Nowadays, there is many online forex & securities dictionary/glossary which can be accessed anytime on internet. So that to avoid a tiresome iteration content in this site, I will arrange my glossary index into two types, one consist of words that rarely shown/indexed in other online dictionary (but this is not mean no other dictionary show the word) - under "My Glossary" title and other that links to other online dictionaries.
A
My Glossary :
- ABA : A digital code used by the American Bankers Association to define a Bank
- Above The Market : An order to sell securities or obligation above the market price at the time.
- Accumulation Swing Index : An oscillator based on the swing index, i.e oscillator momentum (arranged to quantify the price change rate, not real price) in -100 : +100 scale.
- Adjustable Peg : An exchange rate system in which the exchange rate of a country is fixed in connection with another currency. The official rate may be changed from time to time.
- Aggregate Demand : Tottal demand in an economy, consisting of government spending, private and consumer spending, and business investment.
- Association Cambiste Internationale : International society of foreign exchange dealers, consists of national "Forex clubs" affiliated on a worldwide basis.
- At The Money (ATM) : An option put or call that strike price of the exercise is equal or nearly equal to the market value of a currency/ underlying security.
or if you need to learn about specific Economic glossary that influence forex/securities market, you can Click Here.
B
My Glossary
My Glossary
- Back office : Settlement and any related processes
- Backtesting : Testing a system or strategy on historical data.
- Bank Notes : Paper issued by the central bank, redeemable as money and considered to be full legal tender.
- Bear trap : Occurs when the market breaks below a significant support level generating a sell signal, but then reverses direction
- Boris : Slang for Russian trading.
- Breakaway gap : A price gap which occurs in the beginning of a new trend, many times at the end of a long consolidation period. It may also appear after the completion of major chart formations.
- Bull Trap : Occurs when the market breaks above a significant resistance level generating a buy signal, but then reverses direction.
C
My Glossary
My Glossary
- Cable : Nickname for the British Poundsterling
- Call : An option that gives the holder the right to buy the underlying instrument at a specified price during a fixed period. This term also point the right of an bond issuer to pre-pay debt and demand the surrender of its bonds.
- Carry Trade : An investment position of buying a higher yielding currency with the capital of a lower yielding currency expecting a gain in interest differentials.
- Carry-Over Charge : A finance charge associated with the storing of commodities (or foreign exchange contracts) from one delivery date to another.
- Channel : Uptrend or downtrend whose boundaries are marked by two or more straight lines. A break above/below the channel signals a possible change of trend.
- CHAPS : Clearing House Automated Payment System.
- Cover on a bounce : A recommendation to close a trade on a bounce off an important support level.
D
My Glossary
My Glossary
- Default : The latest day or time by which the buyer of an option must indicate to the seller his intention to the option.
- Devaluation : Deliberate downward adjustment of a currency against its fixed parities or bands, normally by formal announcement.
- Delta : The change in the value of the option premium made fully paid by the capitalisation of reserves and given relative to the instantaneous change in the value of the; underlying instrument, expressed as a coefficient.
- Double Top and Bottom : When currency pair has touched twice (and upper or lower level) and fails to break through.
- Durable Goods Order : An economic indicator which measures the changes in sales of products with a life span in excess of three years.
E
My Glossary
My Glossary
My Glossary
- Elliot Wave Principle : Theory based on the notion that the market moves in waves, trends and corrections. A system of empirically derived rules for interpreting action in the markets. It refers to a five-wave/three-wave pattern which forms one complete bull market /bear market cycle of eight waves.
- Exercise Notice : A formal notification that the holder of an option wishes to exercise it by buying or selling the underlying stock at the exercise price.
- Exercise Price (Strike Price) : The price at which an option may be exercised.
- Exponentially Moving Average (EMA) : Variation of Moving averages that has a greater weight on recent data.
F
My Glossary
My Glossary
- Fedwire : An automated communications and settlement system linking the Federal Reserve banks with other banks and with depository institutions.
- Fibonacci Numbers : Developed by Leonardo de Pisa, they are a sequence of numbers in which each successive number is the sum of the two previous numbers. The most common studies in which the sequence is used are: Fibonacci retracements, Fibonacci arcs, Fibonacci time zones.
- Fill or Kill : An order which must be entered for trading, normally in a pit three times, if not filled is immediately cancelled.
- Finex : A currency market part of the New York Cotton Exchange (NYCE), the oldest futures exchange in New York. The exchange lists futures on the European Currency Unit and the USDX a basket of 10 currencies.
- Forward Points : The pips added to or subtracted from the current exchange rate to calculate a forward price.
