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Financial Glossary
The language of FX, lending and digital finance, explained in plain English. Search, filter by topic, or browse A–Z, then open any term for the full definition.
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Showing 416 of 416 terms
Account Deficit
A negative balance of trade or payments, where a country’s imports and outgoing payments exceed its exports and incoming payments.
Read full definitionAccrual
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.
Read full definitionACH (Automated Clearing House)
A network used for electronic payments and money transfers. ACH is popular in the United States for domestic transactions, including direct deposit, payroll and bill payments.
Read full definitionAdjustment
The impact on a share price of a company paying out dividends on the ex-date. The price takes a slight dip because money flows out of the company to shareholders, with the dividend adjustment occurring at the close of business before the ex-dividend date.
Read full definitionAggressive
A description of traders and/or price action acting with conviction.
Read full definitionAnnual General Meeting (AGM)
A formal, legally mandated gathering where a company’s shareholders meet with the board of directors and executives once a year to discuss financial performance and strategic direction. Publicly listed companies must hold AGMs to comply with corporate governance laws, while rules for private companies vary by jurisdiction.
Read full definitionAppreciation
An increase in the value of one currency relative to another; if EUR/USD rises from 1.10 to 1.15, the euro has appreciated against the dollar. A unit of the strengthened currency now buys more of the other currency.
Read full definitionArbitrage
The simultaneous buying and selling of the same currency in different markets to profit from small price differences. The strategy exploits temporary inefficiencies in FX markets.
Read full definitionAsian Central Banks
The monetary authorities of Asian countries. They have become increasingly active in major currencies as they manage growing pools of foreign currency reserves arising from trade surpluses, and their market interest can influence currency direction in the short term.
Read full definitionAsk Price
The price at which a dealer is willing to sell a currency, also called the offer. In a currency pair quote it is the higher of the two prices, representing what a buyer must pay to purchase the base currency.
Read full definitionAsset
An economic resource that individuals, companies and other organisations can own or control to generate profit or future benefit. In FX the term frequently refers to a currency or currency pair, and assets also underpin the pricing of derivative products such as CFDs and options.
Read full definitionAsset Finance
Funding that lets a business acquire or release cash from equipment, vehicles or machinery, through leasing, hire purchase or refinancing, spreading the cost over the asset’s useful life.
Read full definitionAt Best
An instruction given to a dealer to buy or sell at the best rate that can be obtained at a specific time.
Read full definitionAt or Better
An instruction given to a dealer to buy or sell at a specific price or better.
Read full definitionAUS 200
A term for the Australian Securities Exchange index (ASX 200), which tracks the top 200 companies by market capitalisation listed on the Australian stock exchange.
Read full definitionAussie
Trader shorthand for the AUD/USD (Australian dollar/US dollar) currency pair. Also known as ‘Oz’ or ‘Ozzie’.
Read full definitionBACS
Bankers’ Automated Clearing Services, the process for making sterling payments via domestic UK banks. Mostly used for direct credits and direct debits, BACS payments tend to take three business days to clear.
Read full definitionBank for International Settlements (BIS)
A global financial institution owned by central banks, based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City. Its original members were Switzerland, Germany, Belgium, France, Britain, Italy, the United States and Japan.
Read full definitionBank of China
One of China’s four largest state-owned commercial banks. It maintains close relations with the People’s Bank of China in management, administration and cooperation across several areas.
Read full definitionBank of England (BoE)
The central bank of the United Kingdom, acting as the government’s bank and lender of last resort. Headquartered in the City of London, it issues currency and oversees monetary policy, making it the UK equivalent of the US Federal Reserve.
Read full definitionBar Chart
A chart type built from four significant points: the high and low prices, which form the vertical bar; the opening price, marked with a horizontal line to the left of the bar; and the closing price, marked with a horizontal line to the right.
Read full definitionBase Currency
The first currency in a currency pair (e.g. EUR in EUR/USD). The base currency is quoted against the quote currency, and its value is always one unit.
Read full definitionBase Rate
The interest rate a central bank, such as the Bank of England or Federal Reserve, charges to lend money to commercial banks. Adjusting the base rate helps a central bank regulate the economy by encouraging or discouraging spending as required.
Read full definitionBasing
A chart pattern showing when demand and supply of a product are almost equal, resulting in a narrow trading range and the merging of support and resistance levels.
Read full definitionBasis Point (bps)
A unit of measurement equal to 1/100th of 1%, or 0.01%, pronounced ‘bips’. Basis points are commonly used to describe small movements in interest rates, bond yields and exchange rates.
Read full definitionBear Market
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 traded, including currencies and commodities. It is the opposite of a bull market.
Read full definitionBIC (Bank Identifier Code)
Also known as a SWIFT code, a standard format used to identify a specific bank during an international transaction.
Read full definitionBid Price
The price at which a dealer will buy a currency. In a currency pair quote it is the lower of the two prices, representing what a seller receives when selling the base currency.
Read full definitionBid-Ask Spread
The difference between the price at which the market will buy a currency (bid) and the price at which it will sell (ask). A tighter spread means lower transaction costs.
Read full definitionBlockchain Settlement
Completing a transaction by recording the transfer of value on a blockchain. It can move funds in minutes, around the clock, rather than over the days that traditional rails sometimes take.
Read full definitionBollinger Bands
A technical analysis tool consisting of a band plotted two standard deviations either side of a simple moving average, used to find support and resistance levels.
Read full definitionBonds
A fixed-income investment representing a loan made by an investor to a borrower, typically corporate or governmental. It works like an I.O.U. between lender and borrower that includes the details of the loan and its payments.
Read full definitionBRC Shop Price Index
A UK price indicator from the British Retail Consortium, a trade association of around 170 retail members, tracking changes in the prices of goods sold in shops.
Read full definitionBroker
A third party coordinating the sale of financial securities between sellers and buyers. Exchanges only accept orders from their members, so traders and investors use brokers as intermediaries; brokers are compensated through commissions, fees or payment from the exchange.
Read full definitionBuck
A slang term for one US dollar. Its use traces back to 1748, forty-four years before the first US dollar was minted.
Read full definitionBull Market
Any market in which prices are rising or expected to rise imminently. Typically applied to stock markets, the term can also be used for anything traded, including currencies and commodities. It is the opposite of a bear market.
Read full definitionBulls
Traders who expect prices to rise and who may be holding long positions.
Read full definitionBundesbank
The Federal Republic of Germany’s central bank, established in 1957 and the most influential member of the European System of Central Banks. Like the European Central Bank, it is based in Frankfurt.
Read full definitionBuy
Taking a long position on a product.
Read full definitionCable
The GBP/USD (British pound/US dollar) pair. It earned its nickname because the rate was originally transmitted to the US via a transatlantic cable from the mid-1800s, when the pound was the currency of international trade.
Read full definitionCAD (Canadian Dollar)
The currency of Canada, managed and overseen by the Bank of Canada and also known as the Loonie or Funds. It is frequently traded in pairs such as USD/CAD, GBP/CAD and EUR/CAD.
Read full definitionCall Option
A financial contract giving 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.
Read full definitionCandlestick Chart
A chart type used to analyse a market’s price. Unlike bar charts, candlestick charts show the market’s high, low, open and closing price within each period.
Read full definitionCapital Gains
The profit earned from selling an asset, such as stocks, bonds or real estate, for more than its purchase price. Capital gains are taxable and classified as short-term or long-term depending on the holding period.
Read full definitionCapitulation
The act of surrendering or giving up. In financial markets it describes the point at which investors and traders stop trying to recapture lost gains or maintain positions in the face of falling or rising prices.
Read full definitionCarry Trade
A strategy where traders borrow in a low-interest-rate currency and invest in a higher-interest-rate currency to profit from the interest rate differential.
Read full definitionCash Market
A marketplace where securities are paid for and delivered immediately at the point of sale. A stock exchange is a cash market because investors receive their shares as soon as they have paid for them.
Read full definitionCash Transfer
The movement of funds from one entity to another. When moving cash from one country to another, the term is often used interchangeably with currency transfer, foreign exchange and currency conversion.
Read full definitionCentral Bank
The monetary authority of a country, such as the Federal Reserve or European Central Bank, with special authority to issue government-backed currency. Central banks formulate monetary policy, regulate member banks and influence exchange rates through interest rate decisions and currency intervention.
