FX trading & currency trading glossary

A negative balance of trade or payments.

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.

An adjustment can be defined as the impact of a company paying out dividends on the ex-date. The share price takes a slight dip, because money flows out of the company and to the shareholders. The dividend adjustment occurs at the close of business before the ex-dividend date.

Appreciation is defined as the increase in an asset’s price over time. Capital appreciation refers to the price increase of financial assets such as property, pensions, commodities, etc.

The stock price and perceived value of a quoted company might appreciate due to the company’s improved financial performance, investor confidence, and speculation. Alternatively, the stock price could depreciate if performance worsens affecting investor sentiment.

Arbitrage describes the practice of buying and selling an asset in order to profit from a difference in the asset's price between markets. It is a trade that profits by exploiting the price differences of identical or similar financial instruments in different markets.

Asian Central Banks are the monetary authorities of Asian countries. These institutions have been increasingly active in major currencies as they manage growing pools of foreign currency reserves arising from trade surpluses. Their market interest can be substantial and influence currency direction in the short-term.

23:00 – 08:00 GMT.

The ask price, ask, or offer price is the price a seller will accept for a security.. An ask quote often stipulates the amount of the asset available at the stated price. The ask price is the opposite of the bid price, which is what a buyer will pay for a security – the ask is always higher than the bid.

An instruction given to a dealer to buy or sell at the best rate that can be obtained at a specific time.

An instruction given to a dealer to buy or sell at a specific price or better.

A term for the Australian Securities Exchange (ASX 200), which is an index of the top 200 companies by market capitalization listed on the Australian stock exchange.

Refers to the AUD/USD (Australian Dollar/U.S. Dollar) pair. Also known as ‘Oz’ or ‘Ozzie’.

The Bank for International Settlements (BIS) is a global financial institution owned by central banks. Based in Basel, Switzerland, there are representative offices in Hong Kong and Mexico City.

The BIS's original members were Switzerland, Germany, Belgium, France, Britain, Italy, the United States and Japan.

The Bank of China is one of China's four largest state-owned commercial banks. It is a subsidiary of the People’s Bank of China. However, it maintains close relations in management, administration, and cooperation in several areas with the subsidiary.

The Bank of England (BoE) is the central bank for the United Kingdom, acting as the government's bank and lender of last resort. With headquarters in the City of London, it issues currency and oversees monetary policy. It is the UK equivalent of the Federal Reserve in the United States.

A type of chart which consists of four significant points: the high and the low prices, which form the vertical bar; the opening price, which is marked with a horizontal line to the left of the bar; and the closing price, which is marked with a horizontal line to the right of the bar.

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. In a no-touch barrier, a large defined pay-out is awarded to the buyer of the option by the seller if the strike price is not 'touched' before expiry. This creates an incentive for the option seller to drive prices through the strike level and creates an incentive for the option buyer to defend the strike level.

The base rate, or base interest rate, is the interest rate that a central bank – like the Bank of England or Federal Reserve – will charge to lend money to commercial banks. Adjusting the base rate helps a central bank regulate the economy by encouraging or discouraging spending as required.

A chart pattern used in technical analysis that shows when demand and supply of a product are almost equal. It results in a narrow trading range and the merging of support and resistance levels.

Basis points, also known as bps (pronounced ‘bips’), describe the percentage change in the value of financial instruments or the rate change in an index or other benchmark. Basis points mostly refer to changes in interest rates and bond yields. One basis point is equivalent to 0.01%.

A bear market is any market that experiences a fall of around 20% or more from its recent high. Most commonly applied to stock markets, the term can also be used for anything that is traded, including currencies and commodities. A bear market is the opposite of a bull market.

The difference between the bid and the ask (offer) price.

Bid price, or simply bid, describes what a buyer is willing to pay for a security. It is contrasted with the ask price, the amount a seller is willing to sell a security for. The difference between the two is known as the ‘spread’, which is the cost traders pay to open and close positions.

The term used for systematic, model-based or technical traders.

A tool used by technical analysts that consists of a band plotted two standard deviations on either side of a simple moving average. It is used to find support and resistance levels.

A bond is a fixed-income investment that represents a loan made by an investor to a borrower (who is typically corporate or governmental). It can be illustrated as an I.O.U. between the lender and borrower that includes the details of the loan and its payments.

A financial broker is a third-party coordinating the sale of financial securities between parties selling securities and those purchasing them. Brokers are individuals or firms acting as intermediaries between investors and trading exchanges.

Exchanges only accept orders from their members, either individuals or firms. Therefore, traders and investors require exchange members' services to make financial transactions. Brokers get compensated for their services in several ways; commissions, fees or paid directly by the exchange.

The word buck is a slang term for one US dollar. The word’s use traces back to 1748, forty-four years before the first US dollar became minted.

A bull market describes any market in which prices are rising or are expected to rise imminently. Typically applied to stock markets, the term can also be used for anything that is traded, including currencies and commodities. A bull market is the opposite of a bear market.

The Bundesbank (German Federal Bank) is the Federal Republic of Germany’s central bank. Established in 1957, It is the most influential member of the European System of Central Banks (ESCB). Like the European Central Bank (ECB), the Bundesbank is based in Frankfurt, Germany.

Taking a long position on a product.

‘Buy the dips’ is a phrase used in trading, referring to opening a trade on a market as soon as it experiences a short-term price fall. ‘The dip’ is quite literally a dip shown on a market’s chart when its price falls after a bullish period.

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.

The Canadian dollar, also known as Loonie or Funds.

Call options are financial contracts that give you the right, but not the obligation, to buy a market at a specified price within a specific time. The buyer of a call option can profit when the underlying market rises in price.

The Canadian dollar is the currency of Canada. Managed and overseen by the Bank of Canada, it is frequently traded as part of pairs such as USD/CAD, GBP/CAD and EUR/CAD.

‘Loonie’ is the nickname for the Canadian Dollar (CAD) that first originated among forex traders before becoming common in the public at large. The Loonie is the seventh most traded currency in the world and the sixth most held currency in foreign exchange reserves. The Loonie is a Dollar-based currency, but it is sometimes denoted with ‘C$’ to differentiate it from others like the United States Dollar. The Canadian currency has had a free-floating rate since 1970 but holds a relatively lower value than the U.S. Dollar.

A candlestick chart is a type of chart used to analyse a market’s price in trading. Unlike bar charts, candlestick charts show the market’s high, low, open and closing price within each period.

Capitulation is the act of surrendering or giving up. In financial market trading, the term indicates when investors and traders have decided to stop trying to recapture lost gains or maintain their positions, due to falling or rising prices.

A carry trade is a strategy that involves borrowing at a low-interest rate and investing in an asset that provides a higher rate of return.

A cash market is a marketplace where securities are immediately paid for and delivered at the point of sale. For example, a stock exchange is classed as a cash market – because investors receive their shares as soon as they have paid for them.

A central bank is a financial institution with special authority to issue government-backed currency. It is often responsible for formulating monetary policy and regulating member banks. Examples of central banks include the Bank of England in the UK and the Federal Reserve in the US.

A chartist is a trader that analyses a market’s price history to determine future price trends. A chartist will use a range of analytical tools, as well as indicators, to conduct technical analysis on a market’s price chart.

