Your Ultimate Trading Dictionary!

Back Office
Settlement and related processes.

Balance-of-Payments
A system of recording a country’s economic transactions.

Bank Notes
Paper notes issued by the central bank, redeemable as money and considered to be full legal tender.

Base Currency
The first currency in a currency pair, which is the reference currency for trading and pricing.

Base Price
The starting price of an asset or currency pair in a specific trade or transaction.

Bear Call Spread
A bearish options strategy where a trader sells a call option and buys another call option at a higher strike price, limiting potential losses while profiting from a neutral to declining market.

Bear Put Spread
An option strategy where a trader buys a put option and sells another put option at a lower strike price to limit potential losses.

Bid-Offer Spread
The difference between the buying price (bid) and the selling price (ask/offer) of a currency pair.

Bilateral Grid
A system used in Forex trading to manage currency trading within a specific grid structure, often involving predetermined levels of buy and sell orders.

Bollinger Bands
A technical analysis tool that consists of a moving average and two standard deviation lines above and below it, used to identify volatility and potential price reversals in the market.

Breakaway Gap
A price gap that occurs when the price of a currency pair moves sharply away from a consolidation range, signaling the start of a new trend.

Break-Even Point
The price level at which a trader neither makes a profit nor incurs a loss on a trade.

Bretton Woods
A system established after World War II where currencies were pegged to the U.S. dollar, which was convertible to gold until the system collapsed in 1971.

Broken Dates
Non-standard settlement dates for currency transactions, typically used in forward contracts.

Broker
An intermediary that facilitates the buying and selling of currencies in the Forex market.

Buying Rate
The price at which a broker or financial institution will buy a currency pair.

Buying Selling FX
Refers to the process of buying or selling currencies in the Forex market, also known as currency exchange.

Cable
A slang term for the GBP/USD currency pair, originating from the transatlantic cable used for communication between the UK and the US.

Call
A type of options contract that gives the buyer the right (but not the obligation) to buy a currency pair at a specified price before a certain expiration date.

Candlestick Chart
A chart that displays price movements using candles, each representing a specific time period, showing the open, high, low, and close prices.

Capital Account
A component of the balance of payments that records cross-border transactions involving capital, such as investments and loans.

Carry
The return from holding a position in a currency, often due to the interest rate differential between two currencies in a pair.

Carry-Over Charge
A fee charged for holding a leveraged position overnight, typically related to the interest rate differential between the two currencies.

Cash Settlement
The process of settling a Forex contract by paying the difference in the value of the currencies involved, rather than delivering the actual currencies.

Central Bank
A national institution that manages a country’s currency, money supply, and interest rates and may intervene in the Forex market.

Central Rate
The official exchange rate set by a country’s central bank, often used as a reference rate.

CHIPS
The Clearing House Interbank Payments System, a large electronic payments system used in the U.S. for settling interbank transactions.

CHAPS
Clearing House Automated Payment System, a British same-day payment system used for large-value transactions.

Closed Position
A completed trade where the trader has either sold or bought back an asset, ending the position and realizing any profit or loss.

Closing Purchase Transaction
A transaction where a trader buys back a currency or asset to close a previously opened short position.

Correlation
A statistical measure that indicates the relationship between the movements of two currencies or assets, showing if they move in the same or opposite directions.

Cost of Carry
The cost of holding a position, including interest rates, financing fees, or any costs associated with holding an asset over time.

Covered Interest Rate Arbitrage
A strategy where traders exploit the difference in interest rates between two countries while using a forward contract to hedge against exchange rate risk.

Cross-Rate
The exchange rate between two currencies that do not involve the U.S. dollar, calculated from their respective exchange rates with the dollar.

Currency
A system of money in general use in a particular country, used for trading and exchange in the Forex market.

Day Trader
A trader who buys and sells financial instruments within the same trading day, often capitalizing on short-term price movements.

Deal Ticket/Deal Slip
A document or electronic record that outlines the details of a Forex trade, including the currency pair, price, and quantity.

Dealer
A person or institution that buys and sells currencies in the Forex market, typically acting as a market maker.

Dealing Systems
Automated platforms or networks used by brokers or dealers to execute and manage Forex transactions.

Declaration Date
The date on which a company announces its dividend payments or other financial decisions that may affect the currency market.

Default
The failure to fulfill a contract or financial obligation, such as not delivering on a trade or payment.

Delivery Date
The date on which the actual exchange of currencies or settlement of a contract takes place.

Delivery Month
The month in which a Forex contract is set to expire and the delivery or settlement of the trade will occur.

Delivery Points
The price points or terms at which the physical delivery or settlement of a currency will be made in a Forex contract.

Delivery Risk
The risk that a party in a Forex transaction may not deliver the agreed-upon currency on the settlement date.

Delivery
The actual exchange of currencies between parties in a Forex transaction, typically occurring at the settlement date.

Devaluation
A reduction in the value of a currency relative to other currencies, often by government action.

