| Appreciation: | Describes a currency strengthening in response to market demand. |
| Ask Price: | Lowest price acceptable to the buyer. |
| Back Office: | Settlement and related processes. |
| Bank Rate: | The rate at which a central bank lends money to its banks. |
| Base Currency: | Currency in which bank operates. It is also the first currency in any currency quotation. |
| Base Rate: | Term used in UK to calculate retail interest rates. |
| Basis Point: | A percentage change in interest rates. 25 basis points means 0.25%. |
| Bear: | Person who believes prices will fall. |
| Bear Market: | One characterized by falling prices. |
| Bid Figure: | Refers to first 3 digits of an exchange rate. |
| BIS: | Bank of International Settlement. |
| Bretton Woods: | A system of fixed currency exchange rate. No longer used. |
| Broker: | Executes orders to buy and sell currencies. |
| Bull: | Person who believes prices will rise. |
| Bull Market: | One characterized by rising prices. |
| Cable: | A term used to describe British Pound/US Dollar rate. |
| Central Bank: | Bank responsible for a country’s monetary policy. |
| Counter currency: | The second currency which is quoted in a currency pair. The first is the base currency. |
| Counterparty: | Customer or bank which an fx deal is executed. |
| Cross Rate: | A pair which does not include the US dollar. |
| Currency: | A type of money a country uses. |
| Currency matrix: | Analysis of the strength or weakness of a currency, using multiple currency pairs |
| Currency Basket: | Various weightings of other currencies grouped together. |
| Deal Date: | Date of which a transaction is agreed upon. |
| Deal Ticket: | Primary method of recording a transaction. |
| Dealer: | Individual or firm acting as a principal. |
| Deficit: | Shortfall in balance of trade, balance of payments or government budgets. |
| Delivery: | Settlement of contract by delivery of underlying currency. |
| Delivery Date: | Date of maturity of a contract. |
| EFT: | Electronic fund transfer. |
| EMS: | European Monetary System. |
| European Union: | Formerly known as European Community. |
| Exchange Risk: | Potential loss incurred from adverse rate move. |
| Exotic: | A less broadly traded currency. |
| Expiry Date: | Date of expiry of option or futures contract. |
| FED: | US Federal Reserve. |
| Fixed Xchge Rate: | Official rate set by monetary authorities. |
| Flat/Square: | A neutral position in the market. |
| FOMC: | Federal Open Market Committee. |
| Foreign Exchange: | Purchase or sale of currency. |
| Forex: | An abbreviation of the above term. |
| Forward Contract: | Buying currency at an agreed price in the future. |
| Forward Points: | Interest rate differential between two currencies in points. |
| Forward Rate: | The exchange rate agreed for a future contract. |
| Front Office: | Activities carried out by the dealer. |
| Fundamental Analysis: | Analysis based on economic and political factors. |
| FX: | Foreign exchange. |
| GTC: | Good til cancelled - an order left to buy or sell at fixed price. |
| Indicative Quote: | Market makers price that is not firm. |
| Inflation: | Continued rise in prices and falling purchasing power. |
| Interbank Rates: | Rates quoted between large international banks. |
| Interest Rate Risk: | Potential loss from changes in interest rates. |
| Intervention: | Action by a central bank to manipulate value of its currency. |
| Kiwi: | Dealer slang for the New Zealand Dollar. |
| Lagging Indicator: | Statistic or trading indicator which lags behind the market and one based on historic data. |
| Leading Indicator: | Statistic considered to precede changes in economic growth or signaling where the market is going next. As trading indicators there are only two - volume and price. |
| Liability: | The liability to deliver on a futures contract. |
| Libor: | London interbank offer rate, based on quotes from 16 banks. |
| Limit Order: | An order to execute at a better rate than current level. |
| Long: | Position where trader has bought a currency expecting the pair to go higher. |
| Loonie: | Dealer slang for Canadian Dollar. |
| Margin: | Initial deposit to enter into a position with broker. |
| Margin Call: | Demand for additional funds to cover positions. |
| Maturity: | Date for settlement of a transaction. |
| Offer: | The rate at which dealer is willing to sell base currency. |
| OCO: | One cancels other. One order automatically cancels previous. |
| Open Position: | Any deal that has not been settled. |
| OTC: | Over the counter. Market conducted directly. No exchange. |
| Outright Forward: | Fx transaction involving purchase or sale at a future date. |
| Overbought: | A currency or pair that is over extended to the upside. |
| Oversold: | A currency or pair that is over extended to the downside. |
| Pip: | Smallest incremental move on exchange rate, now increased to a tenth of a pip. |
| Point: | 100th part of 1%, normally 10000 of any spot rate. Position: Net total exposure in a given currency. A trader has ‘a position’ in the market. |
| Range: | Difference between highest and lowest price. |
| Rate: | Price of one currency in terms of another. |
| Reserve Currency: | Currency held by central bank as a store of international liquidity. |
| Resistance: | Price level at which selling is expected to take place. |
| Revaluation: | Increase in exchange rate as a result of official action. |
| Rollover: | Settlement of a deal is carried forward to a future date. |
| Selling Rate: | Rate at which bank is willing to sell foreign currency. |
| Settlement: | Physical exchange of one currency for another. |
| Settlement Date: | Date at which above is carried out. |
| Short: | Position where trader has sold currency expecting the pair to fall. |
| Slippage: | Difference between screen price and fill price. |
| Spot: | The most common forex transaction. |
| Spot Price Rate: | Price currently in the spot market. |
| Spread: | Difference between the bid and the ask. |
| Sterling: | The British Pound. |
| Stop Loss Order: | Automated order execution to exit a trade at a loss. |
| Support Levels: | Price levels at which buying is expected. |
| Swap: | Simultaneous purchase and sale of same amount of currency. |
| Swissy: | Market slang for Swiss Franc rate. |
| Technical Analysis: | The study of price that reflects the supply demand relationship. |
| Technical Correction: | An adjustment to price not based on market sentiment. |
| Tick: | Minimum change in price, up or down. |
| Trade Date: | The date on which a trade occurs. |
| Trailing Stop Loss: | A stop loss order that trails the market position by a fixed number of pips, as set by the trader. |
| Transaction Date: | The date on which a trade occurs. |
| Value Date: | Settlement date of a spot or forward contract. |
| Value Spot: | Normally settlement two days from date of contract. |
| Volatility: | A measure of fluctuation over a given period. |
| Whipsaw: | Dealer slang for highly volatile price action. |
| Yard: | Dealer slang for one billion dollars. |