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here you find the Forex Glossary, Terminology or trading terms , no matter how you want to call it .

Account History -- A record of all transactions made in a client's account.
Accounting Currency -- Currency by which all account account deposit/withdrawal operations are denominated. Not to be confused with base currency the currencies ultimately bought or sold with account funds.
Accrual Swap -- An interest rate swap under which a counterparty pays a vanilla floating reference rate, usually three or six month LIBOR, and receives LIBOR plus a significant spread. Interest payments to this counterparty will only accrue on days when rates stay within a certain range dictated by preset upper and lower boundaries.
Accrued Interest -- The amount of interest or coupon earned on an investment from a previous coupon payment date until the value date to be paid.
Aggregate Demand -- Used loosely to describe all private and public sector demand for goods and services produced by a given country. In practice, it is interchangeable with Gross Domestic Product (GDP). Academic notions of aggregate demand make a distinction between short-term and long-term, and are modeled as a function of price levels.
Aggregate Risk -- Can very depending on context, but generally defined as the amount of exposure a customer has to the (potential) movement of spot and forward rates.
Aggregate Supply -- Measures the total volume of goods and services produced by a given economy. Generally speaking, an increase in demand should lead to an expansion of aggregate supply in the economy. In the event of a mismatch between aggregate supply and aggregate demand, prices would change (i.e. inflation/deflation) in order to return the economy to equilibrium.
Aggressor -- A trader that has committed to the existing price in the market.
Agio -- An archaic term used to describe the difference/premium between the official rate and the market rate.
American Depositary Receipt (ADR) -- A vehicle which effectively enables American investors to own shares in foreign corporations. ADRS trade on exchanges like conventional securities. The sponsoring bank collects dividends, pays local taxes and converts them to dollars for distribution to American shareholders. It should be noted that ADRs are affected both by company performance and by changes in exchange rates.
American Option -- An (currency) option which may be exercised at any time prior to expiration.
Amortising -- An amortising principal is one which decreases during the life of the deal, or is repaid in stages during a loan.
Appreciation -- Common term used to describe a currency increasing in value, as a result of market forces as opposed to official adjustment.
Appreciation -- An increase in the market value of a currency in terms of other currencies.
Arbitrage -- Is a simultaneous operation in two different but related markets in order to take advantage of a discrepancy between them which will lock in a certain profit. The arbitrage operation itself will usually tend to cause the different markets to move back in line.Covered interest arbitrage involves either the lending and borrowing of a currency in different centres, or the creation of a borrowing in one currency by borrowing another and converting the currency borrowed by means of a foreign exchange swap deal to produce the required currency at a cheaper rate.
Around -- Dealer jargon used to quote the forward premium/discount. For example, €œtwo-two around€ would translate into 2 points on either side of the present spot value.
Ask (Offer) Price -- The price at which specific currency or contract can be purchased. In practice, this can be understood as the number on the right side of the quote, which is usually the higher price. For example, in the quote EUR/USD 1.4122/26, the ask price is 1.4126; meaning you can buy one Euro for 1.4126 US dollars. Opposite to bid price.
Asset Allocation -- Investment practice that divides funds among different types of securities/vehicles/markets in order to achieve a return that is calibrated to an investor's risk profile.
Association Cambiste International -- The worldwide affiliation of foreign exchange dealers that together make most of the market for forex trading. Association composed of the three largest future exchanges in the UK.
At Best -- An type of order to buy or sell at the best rate that is currently available in the market.
At or Better -- A type of order to deal at or above (whichever is available) a given price.
At Par Forward Spread -- Describes a scenario in which the forward price (for a given time period) is equivalent to the spot price.
At the Price Stop-Loss Order -- A type of stop-loss order that must be executed at the requested price regardless of €œmarket conditions.€
At-the-Money -- Describes an option whose strike/exercise price is equal to (or close to) the current market price of the underlying security.
Auction -- Sale of securities to the highest bidder(s). In finance, it is mainly used by governments for the allocation of foreign exchange and government paper, such as US Treasury Bills. Sometimes, auctions are conducted in terms of yield, rather than price.
Aussie -- Slang term for the Australian dollar.
