Involved in administrative functions that supports the company such as payments.
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(1) Transaction where all the obligations and liabilities in one transaction are mirrored in a second transaction. (2) Transaction where a loan is made in one currency in one country against a loan in another country in another currency.
Balance of Payments
An accounting record of all the transactions between a country’s imports and exports and the rest of the world for a specific period of time.
Balance of trade
The difference in value between the exports and the imports of a country over a certain period of time. Positive Balance of trade is known as Surplus while negative Balance of trade is known as Deficit.
The rate of interest which a central bank charges on lendings to its domestic commercial banks.
A popular chart used to display the opening and closing price as well as to indicate the highest and lowest price of a security traded during the day.
A certain price of great importance included in the structure of a Barrier Option. If a Barrier Level price is reached, the terms of a specific Barrier Option call for a series of events to occur.
Any number of different option structures (such as knock-in, knock-out, no touch, double-no-touch-DNT) that is important to a specific price trading. In a no-touch barrier, a large defined payout is awarded to the buyer of the option by the seller if the strike price is not ‘touched’ before expiry. This creates an incentive for the option seller to drive prices through the strike level and creates an incentive for the option buyer to defend the strike level.
The first currency of a currency pair is called the Base. When you buy the currency pair it shows how much of the quoted currency is needed to buy one unit of the base currency. When you sell it shows how much of the quoted currency you will get for selling 1 unit of the Base currency.
The rate at which the Central Bank of a country is lending.
A method used in technical analysis – a chart pattern that shows when demand and supply of a product are almost equal. It results in a narrow trading range and the merging of support and resistance levels.
The difference between the cash price and futures price.
A unit of measurement used to describe the minimum change in the price of a product.
A group of currencies normally used to manage the exchange rate of a currency. Sometimes referred to as a unit of account.
Bearish / Bear market
A currency market in which prices are declining. For example, “We are bearish EUR/USD” means that we think the Euro will weaken against the dollar.
Traders who believe prices will move lower and may be holding short positions.
The price at which a buyer has offered to purchase the currency. Prices are quoted two-way as Bid/Ask. In FX trading, the Bid represents the price at which a trader can sell the base currency, shown to the left in a currency pair. For example, in the quote USD/CHF 1.4527/32, the base currency is USD, and the Bid price is 1.4527, meaning you can sell one US Dollar for 1.4527 Swiss francs.
The difference between the Bid and the Ask (Offer) price.
Refers to the first 3 digits of a currency quote, such as 122 USD/JPY or 1.37 in EUR/USD. If the price moves by 1.7 big figures, it has moved 170 pips.
A trading option in which the trader chooses Call or put (up or down) on a specific asset which expires at an exact time and the payout is standard.
The Bank for International Settlements located in Basel, Switzerland, is the central bank for central banks. The BIS frequently acts as the market intermediary between national central banks and the market. The BIS has become increasingly active as central banks have increased their currency reserve management. When the BIS is reported to be buying or selling at a level, it is usually for a central bank and thus the amounts can be large. The BIS is used to avoid markets mistaking buying or selling interest for official government intervention.
A digital or virtual currency that uses peer-to-peer technology to facilitate instant payments. Bitcoin is a type of alternative currency known as a cryptocurrency, which uses cryptography for security, making it difficult to counterfeit.
The term used for systematic, model-based or technical traders.
A sharp price increase that comes after a long period of price appreciation, and is followed by a fall in the price.
Bank of Canada, the central bank of Canada.
Bank of England, the central bank of the UK.
Bank of Japan, the central bank of Japan.
A tool used by technical analysts. A band plotted two standard deviations on either side of a simple moving average, which often indicates support and resistance levels.
A name for debt which is issued for a specified period of time. Depending the terms of the Bond, the issuer owes the holder/s a debt, and is obliged to pay interest and/or repay the principal at a later date which is called the maturity date.
In a professional trading environment, a ‘book’ is the summary of a trader’s or desk’s total positions.
Break Even Point
The price of a financial instrument at which the option buyer recovers the premium, meaning that he makes neither a loss nor a gain. In the case of a call option, the breakeven point is the exercise price plus the premium.
The site of the conference which in 1944 led to the establishment of the post war foreign exchange system that remained intact until the early 1970s. The conference resulted in the formation of the IMF. The system fixed currencies in a fixed exchange rate system with 1% fluctuations of the currency to gold or the dollar.
British Retail Consortium (BRC) shop price index
A British measure of the rate of inflation at various surveyed retailers. This index only looks at price changes in goods purchased in retail outlets.
An individual or firm that acts as an agent, that arranges transactions between buyers and sellers in exchange of a fee or commission.
(1) Commission charged by a broker.
(2) The business of a broker.
The slang name for the American dollar.
Bullish / Bull market
A market in which prices are rising or expected to rise. For example, “We are bullish EUR/USD” means that we think the Euro will strengthen against the dollar.
Traders who expect prices to rise and who may be holding long positions.
Germany’s central bank.
Taking a long position on a product.
Looking to buy 20-30-pip/point pullbacks in the course of an intra-day trend.