Delta
A measure of how much an option’s price will change with a change in the price of the underlying asset (currency pair).

Direct Quotation
A Forex quote where the domestic currency is the base currency, and the price represents how much of the foreign currency is needed to buy one unit of the domestic currency.

Discount Rate
The interest rate charged by a central bank on loans to commercial banks, influencing currency value and market rates.

Discount
A reduction in the price of a currency or financial instrument, often due to a market condition or a central bank policy.

Double
A term used to describe a large market movement, such as a currency pair doubling in value.

Durable Goods Order
An economic indicator that measures new orders for long-lasting goods (like machinery and equipment) and reflects economic strength.

Economic Exposure
The risk faced by a company or investor due to changes in exchange rates that can impact the value of future cash flows or assets.

Elliot Wave Principle
A technical analysis theory that suggests market prices move in predictable wave patterns, with trends unfolding in five-wave movements and corrections in three-wave movements.

Economic and Monetary Union (EMU)
A group of European Union countries that have adopted a common currency, the euro, and share common economic and monetary policies.

European Currency Unit
A former basket of EU currencies used as a unit of account before the introduction of the euro.

European Monetary System
A system established to reduce exchange rate fluctuations and stabilize currencies within the European Union before the introduction of the euro.

Exercise Notice
A formal notification from the holder of an options contract to exercise their option, either to buy or sell the underlying currency.

Exercise Price (Strike Price)
The price at which the holder of an options contract can buy or sell the underlying currency.

Expiry Date
The date on which an options contract or futures contract expires, after which it can no longer be exercised.

Exposure
The amount of risk a trader or investor faces due to fluctuations in currency prices.

Factory Orders
A report measuring the total value of new orders placed with manufacturers for goods, indicating economic activity.

Fedwire
A real-time gross settlement system used by the Federal Reserve to process high-value payments between U.S. financial institutions.

Fill or Kill
A type of order in Forex where the trader requires the order to be filled immediately at the desired price, or canceled (killed) if not executed.

Finex
A division of the New York Mercantile Exchange (NYMEX) that specializes in trading financial instruments, including currencies.

Foreign Exchange Cents
The smallest unit of a currency price movement in Forex, often referring to the pip or fractional movement in exchange rates.

Foreign Exchange Market
A global decentralized market where currencies are traded, involving banks, brokers, and other financial institutions.

Forward Forward
A Forex contract where two forward contracts are traded simultaneously, usually with different maturity dates.

Forward Outright
A contract in which a currency pair is bought or sold at a specified price for delivery at a future date, with no option for early settlement.

Forward Rate
The agreed-upon exchange rate in a forward contract for a currency transaction to take place at a specified future date.

Forward Spread (forward points or forward pips)
The difference between the forward rate and the spot rate, quoted in pips or points, representing the cost of holding a currency position in the future.

Futures
Standardized contracts to buy or sell a currency or other asset at a predetermined price on a specified future date.

G7
Group of Seven, a collection of seven major advanced economies: Canada, France, Germany, Italy, Japan, the UK, and the U.S.

Gap
A price movement in the Forex market where the price opens significantly higher or lower than the previous close, creating a gap in the price chart.

Globex
An electronic trading platform used by the CME Group to trade futures, options, and other financial instruments globally.

Gold Standard
A monetary system where the value of a country’s currency is directly linked to a specified amount of gold.

Gold Tranche
The portion of a country’s quota in the International Monetary Fund (IMF) that can be used without the need for specific conditions or approval.

Golden Cross
A bullish chart pattern where a short-term moving average crosses above a long-term moving average, indicating a potential upward price movement.

Good Until Cancelled
A type of order that remains active in the market until it is either filled or canceled by the trader.

Gross Settlement
A system where each transaction is settled individually and immediately, without netting against other transactions.

Gross Domestic Product
The total value of goods and services produced within a country’s borders over a specific period. This is a key economic indicator.

Gross National Product
The total value of goods and services produced by a country’s residents, both domestically and abroad.

Hard Currency
A currency that is widely accepted for international trade and is considered stable, such as the U.S. dollar or euro.

Head and Shoulders
A technical chart pattern indicating a potential reversal in the market, typically signaling a change from an uptrend to a downtrend.

Hedging
A strategy used to protect against potential losses in Forex by taking an offsetting position in the market.

Hedge Ratio
The ratio used to determine the amount of one asset needed to hedge against the risk of another asset.

ICCH
International Commodity Clearing House, a clearing house that manages and settles futures and options contracts for commodities and financial instruments.

IFEMA
International Foreign Exchange Market Association, a group focused on promoting global Forex market standards.

IMF
International Monetary Fund, an international organization that helps maintain global economic stability and provides financial assistance to countries in need.

IMM
International Monetary Market, a division of the Chicago Mercantile Exchange (CME) where futures and options contracts are traded, particularly for currencies.

Implied Volatility
The estimated volatility of an asset’s price, derived from the price of its options, indicating expected price movement.

