The apportionment of premiumsand discounts on forward exchange transactions that relate directly to depositswap (Interest Arbitrage) deals, over the period of each deal.

Official action normallyoccasioned by a change either in the internal economic policies to correct apayment imbalance or in the official currency rate.

Traders and/or price action areacting with conviction.

A financial professional whohas expertise in evaluating investments and puts together buy, sell and holdrecommendations for clients.

A financial professional whohas expertise in evaluating investments and puts together buy, sell and holdrecommendations for clients.

The simultaneous purchase orsale of a financial product in order to take advantage of small pricedifferentials between markets.

Refers to the central banks ormonetary authorities of Asian countries. These institutions have beenincreasingly active in major currencies as they manage growing pools of foreigncurrency reserves arising from trade surpluses. Their market interest can besubstantial and influence currency direction in the short-term.

23:00 – 08:00 (Tokyo).

The price at which the marketis prepared to sell a product. Prices are quoted two-way as Bid/Ask. The Askprice is also known as the Offer.

In FX trading, the Askrepresents the price at which a trader can buy the base currency, shown to theright in a currency pair. For example, in the quote USD/CHF 1.4527/32, the basecurrency is USD, and the Ask price is 1.4532, meaning you can buy one US dollarfor 1.4532 Swiss francs.

In CFD trading, the Ask alsorepresents the price at which a trader can buy the product. For example, in thequote for UK OIL 111.13/111.16, the product quoted is UK OIL and the Ask priceis £111.16 for one unit of the underlying market.*

A name for the AustralianSecurities Exchange (ASX 200) which is an index of the top 200 companies (by market capitalization) listed on the Australian stock exchange.

An instruction given to adealer to buy or sell at the best rate that can be obtained.

An order to deal for a specificprice or better.

Also, “Oz” or “Ozzie”; refersto the AUD/USD pair.


The value of a country’sexports minus its imports.

A type of chart which consistsof four significant points: the high and the low prices, which form thevertical bar, the opening price, which is marked with a little horizontal lineto the left of the bar, and the closing price, which is marked with a littlehorizontal line to the right of the bar.

A certain price of greatimportance included in the structure of a Barrier Option. If a Barrier Levelprice is reached, the terms of a specific Barrier Option call for a series ofevents to occur.

Any number of different optionstructures (such as knock-in, knock-out, no touch, double-no-touch-DNT) thatattaches great importance to a specific price trading. In a no-touch barrier, alarge defined payout is awarded to the buyer of the option by the seller if thestrike price is not ‘touched’ before expiry. This creates an incentive for theoption seller to drive prices through the strike level and creates an incentivefor the option buyer to defend the strike level.

The first currency in aCurrency Pair. It shows how much the base currency is worth as measured againstthe second currency. For example, if the USD/CHF rate equals 1.6215 then oneUSD is worth CHF 1.6215. In the forex markets, the US Dollar is normallyconsidered the ‘base’ currency for quotes, meaning that quotes are expressed asa unit of $1 USD per the other currency quoted in the pair. The primaryexceptions to this rule are the British Pound, the Euro and the AustralianDollar.

The lending rate of the centralbank of a given country.

A method used in technicalanalysis – a chart pattern that shows when demand and supply of a product arealmost equal. It results in a narrow trading range and the merging of supportand resistance levels.

A unit of measurement used todescribe the minimum change in the price of a product.

Negative for price direction;favoring a declining market. For example, “We are bearish EUR/USD” means thatwe think the Euro will weaken against the dollar.

Traders who expect prices todecline and may be holding short positions.

The price at which the marketis prepared to buy a product. Prices are quoted two-way as Bid/Ask.

In FX trading, the Bidrepresents the price at which a trader can sell the base currency, shown to theleft in a currency pair. For example, in the quote USD/CHF 1.4527/32, the basecurrency is USD, and the Bid price is 1.4527, meaning you can sell one USDollar for 1.4527 Swiss francs.

In CFD trading, the Bid alsorepresents the price at which a trader can sell the product. For example, inthe quote for UK OIL 111.13/111.16, the Bid price is £111.13 for one unit ofthe underlying market.*

The difference between the Bidand the Ask (Offer) price.

Refers to the first 3 digits ofa currency quote, such as 117 USD/JPY or 1.26 in EUR/USD. If the price moves by1.5 big figures, it has moved 150 pips.

The Bank for InternationalSettlements located in Basel, Switzerland, is the central bank for centralbanks. The BIS frequently acts as the market intermediary between nationalcentral banks and the market. The BIS has become increasingly active as centralbanks have increased their currency reserve management. When the BIS isreported to be buying or selling at a level, it is usually for a central bankand thus the amounts can be large. The BIS is used to avoid markets mistakingbuying or selling interest for official government intervention.

The term used for systematic,model-based or technical traders.

The upside equivalent ofcapitulation. When shorts throw in the towel and cover any remaining shortpositions.

