARKET COMMITTEE

‘FOMC ‘ - The body of individuals that is responsible for setting the interest rates and credit policies of the Federal Reserve System. The FOMC is directly responsible for pegging the Federal Funds rate and the Discount Rate. (Both rates are influential in controlling levels of money supply and economic activity in the United States.)

FEDERAL RESERVE SYSTEM

The central banking system of the US – this is made up of 12 Federal Reserve Banks controlling 12 districts under the Federal Reserve Board. Membership is compulsory for banks chartered by the Comtroller of Currency and is optional for state chartered banks.

FISCAL POLICY

Use of taxation as a tool in implementing monetary policy.

FIXED EXCHANGE RATE

An official exchange rate for a currency where the government has decided to link the value of its own currency to another currency or to some valuable commodity like gold.

FIXING

A method of determining rates by finding a rate that balances buyers to sellers. This occurs either once or twice a day at defined times. Used by some currencies particularly for establishing tourist rates.

FLOATING EXCHANGE RATE

A floating exchange rate is a type of exchange-rate regime in which a currency's value is allowed to fluctuate in response to foreign-exchange market events. A currency that uses a floating exchange rate is known as a floating currency. Even floating currencies are subject to intervention by the monetary authorities. When such activity is frequent the float is known as a ‘dirty float.’

FOREIGN EXCHANGE

The trading of one currency for another.

FOREX

"Forex" a short name for ‘foreign exchange’ – The trading of one currency for another.

FOREX MARKET HOURS

The hours during which Forex traders are able to buy, sell, exchange and speculate on currencies. The market is open 24 hours a day, five days a week. International currency markets are made up of banks, commercial companies, central banks, investment management firms, hedge funds, and retail Forex brokers and investors around the world. As this forex market operates in multiple time zones around the world, it can be accessed at almost any time.

FOREX SIGNAL (SYSTEM)

A signal indicating that a Trader can you to make a decision to buy or sell a currency and a given point in time.

Signal generation systems can use a number technical analysis principles or economic considerations to generate alerts. A traders system will consist of a number of signals that work together to create a trading strategy. Many people offer trading signals, some free and some paid.

TraderMade offer free trading signals though its Analysis Portal

FOREX TECHNICAL ANALYSIS

Technical analysis uses established principles and charting tools to identify patterns or trends in a currency market. Technical Analysis works on the idea that you can predict future price movement based on historical price movements.

FOREX TECHNICAL TRADING

Technical Trading uses charts, indicators, oscillators and other tools to establish possible Forex market trends and trading opportunities.

FORWARD DEAL

A deal with a value date greater than the spot value date.

FORWARD FORWARD

A forward / forward deal is an agreement between two parties to engage in a loan transaction in the future. The lender agrees to lend the borrower funds on a specified future date. The borrower agrees to repay the loan, plus a premium, at a date beyond the loan issue date. FORWARD RATE

A forward rate is an interest rate applicable to a financial transaction that will take place in the future. Forward rates are quoted in terms of forward points, which represents the difference between the forward and spot rates.

FRONT OFFICE

Simply put, the front office refers to the activities carried out by the dealer, normal trading activities.

FUNDAMENTALS

Fundamental analysis is a way of looking at the forex market by analyzing economic, social, and political forces that may affect the supply and demand of an asset. – these include include inflation, growth, trade balance, government deficit, and interest rates.

FX

"FX" is a popular acronym for Foreign Exchange. Foreign Exchange generally refers to off exchange trading in foreign currency.

G

G7

The top seven industrial economies - US , Germany, Japan, France, UK, Canada, Italy.

G10

This refers to the G7 plus Belgium, Netherlands and Sweden. Switzerland is sometimes peripherally involved.

GOING LONG

To buy a currency pair, the first currency is bought and the second is sold, e.g. buying EUR/USD, you would be "going long" the Euro.