Autocorrelation -- The correlation between changes in a single variable over different time periods. If a price is negatively autocorrelated, a move down in one period would suggest a move up in the next, and vice versa. If it were positively autocorrelated, a move down would suggest a move down in the following period as well, and vice versa.
Average Rate Option -- A hedging tool where a series of spot rate fixings during the life of an option are used to calculate an average rate. If the average rate is below the strike price, then the bank must settle the difference with the customer. Otherwise, the the option expires worthless with no payment made. Average rate options are generally suited for those who need protection against adverse currency moves that still wish to retain full upside potential. Also known as an Asian Option.
Back Office -- The departments and processes related to the settlement of financial transactions.
Back to Back -- Transaction where a loan is made in one currency against a loan denominated in another currency.
Balance of Payments -- A systematic record of the economic transactions during a given period for a country. Can refer to either current account (which takes trade into account), capital account, or a combination thereof. Prolonged balance of payment deficits theoretically lead to currency depreciation.
Balance of Trade -- Calculated by subtracting imports from exports. A negative balance of trade (when imports exceed exports) is called a €œdeficit,€ while a positive balance is known as a €œsurplus.€ The balance of trade is inversely related to the difference between savings and investment.
Balance sheet -- Financial statement showing a company's assets, liabilities, and shareholders' equity on a given date.
Bank Line -- A Line of credit provided by a bank.
Bank Notes -- Issued as legal tender; while they can sometimes be converted into currencies, they are generally excluded from the forex market.
Bank of England -- Central Bank for the UK, whose actions directly weigh on the value of the Pound Sterling.
Bar Chart -- A chart type consisting of four points: high price and low price (represented by a vertical bar), opening price (represented by a small horizontal line to the left of the bar), and closing price (represented by small horizontal line to the right of the bar).
Barrier Option -- A type of option whose value/survival depends on whether the underlying security.currency breaks a predetermined price level at any time during the life of the option. Depending on market conditions, it is variously referred to as Down and Out call/put, Down and in call/put, Up and out call/put, and/or Up and in call/put.
Base Currency -- Currency in which the operating results of the bank or institution is reported.
Basis -- Difference between the cash price and futures price.
Basis Convergence -- The process whereby the basis tends towards zero as the contract expiration date nears.
Basis Point -- One per cent of one per cent. For example, 25 basis points is equal to .25%.
Basis Points (or bp) -- One basis point is 0.01%, so fx. 25bp is 0.25%
Basis Price -- The price expressed in terms of yield-to-maturity or rate of return, rather than the actual unit price.
Basis Trading -- The practice of taking opposing positions in the spot and futures markets with the goal of profiting from favorable changes between the two.
Basket -- Group of currencies (as opposed to one single currency) normally used to peg/manage the exchange rate of another currency.
Bear Market -- While precise standards vary, refers generally to prolonged period of falling asset prices.
Bear Put Spread -- An options strategy that seeks to capitalize on a depreciating currency by buying a put option with a high strike price and selling one with a low strike price.
Bear(ish) -- Describes an an investor who believes that asset prices will fall.
Bid -- In general, the price at which the dealer quoting a price is prepared to buy or borrow. The bid price of a foreign exchange quotation is the rate at which the dealer will buy the base currency and sell the variable currency. The bid rate in a deposit quotation is the interest rate at which the dealer will borrow the currency involved.
Bid Price -- The price at which specific currency or contract can be sold. In practice, this can be understood as the number on the left side of the quote, which is usually the lower price. For example, in the quote EUR/USD 1.4122/26, the bid price is 1.4122; meaning you can sell one Euro for 1.4122 US dollars. Opposite of Ask/Offer price.
Big Figure -- Refers to the first three digits of an exchange rate, such as the 2.30 in 2.3025. The big figure is often omitted in dealer quotes, such that a quote of €œ25/30€³ on dollar mark would indicate a price of 2.3025/2.3030. In the foreign exchange markets, the terminology for a 100 pip move is one big figure. For example a move to 1.2530 to 1.2630 is a move of one big figure.
Bilateral Clearing -- In a system of limited foreign currency, payments are usually routed through the central bank, which is also charged with clearing the balance of payments.
Black-Scholes Model -- The most common option pricing formula, which is based on a set of ideal assumptions that pertain mostly to the underlying security/currency.
