Explore essential investment terms and concepts to deepen your understanding
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The apportionment of premiums and discounts on forward exchange transactions that relate directly to deposit swap (interest arbitrage) deals, over the period of each deal.
Official action normally occasioned by a change either in the internal economic policies to correct a payment imbalance or in the official currency rate.
Traders and/or price action are acting with conviction.
A financial professional who has expertise in evaluating investments and puts together buy, sell and hold recommendations for clients.
A product is said to ‘appreciate’ when it strengthens in price in response to market demand.
The simultaneous purchase or sale of a financial product in order to take advantage of small price differentials between markets.
The value of a country’s exports minus its imports.
A certain price of great importance included in the structure of a Barrier Option. If a Barrier Level price is reached, the terms of a specific Barrier Option call for a series of events to occur.
A certain price of great importance included in the structure of a Barrier Option. If a Barrier Level price is reached, the terms of a specific Barrier Option call for a series of events to occur.
Any number of different option structures (such as knock-in, knock-out, no touch, double-no-touch-DNT) that attaches great importance to a specific price trading.
The first currency in a currency pair. It shows how much the base currency is worth as measured against the second currency. For example, if the USD/CHF (U.S. Dollar/Swiss Franc) rate equals 1.6215, then one USD is worth CHF 1.6215.
The lending rate of the central bank of a given country.
The GBP/USD (Great British Pound/U.S. Dollar) pair. Cable earned its nickname because the rate was originally transmitted to the US via a transatlantic cable beginning in the mid 1800s when the GBP was the currency of international trade.
A currency trade which exploits the interest rate difference between two countries. By selling a currency with a low rate of interest and buying a currency with a high rate of interest, the trader will receive the interest difference between the two countries while this trade is open.
This is a fee that the client has to pay to keep a position open overnight. From Wednesday to Thursday swaps are calculated in triple size (for the weekend).
The Canadian dollar, also known as Loonie or Funds.
Abbreviation referring to central banks.
Speculators who take positions in commodities and then liquidate those positions prior to the close of the same trading day.
A term that denotes a trade done at the current market price. It is a live trade as opposed to an order.
An individual or firm that acts as a principal or counterpart to 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.
A trade where both sides make and take actual delivery of the product traded.
The ratio between the change in price of a product and the change in price of its underlying market.
The decrease in value of an asset over time.
European Central Bank, the central bank for the countries using the euro.
The currency of the Eurozone.
A market that is thought to have traveled too far, too fast.
A share bought in which the buyer forgoes the right to receive the next dividend and instead it is given to the seller.
The dollar level of new orders for both durable and nondurable goods. This report is more in depth than the durable goods report which is released earlier in the month.
The Federal Reserve Bank, the central bank of the United States, or the FOMC (Federal Open Market Committee), the policy-setting committee of the Federal Reserve.
When an order has been fully executed.
All positions opened within a particular currency pair are liquidated in the order in which they were originally opened.
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