Bank of Canada, the centralbank of Canada.

Bank of England, the centralbank of the UK.

Bank of Japan, the central bankof Japan.

A tool used by technicalanalysts. A band plotted two standard deviations on either side of a simplemoving average, which often indicates support and resistance levels.

A name for debt which is issuedfor a specified period of time.

In a professional tradingenvironment, a ‘book’ is the summary of a trader’s or desk’s total positions.

A British measure of the rateof inflation at various surveyed retailers. This index only looks at pricechanges in goods purchased in retail outlets.

An individual or firm that actsas an intermediary, bringing buyers and sellers together for a fee orcommission. In contrast, a ‘dealer’ commits capital and takes one side of aposition, hoping to earn a spread (profit) by closing out the position in asubsequent trade with another party.

Market slang for 1 millionunits of a dollar-based currency pair or for the US dollar in general.

Favoring a strengthening marketand rising prices. For example, “We are bullish EUR/USD” means that we thinkthe Euro will strengthen against the dollar.

Traders who expect prices torise and who may be holding long positions.

Germany’s central bank.

Taking a long position on aproduct.

Looking to buy 20-30-pip/pointpullbacks in the course of an intra-day trend.


The GBP/USD pair. “Cable”earned its nickname because the rate was originally transmitted to the US via atransatlantic cable beginning in the mid 1800’s when the GBP was the currencyof international trade.

The Canadian dollar, also knownas Loonie or Funds.

A currency trade which exploitsthe interest rate difference between two countries. By selling a currency witha low rate of interest and buying a currency with a high rate of interest, thetrader will receive the interest difference between the two countries whilethis trade is open.

A monthly gauge of Canadianbusiness sentiment issued by the Richard Ivey Business School.

A chart that indicates thetrading range for the day as well as the opening and closing price. If the openprice is higher than the close price, the rectangle between the open and closeprice is shaded. If the close price is higher than the open price, that area ofthe chart is not shaded.

A point at the end of anextreme trend when traders who are holding losing positions exit thosepositions. This usually signals that the expected reversal is just around thecorner.

A trade strategy that capturesthe difference in the interest rates earned from being long a currency thatpays a relatively high interest rate and short another currency that pays alower interest rate. For example: NZD/JPY has been a famous carry trade forsome time. NZD is the high yielder and JPY is the low yielder. Traders lookingto take advantage of this interest rate differential would buy NZD and sellJPY, or be long NZD/JPY. When NZD/JPY begins to downtrend for an extendedperiod of time, most likely due to a change in interest rates, the carry tradeis said to be ‘unwinding’.

The market in the actualunderlying markets on which a derivatives contract is based.

The price of a product forinstant delivery; i.e. the price of a product at that moment in time.

Abbreviation referring tocentral banks.

A government orquasi-governmental organization that manages a country’s monetary policy. Forexample, the US central bank is the Federal Reserve, and the German centralbank is the Bundesbank.

A Contract for Difference (orCFD) is a type of derivative that gives exposure to the change in value of anunderlying asset (such as an index or equity). It allows traders to leveragetheir capital (by trading notional amounts far higher than the money in theiraccount) and provides all the benefits of trading securities, without actuallyowning the product. In practical terms, if you buy a CFD at $10 then sell it at$11, you will receive the $1 difference. Conversely, if you went short on thetrade and sold at $10 before buying back at $11, you would pay the $1difference.

An individual, also known as atechnical trader, who uses charts and graphs and interprets historical data tofind trends and predict future movements.

Short-lived price moves withlimited follow-through that are not conducive to aggressive trading.

Funds that are freelyavailable, sent in to settle a trade.

The process of settling atrade.


The process of stopping(closing) a live trade by executing a trade that is the exact opposite of theopen trade.

The price at which a productwas traded to close a position. It can also refer to the price of the lasttransaction in a day trading session.

An asset given to secure a loanor as a guarantee of performance.

A fee that is charged forbuying or selling a product.

Currencies from economies whoseexports are heavily based in natural resources, often specifically referring toCanada, New Zealand, Australia and Russia.

The dollar pairs that make upthe crosses (i.e. EUR/USD + USD/JPY are the components of EUR/JPY). Selling thecross through the components refers to selling the dollar pairs in alternatingfashion to create a cross position.

Symbol for NASDAQ CompositeIndex.

A document exchanged bycounterparts to a transaction that states the terms of said transaction.

A period of range-boundactivity after an extended price move.

Measures the amount of spendingtowards new construction, released monthly by the U.S. Department of Commerce’sCensus Bureau.

The tendency of an economiccrisis to spread from one market to another.

The standard unit of forextrading.

A confirmation sent thatoutlines the exact details of the trade.

The notional number of sharesone CFD represents.