A choppy market is when an asset’s price shows no clear trend but instead experiences many smaller fluctuations.

Cleared funds refers to the balance in a trading account and means that these funds are ready to be traded with. Once funds have cleared, they are free from any obligation and can be used to either make a trade or be withdrawn. If funds aren’t cleared, they might be pending, which will limit what a trader can do with them.

The process of settling a trade.

A clearing house is an organisation, institution or third party that settles a financial obligation between a buyer and seller. It’s the job of a clearing house to ensure that all parties in a financial transaction honour the agreements that they’ve committed to and settle them as such.

A closed position is a trade that is no longer active and has been closed by a trader. To close a position, you need to trade in the opposite direction to when you opened it.

The process of stopping (closing) a live trade by executing a trade that is the exact opposite of the open trade.

A closing price is a market’s final price level before it closes for the day. A market’s closing price is used as the price level shown on a typical line chart.

Collateral is something pledged as security for the repayment of a loan, which can become forfeited in the event of loan default. Examples of collateral include real estate, vehicles, cash, and investments.

A commodity trading advisor (CTA) is a type of financial advisor that only supplies advice on commodities trading: typically the buying and selling of futures contracts, commodity options or swaps.

The dollar pairs that make up the crosses (ie EUR/USD and USD/JPY are the components of EUR/JPY). Selling the cross through the components refers to selling the dollar pairs in alternating fashion to create a cross position.

Symbol for NASDAQ Composite Index.

A document signed by counterparts to a transaction that states the terms of said exchange.

In technical analysis, a consolidating market is a market that is neither continuing nor countering a long-term trend. Instead, its price is only experiencing rangebound price activity.

A period of range-bound activity after an extended price move.

Construction spending is the amount of money the government or businesses have spent on construction, labour and materials over a monthly period. This can refer to either residential and non-residential construction and also includes engineering costs.

The tendency of an economic crisis to spread from one market to another.

Contract size is the deliverable amount of a market that makes up a futures or options contract, spot forex or CFDs. These vary between markets and assets.

A contract for difference (CFD) is a financial contract in which you agree to exchange the difference in the settlement price between the open and closing trades on a particular asset. CFDs enable traders and investors to speculate on whether a market will go up or down, and profit from the price movement without owning the underlying asset.

Controlled risk is where the amount of risk on a trade is capped at a certain level, typically through a guaranteed stop-loss order. This enables you to set the maximum possible amount you can lose on a trade, giving you full control of your risk.

A technical observation that describes moving averages of different periods moving towards each other, which generally forecasts a price consolidation.

A corporate action is an effort made by a public company to alter or change its securities (equity or debt). Corporate action is agreed on by the company’s board of directors with authorization from shareholders.

Refers to corporations in the market for hedging or financial management purposes. Corporates are not always as price sensitive as speculative funds and their interest can be very long term in nature, making corporate interest less valuable to short-term trading.

The second listed currency in a currency pair.

One of the participants in a financial transaction.

Risk associated with a cross-border transaction, including but not limited to legal and political conditions.

CPI stands for Consumer Price Index. It is the most popular reference for day-to-day inflation. CPI gets calculated as a measurement of price change using a weighted average basket of consumer goods and services purchased by households.

The market is ready to sell-off hard.

Refers to CAD (Canadian dollar), Aussie (Australian dollar), Sterling (British pound) and Kiwi (New Zealand dollar) – countries off the Commonwealth.

The cup and handle is a technical analysis pattern that got its name by resembling a tea cup. It features candlesticks that resemble a shallow, rounded saucer with a downward trending handle extending from the cup’s righthand side. The formation can occur over a timeframe as short as several weeks up to an entire year.

Currency is the money underpinned by the legal tender system unique to a particular country or economic area. Currency gets used as a medium of exchange for goods and services.

Currency in the form of paper or coins gets issued by governments and central banks and is usually accepted at face value as a payment method.

A currency pair is a price quote of the exchange rate for two different currencies traded in FX markets: known as the base currency and the quote currency. The exchange rate of a currency pair indicates how much of the quote currency is needed to purchase one unit of the base currency.

Currency risk is the danger of losing capital due to changes in forex prices. In the context of trading, this is the risk to a trader’s portfolio if currency markets experience strong price changes.

A three-letter symbol that represents a specific currency. For example, USD (US dollar).

The current account records a nation's global transactions such as imports and exports of goods and services, payments to and from investments abroad, and transfers such as foreign aid and remittances. Together the current account and the capital account make up a nation's balance of payments.

A day order is a limit or stop order given to a broker to execute a trade at a specific price before the markets close that day. If the price is not reached before the markets close, the order is cancelled. A day order is the most common of the several types of limit orders. Other limit orders include good ‘til cancelled (GtC) and fill or kill (FoK) orders.

Day trading takes advantage of small, short-term changes in the market to buy and sell a financial instrument multiple times within one trading day. Day trading typically has a lower success rate than other methods of trading, but it can pay off for well-educated, well-funded traders.

A deal, also known as a trade, is the name given to any forex transaction. The most common deal is a spot contract, a purchase or sale of a foreign transaction based on the exchange rate at that current moment. Other deals include forward contracts, window forwards, limit orders, stop loss orders, and fx swaps.

A dealer is a financial institution working with their country’s regulatory body to trade foreign currencies. Most dealers are banks who trade securities on their own behalf and in such large amounts that they help maintain liquidity in the market and regulate bid and ask quotes.

The dealing spread is the difference between the bid (sell) price and the ask (buy) price for different currency pairs. It is also known as the ‘spread’ or ‘bid-offer spread’ and is represented by the number of pips between the bid price and the ask price.

Action taken by a trader, or group of traders, to prevent a product from trading at a certain price or price zone, usually because they hold a vested interest in doing so, such as a barrier option.

A deficit occurs when more money is spent than received. This term can be used to describe imports and exports, expenses and revenues, and liabilities and assets. Governments may intentionally spend in a deficit to help raise countries out of recessions or create future economic growth.

Delisting is removing a quoted security from an exchange. Delisting can either be voluntary or involuntary.

Delta spread is an options trading strategy where traders adopt delta neutral positions by buying and selling options simultaneously in direct proportion to the neutral ratio.

A monthly survey produced by the DCLG that uses a very large sample of all completed house sales to measure the price trends in the UK real estate market.

The deposit rate is the interest rate paid by financial institutions on cash deposits such as checking, savings, and Money Market accounts in exchange for the institutions use of that cash while on deposit.

Depreciation is an ongoing decrease in the value of a currency caused by dovish financial policies, a weakening economy, or even a surge in imports. This currency depreciation is viewed in terms of its exchange rate versus other currencies on the forex market.

A derivative is a financial security with a value derived from one or more underlying assets. Common derivatives are futures contracts, forwards, options, and swaps. Derivatives are often traded over the counter but can also be traded on an exchange. Many derivatives are leveraged.

Divergence occurs when a financial security’s price displays deviation from the indicator you might see on your chart.

For example, a specific technical indicator might indicate bullish trading conditions, but the price is falling. Alternatively, the indicator might be showing bearish signals, but price is rising. Price is moving in the opposite direction to the trade direction the indicators are suggesting.

