Listing of all transactions (trading and non-trading) completed for a given account.
The simultaneous purchase and sale of an equivalent security in different markets, with the goal of profiting from pricing inconsistencies. In the context of currency trading, arbitrage applies to a mismatch in paired exchange rates between three currencies (triangular arbitrage) or an inefficiency between identical securities listed in different markets that arises from exchange rate fluctuation.
The price at which a trader will buy a currency. Also known as the offer, it is the price a seller is willing to sell at.
Slang term for the Australian dollar.
The departments and processes related to the settlement of financial transactions.
A chart type consisting of four points: high price and low price (represented by a vertical bar), opening price (represented by a small horizontal line to the left of the bar), and closing price (represented by small horizontal line to the right of the bar).
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 sell a currency.
Bank of Canada, Canadian central bank.
Bank of England, UK’s central bank.
Bank of Japan, Japanese central bank.
Technical analysis tool used to measure the highness or lowness of the price relative to previous trades, consisting of three bands: middle band (simple moving average), upper band (given number of standard deviations above the middle band), and lower band (given number of standard deviations below the middle band)
An agent who executes investors' orders to buy and sell currency. In the FX business, no commission is charged as the broker earns its shares thanks to the spread and performance fees if applicable.
Someone who believes the prices/market will rise.
A market characterized by rising prices.
The overnight interbank interest rate.
Type of chart that uses shaded bars to indicate trading range (i.e. high and low price) as well as the opening and closing prices for consecutive time periods.
Financial assets, or the financial value of assets such as cash.
Spot market, as opposed to the futures market.
The institution that manages a country’s monetary policy.
Transaction fee charged by a broker.
Currency which can be freely exchanged for other currencies or gold, without special authorization from the appropriate central bank.
The customer or bank with whom a foreign 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 made from the individual exchange rates of the two currencies, measured against the United States dollar.
The risk of incurring losses, resulting from an adverse change, in exchange rates.
Contract which commits two counter-parties to exchange streams of interest payments in different currencies for an agreed period of time, and to exchange principal amounts, in different currencies, at a pre-agreed exchange rate at maturity.
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's trading.
Depth of Market
The volume of buy and sell orders waiting to be transacted for a particular currency pair at a particular point in time.
European Central Bank.
Type of calendar that is intended to inform financiers and traders about the scheduled major economic indicators, government reports and speeches by influential people.
Currencies that are not actively traded; used in contradistinction to "major currencies."
Net of all long and short positions for a particular currency (pair).
Strong pressure in the market, in which prices are moving too quickly to be disseminated.
Federal Reserve (Fed)
The Central Bank of the United States.
Fixed Exchange Rate
Exchange rate regime in which a currency is pegged by the Central Bank so that it cannot fluctuate against other currencies. Currencies can be pegged to other currencies or commodities, such as gold.
A situation in which a position is closed, or two positions exist that cancel each other out.
Foreign Exchange (Forex or FX)
The buying and selling of currencies.
Thorough analysis of economic and political data with the goal of determining future movements in a financial market.
A currency trader that relies on fundamental analysis.
"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 on future performance.
Foreign Exchange rates (or interest rates) quoted by large multinational banking institutions.
Cost of using/borrowing money, expressed as a rate per period of time.
Bank or investment account owned by two or more people.
Slang term for the New Zealand Dollar.
An order to buy at or below a specified price or to sell at or above a specified price.
Most basic type of chart, which plots a series of price levels over time and connects them with lines.
When there are plenty of lots of a particular currency being bought and sold every day.
A market position where the Client has bought a currency he previously did not own. Normally expressed in base currency terms, e.g., long Dollars.
Slang term for a Canadian Dollar.
Standardized quantity in forex, composed of 100,000 units of a particular currency pair.
Customers must deposit funds 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 (or by a brokerage firm that's a client) brings margin deposits up to a required minimum level, to cover an adverse movement in the price in the market.