Read full definitionCHAPS
Clearing House Automated Payment System, a faster way of making sterling payments that are usually cleared on the same working day.
Read full definitionChartist
A trader who analyses a market’s price history to determine future price trends, using a range of analytical tools and indicators to conduct technical analysis on a price chart.
Read full definitionChoppy
A market in which an asset’s price shows no clear trend but instead experiences many smaller fluctuations.
Read full definitionCleared Funds
The balance in a trading account that is ready to be traded with. Once funds have cleared they are free from any obligation and can be used to make a trade or be withdrawn; pending funds limit what a trader can do.
Read full definitionClearing House
An organisation, institution or third party that settles a financial obligation between a buyer and seller, ensuring all parties honour and settle the agreements they have committed to.
Read full definitionClosed Position
A trade that is no longer active, closed by trading in the opposite direction to the one in which it was opened. Closing a position locks in its final profit or loss.
Read full definitionClosing Price
A market’s final price level before it closes for the day, used as the price level shown on a typical line chart.
Read full definitionCollateral
Something pledged as security for the repayment of a loan, which can be forfeited in the event of default. Examples include real estate, vehicles, cash and investments.
Read full definitionCommercial Mortgage
A long-term loan secured against business or investment property. It is used to buy premises or refinance existing property, with the building serving as collateral.
Read full definitionCommission
A fee charged for buying or selling a product.
Read full definitionCommodity Trading Advisor (CTA)
A type of financial advisor that only supplies advice on commodities trading, typically the buying and selling of futures contracts, commodity options or swaps.
Read full definitionCompliance
Adherence to the laws, regulations, guidelines and specifications relevant to a business. In the FX market it involves following financial services rules and guidelines.
Read full definitionComponents
The dollar pairs that make up a cross (EUR/USD and USD/JPY are the components of EUR/JPY). Selling a cross through the components refers to selling the dollar pairs in alternating fashion to create a cross position.
Read full definitionCOMPX
The symbol for the NASDAQ Composite Index.
Read full definitionConsolidation
A period of range-bound activity after an extended price move, in which a market neither continues nor counters the longer-term trend.
Read full definitionConstruction Spending
The amount of money governments or businesses have spent on construction, labour and materials over a monthly period, covering residential and non-residential construction as well as engineering costs.
Read full definitionContagion
The tendency of an economic crisis or sell-off to spread from one country or market to another. Exchange rates, stock prices and sovereign bond prices can all be quickly affected as capital flows away from the areas involved.
Read full definitionContract for Difference (CFD)
A financial contract in which you agree to exchange the difference in price between the opening and closing of a trade on a particular asset. CFDs enable traders to speculate on whether a market will rise or fall and profit from price movement without owning the underlying asset.
Read full definitionContract Size
The standardised quantity of the underlying asset represented by a single contract or lot, such as 100,000 units of currency in a standard FX lot.
Read full definitionControlled Risk
A position whose maximum possible loss is capped at a certain level, typically through a guaranteed stop-loss order, giving the trader full control of risk on the trade.
Read full definitionCorporate Action
An effort made by a public company to alter or change its securities, whether equity or debt. Corporate actions are agreed by the company’s board of directors with authorisation from shareholders.
Read full definitionCorporates
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.
Read full definitionCounterparty
One of the participants in a financial transaction.
Read full definitionCountry Risk
Risk associated with a cross-border transaction, including but not limited to legal and political conditions.
Read full definitionCovenant
A condition written into a loan agreement that the borrower must meet, such as maintaining a minimum cash level or financial ratio. Breaching a covenant can trigger a review or repayment of the facility.
Read full definitionCPI (Consumer Price Index)
The most popular reference for day-to-day inflation, calculated as a measurement of price change using a weighted average basket of consumer goods and services purchased by households.
Read full definitionCrater
Trader slang for a market that is ready to sell off hard.
Read full definitionCross Rate
An exchange rate between two currencies that does not involve the US dollar. EUR/GBP is a cross rate because it directly quotes euros against pounds without referencing the dollar.
Read full definitionCross-Border Payment
A transaction involving a money transfer between two entities in different countries. These payments typically involve currency conversion and are subject to foreign exchange regulations.
Read full definitionCup and Handle
A technical analysis pattern named for its resemblance to a tea cup: a shallow, rounded saucer with a downward-trending handle extending from the right-hand side. The formation can occur over anything from several weeks to an entire year.
Read full definitionCurrency
Money underpinned by the legal tender system of a particular country or economic area, used as a medium of exchange for goods and services. Paper currency and coins are issued by governments and central banks and usually accepted at face value as payment.
Read full definitionCurrency Conversion Fee
A fee charged for converting one currency to another, commonly encountered in international transactions and a significant consideration in foreign exchange services.
Read full definitionCurrency Converter
An online tool that shows how much your money is worth in a different currency at the current exchange rate.
Read full definitionCurrency Futures
Exchange-traded contracts specifying the price at which a currency will be bought or sold and the date of the exchange; the holder at expiry is legally obliged to transact at the contracted price and date. Unlike privately negotiated, customisable forwards, futures are standardised, highly regulated and priced off a future potential market price rather than the current spot price.
Read full definitionCurrency Pair
Two currencies quoted against each other, such as GBP/USD. The first is the base currency and the second the quote currency; the price shows how much of the quote currency one unit of the base is worth.
Read full definitionCurrency Risk
The danger of losing capital due to changes in foreign exchange prices, including the risk to a portfolio when currency markets experience strong moves.
Read full definitionCurrency Symbols
The three-letter codes that represent specific currencies, such as USD for the US dollar.
Read full definitionCurrency Transfer
The process of moving funds from one location, and therefore one currency, to another.
Read full definitionCurrent Account
A record of a nation’s global transactions, covering imports and exports of goods and services, payments to and from investments abroad, and transfers such as foreign aid and remittances. Together with the capital account, it makes up a nation’s balance of payments.
Read full definitionCustody
The secure holding and safekeeping of digital assets on a client’s behalf, including the management of the private keys that control them. Institutional custody adds controls, insurance and segregation of assets.
Read full definitionDay Order
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, the order is cancelled. It is the most common of several types of limit order, alongside good-til-cancelled and fill-or-kill orders.
Read full definitionDay Trader
A speculator who takes positions in products and then liquidates them prior to the close of the same trading day.
Read full definitionDay Trading
The practice of opening and closing positions within a single trading day to profit from short-term price movements, avoiding overnight positions.
Read full definitionDCLG UK House Prices
A monthly survey from the UK Department for Communities and Local Government using a very large sample of completed house sales to measure price trends in the UK real estate market.
Read full definitionDeal
Another name for a trade: any FX transaction. The most common deal is a spot contract, while others include forward contracts, window forwards, limit orders, stop-loss orders and FX swaps.
Read full definitionDealer
A financial institution, typically a bank, that trades foreign currencies on its own behalf in volumes large enough to help maintain market liquidity and regulate bid and ask quotes.
Read full definitionDefend a Level
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.
Read full definitionDeficit
When more money is spent than received, whether in imports versus exports, expenses versus revenues, or liabilities versus assets. Governments may intentionally run deficits to lift countries out of recession or create future economic growth.
Read full definitionDelisting
The removal of a quoted security from an exchange, which can be either voluntary or involuntary.
Read full definitionDeliverable Forward
A forward contract that results in the physical delivery of currencies on the settlement date, with both parties exchanging the actual currencies as agreed.
Read full definitionDeliverable FX
A type of foreign exchange transaction where the underlying currencies are physically exchanged following a contract. Common in international trade and investment transactions.
Read full definitionDelta
A ratio comparing the change in an option’s price to the change in the price of its underlying asset. If an option’s delta is 0.50 and the underlying rises by $1 per share, the option’s price will rise by about $0.50 per share.
Read full definitionDeposit Rate
The interest rate paid by financial institutions on cash deposits such as checking, savings and money market accounts, in exchange for the institution’s use of that cash while on deposit.
Read full definitionDepreciation
A decrease in the value of a currency relative to another. If EUR/USD falls from 1.15 to 1.10, the euro has depreciated against the dollar.
