The price at which the market is prepared to sell a product. The Ask price is also known as the Offer.
In FX trading, the Ask represents the price at which a trader can buy the base currency, shown to the left in a currency pair. In CFD trading, the Ask also represents the price at which a trader can buy the product. A type of chart which consists of four significant points: Typically these times are associated with market volatility. The regular fixes are as follows all times NY: In CFD trading, the Ask represents the price a trader can buy the product.
A rollover is the simultaneous closing of an open position for today's value date and the opening of the same position for the next day's value date at a price reflecting the interest rate differential between the two currencies. In the spot forex market, trades must be settled in two business days. For example, if a trader sells , Euros on Tuesday, then the trader must deliver , Euros on Thursday, unless the position is rolled over.
As a service to customers, all open forex positions at the end of the day 5: The rollover or swap adjustment is simply the accounting of the cost-of-carry on a day-to-day basis. Please let us know how you would like to proceed. A Accrual The apportionment of premiums and discounts on forward exchange transactions that relate directly to deposit swap interest arbitrage deals, over the period of each deal. Adjustment Official action normally occasioned by a change either in the internal economic policies to correct a payment imbalance or in the official currency rate.
Analyst A financial professional who has expertise in evaluating investments and puts together buy, sell and hold recommendations for clients. Appreciation A product is said to 'appreciate' when it strengthens in price in response to market demand.
Arbitrage The simultaneous purchase or sale of a financial product in order to take advantage of small price differentials between markets.
Asian central banks Refers to the central banks or monetary authorities of Asian countries. These institutions have been increasingly active in major currencies as they manage growing pools of foreign currency reserves arising from trade surpluses.
Their market interest can be substantial and influence currency direction in the short-term. Ask offer price The price at which the market is prepared to sell a product. At or better An instruction given to a dealer to buy or sell at a specific price or better. Also "Oz" or "Ozzie". B Balance of trade The value of a country's exports minus its imports. Bar chart A type of chart which consists of four significant points: Barrier level 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. Barrier option Any number of different option structures such as knock-in, knock-out, no touch, double-no-touch-DNT that attaches great importance 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.
Base currency The first currency in a currency pair. It shows how much the base currency is worth as measured against the second currency. The primary exceptions to this rule are the British pound, the euro and the Australian dollar.
Base rate The lending rate of the central bank of a given country. Basing A chart pattern used in technical analysis 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. Basis point A unit of measurement used to describe the minimum change in the price of a product.
Bears Traders who expect prices to decline and may be holding short positions. Bid price The price at which the market is prepared to buy a product. 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.
In CFD trading, the Bid also represents the price at which a trader can sell the product. If the price moves by 1. 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. Black box The term used for systematic, model-based or technical traders.
Blow off The upside equivalent of capitulation. When shorts throw in the towel and cover any remaining short positions. Bollinger bands 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. Bond A name for debt which is issued for a specified period of time. Book In a professional trading environment, a book is the summary of a trader's or desk's total positions.
This index only looks at price changes in goods purchased in retail outlets. Broker An individual or firm that acts as an intermediary, bringing buyers and sellers together for a fee or commission. In contrast, a dealer commits capital and takes one side of a position, hoping to earn a spread profit by closing out the position in a subsequent trade with another party. Buck Market slang for one million units of a dollar-based currency pair, or for the US dollar in general.
Bulls Traders who expect prices to rise and who may be holding long positions. Bundesbank Germany's central bank. Buy Taking a long position on a product. Cable earned its nickname because the rate was originally transmitted to the US via a transatlantic cable beginning in the mid s when the GBP was the currency of international trade. Call option A currency trade which exploits the interest rate difference between two countries.
By selling a currency with a low rate of interest and buying a currency with a high rate of interest, the trader will receive the interest difference between the two countries while this trade is open.
Candlestick chart A chart that indicates the trading range for the day as well as the opening and closing price. If the open price is higher than the close price, the rectangle between the open and close price is shaded. If the close price is higher than the open price, that area of the chart is not shaded. Capitulation A point at the end of an extreme trend when traders who are holding losing positions exit those positions.
This usually signals that the expected reversal is just around the corner. Carry trade A trading strategy that captures the difference in the interest rates earned from being long a currency that pays a relatively high interest rate and short another currency that pays a lower interest rate.
Cash market The market in the actual underlying markets on which a derivatives contract is based. Cash price The price of a product for instant delivery; i. CBs Abbreviation referring to central banks. Central bank A government or quasi-governmental organization that manages a country's monetary policy. It allows traders to leverage their capital by trading notional amounts far higher than the money in their account and provides all the benefits of trading securities, without actually owning the product.
Chartist An individual, also known as a technical trader, who uses charts and graphs and interprets historical data to find trends and predict future movements. Choppy Short-lived price moves with limited follow-through that are not conducive to aggressive trading.
Cleared funds Funds that are freely available, sent in to settle a trade. Clearing The process of settling a trade. Closed position Exposure to a financial contract, such as currency, that no longer exists.
A position is closed by placing an equal and opposite deal to offset the open position. Once closed, a position is considered squared. Closing The process of stopping closing a live trade by executing a trade that is the exact opposite of the open trade.
Closing price The price at which a product was traded to close a position. It can also refer to the price of the last transaction in a day trading session. Collateral An asset given to secure a loan or as a guarantee of performance. Commission A fee that is charged for buying or selling a product. Commodity currencies Currencies from economies whose exports are heavily based in natural resources, often specifically referring to Canada, New Zealand, Australia and Russia.
Components The dollar pairs that make up the crosses i. Selling the cross through the components refers to selling the dollar pairs in alternating fashion to create a cross position. Confirmation A document exchanged by counterparts to a transaction that states the terms of said transaction.
Consolidation A period of range-bound activity after an extended price move. Construction spending Measures the amount of spending towards new construction, released monthly by the U. Department of Commerce's Census Bureau. Contagion The tendency of an economic crisis to spread from one market to another. Contract The standard unit of forex trading.
Contract note A confirmation sent that outlines the exact details of the trade. Contract size The notional number of shares one CFD represents.More...