- Futures : Exchange-traded contracts. They are firm agreements to deliver (or take delivery of) a standardized amount of something on a certain date at a predetermined price. Futures exist in currencies, money market deposits, bonds, shares and commodities. The Chicago Board of Trade's Treasury bond future is the world's most actively-traded derivative contract. The Chicago Mercantile Exchange's Eurodollar contract has the world's largest open interest
Other forex terms in alphabet "F" could find at :
G
My Glossary
My Glossary
- Globex : A system for global after hours electronic trading in futures and options developed by Reuters for CME and CBOT for use in conjunction with various exchanges around the world
- Gold Standard : The original system for supporting the value of currency issued. The way that where the price of gold is fixed against the currency it means that the increased supply of gold does not lower the price of gold but causes prices to increase.
- Gold Tranche : Part of the country quota for IMF members that had to be paid in gold. This was normally 25% of the quota, the remainder being in domestic currency. The Gold Tranche was automatically available to members without condition.
- Golden Cross : An intersection of two consecutive moving averages which move in the same direction and suggest that the currency will move in the same direction
Other forex terms in alphabet "G" could find at :
H
My Glossary
My Glossary
- Hard Currency : A currency whose value is expected to remain stable or increase in terms of other currencies.
- Hedge : A position established in one market in an attempt to offset exposure to the price risk of an equal but opposite obligation or position in another market ; and Hedging is a strategy used to offset market risk, whereby one position protects another.
- Hedge Ratio : The number of futures or options required to hedge a given exposure in the cash market.
I
My Glossary
My Glossary
- Inconvertible Currency : Currency which cannot be exchanged for other currencies, either because this is forbidden by the foreign exchange regulations.
- Initial Margin : The payment which investors have to pay to a broker to trade on margin, usually used in futures trading and contracts for difference. Initial margin set at percentage of the price of a security or amount of money required to enter a transaction
- Interbank Rate : The rate at which the major banks trade or the rate of interest charged on short-term loans made between banks
- Intervention : An action taken by central banks to affect currency in its country.
Other forex terms in alphabet "I" could find at :
JMy Glossary
- Jawbone : Announcements and statements by politicians or monetary authorities to influence decisions by business, consumer, or trade union sectors, often associated with forecasts and policy implications.
- Jurisdiction Risk : (1) The risk inherent in placing funds in the Center where they will be under the jurisdiction of a foreign legal authority. (2) The risk in making a loan subject to the laws of another country.
Other forex terms in alphabet "J" could find at :
K
My Glossary
My Glossary
- Kappa : A measure of the sensitivity of the price of an option to a change in its implied volatility.
- Kiwi :Slang for the New Zealand dollar.
L
My Glossary
My Glossary
- Leverage (Margin) : Ratio of the amount used in a transaction to the required security deposit. We can compare leverage with buying power of credit.
- Limit order : Order given to a broker on maximum price to be paid or minimum price to be received on a given transaction.
- Liquidity : The more liquid the market the less impact on price stability is made by transactions.
- Long : Refers to the buying of one currency pair with intention to profit from future movements.
M
My Glossary
My Glossary
- Margin : A percentage of the total value of a transaction that a trader is required to deposit as collateral to open a position.
- Market Maker : Institution willing to buy and sell at the quoted bid and ask prices.
- Market Order : Order to buy or sell a currency pair.
- Momentum : Technical indicator which measures the rate of change of a currency pair. Momentum is also called when a trade trades in direction of the trend
Other forex terms in alphabet "M" could find at :
N
My Glossary
My Glossary
- Naked Intervention : A central bank type of intervention in the foreign exchange market which consist solely of the foreign exchange activity. This type of intervention has a monetary effect on the money supply and a long term effect on foreign exchange.
- Next Best Price Stop-loss Order : A stop-loss order which must be executed after the request level was reached.
- Narrow money supply : A term used to describe notes and coins held by the public and notes and coins held by the banking system as reserves against withdrawals
O
My Glossary
My Glossary
- OCO Order : Stands for “one cancels other order” Through the execution of this order, cancels the other part of the same order.
- Options : A contract that gives the right, but not obligation, to buy or sell commodities, securities or currencies at a future date and at a prearranged price.
- Overbought/Oversold - It is said that when a currency pair has risen/fallen at untypical market acceleration, the currency pair is overbought/oversold.
- Over the Counter (OTC) - Transactions are not conducted over an exchange.
P
My Glossary
My Glossary
- Pip : Stands for price interest points. The smallest increment an exchange rate can move.
- Point & Figure Chart : Charting method that completely disregard the passage of time, opting only to display changes in prices
Q
My Glossary
My Glossary
- Quota : (1) A limit on imports or exports. (2) A country's subscription to the IMF.