Read full definitionDerivative
A financial security whose value derives from one or more underlying assets. Common derivatives are futures, forwards, options and swaps; they are often traded over the counter, can be exchange-traded and are frequently leveraged.
Read full definitionDiscount Rate
The interest rate an eligible depository institution is charged to borrow short-term funds directly from the Federal Reserve.
Read full definitionDivergence
When a security’s price deviates from a technical indicator, for example the indicator signals bullish conditions while the price falls, or signals bearish conditions while the price rises.
Read full definitionDividend
A share of profits and retained earnings that a company pays out to shareholders, usually annually, after reinvesting a portion in the business. Often regarded as a measure of a company’s health and good management.
Read full definitionDovish
A description of monetary policy that advocates low interest rates aimed at reducing unemployment and stimulating economic growth. It is the opposite of hawkish.
Read full definitionDow Jones Industrial Average (DJIA)
An equity index tracking the performance of thirty large publicly traded firms quoted on the NYSE and NASDAQ. Also called the DJIA, it is referred to as the US30 on many trading platforms.
Read full definitionDowntrend
Price action consisting of lower lows and lower highs.
Read full definitionDrawdown
The peak-to-trough decline in a currency or portfolio value over a specific period, measuring the maximum loss from a recent high point.
Read full definitionDry Powder
The cash reserve or liquid securities an investor keeps readily on hand to cover potential future costs and obligations, including any marketable securities that can be liquidated on short notice.
Read full definitionDXY
The symbol for the US Dollar Index, which measures the dollar against a basket of major currencies.
Read full definitionEarnings Per Share (EPS)
A measure of profitability calculated as the portion of a company’s net income allocated to each outstanding share of common stock. EPS is a key ratio in fundamental analysis and feeds into metrics such as the price-to-earnings ratio and return on equity.
Read full definitionECB (European Central Bank)
The central bank for the euro and the euro area, headquartered in Frankfurt. It administers monetary policy within the Eurozone, which comprises 19 EU member states and is one of the world’s largest trading blocs.
Read full definitionEconomic Indicator
Economic data used by analysts, traders and investors to identify investment and trading opportunities, usually delivered at a macroeconomic level to define the overall health of an economy.
Read full definitionEFT (Electronic Funds Transfer)
The electronic transfer of funds from one account to another, including direct debits, online payments and wire transfers.
Read full definitionEmerging Markets
Economies that are developing toward advanced-market status, often offering higher growth alongside greater currency, political and liquidity risk. Trading with them frequently calls for tailored FX and payment solutions.
Read full definitionEnd of Day Order (EOD)
An order to buy or sell at a specified price that remains open until the end of the trading day, typically 5pm New York time.
Read full definitionEquity
The total market value of a trading account, including the initial deposit and any unrealised profits or losses from open positions. Equity is a key metric for assessing account health and plays a crucial role in risk management and margin calculations.
Read full definitionEST (Eastern Standard Time)
The time zone five hours behind UTC/GMT, used during standard time in North America, Central America and the Caribbean. Often called the Eastern Time Zone, it is the reference for many US market hours.
Read full definitionESTR (Euro Short-Term Rate)
The interest rate benchmark for overnight borrowing costs across the euro area, calculated and published by the European Central Bank as a replacement for EONIA and EURIBOR.
Read full definitionESTX50
A name for the Euronext 50 index.
Read full definitionEURIBOR
The Euro Interbank Offered Rate, an interest rate benchmark for the eurozone calculated from the average rates eurozone banks offer each other on unsecured short-term loans of various maturities under one year. Quoted daily, EURIBOR rates are used in many financial products, including OTC derivatives.
Read full definitionEuro
The currency of the Eurozone.
Read full definitionEuropean Monetary Union (EMU)
An umbrella name for the group of policies that aims to coordinate economic and fiscal policies across EU member states.
Read full definitionEurozone Labour Cost Index
Measures the annualised rate of inflation in the compensation and benefits paid to workers and is seen as a primary driver of overall inflation.
Read full definitionEurozone OECD Leading Indicator
A monthly OECD index measuring overall economic health by combining ten leading indicators, including average weekly hours, new orders, consumer expectations, housing permits, stock prices and interest rate spreads.
Read full definitionEx-Dividend
A share bought in which the buyer forgoes the right to receive the next dividend, which is instead given to the seller.
Read full definitionExchange Rate
The rate at which one currency can be exchanged for another, the value of one currency expressed in terms of a second. Rates fluctuate constantly in the open market and can be free-floating or fixed.
Read full definitionExpiration Date
The last day a derivatives contract, such as an option or future, is valid. Before or on this day, traders decide what to do with their position.
Read full definitionExporter
A person, company or country that sends goods or services to a counterparty in another country, moving goods produced in one country to another to trade or sell.
Read full definitionExtended
A market that is thought to have travelled too far, too fast.
Read full definitionFactory Orders
The dollar level of new orders for both durable and nondurable goods. This report is more in-depth than the durable goods report released earlier in the month.
Read full definitionFaster Payments
A UK system for faster payment of amounts up to £10,000 (lower for some banks), with funds usually credited within minutes.
Read full definitionFederal Reserve (Fed)
The central banking system of the United States, created by the Federal Reserve Act on 23 December 1913 after a series of financial shocks showed the need for central control of monetary policy to prevent future crises.
Read full definitionFiat Currency
Money that holds value because a government maintains it as legal tender. Created and regulated by central banks, fiat currency is used for transactions within the national economy under the domain of its backing government.
Read full definitionFigure
Refers to the price quotation of ‘00’ in a price such as 1.2600-03, read as ‘figure-three’. If someone sells at 1.2600, traders say ‘the figure was given’ or ‘the figure was hit’.
Read full definitionFill
When an order has been fully executed.
Read full definitionFill or Kill (FOK)
An instruction sent to a broker or trading venue that must be carried out immediately and in its entirety; if either stipulation cannot be met, the order is cancelled. No partial or delayed execution is allowed.
Read full definitionFinancial Analyst
A financial professional with expertise in evaluating investments and securities.
Read full definitionFinancial Contract
A legally binding document between two or more parties that defines and governs their rights and responsibilities, usually involving the exchange of money, goods, services or promises to trade them. It is enforceable when it meets the law’s requirements.
Read full definitionFirst In First Out (FIFO)
An asset-management and valuation method where assets acquired or produced first are used, sold or disposed of first.
Read full definitionFlat Market
When a price neither rises nor falls significantly for a period of time, often on low trading volume or when gains in some securities are offset by losses in others. In forex, a flat market occurs when a currency pair fails to move significantly up or down.
Read full definitionFlat or Square Position
Dealer jargon for a position that has been completely reversed, for example buying $500,000 then selling $500,000, leaving purchases and sales in balance and the dealer with no open position.
Read full definitionFlat Reading
Economic data matching the previous period’s level, unchanged.
Read full definitionFloating Exchange Rate
A currency price set by the foreign exchange market based on supply and demand relative to other currencies. Long-term changes reflect differences in interest rates and relative economic strength, while short-term moves reflect day-to-day supply and demand, speculation and events. Most major global currencies float.
Read full definitionFollow-Through
Fresh buying or selling interest after a directional break of a particular price level. A lack of follow-through usually indicates a move will not be sustained and may reverse.
Read full definitionFOMC Minutes
A detailed record of Federal Open Market Committee meetings, released three weeks after each meeting. The minutes give concise insight into the monetary policy stances of committee members, and analysts comb them to judge whether members are striking hawkish or dovish tones.
Read full definitionForeign Exchange Market (Forex, FX)
The global market for the movement of capital from one currency to another. The FX market is unique for its global nature, the volume of transactions taking place, the myriad factors affecting exchange rates and the use of leverage to enhance profit and loss.
Read full definitionForex Chart
A graphic representation of two currencies’ relative price movements over time, usually with the time period on the x-axis and the exchange rate on the y-axis. Available in bar, candlestick and line formats, charts help technical analysts identify patterns and trends that could indicate entries, continuations, reversals and exits.
Read full definitionForex Scalping
A style of day trading where currency pairs are bought or sold with very short holding times, from seconds to minutes, in the hope of making several quick profits. Gains are usually small, around 5 to 20 pips per trade, though traders can enlarge position sizes to enhance them.