GOING SHORT

To sell a currency pair - the first currency is sold and the second one is boucht, e.g.selling EUR/USD, you would be "going short" the Euro.

GTC

Good Till Cancelled.

H

"HIT THE BID"

This is the term used to describe an event where a trader sells a currency pair at a price quoted by another trader..

HOLDER

Buyer of a currency pair.

I

INDICATIVE QUOTE

A quote provided by a market maker which is a reasonable estimate of a currency's current market price - the market maker is not obligated to honor an indicative quote.

INITIAL MARGIN REQUIREMENT

The minimum Margin Balance required to open a new position with a broker. Initial Margin requirement can be expressed as a percentage (i.e., 2% of Sterling position amount) or can be calculated by the Leverage Ratio.

INTERBANK MARKET

The global network used by financial institutions to trade currencies between themselves.

INTERNATIONAL TRADE

This is the exchange of capital, goods, and services across international borders - such trade represents a significant share of gross domestic product (GDP).This type of trade gives rise to a world economy where prices, or supply and demand, affect and are affected by global events.

INTERVENTION

A monetary policy tool used by a central bank in an attempt to affect the value of its currency. Concerted intervention refers to action by a number of central banks to influence the value of exchange rates.

INTRA DAY POSITION

Open positions run by a trader during the day and usually squared by the close.

INTRODUCING BROKER

A person or legal entity that introduces customers to a broker, often in return for a fee per transaction. Introducing Brokers are prevented from accepting margined funds from their customers.

J

K

KIWI

Slang term for the New Zealand dollar.

L

LEFT-HAND SIDE

When you take the left hand side of a two way quote i.e. selling the quoted currency.

LEVERAGE

Leverage is when you can control a large position in the market utilising a small amount of capital in your account. Stock traders will call this trading on margin.

LIMIT ORDER

An order to buy or sell at a specified price or better - A sell limit order is filled at the specified price or higher, whilst buy limit orders are executed at the specified price or lower.

LIMIT PRICE

The price that the customer specifies when entering a Limit Order - see above.

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LIQUID

The condition in the market where there are ample available buyers and sellers and comparatively low transaction costs.

LIQUIDATION

Any transaction that offsets or closes out a previously established position.

LIQUIDATION LEVEL

The liquidation level is the predetermined level at which an automatically-triggered liquidation process will start. Liquidation occurs when the Account Value is not sufficient to maintain the current open position(s). A customer can prevent liquidation by depositing additional money into the account, or by closing out existing open position(s).

LIQUIDITY

The term refers to the amount of volume available to buy or sell at a point in time.

LONG

This is the buying of a stock, commodity, or currency with the expectation that it will rise in value.

M

MACD

Moving Average Convergence Divergence

(MACD) - is an indicator used in technical analysis which shows the differences between both the fast and slow EMAs (Exponential Moving Average) of closing prices, although since 1986 the graph has been produced as a histogram. The moving average as expressed by the MACD is essentially the average of a price over a certain set amount of time and the MACD enables easy demonstration of the relationship between two exponential examples of the moving average.The MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA - this result is the MACD line. A 9 day EMA of the MACD called the "signal line," is then plotted on top of the MACD line, which can function as a trigger for buy and sell signals.

"MAKE A MARKET"

A dealer is said to "make a market"; when the dealer gives a quoted bid and ask price to a customer. The price represents the prices at which the dealer is ready to buy from or sell to a customer.

MARGIN CALL

A margin call is when a broker makes a demand for additional funds so that the margin account is brought up to the minimum maintenance margin. This happens when the account value falls below the broker's required minimum value due to adverse exchange rate movements.

MARGIN

This is a percentage of the full amount of the chosen position. For instance, most Forex margin requirements are estimated to be around: 2%, 1%, 0.5%, 0.25%. Based on the margin you can work out the maximum leverage you can wield in your trading account.