Implied Volatility Skews
The difference in implied volatility between options with different strike prices or expiration dates, often reflecting market sentiment.

Implied Rates
Interest rates implied by the price of an instrument, such as a forward contract, based on the difference between spot and forward prices.

In-the-Money
An options contract where the current market price of the underlying asset is favorable to the option holder (i.e., profitable if exercised).

Inconvertible Currency
A currency that cannot be freely exchanged or converted into other currencies on the international market due to government restrictions.

Index Linking
A process where payments or contracts are adjusted according to changes in a specified price index, like inflation or commodity prices.

Indicative Quote
A suggested or estimated price for a currency pair or asset, often used as a guide rather than an actual offer.

Industrial Production Index
An economic indicator that measures the total production of factories, mines, and utilities in a country, reflecting economic activity.

Inflation
The rate at which the general level of prices for goods and services rises, eroding purchasing power.

Initial Margin
The minimum amount of capital required to open a position in Forex trading, often expressed as a percentage of the total position size.

Instruction
An order or directive given by a trader or client to execute a specific Forex trade or action.

Inter-bank Rates
The exchange rates at which major global banks trade currencies with each other in the wholesale market.

Inter-dealer Broker
A broker who facilitates trades between financial institutions or dealers in the Forex market.

Interest Arbitrage
A strategy where a trader exploits differences in interest rates between two currencies to profit from the rate differential.

Interest Parity
A theory that suggests the difference in interest rates between two countries will be reflected in the exchange rate between their currencies.

Interest Rate Options
Financial derivatives that give the holder the right, but not the obligation, to buy or sell a currency or asset at a specified interest rate.

Interest Rate Cap
A financial product that limits the maximum interest rate a borrower or investor can pay or receive, often used in loans or swaps.

Interest Rate Collar
A strategy that combines a cap and a floor to limit the range of interest rate fluctuations for a borrower or investor.

Interest Rate Floor
A minimum interest rate below which a rate cannot fall, often used to protect the lender or investor.

Interest Rate Swaps
A financial contract in which two parties exchange interest payments, typically swapping fixed interest rates for floating rates.

Intervention
When a central bank or government takes action to influence the value of their currency, often by buying or selling foreign currencies.

Intra-Day limit
A restriction on the amount of risk or position size a trader can hold within a single trading day.

Intrinsic Value
The inherent value of an option, determined by the difference between the current price of the underlying asset and the strike price of the option.

Inverted Market
A market condition where the price of a currency pair is quoted with the base currency as the secondary, often indicating a reversal of typical market conditions.

IOM
International Operations Manager, a position or role responsible for overseeing global operations in a financial institution or trading firm.

J Curve

A graphical representation showing the short-term negative impact of a currency devaluation on a country’s trade balance, followed by long-term improvement.

Jawbone
A term used for central bank officials making verbal statements or comments to influence market sentiment without taking direct actions.

Jurisdiction Risk
The risk that changes in laws, regulations, or political conditions in a specific country or region can affect Forex trading outcomes.

Kappa
A measure in options trading representing the rate of change in an option’s delta relative to changes in the price of the underlying asset.

Key currency
A major currency that is widely used in international trade and finance, such as the U.S. dollar, euro, or Japanese yen.

Kiwi
A nickname for the New Zealand dollar (NZD).

Knock In
A type of barrier option that becomes activated and valid only once the underlying asset reaches a specified price level.

Ladder
A type of options strategy or pricing structure where multiple strike prices are set in a step-like fashion, often used in structured products or binary options.

Lagging Indicator
A technical analysis tool that provides signals based on past price movements, such as moving averages or the Relative Strength Index (RSI).

Lapsed Rights
The expiration or loss of rights to exercise an option, typically referring to options or warrants in the Forex market.

Last Trading Day
The final day on which a contract or Forex position can be traded before expiration or settlement.

Lay Off
A strategy where a trader reduces their exposure by entering an offsetting position, often to limit risk.

Leading Indicators
Economic indicators or technical analysis tools that are used to predict future market movements, such as the Consumer Confidence Index (CCI).

Leads and Lags
Refers to the timing differences between economic or market events (leads) and their effects on other markets or economies (lags).

Left-hand Side
The side of a Forex quote representing the base currency (i.e., the first currency in a pair).

Leverage
The ability to control a large position with a small amount of capital, typically expressed as a ratio (e.g., 100:1).

Liability
A financial obligation or debt owed by an individual or institution, including currency positions that must be settled.

LIBOR
London Interbank Offered Rate, the interest rate at which major banks lend to each other in the London interbank market.

Life of Contract
The duration from when a contract is initiated to its expiration or settlement date.

LIFFE
London International Financial Futures Exchange, a global futures and options exchange, now part of Euronext.

Limit Down
The maximum allowed downward price movement in a trading day for a particular futures or Forex contract.

Limit Move
The maximum allowed price fluctuation in a specific period, often referring to futures contracts.