Read full definitionForex Signal System
A set of analyses based on charting tools, technical analysis or news events that traders use to decide whether to buy or sell a currency pair. Systems can be manual, with the trader interpreting signals, or automated, with software taught to find and interpret them.
Read full definitionForward Contract
An agreement to exchange a set amount of one currency for another at a fixed rate on a future date. It locks in today’s rate, protecting a business from adverse currency moves before a payment falls due.
Read full definitionForward Points
The amount added to or subtracted from the spot rate to price a forward contract. They reflect the interest-rate difference between the two currencies over the contract period.
Read full definitionForward Rate
The rate at which two currencies can be exchanged on a pre-set future date.
Read full definitionFRA40
A benchmark index containing 40 of the biggest companies on the Euronext Paris exchange, commonly referred to as the French 40. Banking and oil equipment are the heaviest sectors, and foreign investors own nearly half of all shares.
Read full definitionFTSE 100
An index of the 100 companies with the highest market capitalisation on the London Stock Exchange, many of them international. The FTSE 250 covers the next largest 250 companies and the FTSE 350 combines both; these are seen as better indicators of the UK economy because they contain fewer international companies.
Read full definitionFund
An investment vehicle that pools investors’ money to invest in securities such as stocks, bonds, currencies, property or commodities. Funds may aim to deliver a regular income or capital growth.
Read full definitionFundamental Analysis
Analysis of the economic and political factors that influence prices, from the overall health of an industry or country to company-specific details such as management decisions, revenue and profit. For currencies this includes interest rates, inflation, GDP growth and central bank policy, and it can be applied to indices, stocks, forex and commodities.
Read full definitionFX Exposure
The degree to which a business’s financial results are affected by exchange-rate movements. It arises from foreign-currency sales, purchases, assets, liabilities or forecast cash flows.
Read full definitionFX Option
The right, but not the obligation, to buy or sell currency at a specified rate (the strike price) on or before a specific date. Options provide flexibility in currency hedging strategies.
Read full definitionFX Swap
The simultaneous purchase and sale of the same amount of a currency for two different value dates, typically a near leg at spot and a far leg forward. It is used to roll a hedge forward or manage short-term cash-flow timing.
Read full definitionG7
The Group of Seven, an international governmental organisation comprising France, Germany, Italy, Japan, the United Kingdom, Canada and the United States.
Read full definitionG8
The Group of Eight, an international governmental political forum that existed from 1997 until 2014, having originated in 1975 as the Group of Six after France held the first summit.
Read full definitionGapping
When the price of a security jumps to a new price not directly adjacent to the previous one, creating a gap between ticks on a price chart. Gapping often occurs when liquidity is low and the price is heavily affected by lighter trading.
Read full definitionGearing Ratio
A financial ratio comparing owner’s equity (or capital) to the company’s debt and borrowed funds. It measures financial leverage, showing how much of a firm’s operations are funded by equity capital versus debt financing.
Read full definitionGER40
An index of the top 40 companies by market capitalisation listed on the German stock exchange, another name for the DAX.
Read full definitionGiven
Refers to a bid being hit, or selling interest.
Read full definitionGiving It Up
When a technical level succumbs to a hard-fought battle.
Read full definitionGMT (Greenwich Mean Time)
The reference point for all time on Earth, chosen in 1884 due to the maritime importance of Greenwich, London. FX market hours are often quoted in GMT.
Read full definitionGoing Long
The purchase of a stock, commodity or currency for investment or speculation, with the expectation of the price increasing.
Read full definitionGoing Short
The selling of a currency or product not owned by the seller, with the expectation of the price decreasing.
Read full definitionGold Bullion
A large quantity of physical gold of at least 99.5% purity, cast in bars, ingots or coins. Investors often buy bullion as a tangible alternative investment and safe-haven asset to hedge risk against other market exposure.
Read full definitionGold Certificate
A certificate of ownership that gold investors use to buy and sell the commodity instead of handling transfer and storage of the physical gold itself.
Read full definitionGold Contract
The standard unit for trading gold on the futures exchange: one contract is equal to 100 troy ounces.
Read full definitionGood ’Til Cancelled Order (GTC)
An instruction to execute a trade at a set rate that remains active in the market until it is filled or the trader cancels it. Brokerages typically limit how long a GTC order can remain open, often to 90 days.
Read full definitionGood ’Til Date Order (GTD)
An instruction to execute a trade that remains open until a future date specified by the trader; once that date is reached, the order is cancelled if it has not already been filled.
Read full definitionGood for Day
An order that will expire at the end of the day if it is not filled.
Read full definitionGross Domestic Product (GDP)
A measure of the market value of all final goods and services produced within a country or economic area in a specific period, usually a quarter or a year. GDP gauges an economy’s size and health and allows comparison between economies over time.
Read full definitionGross National Product (GNP)
An estimate of the total value of all products and services produced by a country’s residents in a specific period, often a financial quarter or year. It differs from GDP, which counts all output produced within a country’s borders regardless of who owns the means of production.
Read full definitionGuaranteed Order
An order type that protects a trader against the market gapping, guaranteeing to fill the order at the price asked.
Read full definitionGuaranteed Stop
A stop-loss order that ensures a position is closed at the exact price specified, regardless of market volatility, slippage or gapping. Guaranteed stops are often free to attach, but brokers charge a premium if the order is triggered, reflecting the risk they take on.
Read full definitionGunning
Traders pushing the market to trigger known stops or technical levels.
Read full definitionHandle
Every 100 pips in the FX market starting with 000.
Read full definitionHawkish
A description of monetary policymakers who believe higher interest rates are needed, usually to combat inflation or restrain rapid economic growth. It is the opposite of dovish.
Read full definitionHedging
Taking an offsetting position to reduce the impact of currency or price movements on a business. The aim is to protect margins and make cash flows more predictable, not to speculate.
Read full definitionHit the Bid
To sell immediately at the current bid price, the highest price a buyer is willing to pay. The phrase comes from the bid-ask spread, the gap between buyers’ and sellers’ prices.
Read full definitionHK50/HKHI
Names for the Hong Kong Hang Seng index.
Read full definitionIBAN (International Bank Account Number)
An international standard for identifying bank accounts across national borders with minimal risk of transcription errors.
Read full definitionIBOR (Interbank Offered Rate)
A type of interest rate benchmark representing an average of the rates banks offer each other for loans of various maturities.
Read full definitionIlliquid Market
A market in which assets are difficult to sell due to a lack of interested buyers or available assets, often with large bid-ask spreads. Sellers may be forced to lower prices or hold assets longer than preferred to convert them to cash without losing significant value.
Read full definitionImplied Volatility
The market’s expectation of future volatility derived from option prices. Higher implied volatility suggests greater expected price swings.
Read full definitionIndex Components
The individual companies listed on a stock index, also known as constituents; for example, Apple is a component of the Nasdaq. There is no set number of components an index must have.
Read full definitionIndustrial Production
A measure of the output of an economy’s industrial sector, which includes manufacturing, mining, utilities and, at times, construction.
Read full definitionInflation
The decline of a currency’s purchasing power over time, calculated by measuring the cost of a basket of widely consumed goods and services. As prices rise, money buys less, increasing living costs and potentially reducing living standards.
Read full definitionInitial Margin
The deposit required to open a position, usually expressed as a percentage of the total trade value. A trader seeking £100,000 of FX exposure might post £10,000 as a 10% initial margin requirement while still gaining the full exposure.
Read full definitionInterbank Rate
The rate at which banks transact foreign currency with other banks. Interbank rates are typically better than those offered to retail customers and are used as the basis for setting them; like all FX rates, they fluctuate constantly.
Read full definitionInterest Rate
The percentage charged above a lender’s principal for the use of its capital. Central banks set base interest rates to manage their domestic economies, and these become the benchmark for borrowing and investment rates across the banking system.
Read full definitionInternal Rate of Return (IRR)
A financial metric estimating the profitability of an investment by finding the discount rate that makes the net present value of future cash flows equal to zero. In simple terms, it is the annualised return an investment is expected to generate over its lifetime.
Read full definitionIntervention
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.