Bollinger Bands -- Technical analysis tool used to measure the highness or lowness of the price relative to previous trades, consisting of three bands: middle band (simple moving average), upper band (given number of standard deviations above the middle band), and lower band (given number of standard deviations below the middle band)
Bono -- Bono del Estado, a Spanish government bond
Book -- Summary of a (professional) trader's total positions; may also include gains and losses.
Booked -- Refers to the location where the transaction is recorded, which may differ from the location/country of negotiation.
Break Even Point -- The price at which the option buyer recovers the necessary premium paid, resulting in neither loss nor gain. With a call option, the break even point is simply the premium plus the strike price.
Break of Which (BOW) -- Based on a series of predetermined levels, this describes the belief that if a price breaks a specific level, it will move towards the next level, and continue (upwards or downwards) if it then breaks through that level.
Break Out -- Describes a technical scenario in which a currency/security is seen to have exited a pre-existing pattern, such as a range or other trend.
Breakaway Gap -- Price gap that forms following breakout which often represents a (temporary) pricing inefficiency following a long period of consolidation.
Bretton Woods -- 1944 agreement that used the price of gold to fix exchange rates for major currencies. It was replaced in 1971 by a floating exchange rate system that remains in place today.
Broken Dates/Period -- Describes deals involving non-standard periods.
Broker -- An agent who executes orders to buy and sell currencies either for a commission or based on a bid/ask spread. In the foreign exchange market, brokers essentially serve as intermediaries between banks. This commission is known as the brokerage fee.
BTP -- Buono del Tesore Poliennale, an Italian Treasury bond
Bull Market -- While precise standards vary, refers generally to prolonged period of rising asset prices.
Bull Spread -- An options strategy that seeks to capitalize on a (moderate) rise in exchange rates, executed typically by buying a call option with a low strike price and selling one with a high strike price. Also known as Buying the Spread.
Bull(ish) -- Describes an an investor who believes that asset prices will rise.
Bulldogs -- Bonds issued in the UK by foreign institutions, denominated in British Pounds.
Bullion -- Refers to gold bars, as opposed to coins or indirect ownership of gold.
Bundesbank (BUBA) -- Central bank of Germany and most influential member of the European System of Central Banks (ESCB).
Butterfly Spread -- An options strategy in which options with different expiration dates and strike prices are bought and sold simultaneously against each other.
Buyer/Taker -- Refers to the buyer/holder of an option, who has the right but not the obligation, to purchase the underlying security.
Cable -- Refers to the Sterling/US Dollar exchange rate.
Calendar Spread -- Options strategy which involves the purchase of futures/ options of an underlying market expiring in some named month, and the simultaneous sale of other futures/options of the same underlying market and the same striking price in a different month.
Call Option -- Contract in which the buyer has the right but not the obligation to purchase a particular security for a given strike price, on (in the case of European call options) or before (in the case of American call options) the expiration date.
Cancel -- To delete a previous order before it has been executed.
Candlestick Chart -- Type of chart that uses shaded bars to indicate trading range (i.e. high and low price) as well as the opening and closing prices for consecutive time periods.
Cap/Ceiling -- Maximum rate of interest that can be charged under a loan. Opposite of a floor.
Capacity Utilization -- Indicator of inflation released by the Federal Reserve Bank, which measures the percentage of available resources being utilized by factories, mines and utilities.
Capital -- Financial assets, or the financial value of assets such as cash.
Capital Account -- One of two primary components of the balance of payments, the other being the current account. It is the net result of public and private international investment flowing in and out of a country, and includes foreign direct investment, portfolio investment, and other investments.
Capital Gains -- Profit made when any asset is sold; used primarily for tax purposes.
Capital Market -- Long-term market for financial instruments (typically more than one year.)
Carry Grid -- A detailed trading schematic designed to profit from a carry trading strategy.
Carry Trade -- A trading strategy involving the sale of low-yielding currency (funding currency) in favor of a higher-yielding (carry currency) alternative, with the goal of earning a return on the spread/differential. [This differential is known as the "carry"].
Cash Market -- Spot market, as opposed to the futures market.
Cash on Deposit -- Total funds deposited in a trading account.
Cash Transaction -- Same day settlement for a currency transaction. Also known as Value Today.