A position which has a limitedrisk because of a Guaranteed Stop.*

A technical observation thatdescribes moving averages of different periods moving towards each other, whichgenerally forecasts a price consolidation.

Refers to corporations in themarket for hedging or financial management purposes. Corporates are not alwaysas price-sensitive as speculative funds and their interest can be very long-termin nature, making corporate interest less valuable to short-term trading.

The second listed currency in acurrency pair.

One of the participants in afinancial transaction.

Risk associated with across-border transaction, including but not limited to legal and politicalconditions.

A measure of inflation – shortfor Consumer Price Index.

The market is ready to sell-offhard.

A pair of currencies that doesnot include the US Dollar.

Refers to CAD (CanadianDollar), Aussie (Australian Dollar), Sterling (British Pound) and Kiwi (NewZealand Dollar) – countries off the Commonwealth.

Refers to commodity tradingadvisors, speculative traders whose activity can resemble that of short-termhedge funds; frequently refers to the Chicago-based or futures-orientedtraders.

Any form of money issued by agovernment or central bank and used as legal tender and a basis for trade.

The two currencies that make upa foreign exchange rate, for example EUR/USD.

The probability of an adversechange in exchange rates.

A three-letter symbol thatrepresents a specific currency, for example USD (US Dollar).

The sum of the balance of trade(exports minus imports of goods and services), net factor income (such asinterest and dividends) and net transfer payments (such as foreign aid). Thebalance of trade is typically the key component to the current account.


Speculators who take positionsin commodities and then liquidate those positions prior to the close of thesame trading day.

Making an open and close tradein the same product in one day.

A term that denotes a tradedone at the current market price. It is a live trade as opposed to an order.

An individual or firm that actsas a principal or counterpart to a transaction. Principals take one side of aposition, hoping to earn a spread (profit) by closing out the position in asubsequent trade with another party. In contrast, a broker is an individual orfirm that acts as an intermediary, putting together buyers and sellers for afee or commission.

The difference between thebuying and selling price of a contract.

Action taken by a trader, orgroup of traders, to prevent a product from trading at a certain price or pricezone, usually because they hold a vested interest in doing so, such as abarrier option.

A negative balance of trade orpayments.

Removing a stock’s listing onan exchange.

A trade where both sides makeand take actual delivery of the product traded.

The ratio between the change inprice of a product and the change in price of its underlying market.

A monthly survey produced bythe DCLG that uses a very large sample of all completed house sales to measurethe price trends in the UK real estate market.

The decrease in value of anasset over time.

A financial contract whosevalue is based on the value of an underlying asset. Some of the most commonunderlying assets for derivative contracts are indices, equities, commoditiesand currencies.

When a pegged currency isallowed to weaken or depreciate based on official actions; the opposite of arevaluation.

Interest rate that an eligibledepository institution is charged to borrow short-term funds directly from theFederal Reserve Bank.

In technical analysis, asituation where price and momentum move in opposite directions, such as pricesrising while momentum is falling. Divergence is considered either positive(bullish) or negative (bearish); both kinds of divergence signal major shiftsin price direction. Positive/bullish divergence occurs when the price of asecurity makes a new low while the momentum indicator starts to climb upward.Negative/bearish divergence happens when the price of the security makes a newhigh, but the indicator fails to do the same and instead moves lower.Divergences frequently occur in extended price moves and frequently resolvewith the price reversing direction to follow the momentum indicator.

A technical observation thatdescribes moving averages of different periods moving away from each other,which generally forecasts a price trend.

The amount of a company’s earningdistributed to its shareholders – usually described as a value per share.

Abbreviation for the Dow JonesIndustrial Average or US30.

Dovish refers to data or apolicy view that suggests easier monetary policy or lower interest rates. Theopposite of hawkish.

Price action consisting oflower-lows and lower-highs.

Symbol for US Dollar Index.


European Central Bank, thecentral bank for the countries using the Euro.

A government issued statisticthat indicates current economic growth and stability. Common indicators includeemployment rates, Gross Domestic Product (GDP), inflation, retail sales, etc.

An order to buy or sell at aspecified price that remains open until the end of the trading day, typicallyat 5pm / 17:00 New York.

The time zone of New York City,which stands for United States Eastern Standard Time/Eastern Daylight time.

A name for the Euronext 50index.

The currency of the Eurozone.

An umbrella name for the groupof policies that aims to coordinate economic and fiscal policies across EUMember States.

07:00 – 16:00 (London).

Measures the annualized rate ofinflation in the compensation and benefits paid to civilian workers and is seenas a primary driver of overall inflation.

A monthly index produced by theOECD. It measures overall economic health by combining ten leading indicatorsincluding average weekly hours, new orders, consumer expectations, housingpermits, stock prices and interest rate spreads.

A monthly survey produced bythe DCLG that uses a very large sample of all completed house sales to measurethe price trends in the UK real estate market.

A share bought where the buyerforgoes the right to receive the next dividend and instead it is given to theseller.