Read full definitionInvoice Finance (Factoring)
Borrowing against unpaid invoices to release cash tied up in receivables. The lender advances a percentage of each invoice up front and collects, or is repaid, when the customer pays.
Read full definitionINX
The symbol for the S&P 500 index.
Read full definitionIPO (Initial Public Offering)
A private company’s initial offer of stock to the public.
Read full definitionISM Non-Manufacturing (Services PMI)
A monthly index assessing the performance of US services companies, based on surveys of more than 400 purchasing and supply managers in non-manufacturing firms.
Read full definitionJapanese Economy Watchers Survey
Measures the mood of businesses that directly serve consumers, such as waiters, drivers and beauticians. Readings above 50 generally signal improvements in sentiment.
Read full definitionJapanese Machine Tool Orders
The total value of new orders placed with machine tool manufacturers, a measure of demand for machine makers and a leading indicator of future industrial production. Strong data generally signals manufacturing is improving and the economy is expanding.
Read full definitionJPN225 (Nikkei)
A Japanese index based on the top 225 companies traded on the Tokyo Stock Exchange, commonly called the Nikkei. Price-weighted and calculated daily since 1950, it operates in yen and shows a positive correlation to the currency: when the yen depreciates, listed Japanese stocks tend to rise. It is known for its day-to-day volatility.
Read full definitionKeep the Powder Dry
To limit trading due to inclement conditions. In choppy or extremely narrow markets, it may be better to stay on the sidelines until a clear opportunity arises.
Read full definitionKiwi
The colloquial name for the New Zealand dollar (NZD), coined after the flightless bird featured on the nation’s $1 coin. In forex pairs the NZD is often referred to as the Kiwi.
Read full definitionKnock-In Option
A type of options contract that only becomes active once the underlying reaches a predetermined price; until then the contract is inactive.
Read full definitionKnock-Out Option
An option that expires, or ‘knocks out’, if the underlying asset surpasses or falls below a certain price. When the knock-out level trades, the option ceases to exist and any hedging may have to be unwound.
Read full definitionKYC (Know Your Customer)
A standard compliance process for financial institutions to verify the identity of their clients, helping prevent fraud, money laundering and terrorist financing.
Read full definitionLast Dealing Day
The last day, and with the last dealing time, the final moment, you may trade a particular product.
Read full definitionLast Trading Day
The final day you can trade or close out a derivatives position, one day prior to the contract’s expiration date. Once it passes, the derivative is no longer tradable and the settlement process begins, with delivery or cash settlement the following day.
Read full definitionLevel
A price zone or particular price that is significant from a technical standpoint or based on reported orders or option interest.
Read full definitionLeverage
The use of borrowed capital, such as margin, to increase the potential return of an investment. In FX it allows traders to open a much larger position with a smaller amount of actual capital.
Read full definitionLeveraged Names
Short-term traders, referring largely to the hedge fund community.
Read full definitionLiability
Sums owed by a person or company, settled through the transfer of cash, goods or services and recorded against assets on the balance sheet. Liabilities include loans, accounts payable, mortgages, deferred revenues, bonds, warranties and accrued expenses; the term can also refer to a legal or regulatory obligation.
Read full definitionLIBOR
The London Interbank Offered Rate, formerly a leading interest rate benchmark set daily from estimates by up to 18 global banks across multiple currencies, including GBP, USD and EUR. It has been phased out in favour of risk-free rates such as SOFR, SONIA and ESTR.
Read full definitionLimit Order
An instruction to buy or sell at a specific target price or better. Unlike a market order, which executes immediately at the current price, a limit order only triggers when the market reaches the predefined level, giving more control over execution.
Read full definitionLiquid Market
A market with a high volume of activity, giving traders ample opportunity to buy or sell large quantities at any time and for low transaction costs.
Read full definitionLiquidation
The closing of an existing position through an offsetting transaction, required when there are insufficient funds, generally when a client’s funds fall below 50% of the required margin.
Read full definitionLiquidity
How easily an asset can be converted into cash, or how readily a business can meet its short-term obligations. Strong liquidity means funds are available when and where they are needed.
Read full definitionLoan-to-Value (LTV)
The size of a loan expressed as a percentage of the value of the asset securing it. A lower LTV means more borrower equity and generally lower risk and pricing for the lender.
Read full definitionLondon Session
Also known as the European session, one of the three trading sessions that keep the forex market open 24 hours a day.
Read full definitionLong Position
Buying a currency or asset in the expectation that its price will increase. In FX you go long on the base currency you purchase and short on the quote currency you sell: buying EUR/GBP means going long euros and short sterling.
Read full definitionLongs
Traders who have bought a product.
Read full definitionLoonie
The nickname for the Canadian dollar (CAD), which originated among forex traders before becoming common with the public at large. The Loonie is the seventh most traded currency in the world and the sixth most held in foreign exchange reserves; free-floating since 1970, it is sometimes denoted C$ to distinguish it from other dollar currencies.
Read full definitionLot
The standard unit amount of currency traded in forex, equal to 100,000 units of the base currency. Lot sizes are large to magnify changes in currency values, which usually occur in a matter of a few pips.
Read full definitionMacro Trader
The longest-term trader, basing decisions on fundamental analysis with holding periods from around six months to multiple years.
Read full definitionMargin
A deposit required to open and maintain a position, such as a forward contract or option. Margin serves as collateral to secure the transaction and protect against counterparty default risk.
Read full definitionMargin Call
A request for additional funds when an open hedging position moves against you and its mark-to-market loss exceeds the collateral already posted. It restores the required security buffer.
Read full definitionMark-to-Market
Revaluing an open position at the current market rate to show its present gain or loss. Hedges are marked to market so a business can see the live value of its contracts.
Read full definitionMarket Capitalisation
The total market value of a company’s outstanding shares, calculated as share price multiplied by shares outstanding. Market cap is a key indicator of a company’s size, financial strength, market position and growth potential.
Read full definitionMarket Intervention
Any action taken by a government or other body to modify or adjust a market, mainly through setting interest rates, subsidies, tariffs and industry regulations.
Read full definitionMarket Maker
A dealer who regularly quotes both bid and ask prices and is ready to make a two-sided market for any financial product.
Read full definitionMarket Order
An instruction to buy or sell immediately at the current market price. Market orders execute instantly but may not achieve the exact desired price due to market movement.
Read full definitionMaturity Date
The date a debt instrument such as a note, draft or bond becomes due, as quoted on its certificate. It can also refer to the expiration date of futures and options contracts or the date an instalment loan must be fully repaid.
Read full definitionMedley Report
Market coverage from Medley Global Advisors, a New York macro-policy consultancy serving large hedge funds, asset managers, banks and institutional investors. Its close contact with central banks and government officials worldwide gives its reports on economies, commodities and markets particular weight.
Read full definitionMerchant Cash Advance
A lump-sum advance repaid as a fixed percentage of a business’s daily card takings. Repayments flex with sales, so they rise in busy periods and fall in quieter ones.
Read full definitionMid-Market Rate
The mid-point between the bid and offer rates; customers buy currency at the offer rate and sell at the bid rate.
Read full definitionModels
Synonymous with ‘black box’: systems that automatically buy and sell based on technical analysis or other quantitative algorithms.
Read full definitionMoM (Month-over-Month)
Abbreviation for month-over-month, the change in a data series relative to the prior month’s level.
Read full definitionMomentum
A series of technical studies (such as RSI, MACD and Stochastics) that assess the rate of change in prices.
Read full definitionMomentum Players
Traders who align themselves with an intra-day trend and attempt to grab 50–100 pips.
Read full definitionMoney Transfer
The movement of money from country to country across a variety of volumes and currencies. Common types include electronic funds transfers, wire transfers, giro and money orders.
Read full definitionMT103
A standard SWIFT message format used specifically for a single customer transfer, conveying a payment order from one bank to another.
Read full definitionNASDAQ
The NASDAQ Composite, an equity index including most stocks listed on the NASDAQ stock market. Together with the Dow Jones Industrial Average and S&P 500, it is one of the three most-followed equity indices in the United States.
Read full definitionNatural Hedge
Reducing currency risk by matching revenues and costs in the same currency, so gains and losses offset without a financial instrument, for example, paying suppliers in the currency you also earn.