Central Bank -- A governmental or quasi-governmental organization that conducts monetary policy and manages the exchange rate for a given economy and its currency. It may also be charged with printing money.
Central Bank Intervention -- Refers to a central bank buying or selling its own currency on the spot market in order to bring about a desired exchange rate.
Certificate of Deposit (CD) -- Time deposit offered by banks with a specific, fixed term (often three months, six months, or one to five years), and, usually, a fixed interest rate. It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest.
Channel -- Uptrend, downtrend, or sideways trend whose boundaries can be marked clearly by two or more straight lines. A break above/below the channel signals a possible change of trend.
Chartist -- One who takes a technical approach to trading, relying on charts and graphs (and their associated indicators) to discern trends and predict future price movements.
Chooser Option -- Type of option where the holder can choose whether the option is a call or a put during the life of the option.
Clean Float -- Exchange rate regime in which the rate is determined only by market forces, with no central bank intervention.
Cleared Funds -- Settled funds that are freely available for trading.
Clearing -- The process of settling a trade.
Clearing House Automated Payment System (CHAPS) -- Forex settlement system used in the UK.
Clearing House Interbank Payment System (CHIPS) -- International wire transfer system used by major banks.
Closed Position -- The result of closing a position, in which an equal/offsetting trade is made to eliminate one's exposure to a given currency pair. For example a position of 100 GPB/USD can be closed by buying 100 USD/GPB.
Closing Market Rate -- The market rate at the end of the day.
CME Group -- The world's largest futures exchange, which includes the Chicago Mercantile Exchange (CME), Chicago Board of Trade (CBOT), and New York Mercantile Exchange (NYMEX).
Coincident Indicator -- A type of economic indicator that moves in line with the general business cycle. GDP is an example of a coincident indicator.
Collateral -- Asset used to secure a loan.
Commission -- Transaction fee charged by a broker.
Commitments -- Denotes the total number of derivative contracts, like futures and options, that are currently active on a specific underlying security. Also known as Open Interest.
Commodity Futures Trading Commission (CFTC) -- Independent agency of the US government, charged with regulating commodity, currency, and financial futures and options.
Compound Option -- An option, where the underlying instrument is another option. A compound option then has two expiration dates and two strike prices.
Confirmation -- Written correspondence that details the terms of a given trade, including date/time of execution, quantity, price, and commission.
Construction Spending -- Closely watched economic indicator released monthly by the U.S. Department of Commerce' that benchmarks spending towards new construction.
Consumer Confidence -- The degree of optimism that consumers feel about the overall state of the economy and their respective personal financial situations. Consumer Confidence is indexed and gauged using surveys, the most famous of which is conducted by the University of Michigan.
Consumer Price Index (CPI) -- One of the most closely watched national economic statistics, CPI measures a price change for a constant market basket of goods and services from one period to the next within the same area.
Contagion -- The phenomenon whereby an economic crisis spreads from one region/economy/market to another.
Contango -- Refers to a an upward-sloping curve for forwards prices. For example, contango is said to occur when the future price of a commodity is higher than the current/spot price.
Continuation -- Extension of the existing trend.
Continuous Linked Settlement (CLS) -- System for settling foreign exchange transactions between major banks that purports to to eliminate settlement risk.
Contract (Lot) -- Trading unit. A standard lot in the forex market is $100,000. A mini lot is $10,000.
Contract for difference (CFD) -- Agreement between a client and a provider to exchange the difference between the opening and the closing value of the contract.Contract For Differences. A deal where the instrument or commodity traded cannot be delivered. Instead, a net amount is taken by comparing the price dealt with the market price, or an index, at maturity
Conversion Rate -- Another term for exchange rate.
Convertible Currency -- Any currency that can be exchanged for another without special permission. Almost all of the world's major currencies are fully convertible, with the notable exception of the Chinese Yuan.
Co-Owner -- Secondary account holder.
Copey -- Slang term for the Danish Krone.
Correction -- Partial reversal in the existing trend, or a pullback after a sudden, large move to compensate for an overreaction.
Correlation -- Measure of the degree to which changes in two variables/assets are related. The standard measure of correlation is the correlation coefficient, a number between -1 and one that indicates the strength and direction of a linear relationship between two variables. A correlation coefficient of -1 indicates that they are perfectly negatively correlated. A correlation coefficient of one means that they are perfectly correlated.
