alali
04-07-2003, Fri 6:19 PM
BEAR
A person who thinks that market prices will decline.
BEAR MARKET
A market that is characterized by declining prices.
Bid
An expression indicating the desire to buy at a certain price.
Broker
An agent who handles investors orders to buy and sell financial instruments against a
commission.
BULL
A person who thinks that market prices will rise.
BULL MARKET
A market that is characterized by rising market prices.
Cable
A slang used among traders to indicate GBP/$ exchange rate.
Call Rate
Overnight inter-bank interest rate.
CFD (Contract for Difference)
An agreement between two parties to exchange, at the close of the contract, the difference
between the opening price and the closing price of the contract, multiplied by the number of
(shares) specified in the contract.
CONVERTIBLE CURRENCY
A currency that can be freely exchanged for another or for gold without special authorization from the appropriate authority.
Counter-party
A party or bank with whom a deal is made.
Credit Checking
Credit is an important consideration when making trades. As large sums of money
change hands it is important to check that the counter-party is capable of making the
trade. Once the price has been agreed then the credit is checked. If the credit is not good
then no trade takes place.
Cross Rate
An exchange rate between two currencies. It is usually made up from the individual exchange rates of the two currencies, measured against the US$.
DAY TRADING
It is a term that refers to opening and closing the same position/positions within one day`s trading.
Derivatives
Derivatives are trades that are derived from some other existing products, such as shares,
bonds, currencies and commodities. Derivatives can be traded through an exchange or out
of Exchange (Over The Counter or OTC). OTC derivatives carry more credit risk as they are traded direct with the counter-party rather than through an Exchange. Examples of derivative instruments include Options, Interest Rate Swaps, Caps, and Floors.
Eurodollars
US dollars on deposit with a bank outside the United States, even if this bank is a subsidiary
of a U.S. bank. Consequently this deposit is outside the jurisdiction of the United States.
Fill or Kill
A client order that is a price limit order that must be filled immediately or cancelled
Flat/Square
To be flat or square is to be neither long nor short, or to have no positions, or if all the
positions held cancel each other out.
Floating Interest Rate
An interest rate that fluctuates as market rates move.
Forward
A deal that will commence at an agreed date in the future i.e. a 3 month GBP/$ will
commence 3 months from the deal date.
Front and Back Office
The `front office` usually means the trading room, while the `back office` is where
settlement of trades takes place.
Futures
Futures is a way of trading financial instruments, currencies or commodities for forward
value dates or delivery.
Futures Contract
A futures contract is a legally binding standardized agreement made to buy
or sell a commodity or financial instrument sometime in the future.
Foreign Exchange Market (Fx/Forex)
The buying and selling of foreign currency. Most FX is quoted against US$. If other
currencies are traded (e.g. £/CHF) then it is known as a cross rate.
Fx (see Foreign Exchange Market)
Forex (see Foreign Exchange Market)
An abbreviation of Foreign Exchange Market.
GTC (Good Till Cancelled)
An order left with a Dealer to buy or sell at a fixed price. The order remains
standing until it is cancelled by the client.
Hedging
The practice of undertaking an investment activity in order to protect against loss in another.
An example of this is selling short to nullify a previous purchase, or buying long to offset a
previous short sale.
High/Low
High/Low is the highest traded price and the lowest traded price for an underlying instrument
for a current trading day.
Indicated and Firm Prices
An "indicated price " is one that is not a "firm price". An "indicated price" is for information
purposes and would need to be `firmed up` in order to transact a deal.
Initial Margin
It is the deposit required before a client can transact any deal.
Interest Rate Swaps (IRS)
It is a transaction whereby two counter-parties exchange fixed and floating interest with
each other. This transaction can be regarded as two parallel loans, one fixed and one
floating. The floating is set against LIBOR, and the difference between the two rates is
paid in the appropriate direction on each rollover. In a single currency Interest Rate
Swaps, no principal changes hands, only interest.
Introducing Broker (IB)
A person or organization that solicits or accepts orders to buy or sell futures contracts
Or forex but does not accept money or other assets from the customers to support such
orders.
Leverage
The ability to control large amounts of currency/commodity with a comparatively small
amount of capital.
LIBOR
LIBOR stands for London Inter-Bank Offer Rate. It is a reference point used in IRS transactions
for setting the floating side of derivative deals. It is used as the reference point for most trades
around the globe.
Limit Order
It is an order given to sell at an agreed price sometime in the future.
Liquid/ Illiquid Market
A Liquid Market is a situation when a "close" spread is obtained between the bid and the
offer price. It can also mean that the number of institutions trading in the market is high.
An Illiquid Market is the opposite of a liquid market.
Long (Long Position/Going Long)
It is a market position where the client has bought a financial instrument he
previously did not hold/own . If a trader is "long $" that means that he owns $. It is the
opposite of "short".
Managed Account/ Discretionary Account
An arrangement by which the holder of the account gives written power of attorney
to a person, often his broker, to make trading decisions.
Margin
Margin is the deposit withdrawn from the client account as collateral to cover for
losses if any, that may result from trades that the client makes. It is returned to
the client account when a trade is closed.