A dividend is a share of profits and retained earnings a company usually pays out annually to its shareholders – after it’s used a portion to reinvest in the business.

A dividend is often regarded as a measurement of a company’s health and good management. Mostly profitable or cash rich firms pay out dividends and some investors rely on these annual returns for investment income.

Like bull and bear market descriptors, dovish is one of two ways to describe monetary policy from the Federal Reserve. A dovish policy advocates for low interest rates aimed at reducing unemployment and stimulating economic growth.

The Dow Jones Industrial Average is an equity index. It tracks the performance of thirty large publicly firms quoted on the NYSE and NASDAQ in the USA. The index also gets called the DJIA and DJIA 30. Many financial brokers refer to the index as the US30 on trading platforms.

A downtrend is a sustained decrease in price over time, which is created when bearish traders (sellers) take control of a market. The chief characteristic of a downtrend is a step-like descent of candlesticks or bars making lower highs and lower lows.

The term dry powder refers to the amount of cash reserve or liquid securities kept readily on hand by an investor to cover potential future costs and obligations. Dry powder includes any and all marketable securities that can be liquidated on short notice.

Symbol for the US Dollar Index.

ECB stands for the European Central Bank, which is the central bank for the euro and Euro Area. The headquarters are in Frankfurt, Germany.

It administers monetary policy within the Eurozone, which comprises 19 member states of the European Union, one of the world’s largest trading blocs.

An economic indicator is economic data used by analysts, traders and investors to determine investment and trading opportunities. The data is usually delivered on a macroeconomic level and defines the overall health of an individual economy.

An end of day order (EOD) is an instruction to your broker to keep a buy or sell order open only until the end of a trading day. An EOD, also known as a day order, can be to open a new position or close an existing one, but either way it will close on the same business day it’s placed, usually by way of a stop or limit.

EST stands for Eastern Standard Time. It is five hours behind Coordinated Universal Time (UTC) and Greenwich Mean Time (GMT). The EST time zone gets used during standard time in North America, Central America, and The Caribbean. EST is often called Eastern Time Zone.

The Euro Short-Term Rate (ESTR) is the interest rate benchmark for overnight borrowing costs throughout the euro area. It’s calculated and published by the European Central Bank (ECB) as a replacement for the Euro Overnight Index Average (EONIA) and the Euro Interbank Offered Rate (EURIBOR).

The ESTX50 is a common abbreviation for the Euro Stoxx 50, which lists the top 50 most highly-capitalised stocks on the EURO STOXX – another European index. It’s weighted based on each company’s free float market capitalisation.

EURIBOR is an interest rate benchmark for the eurozone, standing for Euro Interbank Offered Rate. It is calculated using the average rates that eurozone banks offer each other on unsecured short-term loans of various maturities. EURIBOR represents the rate at which banks will lend capital to each other for short periods (short in this instance meaning less than one year). The rates quoted by various different banks are averaged together to make the benchmark, which is quoted daily. Like other IBORs, EURIBOR rates are used in various financial products – including OTC derivatives.

The Euro is the single European currency that replaced national monetary systems for 19 member states of the European Union. In forex markets, the Euro is abbreviated to EUR, and is the second-most traded currency after the US Dollar.

The European Economic and Monetary Union (EMU) was introduced when the founding members of the European Union (EU) set up a centralised economic system for the supranational body.

The European session is the second session of the forex trading day. While the FX market is open 24 hours a day, it’s split into three major sessions – Asian, European and North American, also known as Tokyo, London and New York.

Measures the annualised rate of inflation in the compensation and benefits paid to civilian workers and is seen as a primary driver of overall inflation.

A monthly index produced by the OECD. It measures overall economic health by combining ten leading indicators including average weekly hours, new orders, consumer expectations, housing permits, stock prices and interest rate spreads.

A share bought in which the buyer forgoes the right to receive the next dividend and instead it is given to the seller.

Expiration dates vary depending on the derivative.

The expiration date for US stock options is usually the third Friday of the contract month or the month when the contract expires. If the Friday falls on a holiday, the expiration date is the Thursday immediately before the third Friday.

An exporter is a person, company, or country, that sends goods or services to a counterparty in another country. Exporting is a global trade function whereby goods produced in one country get moved to another country to trade or sell.

A market that is thought to have travelled too far, too fast.

Factory orders are a common economic indicator, used to assess the dollar value of goods from factories. The data for factory orders are released in monthly reports by the US Census Bureau, and are split into two major groupings: durable and non-durable goods. Each factory orders report includes new orders, unfilled order, shipments and inventories.

The Federal Reserve System, referred to as the Federal Reserve or the Fed, is the United States of America’s central banking system.

On December 23, 1913, the Federal Reserve Act created the system after a series of financial shocks caused the need for central control of monetary policy to prevent future crises.

Refers to the price quotation of '00' in a price such as 00-03 (1.2600-03) and would be read as 'figure-three.' If someone sells at 1.2600, traders would say 'the figure was given' or 'the figure was hit’.

A filled order, of fill for short, is simply an executed order in the markets. It is an order that has had its parameters filled, whether it was an order to buy or sell an asset, to open or close a position. For example, if you were to create an order to buy a stock at $45, and your order is accepted, it would be said to have been ‘filled’ and $45 would be the ‘fill price’.

A fill or kill (FOK) order is an instruction sent to a broker or directly to a trading venue that must be carried out immediately and in its entirety. If either of those stipulations cannot be met, the order is cancelled. No partial or delayed execution of the order is allowed.

A financial analyst conducts financial analysis for external or internal clients. Their primary duty is to examine data to identify opportunities or evaluate outcomes for investment recommendations or business decisions.

In the financial services industry, analysts provide regular reports on forex, equity, commodity, and cryptocurrency markets to assist traders’ decision making.

A financial contract is a legally binding document between at least two parties which defines and governs the parties’ rights and responsibilities under the agreement.

A financial contract is legally enforceable when it meets the law’s requirements and approval. It usually involves exchanging money, goods, services or promises to trade any of these products.

First-In-First Out, also called FIFO, is an asset-management and valuation method where assets acquired or produced get used, sold, or disposed of first.

One of approximately five times during the forex trading day when a large amount of currency must be bought or sold to fill a commercial customer’s orders. Typically, these times are associated with market volatility.

A flat market describes when the price for a certain security neither rises nor falls for a significant time period. Flat markets can occur when there is low trading volume or when increasing price movements on some securities are offset by declining price movements of other securities in the same index. In forex, a flat market occurs when a currency pair fails to move significantly up or down and does not contribute a significant loss or gain to the forex trading position.

Dealer jargon used to describe a position that has been completely reversed, eg you bought $500,000 and then sold $500,000, thereby creating a neutral (flat) position.

Economic data readings matching the previous period's levels that are unchanged.

Fresh buying or selling interest after a directional break of a particular price level. The lack of follow-through usually indicates a directional move will not be sustained and may reverse.

FOMC minutes are a detailed record of the Federal Open Market Committee (FOMC) meetings and are released three weeks after every meeting. The minutes offer more concise insights on the monetary policy stances of all members of the committee and how individual members see the value of the USD and other securities. Analysts comb through these minutes to determine if individual committee members are striking hawkish or dovish tones in their remarks, regardless of what tone the statement took weeks prior.