Limit Order
An order to buy or sell a currency at a specific price or better, ensuring no trade occurs outside the set price range.

Limit Up
The maximum allowed upward price movement in a trading day for a particular futures or Forex contract.

Limit
The maximum or minimum price levels allowed in certain trading situations, such as limit orders or price movements.

Limited Convertibility
A situation where a currency can only be exchanged for foreign currencies under specific conditions, often due to government restrictions.

M1
A measure of the money supply that includes the most liquid forms of money, such as currency and checking accounts.

M2
A broader measure of the money supply, including M1 plus savings accounts, money market funds, and other near-money assets.

M3
A further broadening of the money supply, including M2 plus large time deposits, institutional money market funds, and other forms of liquid assets.

M4
An extended measure of the money supply that includes M3 and other forms of financial assets or liquidity in certain countries.

Maintenance Margin
The minimum amount of equity required in a margin account to maintain an open position.

Make a Market
To provide liquidity by quoting both buy and sell prices for a currency pair or financial instrument, making it available for others to trade.

Managed Float
A system where a country’s central bank intervenes in the currency market to influence its currency’s value while allowing it to fluctuate within a range.

Margin
The amount of money required to open and maintain a position in Forex trading, usually expressed as a percentage of the total position size.

Margin Call
A notification from a broker requiring a trader to deposit more funds into their margin account to maintain an open position when the equity falls below the required level.

Marginal Risk
The risk associated with holding a marginal position in a market, particularly when the margin level is low.

Mark to Market
The practice of adjusting the value of a financial position to reflect its current market value.

Markup
The amount added to the cost price of a currency or asset to determine its selling price, often used by brokers.

Market Amount
The total value of an asset or currency involved in a transaction, often indicating the size of the trade.

Market Maker
A financial institution or individual that quotes both buy and sell prices for a currency pair, providing liquidity to the market.

Market Order
An order to buy or sell a currency immediately at the best available current market price.

Marshall – Lerner
An economic theory suggesting that a currency devaluation will improve a country’s trade balance if the sum of the price elasticity of demand for exports and imports is greater than one.

Marry
To combine two currency positions or instruments into one, often referring to a strategy in options or swaps.

Matched Book
A trading strategy or approach where a market maker matches buy and sell orders to minimize risk and maintain market liquidity.

Matching
The process of pairing buy and sell orders in the market, typically performed by brokers or market-making institutions.

Matching Systems
Automated systems used by exchanges or brokers to match buy and sell orders efficiently.

Maturity Date
The date on which a financial contract, such as a forward or futures contract, expires, and the transaction must be settled.

Mid-price or Middle Rate
The price halfway between the bid and ask price, often considered the fair market value of an asset or currency.

Minimum Price Fluctuation
The smallest allowable price movement in a Forex or futures contract, often referred to as a tick.

Minimum Reserve
The minimum amount of capital that a central bank or financial institution must hold in reserve against their liabilities.

Mismatch
A situation where there is an imbalance or inconsistency between the buy and sell positions, often leading to risk or exposure.

MITI
Malaysian Industrial Development Authority, a government body responsible for the industrial development of Malaysia, including Forex-related regulations.

MM
Market Maker, an entity or firm that provides liquidity by quoting both buy and sell prices for currencies or other assets.

Monetarism
An economic theory that emphasizes controlling the money supply to manage inflation and stabilize the economy.

Monetary Base
The total amount of money circulating in an economy, including currency in circulation and reserves held by central banks.

Monetary Easing
A policy where a central bank lowers interest rates or increases the money supply to stimulate economic activity.

Monetary Policy
Actions taken by a central bank or government to control money supply, interest rates, and inflation to influence economic performance.

Monetary Union
A group of countries that share a common currency and monetary policy, such as the Eurozone.

Money Market
A sector of the financial market in which short-term borrowing, lending, and trading of instruments like Treasury bills, certificates of deposit, and commercial paper occur.

Money Market Operations
Central bank actions that involve the buying or selling of short-term government securities to control the money supply and interest rates.

Money Supply
The total amount of money available in an economy, including currency, coins, and checking accounts.

Most Favoured Nation (MFN)
A principle in international trade where a country must extend the same trade terms to one country that it offers to another, ensuring equal treatment.

Moving Average
A statistical indicator used in technical analysis that smooths price data to create a trend-following indicator.

Naked Intervention
A form of central bank intervention where a country’s monetary authority buys or sells its currency without changing its underlying monetary policy.

Narrow Money
A measure of the money supply that includes only the most liquid forms, such as coins, currency, and demand deposits.

Nearby Contracts
Futures contracts that are closest to their expiration date.

Negative Sloping Yield Curve
A situation where short-term interest rates are higher than long-term rates, often signaling economic downturns.

Netting
The process of offsetting positions or payments to reduce the amount of money or transactions needed.

Net Position
The total value of a trader’s positions after subtracting any offsetting positions.

Next Best Price Stop-loss Order
A type of stop-loss order that gets executed at the next available price when the specified stop price is no longer available.