- Quote : An indicative price. The price quoted for information purposes but not to deal
R
My Glossary
My Glossary
- Rally : recovery in price after a decline period.
- Range : Difference between the high and the low over a period of time. Ranging in also used when the market is not able to make new highs or lows over a period of time.
- Rate : The price of one currency in terms of another (currency pair).
- Resistance : Price level at which a currency pair had trouble breaking through. At this level the sellers gained control of the market outnumbering the buyers. If the price approaches to this level again, the market is likely to hold again.
- Retracements : Correction phase after a considered uptrend or downtrend.
- Reversal : Potential shift of the current trend.
- Risk Management : Techniques developed to avoid substantial risks.
- Roll-over : Settlement of a transaction is rolled forward to another value date, the cost of this is the interest rate differential between the two currencies.
S
My Glossary
My Glossary
- Short : Refers to the selling of one currency with the intention to profit from its future movements.
- Spike : Untypical and significant lower low or higher high within a data series.
- Spot Market : A market in which financial instruments are delivered immediately.
- Spot Price : The current market price.
- Spread : The difference between the bid and ask price.
- Stochastics : Technical indicator that indicates overbought/oversold conditions. Higher values indicate overbought levels, while lower values indicate oversold levels.
- Stop-Loss Order : Order to close a position at a predetermined valued should the position goes against the trader.
- Support : Price level at which a currency pair had trouble breaking through. At this level the buyers gained control of the market pushing the prices higher. If the price approaches to this level again, the market is likely to hold again
T
- My Glossary
- Technical Analysis : A technique used to try and predict future movements of a currency pair based solely on past price movements and volume data.
- Tick : Minimum change of price.
- Tier One : A measure of a banks financial strength used by the BIS being the shareholders' equity available to cover actual or potential irredeemable and non-cumulative preference shares. It excludes, hybrid forms of capital such as fixed term stock, goodwill, and revaluation reserves. BIS has a minimum requirement of 4 percent on risk-weighted assets.
- Transaction Costs : The costs incurred by a trader when buying or selling financial instruments (spread, commissions, etc).
- Trend Lines : A straight line drawn across highs or lows in a chart that indicates the overall trend for the currency pair.
- Triple Top : Pattern in which a currency has reached a price level three times previously, and has been unable to break through that level.
- Turnover : The number or volume of transactions traded over a specific period of time.
- Two-Tier Market : A dual exchange rate system where normally only one rate is open to market pressure, e.g. South Africa.
- Two-Way-Price : When both, bid and ask prices are quoted in a transaction.
Other forex terms in alphabet "T" could find at :
U
My Glossary
My Glossary
- Uncovered :Open position
- Under-Valuation :Exchange rate is normally considered to be undervalued when it is below its purchasing power parity
- Up-Tick :A transaction executed at a price greater than the previous transaction.
Other forex terms in alphabet "U" could find at :
V
My Glossary
My Glossary
- Vanilla : A simple option whose terms and conditions do not include any provisions other than exercise style, expiry and strike. To compare with exotic options which have additional terms.
- Vega :Expresses the price change of an option for a one per cent change in the implied volatility.
- Volatility : A measure of the amount by which an asset price is expected to fluctuate over a given period. Normally measured by the annual standard deviation of daily price changes. (historic). Can be implied from futures pricing, implied volatility.
W
My Glossary
My Glossary
- Whipsaw : Term for where a trader takes a position, then has to move against it, triggering stop-loss limits and liquidation of positions, then having to move in the original direction. Normally occurs in volatile markets.
- Writer :The seller of a call or put option in connection with an opening position who receives a premium and who is required to perform if it is exercised.
X
My Glossary
My Glossary
- XAF : Currency code (ISO 4217) used in Communauté Financière Africaine BEAC (CFA), called Francs
- XDR : Currency code (ISO 4217), used in International Monetary Fund (IMF) special drawing rights.
Y
My Glossary
My Glossary
- YER : Currency code (ISO 4217), used in Yemen that called Rials.
- Yield Curve : The graph showing changes in yield on instruments depending on time to maturity. A system originally developed in the bond markets is now broadly applied to various financial futures. A positive sloping curve has lower interest rates at the shorter maturities and higher at the longer maturities. A negative sloping curve has higher interest rates at the shorter maturities.
Z
My Glossary
My Glossary
- ZERO COUPON BOND : Non interest-charged obligation. This bond at beginning offered with discount to its redeem value.
- ZEW : An Economic indicator, The ZEW do a field research in empirical economics in relation with users. In this context, ZEW specifically differ itself between local and foreign by analyzing comparative issues at international level in European context and by combine important databases scientifically.