A lot is the typical unit amount of currency traded in forex and equals 100,000 units of whichever specific currency is quoted. Lot sizes are so large in order to magnify the changes in currency values, which usually occur in a matter of only a few pips. For example, if the USD/JPY is trading at 119.80, a single pip change would amount in $8.34 difference when multiplied against a single lot. The math is: (.01/119.80) x 100,000 = $8.34

The FRA40 is a benchmark index containing 40 of the biggest companies on the Euronext Paris exchange. It’s commonly referred to as the French 40. Most of the companies included are international, representing 35 different sectors. The sectors with the largest effect on the index are banking at 10% and oil equipment at 9%. Because the index consists of many international companies, foreign investors from countries like America, Britain, Germany, and Japan own nearly half of all shares.

The FTSE 100 is an index of the 100 companies with the highest market capitalisation on the London Stock Exchange. Although, many of the listed companies are international, making it a somewhat weak indicator of the UK economy. The FTSE 250 is an index of the next largest 250 companies based on market capitalisation after the FTSE 100, and the FTSE 350 is a combination of both indices. These other indices are seen as better indications of the UK economy as they contain a smaller proportion of international companies.

A fund is an investment vehicle that enables people to pool their money together to invest in different securities like stocks, bonds, currencies, property, or commodities.

Funds might have different objectives; either to deliver a regular income or capital growth for the investor.

Fundamental analysis is involves using related economical and financial factors to determine the value of a security. Both macro and microeconomic factors are considered when performing fundamental analysis. This includes looking at everythingfrom the overall economic health of an industry or country to specific details pertaining to one company such as specific management decisions made by the company to its revenue and profit. Fundamental analysis can be used on a range of securities including indices and individual stocks, forex, and commodities.

The Group of Seven is an international governmental organisation which includes France, Germany, Italy, Japan, the United Kingdom, Canada, and the United States.

During recent decades, the G7 claimed to have ‘strengthened security policy, mainstreamed climate change and supported disarmament programmes’.

The Group of Eight (G8) was an international governmental political forum which existed from 1997 until 2014.

The discussion forum originated in 1975 as the Group of Six (G6) after France held the first summit.

Gapping describes when the price action of a security jumps to a new price not directly adjacent to the previous price, creating a gap between ticks on a price chart. Gapping can occur during a trading day, often when there is low liquidity and the asset price is heavily affected by a lower level of trading.

The gearing ratio is a financial ratio comparing a business owner’s equity (or capital) to the company’s overall debt and borrowed funds. It’s a measurement of financial leverage, illustrating how much of a firm’s operations get funded by equity capital instead of debt financing.

Refers to a bid being hit or selling interest.

A technical level succumbs to a hard-fought battle.

GMT stands for Greenwich Mean Time. Due to its maritime connection, back in 1884 the village of Greenwich, London England, was chosen as the reference point for all time on Earth.

GNP is related to another crucial economic measure: GDP (gross domestic product). GDP calculates all output produced within a country’s borders regardless of who owns the means of production.

The term gold bullion describes a large quantity of physical gold that is at least 99.5% pure metal, it can be cast in bars, ingots, or coins.

Investors often purchase gold bullion as an alternative physical investment to hedge their risk against other financial exposure to markets. Gold bullion is a tangible asset that is regarded as both an alternative and safe-haven asset.

A certificate of ownership that gold investors use to purchase and sell the commodity instead of dealing with transfer and storage of the physical gold itself.

The standard unit of trading gold is one contract which is equal to 10 troy ounces.

An order that will expire at the end of the day if it is not filled.

A good ‘til cancelled (GTC) order is an instruction to execute a trade that will remain active until the order is fulfilled or the trader cancels it. Brokerages typically limit the length a GTC order can remain open to 90 days.

A good ‘til date (GTD) order is an instruction to execute a trade that remains open until a future date specified by the trader. Once the date is reached, the order is cancelled if it has not been fulfilled or cancelled already.

Gross domestic product (GDP) is a measure of the market value of all the final services and goods produced in a specific period by a country or economic area.

It’s a measurement of an economy’s size and health over a period, usually one quarter or one year. GDP is used to compare different economies’ size at various points in time.

Gross national product (GNP) is an estimate of the total value of all products and services produced by a country in a specific period, often a financial quarter or year.

An order type that protects a trader against the market gapping. It guarantees to fill your order at the price asked.

A guaranteed stop-loss order (GSLO) is a type of order that ensures your position is closed out at the price you specify, regardless of market volatility, slippage or gapping. Guaranteed stops are often free to attach, but your brokerage will charge you a premium if the order is triggered. This is due to the risks your broker is taking on for you.

Refers to traders pushing to trigger known stops or technical levels in the market.

Every 100 pips in the FX market starting with 000.

Hawkish is a term used in economics to describe a monetary policy that takes rigorous steps to control inflation, principally by means of raising interest rates. An inflation hawk will be less concerned with economic growth than they with reducing the likelihood of a recession.

Hedging is an investment technique to offset potential investment losses by purchasing correlated investments, expected to move in the opposite market direction.

Hedging techniques are popular methods for investors to protect themselves from risky positions; they hedge their bets. It’s like having investment insurance. If a sudden price reversal occurs, the damage gets limited due to the hedge position.

The phrase ‘hit the bid’ refers to the bid-ask spread, the price difference between the highest price a buyer is willing to purchase a security at and the lowest price the holder of that security is willing to sell at. A trader willing to sell immediately at the given bid price will ‘hit the bid.’

Names for the Hong Kong Hang Seng index.

IBOR stands for Interbank Offered Rate – a type of interest rate benchmark that represents an average of the rates that banks will offer each other for loans of various maturities.

The most well-known and widely used IBOR is LIBOR. However, you might also encounter EURIBOR, TIBOR and other rates.

IBORs have been used in financial markets for a long time and feature in a huge variety of different products and transactions. Over-the-counter (OTC) derivatives in particular have long been associated with IBORs.

An illiquid market is a market that is difficult to sell assets in due to a lack of interested buyers, available assets, or because the market itself is not viable as a financial asset. Assets in these markets are often difficult to convert to cash without losing a significant portion of its value because of their large bid-ask spreads. Illiquid markets can hold high-value assets, but if no willing buyers are found, sellers may be forced to lower their price or hold on to their assets longer than preferred.

An index’s components are the individual companies that are listed on a stock index. For example, Apple is a component of the Nasdaq stock index.

Components are also known as constituents. There is no set number of components an index must have.

Industrial production is a measure of the output of the industrial sector of an economy. The industrial sector includes manufacturing, mining, utilities (like gas and electricity) and, at times, construction output.

Inflation is the decline of a specific currency's purchasing power over time. It’s calculated by measuring the cost of a basket of widely consumed goods and services in an economy.

Inflation reduces each unit of currency's purchasing power and increases living costs; consumers must spend more to fill a shopping basket or get a haircut. As prices rise, money buys less so inflation can reduce living standards over time.