Nominal Quotation
The quoted price of a currency pair or financial instrument without adjusting for factors like inflation.

Nominee Name
The name under which an account or asset is registered, usually used to protect the identity of the actual owner.

Nostro Account
An account held by a domestic bank in a foreign bank in the foreign currency.

Note
A short-term debt instrument with a fixed interest rate, typically maturing within one year.

Notice Day
The day on which a notice to terminate or amend a contract is given, often related to futures or options.

Odd Lot
A smaller quantity of securities or foreign currency than the standard trading unit, often less than 100 shares or a standard contract size.

OECD
Organization for Economic Cooperation and Development, an international organization that promotes policies to improve the economic and social well-being of people worldwide.

Offer
The price at which a seller is willing to sell an asset or currency.

Offered Market
A market in which assets or currencies are available for sale at specific prices.

Offset
To counterbalance or reduce the risk of an existing position by opening an opposite position.

Old Lady
A nickname for the Bank of England.

Omnibus Account
An account held by a broker or financial institution that contains funds or securities of multiple clients.

Open Interest
The total number of outstanding contracts (futures or options) that have not been settled or closed.

Open Outcry
A method of trading in which buyers and sellers publicly announce their bids and offers on the trading floor.

Open Market Operations
The buying and selling of government securities by a central bank to control the money supply and interest rates.

Open Position
A trading position that has been established but not yet closed by the opposite trade.

Option
A financial derivative that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specific price before or on a certain date.

Option Class
A group of options that all have the same underlying asset but differ in terms of expiration date or strike price.

Option Series
All options for a given underlying asset, share the same expiration date and strike price.

Original Margin
The initial amount of money required to open a position in futures trading, representing a fraction of the total contract value.

OTC
Over-the-counter trading refers to buying and selling financial instruments directly between parties, outside of formal exchanges.

Out-of-the-Money
An option that has no intrinsic value because the strike price is unfavorable compared to the current market price of the underlying asset.

Outright Deal
A spot or forward contract in which a buyer and seller agree on a specific transaction involving currencies or other assets.

Overhang
Excess supply in a market that could limit price increases or affect demand.

Overheated (Economy)
A condition where an economy is growing too quickly, often leading to inflation and unsustainable growth.

Overnight Limit
The maximum exposure allowed by a trader or institution for positions held overnight.

Overnight
A term referring to the holding of positions from one trading day to the next.

Over the Counter
A method of trading financial instruments directly between two parties without a centralized exchange.

Oscillators
A type of technical indicator used to measure market momentum, often used to predict overbought or oversold conditions.

Package deal
A transaction that involves the simultaneous purchase or sale of multiple financial instruments.

Par
The nominal or face value of a financial instrument, particularly bonds, when the market price equals the par value.

Paris
Refers to the location of the International Monetary Fund’s headquarters in the context of currency-related policies.

Parity
The exchange rate between two currencies or the condition where two currencies are at equal value.

Parities
The value or exchange rate of one currency relative to another.

Parity Grid
A chart or grid that shows the exchange rates of different currencies at various points in time, often used in currency options trading.

Pegged
When a currency’s value is tied or fixed to the value of another currency, such as the US dollar.

Payment Date
The date on which a payment must be made or received under a contract.

Petrodollars
U.S. dollars earned by countries through the export of oil.

Philadelphia Stock Exchange (PHLX)
A stock exchange based in Philadelphia known for trading options and futures.

Pip
The smallest unit of movement in a currency pair’s exchange rate, often equal to 0.0001 for most currency pairs.

Point
A unit of measurement in Forex or stock trading representing the smallest possible change in price for a currency or stock.

Portfolio Insurance
A strategy to hedge a portfolio against market downturns, typically using options or futures.

Position
A trader’s commitment to buy or sell a particular financial instrument.

Position Clerk
A person responsible for recording and tracking the open positions in a trading operation.

Position Limit
The maximum number of contracts a trader or entity is allowed to hold in a particular futures or Forex position.

Pre-Spot Dates
Dates that are earlier than the standard spot date for a currency transaction, typically used in forward contracts.

Premium
The price paid for an option, or the amount by which the price of a bond or asset exceeds its face value.

Primary Reserves
The most liquid assets held by a central bank or financial institution, such as foreign exchange reserves.

Prime Rate
The interest rate that commercial banks charge their most creditworthy customers, often used as a benchmark.

Principal
The original amount of money invested or borrowed, excluding any interest or profits.

Producer Price Index
A measure of the average change over time in the selling prices of domestic producers’ goods and services.

Profit Graph
A visual representation of a trader’s profit or loss across various price levels of an asset or currency.

Profit Taking
The act of selling an asset or position to realize profits after a price move in the trader’s favor.

Proxy Hedge
A strategy where a trader uses an alternative asset to hedge exposure to another asset or currency.

Purchasing Power Parity
An economic theory suggesting that in the absence of transaction costs, identical goods should have the same price in different markets when expressed in the same currency.