Read full definitionNDF (Non-Deliverable Forward)
A forward contract settled in cash rather than by physical currency delivery. NDFs are commonly used for currencies with trading restrictions or capital controls.
Read full definitionNet Position
The difference between total open long (bought) and open short (sold) positions in a given asset.
Read full definitionNon-Farm Payrolls (NFP)
The monthly change in the number of employed US workers, excluding farm employees, government staff and private household workers. Released by the Bureau of Labor Statistics, it is one of the most closely watched economic indicators, showing which sectors created or lost jobs and whether the US economy is expanding or contracting.
Read full definitionNYA.X
The symbol for the NYSE Composite index.
Read full definitionOffered
A market trading offered is attracting heavy selling interest; the pair is acting weak and/or moving lower as offers to sell keep coming into the market.
Read full definitionOffsetting Transaction
A trade that cancels or offsets some or all of the market risk of an open position.
Read full definitionOn Top
Attempting to sell at the current market order price.
Read full definitionOn/Off-Ramp
The services that convert traditional money into digital assets (on-ramp) and back again (off-ramp). They are the entry and exit points between bank accounts and the crypto ecosystem.
Read full definitionOne Cancels the Other (OCO)
A combination of two orders, commonly a stop-loss and a take-profit, where the execution of one automatically cancels the other.
Read full definitionOPEC
The Organization of the Petroleum Exporting Countries, a multinational body established in 1960 that coordinates oil production and pricing among member states such as Saudi Arabia, Iran, Iraq and Venezuela. Its goal is a stable oil market that balances supply and demand while securing fair returns for producing nations.
Read full definitionOpen Order
An order that will be executed when a market moves to its designated price, normally associated with good-til-cancelled orders.
Read full definitionOpen Position
An active trade with corresponding unrealised profit or loss that has not been offset by an equal and opposite deal.
Read full definitionOption Expiry Date
The precise date and time an option expires. The two most common expiries are 10:00am New York time (the NY cut) and 3:00pm Tokyo time (the Tokyo cut); these periods frequently see increased activity as option hedges unwind in the spot market.
Read full definitionOptions Collar
A hedging strategy that combines buying a protective option and selling another to offset the cost. It caps downside risk within a defined range while keeping some upside, often at little or no premium.
Read full definitionOrder
An instruction to transact on your behalf if a particular exchange rate or price is reached.
Read full definitionOrder Book
A list of orders for a specific market, recorded by an exchange to measure market depth and the interest of buyers and sellers at prices beyond the best available.
Read full definitionOver the Counter (OTC)
Describes any transaction that is not conducted via an exchange.
Read full definitionOvernight Position
A trade that remains open until the next business day.
Read full definitionOvernight Rate
The interest rate at which banks lend reserve balances to each other overnight. Central banks often target this rate to influence monetary policy and overall liquidity in the financial system.
Read full definitionPaid
Refers to the offer side of the market dealing.
Read full definitionPaneled
A very heavy round of selling.
Read full definitionParity
When two currencies are exchanged at a one-to-one ratio, such as the euro reaching 1:1 with the US dollar. Parity can result from shifts in interest rates, inflation or central bank policies that affect exchange rates.
Read full definitionPartial Fill
When only a portion of a limit order is executed because the price surpasses the specified level before the full amount can trade. Units are exchanged only up to the limit price, and the rest remain unfilled.
Read full definitionPatient
Waiting for certain levels or news events to hit the market before entering a position.
Read full definitionPayment Gateway
An e-commerce service that processes credit card payments for online and traditional brick-and-mortar stores, acting as an intermediary between the merchant and the payment processor.
Read full definitionPhysical Settlement
Settlement requiring the option seller to deliver the underlying asset (for a call) or buy the underlying from the option buyer at the strike price (for a put). It is more common for stocks and commodities than other securities.
Read full definitionPip
The smallest standard increment by which a currency pair moves, usually the fourth decimal place (0.0001). Pips are the common unit for quoting spreads and price movements.
Read full definitionPortfolio
A collection of investments owned by an entity.
Read full definitionPosition
The net total holdings of a given product.
Read full definitionPrice Transparency
The extent to which information on trading quantities, bid prices and ask prices is available to all participants, so everyone operates with the same information. Higher transparency supports better investment decisions and lowers barriers to entry.
Read full definitionProfit
The revenue earned from a business activity or transaction after subtracting related expenses. The most common types are gross, operating and net profit, and profitability is a crucial indicator of business health for analysts.
Read full definitionProfit and Loss (P&L)
A measure of the financial performance of a business or trading activity, calculated as revenue minus expenses over a specific period. The final figure shows whether the activity generated a profit or incurred a loss.
Read full definitionPullback
A moderate drop or slowdown in price after a continuous upward trend. Because pullbacks are considered a temporary pause before the trend resumes, they can offer an entry opportunity.
Read full definitionPurchasing Managers Index (Services)
Measures the outlook of purchasing managers in the service sector across economies such as France, Germany, the Eurozone and the UK, surveying employment, production, new orders, supplier deliveries and inventories. Readings above 50 generally indicate expansion; below 50, contraction.
Read full definitionPut Option
A financial contract giving the owner the right, but not the obligation, to sell an underlying asset at a specified price within a specific time. The buyer of a put can profit when the underlying falls in price.
Read full definitionQuantitative Easing (QE)
A dovish monetary strategy in which a central bank increases the money supply by purchasing long-term securities on the open market, aiming to stoke growth and investment when interest rates are at or near zero.
Read full definitionQuarterly CFDs
A type of future with expiry dates every three months, once per quarter.
Read full definitionQuote
The final price an asset trades for when a transaction completes. Before processing, the price is listed as a bid quote, which may change before the transaction is finalised.
Read full definitionQuote Currency
The second currency in a currency pair (e.g. USD in EUR/USD), also known as the counter currency. Its value is used to express the value of one unit of the base currency.
Read full definitionRally
A series of price increases in shares, indices or bonds over a short period, generally stoked by a considerable boost in demand and often following a period of flat or downward movement.
Read full definitionRange
When a security trades between consistent high and low price points for a given period, identified by charting the highs and lows across horizontal trendlines, for example a 52-week trading range.
Read full definitionRBA (Reserve Bank of Australia)
Australia’s central bank, responsible for monetary policy with mandates to maintain the stability of the dollar, achieve full employment and promote economic prosperity. It sets interest rates to stoke growth and keep inflation between 2% and 3% per year, governed by the Reserve Bank Board and the Payments System Board.
Read full definitionRBNZ (Reserve Bank of New Zealand)
New Zealand’s central bank, responsible for the monetary policy that manages economic conditions. Its core purpose is a stable financial system that supports growth, and it issues the local currency, the NZD.
Read full definitionReal Money
Traders of significant size, including pension funds, asset managers and insurance companies. They are viewed as indicators of major long-term market interest, as opposed to shorter-term intra-day speculators.
Read full definitionRealised Profit/Loss
The gain or loss recognised when an investment is actually sold for a higher or lower price than was paid. Buying 1,000 shares at $5 and selling at $8 realises a $3,000 profit, and only at that point does it become liable for capital gains tax.
Read full definitionRectangle Chart Pattern
A formation in which price stays within a bounded range, creating horizontal trendlines with well-defined support and resistance. Rectangles signal market indecision, a supply-demand stalemate, and traders watch for a breakout in either direction; a rectangle in a downtrend is bearish, in an uptrend bullish.
Read full definitionResistance
A price level where a market tends to encounter selling pressure and struggles to rise above, formed when more traders repeatedly sell than buy at that point. Identified through technical analysis, resistance levels mark potential reversal points.
Read full definitionRetail Investor
An individual, non-professional investor who buys and sells securities or funds through brokers or investment accounts, typically in smaller amounts than institutional investors. Retail investment has grown significantly with access to financial information and trading tools.
Read full definitionRetail Sales
A measure of consumer demand calculated from total goods sold over a given period. Consumer demand indicates an economy’s financial wellbeing; in the US, consumer spending accounts for around 70% of GDP.
Read full definitionRevaluation
An upward adjustment of a country’s currency relative to a baseline such as gold, wages or another currency. In a fixed exchange rate economy only the central bank can revalue; in a free-floating one, market forces drive it. It is the opposite of devaluation.