The initial margin requirement is the amount of money required to open a position in a given market through a brokerage. It is usually represented as a percentage of the total amount you seek to open as a position. A trader looking to trade £100,000 in the forex market place may pay £10,000 to a brokerage as a 10% initial margin requirement and would still get the total £100,000 exposure through the brokerage.

The interbank rate is the interest rate charged by banks when conducting transactions of foreign currency with other banks. These rates are typically lower than interest rates paid by retail traders, but they are used to set those higher interest rates paid by individuals and institutions. Like all foreign currency exchange rates, these fluctuate constantly.

An interest rate is the percentage of money charged above the lender's principal – the amount of money loaned – for using its capital. Global central banks set base interest rates to manage their domestic economies. Base rates are the benchmark all banks use to decide their borrowing and investment rates.

Action by a central bank to affect the value of its currency by entering the market. Concerted intervention refers to action by a number of central banks to control exchange rates.

Symbol for S&P 500 index.

The ISM Non-Manufacturing Index (now called the Services PMI) is an index used to assess the performance of services companies in the United States. The reading, published monthly, is based on surveys of more than 400 purchasing and supply managers in non-manufacturing (services) firms.

Measures the mood of businesses that directly service consumers such as waiters, drivers and beauticians. Readings above 50 generally signal improvements in sentiment.

Measures the total value of new orders placed with machine tool manufacturers. Machine tool orders are a measure of the demand for companies that make machines, a leading indicator of future industrial production. Strong data generally signals that manufacturing is improving and that the economy is in an expansion phase.

Commonly referred to as “The Nikkei,” the JPN 225 is a Japanese index based on the market capitalisation of the top 225 companies traded on the Tokyo Stock Exchange (TSE). The Nikkei is a price-weighted index calculated daily since 1950 by the Nihon Keizai Shimbun, Japan’s largest financial newspaper. The Nikkei operates in the Japanese Yen and displays a positive correlation to the value of the currency. When the Yen depreciates, prices of Japanese stocks listed on the index rise. Overall the Nikkei is popular for its day-to-day volatility.

To limit your trades due to inclement trading conditions. In either choppy or extremely narrow markets, it may be better to stay on the side lines until a clear opportunity arises.

Kiwi is the colloquial name for the New Zealand Dollar (NZD), coined after the flightless Kiwi bird featured on the island nation’s $1 coin. In forex pairs the NZD is often referred to as the ‘Kiwi.’

A knock-in option is a type of options contract that is not activated until a predetermined price is reached.

The knock-in options contract is inactive until that price is reached.

A knock-out option is a type of option that expires or “knocks out” if the asset surpasses or falls below a certain price.

The knock-out options contract is active until the predetermined price is hit.

Option that nullifies a previously bought option if the underlying product trades a certain level. When a knock-out level is traded, the underlying option ceases to exist, and any hedging may have to be unwound.

The last day you may trade a particular product.

The last time you may trade a particular product.

The last trading day is one day prior to the expiration date of a derivatives contract. The last trading day is the final day you can trade or close out your position before the commodity is delivered or settled in cash the following day. Once the last trading day passes, the derivative is no longer tradable, and the settlement process begins.

A price zone or particular price that is significant from a technical standpoint or based on reported orders/option interest.

Short-term traders, referring largely to the hedge fund community.

Liabilities are sums owed by a person or company, usually cash, that are settled through the transfer of cash, goods, or services. On balance sheets, liabilities are recorded on the right side against the figure’s assets. Liabilities include loans, accounts payable for goods or services, mortgages, deferred revenues, bonds, warranties, and accrued expenses. Liabilities may also refer to a legal or regulatory risk or obligation.

LIBOR is a leading interest rate benchmark, set each day according to estimates from up to 18 global banks. It stands for London Interbank Offered Rate. There are LIBOR rates for multiple different currencies: including GBP, USD, EUR and more.

A liquid market is any market with a high volume of activity, allowing traders ample opportunity to buy or sell large quantities at any time and for low transaction costs.

The London session — also known as the European session — is one of three trading sessions responsible for keeping the forex market open 24 hours a day.

Traders who have bought a product.

A unit to measure the amount of the deal. The value of the deal always corresponds to an integer number of lots.

The longest-term trader who bases their trade decisions on fundamental analysis. A macro trade’s holding period can last anywhere from around six months to multiple years.

Mark to market (MTM) is an accounting method that values an asset, portfolio or account at its current market price instead of an assumed book value. An asset’s mark to market value reveals how much a company gets if it sells it at that point in time.

Market contagion refers to the spread of disturbances (usually a sell-off) from one country and one market to another. Foreign exchange rates, stock market prices and sovereign bond prices can all be quickly affected by contagion.

At the same time, capital flows happen from the geographical areas affected by the contagion.

Market intervention is any action taken by a government or other political-action group to modify or adjust the market. Market intervention through monetary policy is a common tool used by governments to regulate markets. Governments mainly intervene in markets by setting interest rates, subsidies and tariffs, and industry regulations.

Process of re-evaluating all open positions in light of current market prices. These new values then determine margin requirements.

The maturity date is the date that a debt instrument—such as a note, draft, or acceptance bond—becomes due. The maturity date can be found quoted on the certificate received with the debt instrument. These dates can vary depending on the instrument and contract received. Maturity date may also refer to the expiration date for futures and options contracts or the date an instalment loan must be fully paid back.

The Medley Report refers to the Medley Global Advisors, a market consultancy based in New York that’s focused on macro policy. It serves some of the world’s largest hedge funds, asset managers, banks, and institutional investors. The Medley Reports contain coverage of global economies, commodities, indices, and various markets. The advisory maintains close contact with central banks and government officials around the world, allowing them to claim they have insider information which informs their reports.

Synonymous with black box. Systems that automatically buy and sell based on technical analysis or other quantitative algorithms.

Abbreviation for month-over-month, which is the change in a data series relative to the prior month's level.

A series of technical studies (eg RSI, MACD, Stochastics, Momentum) that assesses the rate of change in prices.

Traders who align themselves with an intra-day trend that attempts to grab 50-100 pips.

The NASDAQ Composite is an equity index which includes most stocks listed on the NASDAQ stock market.

Together with the DJIA (Dow Jones Industrial Average) and the SPX500 (Standard & Poor’s 500) indices, the NASDAQ Composite is one of three most popular equity indices traded in the United States.

The amount of currency bought or sold which has not yet been offset by opposite transactions.

8:00am – 5:00pm (EST).

An option that pays a fixed amount to the holder if the market never touches the predetermined barrier bevel.

Symbol for NYSE Composite index.

The price at which the market is prepared to sell a product. Prices are quoted two-way as bid/offer.

If a market is said to be trading offered, it means a pair is attracting heavy selling interest, or offers.

A trade that cancels or offsets some or all of the market risk of an open position.

Attempting to sell at the current market order price.

A designation for two orders whereby if one part of the two orders is executed, then the other is automatically cancelled.

An option that pays a fixed amount to the holder if the market touches the predetermined barrier level.

The precise date and time when an option will expire. The two most common option expiries are 10:00am ET (also referred to as 10:00 NY time or NY cut) and 3:00pm Tokyo time (also referred to as 15:00 Tokyo time or Tokyo cut). These time periods frequently see an increase in activity as option hedges unwind in the spot market.

An instruction to execute a trade.