A dealer who supplies prices and is prepared to buy or sell at those stated bid and ask prices. A market maker runs a trading book.
Popular online trading platform designed for financial institutions dealing with forex and derivatives markets.
Refers to the price halfway between the bid and ask quote offered by dealers.
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.
Any deal which has not been settled by physical payment or reversed by an equal and opposite deal for the same value date.
Over The Counter (OTC(
Used to describe any transaction that is not conducted over an exchange.
Refers to a purchase or sale between the hours of 9.00 pm and 8.00 am on the following day.
Pip (or Points(
The term used in currency markets, to represent the smallest incremental move, an exchange rate can make. Depending on context, normally one basis point (0.0001 in the case of EUR/USD, GBP/USD, USD/CHF and 0.01 in the case of USD/JPY).
The uncertainty in return on an investment, due to the possibility that a government might take actions, which are detrimental to the investor's interests.
Profit & Loss or (P & L)
The actual "realized" gain or loss from trading activities. May also include "unrealized" gains and losses from open positions
Provision of a bid/ask spread for a currency pair.
Currency listed second in a currency pairing.
A price level at which you would expect selling to take place.
The amount of money that an individual can afford to invest, which if lost, would not affect their lifestyle.
Where the settlement of a deal is rolled forward to another value date, based on the interest rate differential of the two currencies.
Same Day Transaction
Any position that is opened and closed on the same trading day.
Sell Stop Order
Type of limit order, whereby the limit price is placed below the current market price. Once triggered, the order is executed at the market price.
Ask or offer rate.
The act of selling a currency pair such that one is short the base currency and long the quote currency, with the goal of profiting from depreciation.
An open position that aims to capture gains from currency depreciation.
Simple Moving Average (SMA)
Technical analysis indicator commonly used with time series data to smooth out short-term fluctuations and highlight longer-term trends or cycles, that gives equal weight to all data points.
Refers to the phenomenon whereby the actual fill price differs from the expected fill price, as a result of a fast-moving market or broker error.
Describes a market characterized by more sellers than buyers.
Larger than expected price movement, caused by a news announcement or broker error.
Difference between the bid and ask price for a given currency pair. Also known as Bid Ask Spread.
Refers to a market or currency pair that can accommodate large volumes without causing equally large price fluctuations.
Technical analysis tool designed to compare the closing price of a currency to its price range over a given time period.
An order to buy or sell when the price rises to/above or falls to/below a specified stop price. When buying, a stop order is used to make an investment, but only when an upward trend has been established. When selling, a stop order is used as protection from a sudden fall in the share price, or to lock-in profits already made, and is also known as a stop loss order.
The price at which a stop order is triggered. For purchases, the stop price acts as a minimum price you will pay if an investment is made. For sales, the stop price acts as the maximum price you will receive if a holding is sold.
Level or floor that halts a currency's downward progress, as a result of strong buying pressure at that level.
Type of derivative in which two parties agree to exchange one stream of cash flows against another.
Slang term for the Swiss Franc.
Take-Profit Order (T/P)
An order specifying the exact rate or number of pips from the current price point at which point a current position should be closed, and gains will be locked in.
An effort to forecast future market activity by analyzing market data such as charts, price trends, and volume.
Software applications used for trading forex online.
Trailing Stop Order
Order entered with a stop parameter that creates a moving or trailing activation price. This parameter is entered as a percentage change or actual specific amount of rise (or fall) in the security price.
The current direction of the market, either up, down, or sideways.
Economic indicator defined as the percentage of those in the labor force who are unemployed.
Unrealized Profit & Loss
Gains and losses that exist hypothetically, in positions that have not yet been closed.
US Prime Rate
The rate at which US banks will lend to their prime corporate customers.
Settlement date for a currency contract, usually two business days after the trade date.
A statistical measure of a market, or a security' price movements, over time, and is calculated by using standard deviation. Associated with high volatility is a high degree of risk.
Electronic transfer of funds from one bank to another.