Read full definitionRevolving Credit Facility
A flexible credit line a business can draw down, repay and reuse up to an agreed limit. Interest is charged only on the amount outstanding, making it useful for managing fluctuating working-capital needs.
Read full definitionRights Issue
A way for a company to raise cash by inviting existing shareholders to buy new shares at a discounted price for a defined period. Shareholders have the right but not the obligation to buy; companies often use rights issues to pay down debt or quickly raise capital for investment.
Read full definitionRisk
The exposure to potential losses taken on when trading a security. Different assets carry different levels of risk, letting you tailor strategy to your experience and appetite.
Read full definitionRisk Management
The employment of financial analysis and trading techniques, such as attaching stops and limits, to reduce and control exposure to various types of risk.
Read full definitionRollover
The process of extending the settlement date of an open position. In forex, it involves transferring the settlement of a trade to another value date.
Read full definitionRound Trip
The buying and selling of the same amount of a security; in dubious cases it is done to inflate perceived trading volume and liquidity. In forex it refers to opening and closing a position within a single day, often multiple times, which can interfere with technical analysis.
Read full definitionRunning Profit/Loss
The amount you currently stand to gain or lose if you closed your open trades. Platforms typically show a running profit in green and a running loss in red.
Read full definitionRUT (Russell 2000)
The acronym for the Russell 2000, an index of the smallest 2,000 stocks in the Russell 3000. Investors watch this small-cap index to measure the performance of smaller, domestically focused US businesses.
Read full definitionSEC (Securities and Exchange Commission)
The US government oversight agency that regulates markets and protects investors.
Read full definitionSector
A division within a market or economy used to group companies with similar outputs and analyse their performance, from single-city economies to larger nationwide ones.
Read full definitionSell
Opening a trade by selling, speculating that the price of the security will drop; the trade is closed by buying back the asset at a lower price to secure a profit.
Read full definitionSEPA (Single Euro Payments Area)
An EU initiative enabling fast, reliable and cheap euro transfers between banks in the SEPA zone, which covers much of Europe.
Read full definitionSettlement
The process during which the asset of a trade is delivered or sold and the trade is marked closed: the seller is paid and ownership transfers to the buyer, after which the buyer can use the newly acquired asset or currency in another trade.
Read full definitionSettlement (T+2)
The point at which both sides of a currency trade actually exchange funds. Most spot FX settles two business days after the trade date, written as T+2.
Read full definitionSettlement Date
The date on which the transfer of funds in a transaction takes place.
Read full definitionSHGA.X
The symbol for the Shanghai A index.
Read full definitionShort Covering
Closing out a short position by buying back the security that was sold short. For short covering to be profitable, the security must have declined in price since the short was opened.
Read full definitionShort Position
Selling a security with the promise to buy it back later to close the position. Short positions let traders speculate on falling prices and profit in declining markets.
Read full definitionShort Squeeze
When an event causes the price of a heavily shorted asset to rise rapidly, forcing traders with short positions to add equity to maintain margin or close out by buying back the asset at a loss, which pushes the price higher still.
Read full definitionShorts
Traders who have sold, or shorted, a product, or those who are bearish on the market.
Read full definitionSit on Hands
Staying out of the markets due to directionless, choppy or unclear conditions, allowing time to analyse and enter at optimal moments rather than holding positions in hope.
Read full definitionSlippage
The difference between the expected price of a trade and the price at which it is executed. It can occur during periods of higher volatility.
Read full definitionSlippery
A term used when the market feels like it is ready for a quick move in any direction.
Read full definitionSloppy Market
A market with seemingly random trading patterns that lack meaningful trends, often oscillating between bearish and bullish. Traders typically wait for a breakout or consolidation into a range before entering.
Read full definitionSNB (Swiss National Bank)
Switzerland’s central bank and the sole issuer of Swiss francs. Its monetary policy focuses on price stability while keeping economic developments in mind.
Read full definitionSOFR (Secured Overnight Financing Rate)
The overnight interest rate for US dollar-denominated loans and derivatives, indicating how much a bank pays to borrow cash overnight from another institution.
Read full definitionSoft Currency
A currency whose value fluctuates and is mostly lower than other currencies due to weaker demand, usually caused by economic or political uncertainty. Many developing-country currencies are soft, sometimes worsened by pegs to major currencies that leave exchange rates unfavourably high for investors.
Read full definitionSONIA (Sterling Overnight Index Average)
The effective overnight interest rate banks pay to borrow sterling from other financial institutions, used for overnight funding of trades that occur in off-hours.
Read full definitionSovereign Names
Central banks active in the spot market. ‘Sovereign’ can also label instruments such as bonds, debt and credit default swaps that involve a country’s central bank or government.
Read full definitionSpot Contract
A contract for buying or selling currency at the current market rate, with delivery usually within two business days. It is the immediate purchase or sale of a financial instrument at the prevailing price.
Read full definitionSpot Market
A market where products are traded at their current market price for immediate exchange.
Read full definitionSpot Rate
The current market exchange rate at which one currency can be bought or sold for immediate delivery. Spot trades typically settle two business days later (T+2).
Read full definitionSPX500 (S&P 500)
A name for the S&P index, which tracks 500 of the largest companies on the NYSE and Nasdaq stock exchanges.
Read full definitionStablecoin
A digital token designed to hold a steady value by being pegged to a reference asset, usually a fiat currency such as the US dollar. Stablecoins are used for fast, low-cost settlement and as a bridge between traditional and digital finance.
Read full definitionSterling
A nickname for the British pound or the GBP/USD (British pound/US dollar) currency pair.
Read full definitionStock Exchange
A market on which securities are traded.
Read full definitionStock Index
The combined price of a group of stocks, expressed against a base number, allowing assessment of how the group is performing relative to the past.
Read full definitionStop Entry Order
An order placed to buy above the current price or sell below it, useful if you believe the market is heading in one direction and have a target entry price.
Read full definitionStop Order
An order to buy or sell once a pre-defined price is reached; at that point it becomes a market order, executed at the best available price. Stop orders can be affected by gaps and slippage, so they will not necessarily be filled at the stop level if the market does not trade at that price.
Read full definitionStop-Loss Hunting
When a market seems to reach for a level believed to be heavy with stops. If the stops are triggered, the price often jumps through the level as a flood of stop-loss orders execute.
Read full definitionStop-Loss Order
An order to buy or sell once a currency or security reaches a specified price, designed to limit a trader’s loss on a position. The trade is processed only if the chosen rate is reached, capping downside without the need to monitor the market constantly.
Read full definitionStrike Price
The price at which an options contract can be exercised, set when the contract is purchased along with its expiration date. For call options it is the price at which the underlying may be bought; for puts, the price at which it may be sold.
Read full definitionSupport
A price level where a market tends to encounter buying pressure and struggles to fall below, formed when buyers repeatedly step in at the same point. Technical analysts chart support alongside resistance to understand market trends and identify potential reversal points.
Read full definitionSuspended Trading
A temporary halt in the trading of a product.
Read full definitionSWIFT
The Society for Worldwide Interbank Financial Telecommunication, the global messaging network used for secure international payments and settlement instructions among financial institutions.
Read full definitionSwissie
The nickname for the Swiss franc or the USD/CHF (US dollar/Swiss franc) currency pair.
Read full definitionTake Profit Order (T/P)
An order to close a position at a level better than the current market price, selling above the level that was bought or buying back below the level that was sold. It lets you capitalise on favourable moves without watching the market.
Read full definitionTakeover
Assuming control of a company by buying its stock.
Read full definitionTechnical Analysis
Analysis of historical price and volume data to forecast future movements. Technical analysts use charts, patterns and indicators to identify trading opportunities.
Read full definitionTechnicians (Techs)
Traders who base their trading decisions on technical or chart analysis.
Read full definitionTen (10) YR
US government-issued debt repayable in ten years, for example a US 10-year note.
Read full definitionTenor
The length of time until a contract expires or matures. Common tenors include spot (immediate), overnight, one week, one month, three months, six months and one year.
Read full definitionThin
An illiquid, slippery or choppy market environment; a light-volume market that produces erratic trading conditions.
Read full definitionThirty (30) YR
UK government-issued debt repayable in 30 years, for example a UK 30-year gilt.