An order book is a list of orders for a specific market, recorded by an exchange to measure market depth and interest from buyers and sellers.

Order books are often used by traders to identify market sentiment. For short-term traders in particular, order books are valuable as they show whether bulls or bears are dominant in the market.

Typically, order books are made up of three main components:

• Buy orders – shows buyer information including volume and price
• Sell orders – shows seller information including volume and price
• Order history – shows the orders that have been made in the past

Order books don’t cover every order in the market, as ‘dark pools’ also anonymously take orders. Dark pools are private exchanges that don’t show the identity, nor the intent (e.g. buy or sell) of an order. These are orders from whales – large traders in the market such as banks or corporations – who don’t want their trading activity to be publicly available.

Given the large volume of whales’ trades, if this information was widely available it would give traders a clear indication of how a market’s price might move. 

What is order book trading?

Order book trading is a strategy that involves using the information from an order book to profit from the markets.

If an order book is showing a number of large buy orders not being filled, for example, it can indicate a dominance of bulls in the market as traders want to buy at a certain price but are unable to find a seller. Traders can exploit this imbalance and trade accordingly, in this case anticipating a price rise. 

While order book trading can be a profitable strategy for day or short-term traders, there’s often only a small window to trade. It requires quick thinking and split-second decision making.

Refers to the offer side of the market dealing.

A very heavy round of selling.

A partial fill happens when only a portion of a limit order is executed, the share price surpasses the specified limit order target during the trade. In this instance shares will only be exchanged up to the price on the limit order, and the rest remain unfilled.

Waiting for certain levels or news events to hit the market before entering a position.

A physical settlement requires the option seller to deliver the underlying asset if it’s a call. For puts, the option seller must buy the underlying asset from the buyer at the strike price. Physical settlement is more common for stocks and commodities than other financial securities.

Price transparency is the extent to which all relevant information is available around trading quantities, bid prices, and ask prices of a security so all agents are operating with the same information. Higher transparency allows traders to make better decisions about what securities to invest in and limits barriers to entry.

Profit is the revenue earned for a business activity or transaction after subtracting any related expenses. When analysts look for potential investments, profitability will be a crucial indicator of business health. The most common types of profit are gross profit, operating profit, and net profit.

A pullback is a moderate drop or a slowdown in an asset or commodity’s price after a continuous upward trend. Because pullbacks are considered a temporary pause before resuming its upward journey, it can offer a great opportunity to invest, especially for traders looking to make an entry into an aggressive market.

The purchasing managers' index (PMI) measures the economic wellbeing and direction of the manufacturing and services sectors. It looks at key indicators that show signs of retraction or growth in the economy such as inventory levels, production, and employment.

As a result, the PMI provides insight and guidance to company decision-makers and investors.

Measures the outlook of purchasing managers in the service sector. Such managers are surveyed on a number of subjects including employment, production, new orders, supplier deliveries and inventories. Readings above 50 generally indicate expansion, while readings below 50 suggest economic contraction.

Put options are financial contracts that give the owner the right, but not the obligation, to sell an underlying asset at a specified price within a specific time. A buyer of a put can profit when the underlying asset falls in price.

Quantitative easing (QE) is a dovish monetary strategy imposed by a central bank to increase the money supply in an economy by purchasing long-term securities on the open market. The central bank's objective is to stoke growth and investment when the interest rate is at or near zero.

A type of future with expiry dates every three months (once per quarter).

A quote is the final price an asset is traded for when a transaction is completed. Before a transaction is processed, the asset’s price is listed as a bid quote, which means the current price of the asset is subject to change before the transaction is finalized.

A rally is a series of price increases in shares, indices, or bonds over a short period on the stock market. A considerable boost in demand from a rise in investment generally stokes a rally, and they often follow a period of flat or downward growth.

A range occurs when a security trades in a consistently high and low-price range for a given period. In this situation, a bounded range is identified by charting the high and low price points across horizontal trendlines.

A rate of exchange is the value of one currency against another, and in trading exchanges, the rate can be free-floating or fixed.

The Reserve Bank of Australia (RBA) is Australia's central bank, responsible for managing the country’s monetary policy. The mandates of The RBA include maintaining the stability of the dollar, achieving full employment and promoting economic prosperity for the people of Australia. The RBA is responsible for setting interest rates that stoke economic growth and ensure inflation is kept between 2 and 3% per year. The RBA is comprised of the Reserve Bank Board, which make decisions on monetary policy and interest rate changes, and the Payments System Board, which oversee risk in the financial system and promote a competitive and efficient payments system.

The Royal Bank of New Zealand (RBNZ) is the country's central bank, responsible for driving the monetary policy to manage economic conditions. The core purpose of the RBNZ is to ensure that the economy has a stable financial system under which it can achieve growth. The RBNZ makes decisions about the monetary policy and issues the local currency, the NZD.

Traders of significant size including pension funds, asset managers, insurance companies, etc. They are viewed as indicators of major long-term market interest, as opposed to shorter-term, intra-day speculators.

A realised profit or loss occurs when an investment is sold for a higher or lower price than purchased for, and it is only recognised once the transaction has been made. A realised profit is also known as a realised gain and only becomes liable for capital gains tax* at this point. For example, if an investor buys 1000 shares at $5 each and sells when the shares reach a market value of $8, they will have a realised profit of $3,000 ($8,000 -$5,000). Conversely, if the shares dropped to $2 each and sold, they would have a realised loss of $3,000 ($2,000 - $5,000).

*Tax laws are subject to change and depend on individual circumstances.

A rectangle pattern occurs when the price of a security stays within a bounded range, creating horizontal trend lines that show well-defined support and resistance levels. Rectangle patterns show market indecision and indicate that the supply and demand of a security is in a stalemate. Traders often watch for a breakout to occur either upwards or downwards. When price consolidates to a rectangle pattern during a downtrend, it is considered a bearish rectangle. A bullish rectangle is when the price consolidates during an upward trend.

A resistance level, or resistance, is the price point at which more traders sell an asset than buy, causing the value to reverse and a peak to form on a price chart. For a resistance level to form, the phenomenon must occur more than once, allowing a line to be charted showing a clear price point at which the market reverses. Traders and technical analysts use resistance levels to understand trends in the marketplace from previous data and forecast what may be to come.

A retail investor is an individual and non-professional investor who buys and sells securities or funds through brokers or other investment accounts. Retail investors purchase securities for their personal accounts and invest smaller amounts than institutional investors.

Retail investment has been growing significantly because of access to financial information and trading tools, and in 2021 the retail investment market in the US made up 32% of total equity volume. 

Retail sales measure consumer demand by calculating the total goods sold over a given period. Consumer demand is considered an indicator of an economy’s financial well-being and whether it is heading towards contraction or expansion. In the US consumer spending, or retail sales, account for 70% of GDP.

A revaluation is an upward adjustment on a country's currency relative to a baseline such as gold, wages, or a different currency. In a fixed exchange rate economy, a decision to revaluate a currency can only be made by the central bank. In a free-floating exchange rate, a revaluation is spurred by market forces. Revaluation is the opposite of devaluation, in which a country's currency experiences a downward value adjustment.