The precise date and time whenan option will expire. The two most common option expiries are 10:00am ET (alsoreferred to as 10:00 NY time or NY cut) and 3:00pm Tokyo time (also referred toas 15:00 Tokyo time or Tokyo cut). These time periods frequently see anincrease in activity as option hedges unwind in the spot market.


A market that is thought tohave traveled too far, too fast.


The dollar level of new ordersfor both durable and nondurable goods. This report is more in depth than thedurable goods report which is released earlier in the month.

The difference between theprice of a derivative contract and the underlying cash market price. Fair valuemeans there are no arbitrage opportunities between the two prices.

The Federal Reserve Bank, thecentral bank of the United States, or the FOMC (Federal Open Market Committee),the policy-setting committee of the Federal Reserve.

Refers to members of the Boardof Governors of the Federal Reserve or regional Federal Reserve BankPresidents.

Refers to the price quotationof ’00’ in a price such as 00-03 (1.2600-03) and would be read as ‘figure-three.’If someone sells at 1.2600, traders would say ‘the figure was given’ or ‘thefigure was hit.’

When an order has been fullyexecuted.

An order that, if it cannot befilled in its entirety, will be cancelled.

All positions opened within aparticular currency pair are liquidated in the order in which they wereoriginally opened.

One of approximately 5 timesduring the FX trading day when a large amount of currency must be bought orsold to fill a commercial customer’s orders. Typically these times areassociated with market volatility. The regular fixes are as follows (all timesNY):

5:00am – Frankfurt

6:00am – London

10:00am – WMHCO (World MarketHouse Company)

11:00am – WMHCO (World MarketHouse Company) – more important

8:20am – IMM

8:15am – ECB

Economic data readings matchingthe previous period’s levels that are unchanged.

Dealer jargon used to describea position that has been completely reversed, e.g. you bought $500,000 thensold $500,000, thereby creating a neutral (flat) position.

Fresh buying or sellinginterest after a directional break of a particular price level. The lack offollow-through usually indicates a directional move will not be sustained andmay reverse.

Federal Open Market Committee,the policy-setting committee of the US Federal Reserve.

Written record of FOMCpolicy-setting meetings are released 3 weeks following a meeting. The minutesprovide more insight into the FOMC’s deliberations and can generate significantmarket reactions.

The simultaneous buying of onecurrency and selling of another. The global market for such transactions isreferred to as the “forex” or “FX” market.

The pre-specified exchange ratefor a foreign exchange contract settling at some agreed future date, based uponthe interest rate differential between the two currencies involved.

The pips added to or subtractedfrom the current exchange rate to calculate a forward price.

A name for the index of the top40 companies (by market capitalization) listed on the French stock exchange.FRA40 is also known as CAC 40.

The name of the UK 100 Index.

The assessment of allinformation available on a tradable product to determine its future outlook andtherefore predict where the price is heading. Often non-measurable and subjectiveassessments, as well as quantifiable measurements, are made in fundamentalanalysis.

Refers to hedge fund typesactive in the market; also used as another term for USD/CAD pair.

An agreement between twoparties to execute a transaction at a specified time in the future when theprice is agreed in the present.


Group of 7 Nations – UnitedStates, Japan, Germany, United Kingdom, France, Italy and Canada.

Group of 8 – G7 nations plusRussia.

A quick market move in whichprices skip several levels without any trades occurring. Gaps usually follow economicdata or news announcements.

Gearing refers to trading anotional value that is greater than the amount of capital a trader is requiredto hold in his or her trading account. It is expressed as a percentage or afraction.

An index of the top 30companies (by market capitalization) listed on the German stock exchange –another name for the DAX.

Refers to a bid being hit orselling interest.

A technical level succumbs to ahard-fought battle.

Greenwich Mean Time – The mostcommonly referred time zone in the forex market. GMT does not change during theyear, as opposed to daylight savings/summer time.

The purchase of a stock,commodity or currency for investment or speculation – with the expectation ofthe price increasing.

The selling of a currency orproduct not owned by the seller – with the expectation of the price decreasing.

Commonly accepted that goldmoves in the opposite direction of the US dollar. The long-term correlationcoefficient is largely negative, but shorter-term correlations are lessreliable.

A certificate of ownership thatgold investors use to purchase and sell the commodity instead of dealing withtransfer and storage of the physical gold itself.

The standard unit of tradinggold is one contract which is equal to 10 troy ounces.

An order that will expire atthe end of the day if it is not filled.

An order to buy or sell at aspecified price that remains open until filled or until the client cancels.

An order type that will expireon the date you choose, should it not be filled beforehand.

Nickname for the US dollar.

Total value of a country’soutput, income or expenditure produced within its physical borders.

Gross domestic product plusincome earned from investment or work abroad.

An order type that protects atrader against the market gapping. It guarantees to fill your order at theprice asked.