Read full definitionTick (Size)
The minimum change in price, up or down.
Read full definitionTime to Maturity
The time remaining until a contract expires.
Read full definitionTokenisation
Representing a real-world asset, such as cash, a bond or property, as a digital token on a blockchain, so it can be transferred and settled more quickly and divided into smaller units.
Read full definitionTomorrow Next (Tom/Next)
The simultaneous buying and selling of a currency for delivery the following day.
Read full definitionTONAR (Tokyo Overnight Average Rate)
The risk-free unsecured interbank overnight interest rate for the Japanese yen, also known as TONA. Created in 2016 in the move to risk-free reference rates, it replaced LIBOR for the yen.
Read full definitionTrade Balance
The difference in value between a nation’s imported and exported goods and services. Countries with trade surpluses, such as Japan, tend to see their currencies appreciate, while countries with deficits, such as the US, tend to see theirs weaken.
Read full definitionTrade Confirmation
A receipt of an executed order sent by your broker, verifying the transaction and stating the terms of the exchange. One is sent after every trade you make.
Read full definitionTrade Finance
Funding and risk-mitigation tools, such as letters of credit and guarantees, that help businesses buy and sell goods across borders by bridging the gap between paying suppliers and getting paid by customers.
Read full definitionTrade Size
The number of units of product in a contract or lot.
Read full definitionTrading Bid
A pair acting strong and/or moving higher, with bids continually entering the market and pushing prices up.
Read full definitionTrading Halt
A postponement to trading that is not a suspension from trading.
Read full definitionTrading Heavy
A market that feels like it wants to move lower, usually associated with an offered market that will not rally despite buying attempts.
Read full definitionTrading Level
A designation brokers use to ensure traders only enter markets and strategies on a par with their experience, set after a risk assessment of available capital, occupation, age and trading experience. The term can also refer to support and resistance levels in technical analysis.
Read full definitionTrading Model
A rule-based structure created to govern trading activity, helping take guesswork out of the markets while encouraging traders to set risk parameters.
Read full definitionTrailing Stop
A stop that lets a trade keep gaining value while the market price moves in a favourable direction, but automatically closes the trade if the price moves against it by a specified distance.
Read full definitionTransaction Cost
The cost of buying or selling a financial product.
Read full definitionTransaction Date
The date on which a trade occurs.
Read full definitionTreasury Management
The discipline of managing a company’s cash, funding, currency and financial risk. It covers liquidity planning, payments, hedging and the systems that give finance teams visibility and control.
Read full definitionTrend
Price movement that produces a net change in value: an uptrend shows higher highs and higher lows, a downtrend lower highs and lower lows.
Read full definitionTurnover
The total money value or volume of all executed transactions in a given time period.
Read full definitionTwo-Way Price
When both a bid and an offer rate are quoted for an FX transaction.
Read full definitionTYO10
The symbol for the CBOE 10-Year Treasury Yield Index.
Read full definitionUgly
Describes unforgiving market conditions that can be violent and quick.
Read full definitionUK Average Earnings
Measures the average wage, including and excluding bonuses, paid to employees, measured quarter-on-quarter from the previous year.
Read full definitionUK Claimant Count Rate
The number of people claiming unemployment benefits. Claimant count figures tend to be lower than unemployment data since not all of the unemployed are eligible for benefits.
Read full definitionUK HBOS House Price Index
Measures the relative level of UK house prices, indicating trends in the UK real estate sector and their implication for the economic outlook. Published by the largest UK mortgage lender (Halifax Building Society/Bank of Scotland), it is the longest monthly data series of any UK housing index.
Read full definitionUK Jobless Claims Change
The change in the number of people claiming unemployment benefits over the previous month.
Read full definitionUK Manual Unit Wage Costs
The change in total labour cost expended in the production of one unit of output.
Read full definitionUK Oil
A name for Brent crude oil.
Read full definitionUK PPI Input
The rate of inflation experienced by manufacturers when purchasing materials and services, closely scrutinised as a possible leading indicator of consumer inflation.
Read full definitionUK PPI Output
The rate of inflation experienced by manufacturers when selling goods and services.
Read full definitionUK100
A name for the FTSE 100 index.
Read full definitionUnderlying
The original asset in a derivatives contract, the asset whose price the trade speculates on. Underlying assets can be stocks or commodities in an options trade, or financial metrics such as a benchmark index or interest rate.
Read full definitionUnemployment Rate
The number of people in a country or sector who do not have a job but are actively seeking one, measured as a percentage of the labour force (all people employed and unemployed).
Read full definitionUniversity of Michigan Consumer Sentiment
A monthly poll of 500 US households on their attitudes about the US economy, issued in a preliminary mid-month version and a final end-of-month version. Consumer sentiment is viewed as a proxy for the strength of consumer spending.
Read full definitionUnrealised Gain/Loss
The theoretical gain or loss on open positions valued at current market rates. Unrealised gains and losses become realised profits or losses only when the position is closed.
Read full definitionUptick
A new price quote higher than the preceding quote, which occurs when enough buy orders drive the price of an asset higher. A lower quote is a downtick.
Read full definitionUptick Rule
A US 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 short sale’s execution price.
Read full definitionUS Oil
Another name for West Texas Intermediate (WTI) crude oil, the benchmark for Atlantic basin crudes thanks to its Gulf coast and central-US location. It is traded on the New York Mercantile Exchange (NYMEX).
Read full definitionUS Prime Rate
The short-term interest rate US banks charge to lend to their most trusted customers, published as an average by the Wall Street Journal when 23 of the 30 largest US banks change their prime rates.
Read full definitionUS30
An index representing 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.
Read full definitionValue Date
The date on which counterparts to a financial transaction agree to settle their respective obligations; the date a transaction’s value goes into effect. It is also commonly called the maturity date.
Read full definitionVariation Margin
Funds traders must hold in their accounts to maintain the required margin necessary to cope with market fluctuations.
Read full definitionVirtual IBAN (VIBAN)
A unique IBAN issued on top of a master account, letting a business collect and reconcile payments in a customer’s or currency’s own name without opening a separate bank account for each one.
Read full definitionVIX (Volatility Index)
A measure of the market’s expectation of 30-day volatility, constructed from the implied volatilities of a wide range of S&P 500 index options. The VIX is widely used as a gauge of market risk and is often called the ‘investor fear gauge’.
Read full definitionVolatility
The degree of price fluctuation in a currency over a specific period. Higher volatility means larger price swings and greater uncertainty in exchange rates, making it a key measure of FX market risk.
Read full definitionWedge Chart Pattern
A formation resembling a wedge, created by a price range that narrows over time, either ascending or descending. Two trendlines move in the same direction while converging, until a breakout ends the pattern.
Read full definitionWhipsaw
Slang for a highly volatile market in which a sharp price movement is quickly followed by a sharp reversal, with price jumping up and down with no apparent rhythm.
Read full definitionWholesale Prices
The change in prices paid by retailers for finished goods that are then sold on at a markup. Rising wholesale prices typically signal inflationary pressure before it appears in headline retail costs, often driven by tariffs or international conflict affecting imports.
Read full definitionWindow Forward
A forward contract that allows delivery at any point within a specified date range rather than on a single fixed date, providing flexibility in managing currency exposure.
Read full definitionWire Transfer
An electronic transfer of funds across a network administered by banks and transfer service agencies around the world, moving money directly from one bank or credit union to another.
Read full definitionWorking Capital
The cash a business has tied up in day-to-day operations, broadly its current assets minus current liabilities. Healthy working capital lets a company pay suppliers and staff while waiting on customer payments.
Read full definitionWorking Order
Where a limit order has been requested but not yet filled.
Read full definitionWSJ
Acronym for The Wall Street Journal.
Read full definitionYard
Trader slang for a billion units.
Read full definitionYield
The percentage return from an investment.
Read full definitionYield Curve
A graph showing the relationship between interest rates and bond maturity dates. Yield curve inversions and shifts often signal economic changes that affect currency values.
Read full definitionYoY (Year over Year)
Abbreviation for year over year, the change in a data series relative to the same period a year earlier.
Read full definitionYuan
The base unit of currency in China. The renminbi is the name of China’s currency, of which the yuan is the base unit.
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