MARKET MAKER

An individual market participant or member firm of an exchange that buys/sells securities for its own account, at prices it displays in its exchange’s trading system. The main goal is to profit on the bid-ask spread, which is the amount by which the ask price exceeds the bid price a market asset.

MARKET ORDER

This is an order to buy or sell a chosen currency pair at the current market price. It will be executed at the price displayed at the moment the user clicks the button, but only if the currency price remains within a price range (for example, 5 pips) set by the broker.

MAXIMUM TRADING LEVERAGE RATIO

Maximum expressed as a ratio is the largest allowable size of a trading position permitted through a leveraged account e.g. a leverage ratio of 50:1 allows a customer the ability to control a £100,000 lot position with £2,000 of margin (100,000 / 50 = 2,000).

MID

The middle point between the BID and ASK prices. example- EURUSD BID: 1.11710 ASK: 1.11725 MID: (1.11710+1.11726)/2=1.11718

MONEY SUPPLY

The total amount of bills, coins, loans, credit and other liquid instruments in a country's economy. The money supply figure is important to economists trying to understand how policies will affect interest rates and growth.

MOVING AVERAGE

A way of smoothing a set of price/rate data by taking the average price of data range of values.

N

NET INTEREST RATE DIFFERENTIAL

The net interest rate differential is the difference in interest rates between two countries - e.g. if the spot next rate for the Euro is 3.5% and the spot/next rate in the US is 1.75%, the interest differential is 1.75% (3.5% - 1.75% = 1.75%).

NETTING

NEW ZEALAND DOLLAR (NZD)

This is the currency of New Zealand - It is divided into 100 cents, and usually written with the dollar sign $, or NZ$.

O

OCO ORDER (ONE CANCEL THE OTHER ORDER)

(OCO) is a pair of orders stipulating that if one order executes, then the other order is automatically cancelled. This order combines a stop order with a limit order on an automated trading platform.

OFFER

The amount at which a dealer is willing to sell a cuurency. The Offer is also called the Ask or Ask Price.

OLD LADY

Another name for the for the Bank of England - old Lady of Threadneedle Street.

OPEN POSITION

The difference between assets and liabilities in a particular currency. This may be measured on a per currency basis or the position of all currencies when calculated in base currency. An open position represents market exposure/risk for the investor..

ORDER(S)

When a customer gives directions via an online trading platform or verbally to enter into a specific foreign exchange contract with a broker, by buying or selling a specified currency pair now or at a time when the price meets the customers specific requirements.

OVERNIGHT

A deal from today until the next business day.

P

PERCENTAGE CHANGE

The percentage difference between the last price(current) and the previous price.

PIP

PIP "percentage in point" the smallest price move an exchange rate can make.

PIP DIFFERENCE

The difference in PIP's between the current BID and ASK

POSITION

The netted total commitments in a given currency. A position can be either flat or square (no exposure), long, (more currency bought than sold), or short ( more currency sold than bought).

Q

QUOTE

Consists of the Bid and Ask price for a currency pair.

R

RANGE

Range refers to the difference between the highest and lowest prices traded for a defined period.. The range is marked on charts as the high and low points on a candlestick or bar.Ranges are particularly useful to Technical analysts as they pinpoint entry and exit points for trades.

RATE

The price of one currency in terms of another, normally against USD.

REGULATED MARKET

A regulated market is one where a governmental agency issues a number of guidelines and restrictions designed to protect investors.

RESISTANCE POINT OR LEVEL

A price which will usually stop a movement of a foreign exchange rate from going higher. If a resistance level is broken; the analyst will conclude that the price movement will continue to go higher.

RETAIL SALES

The number of sales made of goods over a set period of time. In the U.S., the retail sales report is a monthly economic indicator compiled and released by the Census Bureau and the Department of Commerce. The report covers the previous month, and is released about two weeks after the month-end. Comparisons are made against historical data; year-over-year comparisons are the most-reported metric because they account for the seasonality of consumer-based retail.