A stop-loss order guaranteed toclose your position at a level you dictate, should the market move to or beyondthat point. It is guaranteed even if there’s gapping in the market.

Refers to traders pushing totrigger known stops or technical levels in the market.


Every 100 pips in the FX marketstarting with 000.

A country’s monetarypolicy-makers are referred to as ‘hawkish’ when they believe that higherinterest rates are needed, usually to combat inflation or restrain rapideconomic growth or both.

A position or combination ofpositions that reduces the risk of your primary position.

To sell at the current marketbid.

A name for the Hong Kong HangSeng Index.


Little volume being traded inthe market; a lack of liquidity often creates choppy market conditions.

International Monetary Market,the Chicago-based currency futures market, that is part of the ChicagoMercantile Exchange.

8:00am – 3:00pm New York.

Abbreviation for the Dow JonesIndustrial Average.

Measures the total value ofoutput produced by manufacturers, mines and utilities. This data tends to reactquickly to the expansions and contractions of the business cycle and can act asa leading indicator of employment and personal income data.

An economic condition wherebyprices for consumer goods rise, eroding purchasing power.

The initial deposit ofcollateral required to enter into a position.

A private company’s initialoffer of stock to the public – short for Initial Public Offering.

The Foreign Exchange rateswhich large international banks quote to each other.

Adjustments in cash to reflectthe effect of owing or receiving the notional amount of equity of a CFDposition.

Action by a central bank toaffect the value of its currency by entering the market. Concerted interventionrefers to action by a number of central banks to control exchange rates.

A person or corporate entitywhich introduces accounts to a broker in return for a fee.

Symbol for S&P 500 Index.

An index that surveys servicesector firms for their outlook, representing the other 80% of the US economynot covered by the ISM Manufacturing Report. Values over 50 generally indicatean expansion, while values below 50 indicate contraction.

An index that survey servicesector firms for their outlook, representing the other 80% of the U.S. economynot covered by ISM Manufacturing Report. Values over 50 generally indicate anexpansion, while values below 50 indicate contraction.


Measures the mood of businessesthat directly service consumers such waiters, drivers, and beauticians.Readings above 50 generally signal improvements in sentiment.

Measures the total value of neworders placed with machine tool manufacturers. Machine tool orders are ameasure of the demand for companies that make machines, a leading indicator offuture industrial production. Strong data generally signals that manufacturingis improving and that the economy is in an expansion phase.

A name for the NEKKEI index.


To limit your trades due toinclement trading conditions. In either choppy or extremely narrow markets, itmay be better to stay on the sidelines until a clear opportunity arises.

Nickname for NZD/USD.

Option strategy that requiresthe underlying product to trade at a certain price before a previously boughtoption becomes active. Knock-ins are used to reduce premium costs of theunderlying option and can trigger hedging activities once an option is activated.

Option that nullifies apreviously bought option if the underlying product trades a certain level. Whena knock-out level is traded, the underlying option ceases to exist and anyhedging may have to be unwound.


The last day you may trade aparticular product.

The last time you may trade aparticular product.

Statistics that are consideredto predict future economic activity.

A price zone or particularprice that is significant technically or based on reported orders/optioninterest.

Also known as margin, this isthe percentage or fractional increase you can trade from the amount of capitalyou have available. It allows traders to trade notional values far higher thanthe capital they have. For example: leverage of 100:1 means you can trade anotional value 100 times greater than the capital in your trading account.*

Short-term traders, referringlargely to the hedge fund community.

Potential loss, debt orfinancial obligation.

The London Inter-Bank OfferedRate. Banks use LIBOR as a base rate for international lending.

An order that seeks to buy atlower levels than the current market or sell at higher levels than the currentmarket. A limit order sets restrictions on the maximum price to be paid or theminimum price to be received. As an example, if the current price of USD/YEN is117.00/05, then a limit order to buy USD would be at a price below the currentmarket, e.g. 116.50.

A market which has sufficientnumbers of buyers and sellers for the price to move in a smooth manner.

The closing of an existingposition through the execution of an offsetting transaction.

The ability of a market toaccept large transaction with minimal to no impact on price stability.

08:00 – 17:00 (London).

A position that appreciates invalue if market price increases. When the base currency in the pair is bought,the position is said to be long. This position is taken with the expectationthat the market will rise.

Traders who have bought aproduct.

Nickname for USD/CAD.

A unit to measure the amount ofthe deal. The value of the deal always corresponds to an integer number oflots.


The longest-term trader whobases their trade decisions on fundamental analysis. A “macro” trade’s holdingperiod can last anywhere from around 6 months to multiple years.

Measures the total output ofthe manufacturing aspect of the Industrial Production figures. This data onlymeasures the 13 sub sectors that relate directly to manufacturing.Manufacturing makes up approximately 80% of total Industrial Production.