Put Option
A financial option giving the holder the right, but not the obligation, to sell an underlying asset at a specific price before a certain date.

Put Call Parity
A financial principle that defines the relationship between the prices of European put and call options of the same class.

Pyramiding
A trading strategy where a trader increases the size of a position as it becomes more profitable.

Quota
A restriction on the amount of a product or currency that can be traded or imported.

Quote
The latest price at which a currency or asset can be bought or sold.

Random Walk Theory
An investment theory suggesting that asset prices follow a random path, making it impossible to predict future price movements.

Rally
A period of sustained upward movement in the price of an asset, such as a currency.

Range
The difference between the highest and lowest prices or values over a specified period.

Rate
The price or value of one currency relative to another.

Ratio Spread
An options strategy involving buying and selling options of the same type but in different ratios.

Ratio Calendar Spread
An options strategy that involves buying and selling options with the same underlying asset but different expiration dates in different ratios.

Reaction
A market movement in response to news, events, or changes in economic conditions.

Real
The term for the currency of Brazil, often used to denote real values in economic contexts.

Realignment
A significant adjustment in the value of a currency, often by a government or central bank.

Reciprocal Currency
A currency in a foreign exchange transaction that is directly related or opposite to another currency.

Reinvestment Rate
The rate of return at which cash flows generated from an investment can be reinvested.

Report
A document that provides a summary of market conditions, trades, or performance.

Reporting Dealer
A financial institution or dealer responsible for reporting trades to a regulatory body or exchange.

Repo Rate
The interest rate charged by central banks on short-term loans to commercial banks.

Repurchase Agreement
A short-term borrowing arrangement in which a seller agrees to repurchase a financial asset at a specific price and date.

Reserve Currency
A currency that is held in large quantities by governments and institutions as part of their foreign exchange reserves, like the U.S. dollar or euro.

Reserves
Assets held by a central bank, such as foreign currencies or gold, to back the value of its own currency.

Reserve Requirement
The percentage of deposits that banks must hold in reserve and not lend out, set by central banks.

Reserve Tranche
A portion of the International Monetary Fund’s lending capacity available to member countries.

Resistance Point or Level
A price level where an asset or currency experiences selling pressure, preventing it from moving higher.

Rescheduling
The act of extending the maturity date or altering the terms of a financial contract.

Retail Price Index
A measure of inflation based on the prices of a basket of goods and services typically purchased by households.

Reversal
A change in the direction of an asset’s price movement, such as from an uptrend to a downtrend.

Revaluation
The official increase in the value of a country’s currency relative to other currencies, often by the central bank.

Revaluation Rate
The rate at which a country’s currency is revalued, increasing in value relative to others.

Right-hand Side
The side of a Forex quote representing the quote currency (the second currency in a pair).

Ring
The trading floor or the physical space where financial transactions occur, often in futures or options markets.

Risk
The potential for loss or adverse outcomes due to market fluctuations or other factors.

Risk/Return
The relationship between the potential risk of an investment and its expected return.

Risk Factor
A variable or condition that contributes to the potential risk in a financial position.

Risk Management
The process of identifying, assessing, and controlling risks in trading and investing.

Risk Position
A financial position that has exposure to potential risk or loss.

Risk Premium
The extra return an investor demands for taking on additional risk compared to a risk-free asset.

Risk Reversal
An options strategy that involves buying a call option and selling a put option or vice versa, to hedge against currency risk.

Rollover
The process of extending the duration of a contract or position by closing it and simultaneously opening a new one for a future date.

Rollover Credit
The interest paid by one party to another for holding a currency position overnight or for an extended period.

Round Trip
A transaction involving both the purchase and sale of an asset or currency, typically to take advantage of price fluctuations.

Running a Position
The act of managing and monitoring an open position until it is closed.

Same Day Transaction
A trade or transaction that settles on the same day it is executed.

Sandwich Spread
An options strategy that involves buying and selling two different options, one in the middle of the range and the others at higher and lower strike prices.

Scalping
A trading strategy that aims to profit from small price movements by opening and closing multiple positions within a very short time.

SDR
Special Drawing Rights, an international reserve asset created by the IMF to supplement member countries’ official reserves.

Selling rate
The rate at which a bank or financial institution is willing to sell a currency.

Seller/Grantor
The party in a transaction who sells an option or initiates the contract.

Serial Expiration
A group of options that expire in successive months.

Series
A set of related financial instruments that share a common characteristic, such as options with the same underlying asset.

Settlement Date
The date when a financial transaction, such as a currency trade, is finalized, and the buyer receives the asset.

Settlement Price
The price at which a transaction is settled or the closing price for futures contracts at the end of a trading session.

Settlement Risk
The risk that a trade will not be completed as expected, often due to counterparty failure.

Short / Short Position
A position where the trader sells an asset or currency with the expectation that its price will fall.

Short Contracts
Futures or options contracts where the trader has sold the underlying asset.