Correspondent Bank -- Foreign bank that performs services for another bank that has no branch in the foreign location.
Cost of Carry -- The net running cost of holding a position according the difference in rates or
Counter Currency -- Currency listed second in a Currency Pair. For example, in USD/GPB, Pound Sterling is the counter currency. Also known as Quote Currency.
Counterparty -- One of the participants in a financial transaction.
Countervalue -- Value of the counter currency in a forex trade. For example, in a trade involving the purchase of a currency against the US Dollar, the countervalue is the total USD amount of the transaction.
Country Risk -- Refers to the likelihood that changes in the business environment adversely affect operating profits or the value of assets in a specific country. These changes could be the result of financial or political factors.
Covariance -- A measure of how two random variables behave in relation to each other. It differs from correlation in that it incorporates measurements of the magnitude of the variations, as opposed to the correlation coefficient which is dimensionless.
Cover on a Bounce -- Recommendation to close a trade based on a predicted €œbounce€ off an important resistance level.
Cover on Approach -- Recommendation to close a trade based on a predicted approach off an important support level.
Covered Call -- An options strategy in which the seller of call options owns the corresponding amount of the underlying instrument, such as shares of a stock or other securities.
Crawling Peg -- A type of exchange rate regime in which the rate is fixed/pegged, but adjusted periodically.
Credit Default Swap -- Financial contract in which the seller of risk pays a periodic fee on the notional amount of a reference obligation, in return for a payment in the event of default.
Credit Risk -- Risk that a borrower will not repay a loan on time. Often referred to as €œDefault Risk.€
Credit Spread -- Interest margin over the relevant benchmark representing the additional interest paid by the issuer to account for the incremental risk of the issuer over the risk-free rate.
Cross-Rate -- Exchange rate derived by €œtriangulating€ two separate exchange rates, used when two currencies cannot exchanged directly, but only through a third-party currency, such as the US Dollar. Also refers to any exchange rate/pair that does not include one's home currency.
Cup with Handle -- Technical pattern used to predict the beginning of an upward trend. A pattern that begins to curve upward and reaches the €œcup line€ is believed to indicate bullishness.
Currency Basket -- Refers to a weighted group of currencies purchased together, usually by a Central Bank for the purpose of fixing an exchanging rate.
Currency Pair -- Two currencies used to create an exchange rate.
Currency Risk -- Possibility that currency depreciation will negatively affect the value of one's assets, especially those denominated in foreign currency.
Currency Swap -- Agreement between two parties to exchange principal and fixed rate interest payments on a loan in one currency for principal and fixed rate interest payments on an equal loan in another currency.
Currency Symbol -- Three-Letter code used to abbreviate/designate a currency.
Current Account -- One of the two primary components of the balance of payments, the other being the capital account. It is the sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid).
Custodian -- Bank, individual, or other organization responsible for safeguarding an individual's financial assets or specific account.
Cyclical -- Stocks/Securities that move with the economy, gaining if the economy booms and losing if the economy weakens.
Daily Charts -- Charts that encapsulate daily price movements for a given currency pair.
Daily Cut-Off -- The designated time of day chosen by a dealer to demarcate the end of one trading day and the beginning of the next, necessary because forex markets operate 24 hours per day.
Day Order -- Buy or sell order that automatically expires at the end of the current trading day.
Day Trading -- An approach to trading which involves entering and closing trades on the same day or trading session.
Deal Blotter -- List of all transactions completed on a given trading day.
Deal Ticket -- Dealer record of the basic details of a transaction, differing slightly from the statement received by the customer.
Dealer -- Individual or firm that acts as a principal in a transaction. Principals take one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party. In contrast to brokers, which serve as mere intermediaries, dealers are exposed to some risk.
Default -- Failure of an issuer to make timely payments of both interest and principal when due.
Deficit -- Describes an excess of liabilities over assets, of losses over profits, or of expenditure over income.
Deflation -- A decrease in the general price level of goods and services, whereby the inflation rate falls below zero percent, resulting in an increase in the real value of money.
Deflator -- An adjustment which turns nominal GDP into real GDP, by taking inflation into account.