The required collateral that aninvestor must deposit to hold a position.

A request from a broker ordealer for additional funds or other collateral on a position that has movedagainst the customer.

The total value of a listedcompany – share price multiplied by the number of shares issued.

A dealer who regularly quotesboth bid and ask prices and is ready to make a two-sided market for anyfinancial product.

An order to buy or sell at thecurrent price.

Exposure to changes in marketprices.

Process of re-evaluating allopen positions in light of current market prices. These new values thendetermine margin requirements.

The date for settlement orexpiry of a financial product.

Refers to Medley GlobalAdvisors, a market consultancy that maintains close contacts with central bankand government officials around the world. Their reports can frequently movethe currency market as they purport to have inside information from policy makers.The accuracy of the reports has fluctuated over time, but the market still paysattention to them in the short-run.

Synonymous with black box.Systems that automatically buy and sell based on technical analysis or otherquantitative algorithms.

Abbreviation for month overmonth, which is the change in a data series relative to the prior month’slevel.

A series of technical studies(e.g. RSI, MACD, Stochastics, Momentum) that assesses the rate of change inprices.

Traders who align themselveswith an intra-day trend that attempts to grab 50-100 pips.


A name for the NASDAQ 100index.

The amount of currency boughtor sold which has not yet been offset by opposite transactions.

8:00am – 5:00pm (New Yorktime).

An option that pays a fixedamount to the holder if the market never touches the predetermined BarrierLevel.

Symbol for NYSE CompositeIndex.


The price at which the marketis prepared to sell a product. Prices are quoted two-way as Bid/Offer. The Offerprice is also known as the Ask. The Ask represents the price at which a tradercan buy the base currency, which is shown to the right in a currency pair. Forexample, in the quote USD/CHF 1.4527/32, the base currency is USD, and the askprice is 1.4532, meaning you can buy one US dollar for 1.4532 Swiss francs.

In CFD trading, the Askrepresents the price a trader can buy the product. For example, in the quotefor UK OIL 111.13/111.16, the product quoted is UK OIL and the ask price is£111.16 for one unit of the underlying market.*

If a market is said to betrading ‘offered’, it means a pair is attracting heavy selling interest, oroffers.

A trade that cancels or offsetssome or all of the market risk of an open position.

Attempting to sell at thecurrent market order price.

A designation for two orderswhereby if one part of the two orders is executed, then the other isautomatically cancelled.

An option that pays a fixedamount to the holder if the market touches the predetermined Barrier Level.

An order that will be executedwhen a market moves to its designated price. Normally associated with Good ’tilCancelled Orders.

An active trade withcorresponding unrealized P&L, which has not been offset by an equal andopposite deal.

A derivative which gives theright, but not the obligation, to buy or sell a product at a specific pricebefore a specified date.

An instruction to execute atrade.

A system used to show marketdepth of traders willing to buy and sell at prices beyond the best available.

Used to describe anytransaction that is not conducted via an exchange.

A trade that remains open untilthe next business day.


Refers to the offer side of themarket dealing.

The forex quoting convention ofmatching one currency against the other.

A very heavy round of selling.

A market that moves a greatdistance in a very short period of time, frequently moving in an acceleratingfashion that resembles one half of a parabola. Parabolic moves can be either upor down.

Where only part of an order hasbeen executed.

Waiting for certain levels, ornews events to hit the market before entering a position.

Measures an individual’s totalannual gross earnings from wages, business enterprises and various investments.Personal income is the key to personal spending, which accounts for 2/3 of GDPin the major economies.

The smallest unit of price forany foreign currency, pips refer to digits added to or subtracted from thefourth decimal place, i.e. 0.0001.

Exposure to changes ingovernmental policy which will have an adverse effect on an investor’sposition.

A collection of investmentsowned by an entity.

The net total holdings of agiven product.

The amount by which the forwardprice exceeds the spot price.

Describes quotes to which everymarket participant has equal access.

The difference between the costprice and the sale price, when the sale price is higher than the cost price.

The tendency of a trendingmarket to retrace a portion of the gains before continuing in the samedirection.


Measures an outlook ofpurchasing managers in the service sector. Such managers are surveyed on anumber of subjects including employment, production, new orders, supplierdeliveries, and inventories. Readings above 50 generally indicate expansion,while readings below 50 suggest economic contraction.

A product which gives the ownerthe right, but not the obligation, to sell it at a specified price.


An indicative market price,normally used for information purposes only.

When a central bank injectsmoney into an economy with the aim of stimulating growth.

A type of future with expirydates every three months (once per quarter).*


A recovery in price after aperiod of decline.

When a price is trading betweena defined high and low, moving within these two boundaries without breaking outfrom them.

The price of one currency interms of another, typically used for dealing purposes.

Reserve Bank of Australia, thecentral bank of Australia.

Reserve Bank of New Zealand,the central bank of New Zealand.