Margin Call
It is a demand for additional funds from the client to bring the client`s margin deposits to a
required minimum level to cover for a possible adverse movement in price in the market.
Mark to Market
It is a method that values the client`s books at the end of each working day i.e. to
debit or credit on a daily basis the clients margin account based on the close of that day`s
trading session. It protects against the possibility of contract default.
Market Maker
Market Maker is a "principal" that supplies prices to create a market by supplying
an offer and a bid price, thereby running a trading book.
Offer
An "offer" is the rate at which a dealer is willing to sell. It is the opposite of "bid".
Offset
Taking a second futures position opposite to the initial or opening position.
One Cancels Other Order
Where the execution of one order automatically cancels a previous one.
Open Position
A deal that has not been settled by being reversed by an opposite deal.
Order
An order is an instruction to make a trade.
OTC (see Over-the-Counter Market)
Over-the-Counter Market (OTC)
A market where financial products such as foreign currencies, stocks and other
items are bought and sold outside an exchange market, by telephone and other
means of communication.
PIP or POINTS
Depending on context, normally one basis point. ie 0.0001
Position
A position is a market commitment expressed by buying or selling.
Resistance (Resistance Level)
A price level at which you expect selling to take place.
Rollover
It is a situation where a deal is rolled forward to another value date based on the differential
of the interest rates of two currencies involved .
Short
It is a market position where a client sells a currency that he does not already own. If a trader
is `short $` then he sold at a certain price level expecting to buy later when the price level declines.
Speculator
A market participant who tries to profit from buying and selling futures contracts by anticipating future price movements.
Spread
The difference in prices between bid and offer rates.
Spot
It usually refers to a cash market price (value 2 days forward) for a financial instrument/
commodity.
Stock Index
An indicator used to measure and report value changes in a selected group of stocks.
Stock Market
A market in which shares of stock are brought and sold.
Stop Order/ Stop Loss Order
It is an order to sell or buy when the market reaches a particular price.
Support (Support Level)
A price level at which you would expect buying to take place.
Swaps
Swaps are used to exchange one currency for another and then back again for a fixed period
of time. The swap rate calculation indicates the interest rate differential between two underlying
currencies.
Technical Analysis
Analysis based on movements in a market through chart study, moving averages, volume
and other technical indicators.
Ticker
A ticker is a table and or a graph or both, showing a trade by trade history of a said instrument.
A ticker shows direction of a market movement. There are tickers for day trading showing
a days movements and historic tickers showing long term movements. Traders like to use
graphs as they show direction of market movement in an easy to understand format.
A person who thinks that market prices will decline.
BEAR MARKET
A market that is characterized by declining prices.
Bid
An expression indicating the desire to buy at a certain price.
Broker
An agent who handles investors orders to buy and sell financial instruments against a
commission.
BULL
A person who thinks that market prices will rise.
BULL MARKET
A market that is characterized by rising market prices.
Cable
A slang used among traders to indicate GBP/$ exchange rate.
Call Rate
Overnight inter-bank interest rate.
CFD (Contract for Difference)
An agreement between two parties to exchange, at the close of the contract, the difference
between the opening price and the closing price of the contract, multiplied by the number of
(shares) specified in the contract.
CONVERTIBLE CURRENCY
A currency that can be freely exchanged for another or for gold without special authorization from the appropriate authority.
Counter-party
A party or bank with whom a deal is made.
Credit Checking
Credit is an important consideration when making trades. As large sums of money
change hands it is important to check that the counter-party is capable of making the
trade. Once the price has been agreed then the credit is checked. If the credit is not good
then no trade takes place.
Cross Rate
An exchange rate between two currencies. It is usually made up from the individual exchange rates of the two currencies, measured against the US$.
DAY TRADING
It is a term that refers to opening and closing the same position/positions within one day`s trading.
Derivatives
Derivatives are trades that are derived from some other existing products, such as shares,
bonds, currencies and commodities. Derivatives can be traded through an exchange or out
of Exchange (Over The Counter or OTC). OTC derivatives carry more credit risk as they are traded direct with the counter-party rather than through an Exchange. Examples of derivative instruments include Options, Interest Rate Swaps, Caps, and Floors.
Eurodollars
US dollars on deposit with a bank outside the United States, even if this bank is a subsidiary
of a U.S. bank. Consequently this deposit is outside the jurisdiction of the United States.
Fill or Kill
A client order that is a price limit order that must be filled immediately or cancelled
Flat/Square
To be flat or square is to be neither long nor short, or to have no positions, or if all the
positions held cancel each other out.
Floating Interest Rate
An interest rate that fluctuates as market rates move.
Forward
A deal that will commence at an agreed date in the future i.e. a 3 month GBP/$ will
commence 3 months from the deal date.
Front and Back Office
The `front office` usually means the trading room, while the `back office` is where
settlement of trades takes place.
Futures
Futures is a way of trading financial instruments, currencies or commodities for forward
value dates or delivery.
Futures Contract
A futures contract is a legally binding standardized agreement made to buy
or sell a commodity or financial instrument sometime in the future.