A rights issue is a way for a company to raise cash by inviting its shareholders to buy new shares at a discounted price for a defined period. Invited shareholders are not obliged to purchase the shares but have the right to do so. Rights issues are often issued by a company to pay down debt or quickly raise capital for increased investment.

Risk is the exposure to potential losses you take on when trading a security. Different assets have different levels of risk, which means you can tailor your strategy based on your experience and the level of risk you want to take on.

The employment of financial analysis and trading techniques – such as attaching stops and limits – to reduce and/or control exposure to various types of risk.

A rollover in forex is the action of keeping your position open from one trading day to the next, hence the name “rolling over”. In a rollover, you technically close your position at the end of the trading day and re-enter the trade at the new open rate. This usually happens automatically.

A round trip in trading refers to the dubious buying and selling of the same amount of a security to inflate the perceived trading volume and liquidity of that security. In forex, round trips involve opening and closing a position within a single day, often multiple times, and can interfere with technical analysis.

Your running profit or loss refers to the money you currently stand to gain or lose should you close your open trades. On most trading platforms a running profit will show as green and a running loss as red. If the sum of your positions is green, you have a running profit, and if the sum of your positions is in the red, you have a running loss.

RUT is the acronym for the Russell 2000, an index comprised of the smallest 2000 stocks in the Russell 3000. Investors typically watch this small-cap index to measure the performance of smaller, domestically focused businesses in the United States.

SEC stands for the Security and Exchange Commission, a US government oversight agency that regulates markets and protect investors.

A sector is a division within a market or economy used to group companies with similar outputs and analyse their performance. Sectors can be used to categorize small economies like that of a single city or larger, nationwide economies.

Sell is one of two options traders have when opening a trade. When you open a trade by selling, you are speculating that the price of the security will drop. You close a sell trade by selling back the asset for the lower price, securing a profit.

Settlement of securities, commodities, or currencies is the process during which the asset of a specific trade is delivered or sold, and the trade is marked as closed. During the settlement, the seller gets paid and ownership of the asset is transferred to the buyer. The settlement must be marked as finished for the buyer to use the newly acquired asset or currency in another trade.

Symbol for the Shanghai A index.

Short covering is simply closing out a short position by buying back the security sold when going short. For a short-covering to be successful, the security must decline in price, allowing the trader to profit from the trade.

A short position describes when an investor sells a security with the promise to buy the security back to close the position. Short positions give traders more flexibility to speculate on a security’s price, allowing you to profit in declining markets.

A short squeeze occurs when an event or condition causes the price of an asset that has been heavily shorted to rise rapidly. Traders with short positions are then forced to increase the equity in their account to maintain the rising margin of the trade, otherwise, they are forced to close the trade and buy back the asset at a loss.

Traders who have sold, or shorted, a product, or those who are bearish on the market.

To sit on hands, or sit on the sidelines, refers to traders staying out of the markets due to directionless, choppy or unclear conditions. This allows traders time to analyse the market and use technical principles to enter at optimal moments rather than just entering a position at will and holding it in hopes its price rises.

Simple moving averages (SMAs) allow you to identify if a market is trending up, down or ranging sideways and are utilized in many technical indicators. SMAs calculate a market’s average price over a given time by adding the closing prices for all periods in the timeframe and dividing the total by the number of periods tallied.

Slippage is the difference between the price requested in an order and the price the order is executed at, typically caused by changing market conditions. Slippage often occurs during periods of high volatility or when the bid/ask spread changes during the execution of large order quantities.

A term used when the market feels like it is ready for a quick move in any direction.

A sloppy market describes a market with seemingly random trading patterns that lack meaningful trends or behaviours. Often sloppy markets are neither bear nor bull but oscillate between the two. During sloppy markets, traders typically wait for a breakout or a consolidation into a range before entering any trades.

SNB stands for the Swiss National Bank, Switzerland’s central bank, and the sole issuer of Swiss francs. The SNB’s monetary policy focuses on price stability while keeping in mind economic developments. Its chairman is Swiss economist Thomas Jordan.

The Secured Overnight Financing Rate (SOFR) is the overnight interest rate used for US dollar-denominated loans and derivatives in the overnight market. It indicates how much a bank will have to pay to borrow cash from another institution.

The Sterling Overnight Index Average (SONIA) is the effective overnight interest rate that banks pay to borrow sterling overnight from other financial institutions. It’s used for overnight funding of trades that occur in off-hours and indicates the depth of business in the marketplace in these hours.

Sovereign names refer to central banks active in the spot market. Sovereign can also be used to label financial instruments like bonds, debt, credit default swaps and more that involve a country’s central bank. Sovereign names may also be referred to as government, public and national and should not be confused for a separate type of security.

A market whereby products are traded at their market price for immediate exchange.

The current market price. Settlement of spot transactions usually occurs within two business days.

A spot trade is the immediate purchase or sale of a financial instrument such as forex, commodities and securities. Spot trades are enacted as market orders as default, but they can also be specialised orders like stop-loss or limit orders which wait until a trigger is activated to transact an immediate trade at the spot price.

The difference between the bid and offer prices.

A name for the S&P index which tracks 500 of the largest companies on the NYSE and Nasdaq stock exchanges.

Purchase and sales are in balance and thus the dealer has no open position.

A nickname for the British pound or the GBP/USD (British pound/US dollar) currency pair.

A market on which securities are traded.

The combined price of a group of stocks - expressed against a base number - to allow assessment of how the group of companies is performing relative to the past.

This is an order placed to buy above the current price, or to sell below the current price. These orders are useful if you believe the market is heading in one direction and you have a target entry price.

When a market seems to be reaching for a certain level that is believed to be heavy with stops. If stops are triggered, then the price will often jump through the level as a flood of stop-loss orders are triggered.

This is an order placed to sell below the current price (to close a long position), or to buy above the current price (to close a short position). Stop loss orders are an important risk management tool. By setting stop loss orders against open positions you can limit your potential downside should the market move against you. Remember that stop orders do not guarantee your execution price – a stop order is triggered once the stop level is reached and will be executed at the next available price.

A stop order is an order to buy or sell once a pre-defined price is reached. When the price is reached, the stop order becomes a market order and is executed at the best available price. It is important to remember that stop orders can be affected by market gaps and slippage and will not necessarily be executed at the stop level if the market does not trade at this price. A stop order will be filled at the next available price once the stop level has been reached. Placing contingent orders may not necessarily limit your losses.

Refers to stop-loss orders building up; the accumulation of stop-loss orders to buy above the market in an up move, or to sell below the market in a down move.

The strike price is the price an options contract or other derivative must reach in order to be exercised. Holders of the options or derivatives contract may exercise the strike price until the expiration date. Both the strike price and expiration date are set at the time the options or derivative contract is purchased. For call options the strike price is the price the underlying security may be bought at, and for put options, the strike price represents at what price the asset may be sold.

A price that acts as a floor for past or future price movements.

A support or support level on an asset is the price point at which it does not fall below for some time. Technical analysts use support levels along with resistance levels to chart price points and predict the performance of a stock over time. The support level represents the price point at which buyers tend to purchase stock. When the price point holds, it is considered a support level, but if it continues to fall, the support level is not set, and a new point will emerge.