Short Covering
The process of buying back a short position to close it.

Short Forward Date/Rate
The date or rate at which a short forward contract will mature and the transaction will be settled.

Short Sale
The sale of an asset that the seller does not own, often done by borrowing it to sell with the intention of buying it back at a lower price.

Short-Term Interest Rates
Interest rates on loans or debt securities with a maturity of less than one year.

Sidelined
A term referring to a trader or investor who is not currently active in the market due to a lack of opportunities or uncertain conditions.

SIMEX
Singapore International Monetary Exchange, a former exchange now integrated into the Singapore Exchange (SGX).

SITC
Standard International Trade Classification, a system used to classify goods traded internationally.

SOFFEX
Swiss Options and Financial Futures Exchange, now part of SIX Swiss Exchange.

Soft Market
A market characterized by low demand, low prices, and lack of liquidity.

Sovereign Immunity
The legal principle that a sovereign state cannot be sued in the courts of another country without its consent.

Sovereign Risk
The risk that a government will default on its debt obligations or fail to honor its financial commitments.

Spot
A transaction involving the purchase or sale of an asset or currency for immediate delivery.

Spot Next
A type of currency transaction where the settlement is made the next business day after the trade is completed.

Spot Month
The month in which the spot contract or commodity is being delivered.

Spot Price/Rate
The current market price at which an asset or currency can be bought or sold for immediate delivery.

Spot Week
The week in which a spot contract or commodity is being delivered.

Spread
The difference between the buy (bid) and sell (ask) price of an asset or currency.

Square
A position where a trader has no net exposure to a market, having equal long and short positions.

Squawk Box
A communications system used on trading floors to transmit market news, quotes, and other information to traders.

Squeeze
A situation where traders are forced to buy or sell an asset due to a shortage of available supply or liquidity, often causing rapid price movements.

Stable Market
A market where prices move within a narrow range, with low volatility and little change.

Standard
A benchmark or reference point for quality or performance, often used in trading contracts or financial instruments.

Stand by Credit
A commitment from a bank or financial institution to provide a loan or credit line in the future if needed.

Sterilization
The central bank’s action of offsetting changes in the money supply resulting from foreign exchange interventions.

Sterling Index
An index that measures the value of the British pound against a basket of other currencies.

Sterling
The currency of the United Kingdom, also known as the British pound.

Stocky
Refers to the term “stocky” to describe a particular type of market movement or currency.

Stop Loss Order
An order placed to sell a security when it reaches a certain price to limit a trader’s loss.

Stop Out Price
The price level at which a broker will automatically close a trader’s position due to insufficient margin.

Straddle
An options strategy that involves buying both a call and a put option with the same strike price and expiration date.

Stagflation
An economic condition characterized by high inflation and high unemployment, typically leading to stagnant demand.

Strap
An options strategy that involves buying more call options than put options, typically to profit from large price movements.

Strike Price
The price at which an option holder can exercise their option to buy or sell an underlying asset.

Strip
An options strategy where a trader buys more puts than calls, anticipating a large move in one direction.

Supply Side Economics
An economic theory focusing on boosting production by lowering taxes, reducing regulation, and encouraging investment.

Support Levels
Price levels where demand for an asset or currency is strong enough to prevent further price declines.

Swap
A derivative contract in which two parties agree to exchange cash flows or other financial instruments over time.

Swap as a Percentage
A measure of the total value of a swap contract relative to the notional amount or principal.

Swap Price
The rate at which two parties agree to exchange future cash flows in a swap agreement.

Swaption
An option on a swap contract, giving the holder the right to enter into a swap agreement at a specified rate in the future.

SWIFT
Society for Worldwide Interbank Financial Telecommunication, a network that allows banks and financial institutions to send and receive financial information securely.

Swissy
A nickname for the Swiss franc (CHF), the currency of Switzerland.

Synthetics
Financial products or positions created by combining two or more assets, often using options or swaps.

Talking Up
A strategy where central banks or financial authorities attempt to influence market sentiment by making positive statements about the economy or currency.

Technical Analysis
A method of evaluating assets by analyzing historical price movements and market data, often using charts and indicators.

Technical Correction
A short-term reversal in price, often after a prolonged price trend, due to technical factors rather than fundamental changes.

Temporal Accounting
An accounting method used to value assets based on historical costs and time-based adjustments.

Tender
An offer to purchase or sell an asset, typically in a formal or public manner, such as in the bond market.

Tenor
The length of time until a financial contract or instrument expires or matures.

Terms of Trade
The ratio at which one country’s exports trade for imports, often indicating a country’s trade efficiency.

Theory of Elasticities
An economic theory that examines how changes in price affect the demand for goods and services.

Threshold of Divergence
The point at which two economic variables begin to move in different directions, indicating a potential shift in market conditions.

Theta
A measure of the sensitivity of an option’s price to the passage of time, indicating how much value the option will lose as time passes.