Delivery -- Refers to the (physical or electronic) exchange by buyer and seller of two given currencies.
Delta -- Rate of change of an option price with respect to changes in the underlying asset value.
Demo Account -- Free forex practice account that allow beginners (or veterans) to measure the profits from hypothetical trades.
Depreciation -- Decline in the value of an asset, currency, or security.A decrease in the market value of a currency in terms of other currencies
Depth of Market -- The volume of buy and sell orders waiting to be transacted for a particular currency pair at a particular point in time.
Derivative -- Financial instrument (forwards, futures, options, swaps) whose value is derived from an underlying security.Strictly, any financial instrument whose value is derived from another, typically options or futures
Descending Triangles -- Trading pattern consisting of two or more comparable lows forming a horizontal line at the bottom. When support on the lower rung of the triangle is broken, it is believed to signal bearishness.
Details -- The information necessary to execute a forex transaction, including currency pair, rate, time/date, and size.
Deutschmark -- Former currency of Germany, phased out (and replaced by the Euro) when Germany joined the European Union.
Devaluation -- A deliberate depreciation of a currency (relative to one or more other currencies), usually affected by the Central Bank.
Direct Quote -- A quote that indicates variable units of domestic currency per fixed units of foreign currency.
Dirty Float (Managed Float) -- Exchange rate regime in which the currency is not pegged outright, but is instead €œmanaged€ by the Central Bank with the professed goal of preventing wild fluctuations in the exchange rate.
Discount Rate -- Interest rate that an eligible depository institution is charged to borrow short-term funds directly from the Federal Reserve Bank.
Discount Spread -- Refers to the situation whereby the bid price of a forward spread rate is less than the ask price.
Discretionary Account -- Type of account whereby a customer allows an institution to make trading decisions on his or her behalf.
Disinflation -- Slow-down in the inflation rate (i.e. when the inflation decreases, but still remains positive).
Divergence -- Describes the phenomenon whereby a technical indicator and corresponding price chart don't yield the same peaks/bottoms. It usually indicates trend €œexhaustion.€
Diversified Carry Basket -- Type of trading strategy in which several carry trades are made/held simultaneously, in order to limit losses/risk from one particular carry trade position.
Double Barrier Option -- A type of option incorporating two knock out or knock in levels, one either side of spot, used by participants that have strong views on both a support and a resistance level.
Double Top and Bottom -- Trading pattern consisting of upper and lower limits that have been touched twice, but never breached. It is usually interpreted as a sign of uncertainty. However, when the currency breaks out of the range, the movement is expected to be significant.
Dow Theory -- One of the ideas underpinning the field of technical analysis, positing that all major trends can be sub-divided into three phases: entrance, acceleration, and consolidation.
Drawdown -- A drop in the value of an account, calculated by subtracting the low from the peak.
Dual Currency Service -- Foreign exchange instruments that let investors place funds into a product that speculates on the movement of the exchange rate between two major currencies.
Dual Currency Swap -- Type of swap used to hedge dual currency bonds in which the issuer has the option to repay principal and coupon in either the base currency or an alternative currency at a pre-agreed exchange rate.
Dual Exchange Rate -- Situation in which there is an official exchange rate and an parallel €œblack market€ rate. Also known as Two-Tier Market.
Durable Goods Orders -- Monthly government report which measures consumer spending on long-term purchases, products that are expected to last more than three years. It is designed to gauge the health of the manufacturing industry.
Easing -- Refers to the use of monetary policy to expand the money supply, either by lowering interest rates or through open market operations.
Econometrics -- A branch of economics which seeks to develop and apply quantitative or statistical methods to the study and elucidation of economic/financial principles.
Economic Calendar -- Type of calendar that is intended to inform financiers and traders about the scheduled major economic indicators, government reports and speeches by influential people.
Economic Indicator -- Statistic that seeks to proxy current economic growth and stability. Economic indicators fall into three categories: leading, lagging and coincident.
Effective Exchange Rate -- Use of trade/current account balance to derive a country's €œfair€ exchange rate
Efficient Market Theory -- Notion that financial markets are €œinformationally efficient€, or that prices on traded assets already reflect all known information and past prices, and instantly change to reflect new information.
EFT -- Electronic Funds Transfer.