A temporary halt in the trading of a product.

A currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate.

The nickname for the Swiss franc or the USD/CHF (U.S. Dollar/Swiss Franc) currency pair.

Take profit refers to limit orders that look to sell above the level that was bought or buy back below the level that was sold.

Assuming control of a company by buying its stock.

The process by which charts of past price patterns are studied for clues as to the direction of future price movements.

Traders who base their trading decisions on technical or charts analysis.

US government-issued debt which is repayable in ten years. For example, a US 10-year note.

An illiquid, slippery or choppy market environment. A light-volume market that produces erratic trading conditions.

UK government-issued debt which is repayable in 30 years. For example, a UK 30-year gilt.

The minimum change in price, up or down.

The time remaining until a contract expires.

09:00 – 18:00 (JST).

Simultaneous buying and selling of a currency for delivery the following day.

The Tokyo Overnight Average Rate (TONAR) is the risk-free unsecured interbank overnight interest rate for the Japanese Yen – it’s also known as TONA.

It was created in 2016 in the move to risk-free reference rates. TONAR is the replacement for LIBOR, which is expected to be completely phased out by June 2023. Learn more about the move away from LIBOR.

Measures the difference in value between imported and exported goods and services. Nations with trade surpluses (exports greater than imports), such as Japan, tend to see their currencies appreciate, while countries with trade deficits (imports greater than exports), such as the US, tend to see their currencies weaken.

A trade confirmation is a receipt of an executed order sent to you by your broker. Trade confirmations are sent to verify that the transaction has taken place and you will receive one after every trade you make.

The number of units of product in a contract or lot.

A pair is acting strong and/or moving higher; bids keep entering the market and pushing prices up.

A postponement to trading that is not a suspension from trading.

A market that feels like it wants to move lower, usually associated with an offered market that will not rally despite buying attempts.

Trading levels are determined by a broker to ensure traders only enter specific markets and employ strategies that are on a par with their experience level. When you create a brokerage account, a broker will perform a risk assessment and determine your trading level. The broker will consider factors such as your available capital, occupation, age, and trading experience. Trading levels can also refer to support and resistance levels, which are key price points in technical analysis.

A trading model is a rule-based structure created to govern trading activities. Trading models help take some guesswork out of the markets while encouraging investors and traders to set risk parameters.

A pair is acting weak and/or moving lower and offers to sell keep coming into the market.

The range between the highest and lowest price of a stock usually expressed with reference to a period of time. For example: 52-week trading range.

A trailing stop allows a trade to continue to gain in value when the market price moves in a favourable direction, but automatically closes the trade if the market price suddenly moves in an unfavourable direction by a specified distance. Placing contingent orders may not necessarily limit your losses.

The cost of buying or selling a financial product.

The date on which a trade occurs.

Price movement that produces a net change in value. An uptrend is identified by higher highs and higher lows. A downtrend is identified by lower highs and lower lows.

The total money value or volume of all executed transactions in a given time period.

When both a bid and offer rate is quoted for a forex transaction.

Symbol for CBOE 10-Year Treasury Yield Index.

Describing unforgiving market conditions that can be violent and quick.

Measures the average wage including/excluding bonuses paid to employees. This is measured quarter-on-quarter (QoQ) from the previous year.

Measures the number of people claiming unemployment benefits. The claimant count figures tend to be lower than the unemployment data since not all of the unemployed are eligible for benefits.

Measures the relative level of UK house prices for an indication of trends in the UK real estate sector and their implication for the overall economic outlook. This index is the longest monthly data series of any UK housing index, published by the largest UK mortgage lender (Halifax Building Society/Bank of Scotland).

Measures the change in the number of people claiming unemployment benefits over the previous month.

Measures the change in total labour cost expended in the production of one unit of output.

A name for Brent Crude Oil.

Measures the rate of inflation experienced by manufacturers when purchasing materials and services. This data is closely scrutinised since it can be a leading indicator of consumer inflation.

Measures the rate of inflation experienced by manufacturers when selling goods and services.

A name for the FTSE 100 index.

Underlying refers to the original asset in a derivatives contract, a trade built around the speculation of another asset’s price. Underlying assets can be stocks or commodities in an options trade, or they can be a financial metric like a benchmark index or interest rate.

The unemployment rate is used to measure the number of people in a country or sector who do not have a job but are actively seeking one. The unemployment rate is measured as a percentage of the labour force, which consist of all people both employed and unemployed.

Polls 500 US households each month. The report is issued in a preliminary version mid-month and a final version at the end of the month. Questions revolve around individuals’ attitudes about the US economy. Consumer sentiment is viewed as a proxy for the strength of consumer spending.

The theoretical gain or loss on open positions valued at current market rates, as determined by the broker in its sole discretion. Unrealised gains/losses become profits/losses when the position is closed.

An uptick is any new price quote that is higher than the preceding quote. An asset experiences an uptick only when enough buy orders are placed to drive the price of the asset higher. Conversely, a downtick is a lower quote.

In the US, a regulation whereby a security may not be sold short unless the last trade prior to the short sale was at a price lower than the price at which the short sale is executed.

US Oil is another name for West Texas Intermediary (WTI) Crude Oil. WTI is the benchmark for Atlantic basin crude oils because of its location in the Gulf coast and central US. The US oil is traded on the New York Mercantile Exchange (NYMEX).

The US prime rate is the short-term interest rate charged by US banks to loan money to their most trusted customers. The US prime rate is published as an average by the Wall Street Journal when 23 of the 30 largest US banks change their prime rates.

The US 30 index represents the value of the 30 largest US-registered corporations, also known as the Dow Jones index. It is one of the most-watched indices in the world because of the short list of companies it represents.

The value date is the date on which counterparts to a financial transaction agree to settle their respective obligations. At the value date, the value of an account, transaction, or asset goes into effect. The value date is more commonly called the maturity date.

Funds traders must hold in their accounts to have the required margin necessary to cope with market fluctuations.

Shows the market's expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. The VIX is a widely used measure of market risk and is often referred to as the ‘investor fear gauge.’

An active market that is experiencing rapid price changes, that can present trade opportunities.

A wedge chart pattern is a chart formation resembling a wedge formed by a narrowing price range over time, either ascending or descending. In a wedge pattern two trend lines are moving in the same direction but narrowing in width. Eventually a breakthrough occurs to end the pattern.

Whipsaw is a slang term used by traders to describe the condition of a highly volatile market in which sharp price movement is quickly followed by a sharp reversal. Often in a whipsaw market, the price jumps up and down with no apparent rhythm.

Wholesale prices measure the change in prices paid by retailers for finished goods, which are then sold at a markup by retailers to consumers. This means wholesale prices will typically rise and signal inflationary pressures occurring before that pressure is seen in rising headline retail costs. A rise in wholesale prices is most often caused by tariffs and international conflict affecting imports.

Where a limit order has been requested but not yet filled.

Acronym for The Wall Street Journal.

Symbol for Silver Index.

Symbol for Gold Index.

Symbol for AMEX Composite Index.

A billion units.

The percentage return from an investment.

Abbreviation for year over year.

The yuan is the base unit of currency in China. The renminbi is the name of the currency in China, where the Yuan is the base unit.