Thin Market
A market with low trading volume, leading to less liquidity and potentially higher price volatility.

Thursday/Friday Dollars
The amount of money that settles in the market on Thursday or Friday due to currency or bond transactions.

Tick
The smallest possible price movement in a market, typically defined by the exchange or trading platform.

Ticket
A document or record representing a financial transaction, such as a trade order or confirmation.

Tier One
Refers to the highest quality or most reliable financial institutions or assets, often used in reference to capital or banks.

Tight Money
A market condition where there is a limited supply of money available for lending, typically causing interest rates to rise.

TIFFE
Tokyo International Financial Futures Exchange, a former exchange for financial futures that is now part of the Tokyo Financial Exchange.

Time Decay
The reduction in the value of options as they approach their expiration date, due to the passage of time.

Time Value
The portion of an option’s price that is attributed to the time remaining until expiration, reflecting the potential for price movement.

Today/Tomorrow
Refers to transactions or contracts that settle either today or the following business day, typically used in Forex trading.

Tombstone
A printed advertisement or notice used in the financial markets to announce the sale of securities.

Tomorrow Next (Tom Next)
A type of Forex transaction where the trade is agreed upon today but settles on the next business day.

Trade Date
The date on which a trade is executed or agreed upon by the parties involved.

Trade Deficit/Surplus
The difference between a country’s exports and imports, indicating whether a country is a net importer (deficit) or exporter (surplus).

Trade-weighted Exchange Rate
An exchange rate index that measures the value of a currency against a basket of other currencies, weighted by trade volume.

Traded Options
Options that are bought and sold on an exchange, as opposed to over-the-counter (OTC) options.

Tradeable Amount
The quantity of a financial instrument that can be bought or sold in a market.

Trade Ticket
A document or record that outlines the details of a trade, including price, quantity, and settlement information.

Transaction Date
The date when a financial transaction is executed, not necessarily the settlement date.

Tranche
A portion or slice of a larger financial deal or investment, often used in structured finance.

Transaction
A financial exchange or trade involving the transfer of assets, such as a purchase or sale.

Transaction Exposure
The risk that changes in exchange rates will affect the value of a company’s foreign currency transactions.

Translation Exposure
The risk that changes in exchange rates will affect the value of a company’s financial statements when translated into its home currency.

Treasury Bills
Short-term debt securities issued by the government, typically with a maturity of less than one year.

Turnover
The total value of transactions conducted in a market or by a company within a specific period.

Two-Tier Market
A market where there are two different levels of participants or transactions, often based on the size or type of assets traded.

Two-Way Quotation
A type of price quote that includes both the buy and sell prices for an asset or currency, showing the spread.

Uncovered
A position or contract that is not hedged, leaving it exposed to risk.

Under Reference (Order)
An order that is pending or waiting to be confirmed, often due to specific conditions or requirements.

Under-Valuation
A situation where an asset or currency is priced below its perceived or true value, often indicating potential for price appreciation.

Undo
To reverse a trade or financial transaction.

Unload
To sell or liquidate a position in a financial asset or security.

Unmatched Book
A situation in which a financial institution has positions that are not balanced or offset, often leading to increased risk.

Unwind
The process of closing or reversing a position, especially in complex financial contracts.

Up-Tick
A price movement in an asset or security where the last trade occurred at a higher price than the previous trade.

USDX
The U.S. Dollar Index, which measures the value of the U.S. dollar against a basket of foreign currencies.

U.S. Quote
A currency quote in which the U.S. dollar is the base currency, typically used to express the value of foreign currencies.

Value at Risk
A risk management measure used to assess the potential loss in the value of a portfolio or investment over a specified period.

Value Date
The date when a financial transaction, such as a currency trade, is settled, with the buyer receiving the asset.

Value Spot
The value of a currency or asset on the spot market, typically used to determine immediate delivery or pricing.

Value Today
The current market value of an asset or currency at the time of the trade.

Velocity of Money
The rate at which money circulates in an economy, indicating the frequency of transactions over a given period.

Vertical (bear or bull) Spread
An options strategy where a trader buys and sells options of the same type (call or put) with different strike prices but the same expiration date.

Visible Trade
Trade in goods that is recorded in official trade statistics, as opposed to invisible trade (services).

Volatility
The degree of price fluctuation or variability in an asset or market over time.

Vostro Account
An account held by a foreign bank in a domestic bank’s country, often used for settling foreign exchange transactions.

Whipsaw
A market condition where an asset’s price moves rapidly in one direction and then reverses quickly, trapping traders.

Wholesale Money
Funds or capital traded in large quantities between financial institutions, often at short-term interest rates.

Wholesale Price Index
An index that measures the changes in prices of goods sold in bulk to businesses rather than to consumers.

Working Balance
A portion of a company’s capital or financial assets that is readily available for use in daily operations.

World Bank
An international financial institution that provides loans and grants to developing countries for economic development projects.

Yield Curve
A graphical representation of the relationship between interest rates and the maturities of debt securities.