Foreign Exchange Market (Fx/Forex)
The buying and selling of foreign currency. Most FX is quoted against US$. If other
currencies are traded (e.g. £/CHF) then it is known as a cross rate.
Fx (see Foreign Exchange Market)
Forex (see Foreign Exchange Market)
An abbreviation of Foreign Exchange Market.
GTC (Good Till Cancelled)
An order left with a Dealer to buy or sell at a fixed price. The order remains
standing until it is cancelled by the client.
Hedging
The practice of undertaking an investment activity in order to protect against loss in another.
An example of this is selling short to nullify a previous purchase, or buying long to offset a
previous short sale.
High/Low
High/Low is the highest traded price and the lowest traded price for an underlying instrument
for a current trading day.
Indicated and Firm Prices
An "indicated price " is one that is not a "firm price". An "indicated price" is for information
purposes and would need to be `firmed up` in order to transact a deal.
Initial Margin
It is the deposit required before a client can transact any deal.
Interest Rate Swaps (IRS)
It is a transaction whereby two counter-parties exchange fixed and floating interest with
each other. This transaction can be regarded as two parallel loans, one fixed and one
floating. The floating is set against LIBOR, and the difference between the two rates is
paid in the appropriate direction on each rollover. In a single currency Interest Rate
Swaps, no principal changes hands, only interest.
Introducing Broker (IB)
A person or organization that solicits or accepts orders to buy or sell futures contracts
Or forex but does not accept money or other assets from the customers to support such
orders.
Leverage
The ability to control large amounts of currency/commodity with a comparatively small
amount of capital.
LIBOR
LIBOR stands for London Inter-Bank Offer Rate. It is a reference point used in IRS transactions
for setting the floating side of derivative deals. It is used as the reference point for most trades
around the globe.
Limit Order
It is an order given to sell at an agreed price sometime in the future.
Liquid/ Illiquid Market
A Liquid Market is a situation when a "close" spread is obtained between the bid and the
offer price. It can also mean that the number of institutions trading in the market is high.
An Illiquid Market is the opposite of a liquid market.
Long (Long Position/Going Long)
It is a market position where the client has bought a financial instrument he
previously did not hold/own . If a trader is "long $" that means that he owns $. It is the
opposite of "short".
Managed Account/ Discretionary Account
An arrangement by which the holder of the account gives written power of attorney
to a person, often his broker, to make trading decisions.
Margin
Margin is the deposit withdrawn from the client account as collateral to cover for
losses if any, that may result from trades that the client makes. It is returned to
the client account when a trade is closed.
Margin Call
It is a demand for additional funds from the client to bring the client`s margin deposits to a
required minimum level to cover for a possible adverse movement in price in the market.
Mark to Market
It is a method that values the client`s books at the end of each working day i.e. to
debit or credit on a daily basis the clients margin account based on the close of that day`s
trading session. It protects against the possibility of contract default.
Market Maker
Market Maker is a "principal" that supplies prices to create a market by supplying
an offer and a bid price, thereby running a trading book.
Offer
An "offer" is the rate at which a dealer is willing to sell. It is the opposite of "bid".
Offset
Taking a second futures position opposite to the initial or opening position.
One Cancels Other Order
Where the execution of one order automatically cancels a previous one.
Open Position
A deal that has not been settled by being reversed by an opposite deal.
Order
An order is an instruction to make a trade.
OTC (see Over-the-Counter Market)
Over-the-Counter Market (OTC)
A market where financial products such as foreign currencies, stocks and other
items are bought and sold outside an exchange market, by telephone and other
means of communication.
PIP or POINTS
Depending on context, normally one basis point. ie 0.0001
Position
A position is a market commitment expressed by buying or selling.
Resistance (Resistance Level)
A price level at which you expect selling to take place.
Rollover
It is a situation where a deal is rolled forward to another value date based on the differential
of the interest rates of two currencies involved .
Short
It is a market position where a client sells a currency that he does not already own. If a trader
is `short $` then he sold at a certain price level expecting to buy later when the price level declines.
Speculator
A market participant who tries to profit from buying and selling futures contracts by anticipating future price movements.
Spread
The difference in prices between bid and offer rates.
Spot
It usually refers to a cash market price (value 2 days forward) for a financial instrument/
commodity.
Stock Index
An indicator used to measure and report value changes in a selected group of stocks.
Stock Market
A market in which shares of stock are brought and sold.
Stop Order/ Stop Loss Order
It is an order to sell or buy when the market reaches a particular price.
Support (Support Level)
A price level at which you would expect buying to take place.
Swaps
Swaps are used to exchange one currency for another and then back again for a fixed period
of time. The swap rate calculation indicates the interest rate differential between two underlying
currencies.
Technical Analysis
Analysis based on movements in a market through chart study, moving averages, volume
and other technical indicators.
Ticker
A ticker is a table and or a graph or both, showing a trade by trade history of a said instrument.
A ticker shows direction of a market movement. There are tickers for day trading showing
a days movements and historic tickers showing long term movements. Traders like to use
graphs as they show direction of market movement in an easy to understand format.