Traders of significant sizeincluding pension funds, asset managers, insurance companies, etc. They are viewedas indicators of major long-term market interest, as opposed to shorter-term,intraday speculators.

The amount of money you havemade or lost when a position has been closed.

A price that might act as aceiling. The opposite of support.

An individual investor whotrades with money from personal wealth, rather than on behalf of aninstitution.

Measures the monthly retailsales of all goods and services sold by retailers based on a sampling ofdifferent types and sizes. This data provides a look into consumer spendingbehavior, which is a key determinant of growth in all major economies.

When a pegged currency isallowed to strengthen or rise as a result of official actions; the opposite ofa devaluation.

A form of corporate actionwhere shareholders are given rights to purchase more stock. Normally issued bycompanies in an attempt to raise capital.

Exposure to uncertain change,most often used with a negative connotation of adverse change.

The employment of financialanalysis and trading techniques to reduce and/or control exposure to varioustypes of risk.

A rollover is the simultaneousclosing of an open position for today’s value date and the opening of the sameposition for the next day’s value date at a price reflecting the interest ratedifferential between the two currencies.

In the spot forex market,trades must be settled in two business days. For example, if a trader sells100,000 Euros on Tuesday, then the trader must deliver 100,000 Euros onThursday, unless the position is rolled over. As a service to customers, allopen forex positions at the end of the day (5:00 PM New York time) areautomatically rolled over to the next settlement date. The rollover (or swap)adjustment is simply the accounting of the cost-of-carry on a day-to-day basis.

A trade that has been opened andsubsequently closed by an equal and opposite deal.


Symbol for Russell 2000 Index.


Securities and ExchangeCommission.

A group of securities thatoperate in a similar industry.

The price of one currency interms of another, typically used for dealing purposes.

The process by which a trade isentered into the books, recording the counterparts to a transaction. Thesettlement of currency trades may or may not involve the actual physicalexchange of one currency for another.

Symbol for Shanghai A Index.

An investment position thatbenefits from a decline in market price. When the base currency in the pair issold, the position is said to be short.

A situation in which tradersare heavily positioned on the short side and a market catalyst causes them tocover (buy) in a hurry, causing a sharp price increase.

After a decline, traders whoearlier went short begin buying back.

Traders who have sold, orshorted, a product, or those who are bearish on the market.

Traders staying out of themarkets due to directionless, choppy, unclear market conditions are said to be‘on the sidelines’ or ‘sitting on their hands’.

A simple average of apre-defined number of price bars. For example, a 50 period daily chart SMA isthe average closing price of the previous 50 daily closing bars. Any timeinterval can be applied.

The difference between theprice that was requested and the price obtained typically due to changingmarket conditions.

A term used when the marketfeels like it is ready for a quick move in any direction.

Choppy trading conditions thatlack any meaningful trend and/or follow-through.

Swiss National Bank, thecentral bank of Switzerland.

Refers to central banks activein the spot market.

A market whereby products aretraded at their market price for immediate exchange.

The current market price.Settlement of spot transactions usually occurs within two business days.

The purchase or sale of aproduct for immediate delivery (as opposed to a date in the future). Spotcontracts are typically settled electronically.

The difference between the bidand offer prices.

Purchase and sales are inbalance and thus the dealer has no open position.

A name for the S&P index.

Nickname for GBP/USD. Alsoknown as Pound or British Pound.

A market on which securitiesare traded.

The combined price of a groupof stocks – expressed against a base number – to allow assessment of how thegroup of companies is performing relative to the past.

When a market seems to bereaching for a certain level that is believed to be heavy with stops. If stopsare triggered, then the price will often jump through the level as a flood ofstop-loss orders are triggered.

A stop order is an order to buyor sell once a pre-defined price is reached. When the price is reached, thestop order becomes a market order and is executed at the best available price.It is important to remember that stop orders can be affected by market gaps andslippage, and will not necessarily be executed at the stop level if the marketdoes not trade at this price. A stop order will be filled at the next availableprice once the stop level has been reached. Placing contingent orders may notnecessarily limit your losses.

This is an order placed to buyabove the current price, or to sell below the current price. These orders areuseful if you believe the market is heading in one direction and you have atarget entry price.

This is an order placed to sellbelow the current price (to close a long position), or to buy above the currentprice (to close a short position). Stop loss orders are an important riskmanagement tool. By setting stop loss orders against open positions you canlimit your potential downside should the market move against you. Remember thatstop orders do not guarantee your execution price – a stop order is triggeredonce the stop level is reached, and will be executed at the next availableprice.

Refers to stop-loss ordersbuilding up; the accumulation of stop-loss orders to buy above the market in anupmove, or to sell below the market in a downmove.

The defined price at which theholder of an option can buy or sell the product.

A price that acts as a floorfor past or future price movements.