Elliot Wave Theory -- Principle that collective investor psychology (or crowd psychology) moves from optimism to pessimism and back again. These swings create patterns, as evidenced in the price movements of a market at every degree of trend, over durations that range from minutes to decades.
End of the Day (Mark to Market) -- Type of accounting process, whereby the value of asset(s) are recorded at the end of each trading day based on the closing rate/price.
Envelopes -- While Bollinger Bands place boundary lines based on standard deviations, envelopes place lines at fixed percentage points above and below a moving average line, designating entry and exit points for trades.
Equilibrium -- Price level/range that seems to represent a balance between demand and supply for a given currency pair.
Escrow Account -- Segregated account which seeks to separate customer deposits from dealer operating funds.
Euro -- Official currency of 16 of the 27 member states of the European Union. The states, known collectively as the Eurozone, are Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. The euro is the second largest reserve currency and the second most traded currency in the world after the US Dollar.
Euro Interbank Offered Rate (Euribor) -- Rate at which euro interbank term deposits within the euro zone are offered by one prime bank to another prime bank.
Eurobond -- Bond in US dollars or other currency that is sold to investors who don't reside in the country whose currency is used.
Eurocurrency -- Currency that is deposited in a financial institution located outside the region where the currency is primarily used.
Eurodollar Bonds -- Type of Eurobond that pays both interest and principal in euros, whose most salient feature is that they are not regulated by the SEC.
European Central Bank (ECB) -- Central Bank for the new European Monetary Union.
European Union -- Economic and political union of 27 member states, located primarily in Western Europe.
European-style Option -- An option or covered warrant that may be exercised only on the date of expiration.
Excess Margin Deposits -- Deposited funds in a trading account above and beyond basic margin requirements.
Execution -- Completion of a trade.
Exercise -- Action by a holder taking advantage of a privilege or right (to buy a security/asset) offered by a company or other financial institution. This includes warrants, options, and other financial instruments.
Exotic Option -- Derivative which has features making it more complex than commonly traded products (vanilla options). These products are usually traded over-the-counter (OTC), or are embedded in structured notes.
Exotics -- Currencies that are not actively traded; used in contradistinction to €œmajor currencies.€
Expiration Date -- Date after which a financial contract or derivative is no longer valid.
Exponential Moving Average (EMA) -- Compared to a simple moving average, which distributes weight equally across a data series, exponential moving averages afford greater weight to recent prices/data.
Exposure -- Net of all long and short positions for a particular currency (pair).Risk to market movements
Face Value -- Value of a bond to be paid out at maturity. Also known as Par Value.(Or nominal value.) The principal amount of a security, generally repaid all a t maturity, but sometimes repaid in stages, on which the coupon amounts are calculated.
Factory Orders -- Economic indicator that measures new orders for both durable and nondurable goods.
Fast Market -- Strong pressure in the market, in which prices are moving too quickly to be disseminated.
Federal Deposit Insurance Corporation (FDIC) -- US regulatory agency charged with regulating US banks. The FDIC provides insurance up to $100,000 per account.
Federal Funds Rate (FFR) -- Interest rate at which private depository institutions (mostly banks) lend balances (federal funds) at the Federal Reserve to other depository institutions, usually overnight. The FFR is guided (but not determined outright) by the Federal Open Market Committee.
Federal Open Market Committee (FOMC) -- Committee made up of Federal Reserve members, which meets eight times a year to discuss/ implement monetary policy.
Federal Reserve Bank (Fed) -- The central bank of the United States, responsible for using monetary policy to promote economic growth and price stability.
Federal Reserve Board -- Senior members of the Federal Reserve, each of whom is appointed by the US President. The chairman of the Fed Reserve Board serves a 4-year term, while the other members serve 14-year terms.
Fiat Currency -- Money declared by a government to be legal tender, and not backed by any other commodity, such as gold.
Fibonacci Numbers -- Sequence of numbers in which each successive number is the sum of the two previous numbers. Fibonacci numbers are used in financial/currency markets to develop trading algorithms, applications and strategies. The four most common forms are the Fibonacci fan, Fibonacci Arc, Fibonacci Retracement and the Fibonacci Time Extension.
Fill -- Execution of an order to buy or sell.
Fill or Kill -- Type of order which is either completed or rejected in full.

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