RIGHT HAND SIDE

The Right hand side corresponds to the Ask/ Offer price of a foreign exchange rate.e.g.given a price of .9410 - .9560, the right hand side is .9560. The right hand side is the side that a customer would buy at.

RISK CAPITAL

Risk capital refers to the funds allocated to speculative activity and used for high-risk, high-reward investments. It is the amount of money the Customer is willing to put at risk and, which if lost would not, change the Customer's lifestyle..<.p>

RUNNING A POSITION

The act of keeping open positions in hopes of a making a speculative gain.

S

SAME DAY TRANSACTION

A transaction that will mature on the day the transaction takes place

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SELL LIMIT

Specifies the lowest price at which the sale of Base Currency can be executed. The limit price in a Sell limit order should be ABOVE the current market Bid price.

SELL STOP

This is a Stop Order that is placed BELOW the current market Bid price and is not activated until the market Bid price is is at or below the stop price - once triggered, this order becomes a market order to sell at the current market price

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SETTLEMENT DATE

This is the date on which a trade settles, i.e.the actual day on which transfer of cash or assets is completed and is usually a few days after the trade was done.

SHORT

Having an open position that was created by selling a currency. If you sold the EUR/USD, the customer is said to be short the currency pair (sold the base currency). If a customer bought the EUR/USD, he would be long the currency pair, but short USD currency. Foreign exchange transactions assume being long one currency and short another.

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SPECULATIVE

Trading Foreign Exchange is speculative in that there is no guarantee that those who invest will make any money. Anyone who trades forex should only risk that capital which is considered risk capital,

SPOT

spot date or ‘spot’, of a transaction is the normal settlement day when the transaction is carried out as soon as practical, i.e. "on the spot" this is in contrast to a transaction which is not settled immediately, such as a forward contract.

SPOT PRICE/RATE

The price at which a currency pair is currently trading in the spot market.<./p>

SPOT SETTLEMENT BASIS

The standardized settlement procedure for forex transactions that sets the value date 2 business days forward from the Trade Date.

SPREAD

The spread is the difference between the bid and ask price for a foreign currency price.

STERLING

British pound - also known as cable

STOP LOSS ORDER

A specific order entered by the customer to close out a position if the price moves a certain number of pips in the direction opposite from where the market currently is. Such orders are designed to limit an investor's loss on a position.

STOP PRICE LEVEL

This level sets the maximum or minimum at which one is willing to buy or sell a particular stock<./p>

SWISSY

Market slang for the Swiss Franc currency<./p>.

T

TECHNICAL TRADING CHARTS

Is the use of charts, indicators, oscillators and other tools to assist in uncovering possible Forex market trends and trading opportunities.

THIN MARKET

A market condition in which trading volume and liquidity is low -in a thin market, prices tend to be volatile.

TICK

A minimum change in price, up or down.

TOMORROW NEXT (TOM NEXT)

This refers to a short-term forex transaction where a currency is simultaneously bought and sold over two separate business days,

TRADE DATE

The date on which a trade occurs.

TRADING PLATFORMS

A computer software program usually provided by your broker to allow you to place orders for final products over the internet..

TRANSACTION DATE

The date on which a trade occurs.

TRANSACTION

The buying or selling of foreign exchange amount resulting from the execution of an order.

TWO-WAY QUOTE

A dealers quote that gives both the bid and the ask price of a security i.e. the current price at which they could buy or sell the security.U

UNCOVERED POSITION

This is another term for an open position.

UNREALIZED P/L

The real time profit/ loss on the current open position(s), given the current exchange rate(s). Profits or losses are said to be "realized" when a stock (or other investment) that you own is actually sold. - ‘unrealized’ gains and losses are also referred to as "paper" profits or losses.

UP TICK

Trading at a higher price today than it was on the previous day.

US DOLLAR

The legal tender of the United States of America (USA).

W

WEEKLY PERCENTAGE CHANGE

The percentage difference between the last price(current) and the opening price of the Week.