A technique used in technicalanalysis that indicates a specific price ceiling and floor at which a givenexchange rate will automatically correct itself. Opposite of resistance.

A temporary halt in the tradingof a product.

A currency swap is thesimultaneous sale and purchase of the same amount of a given currency at aforward exchange rate.

The nickname for USD/CHF.


Simultaneous buying and sellingof a currency for delivery the following day.

Measures the difference invalue between imported and exported goods and services. Nations with tradesurpluses (exports greater than imports), such as Japan, tend to see theircurrencies appreciate, while countries with trade deficits (imports greaterthan exports), such as the US, tend to see their currencies weaken.

The number of units of productin a contract or lot.

A pair is acting strong and/ormoving higher; bids keep entering the market and pushing prices up.

A postponement to trading thatis not a suspension from trading.

A market that feels like itwants to move lower, usually associated with an offered market that will notrally despite buying attempts.

A pair is acting weak and/ormoving lower, and offers to sell keep coming into the market.

The range between the highestand lowest price of a stock usually expressed with reference to a period oftime. For example: 52-week trading range.

A trailing stop allows a tradeto continue to gain in value when the market price moves in a favorabledirection, but automatically closes the trade if the market price suddenlymoves in an unfavorable direction by a specified distance. Placing contingentorders may not necessarily limit your losses.

The cost of buying or selling afinancial product.

The date on which a tradeoccurs.

Price movement that produces anet change in value. An uptrend is identified by higher highs and higher lows.A downtrend is identified by lower highs and lower lows.

The total money value or volumeof all executed transactions in a given time period.

When both a bid and offer rateis quoted for an FX transaction.

Symbol for CBOE 10-YearTreasury Yield Index.


Describing unforgiving marketconditions that can be violent and quick.

A name for the FTSE 100 index.

Measures the average wageincluding/excluding bonuses paid to employees. This is measured QoQ from theprevious year.

Measures the number of peopleclaiming unemployment benefits. The claimant count figures tend to be lowerthan the unemployment data since not all of the unemployed are eligible forbenefits.

Measures the relative level ofUK house prices for an indication of trends in UK real estate sector and theirimplication for overall economic outlook. This index is the longest monthlydata series of any UK housing index, put out by the largest UK mortgage lender(Halifax Building Society/Bank of Scotland).


Measures the change in totallabor cost expended in the production of one unit of output.

A name for Brent Crude Oil.

Measures the rate of inflationexperienced by manufacturers when purchasing materials and services. This datais closely scrutinized since it can be a leading indicator of consumerinflation.

Measures the rate of inflationexperienced by manufacturers when selling goods and services.

The actual traded market fromwhere the price of a product is derived.

Measures the total workforcethat is unemployed and actively seeking employment, measured as the percentageof the labor force.

Polls 500 US households eachmonth. The report is issued in a preliminary version mid – month and a finalversion at the end of the month. Questions revolve around individuals’attitudes about the US economy. Consumer sentiment is viewed as a proxy for thestrength of consumer spending.

The theoretical gain or loss onopen positions valued at current market rates, as determined by the broker inits sole discretion. Unrealized Gains/Losses become Profits/Losses when theposition is closed.

A new price quote at a pricehigher than the preceding quote.

In the U.S., a regulationwhereby a security may not be sold short unless the last trade prior to theshort sale was at a price lower than the price at which the short sale isexecuted.

A name for the Dow Jones index.

A name for WTI Crude Oil.

The interest rate at which USbanks will lend to their prime corporate customers.


Also known as the maturitydate, it is the date on which counterparts to a financial transaction agree tosettle their respective obligations, i.e., exchanging payments. For spotcurrency transactions, the value date is normally two business days forward.

Funds traders must hold intheir accounts to have the required margin necessary to cope with marketfluctuations.

Shows the market’s expectationof 30-day volatility. It is constructed using the implied volatilities of awide range of S&P 500 index options. The VIX is a widely-used measure ofmarket risk and is often referred to as the “investor fear gauge.”

Referring to active marketsthat often present trade opportunities.


Chart formation that shows anarrowing price range over time, where price highs in an ascending wedge areincrementally less, or in a descending wedge, price declines are incrementallysmaller. Ascending wedges typically conclude with a downside breakout, anddescending wedges typically terminate with upside breakouts.

Slang for a condition of ahighly volatile market where a sharp price movement is quickly followed by asharp reversal.

Measures the changes in pricespaid by retailers for finished goods. Inflationary pressures typically show uphere earlier than the headline retail.

Where a limit order has beenrequested but not yet filled.

Stands for TheWall Street Journal.


Symbol for Silver Index.

Symbol for Gold Index.

Symbol for AMEX CompositeIndex.


A billion units.

The percentage return from aninvestment.

Abbreviation for year overyear.

The Yuan is the base unit ofcurrency in China. The Renminbi is the name of the currency in China, where theYuan is the base unit.

*Not available to US residents.