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Account -
Record of all transactions.
Account Balance
- Same as balance.
Agent - An
individual employed to act on behalf of another (the principal).
Aggregate
Demand - The sum of government spending, personal consumption expenditures,
and business expenditures.
All or None -
A limit price order that instructs the broker to fill the whole order at the
stated price or not at all.
Appreciation -
A currency is said to appreciate when price rises in response to market
demand; an increase in the value of an asset.
Arbitrage -
Taking advantage of countervailing prices in different markets by the purchase
or sale of an instrument and simultaneous taking of an equal and opposite
position in a related market to profit from small price differentials.
Ask Size -
The amount of shares being offered for sale at the ask rate.
Ask Rate -
The lowest price at which a financial instrument is offered for sale (as in
bid/ask spread).
Asset
Allocation - Investment practice that distributes funds among different
markets (forex, stocks, bonds, commodity, real estate) to achieve
diversification for risk management purposes and/or expected returns consistent
with the outlook of the investor, or investment manager.
Attorney in
Fact - Person who is allowed to transact business and execute documents on
behalf of another person because one holds power of attorney.
Back Office -
The departments and processes related to the settlement of financial
transactions (i.e. written confirmation and settlement of trades, record
keeping).
Balance -
Amount of money in an account.
Balance of
Payments - A record of a nation’s claims of transactions with the rest of
the world over a particular time period. These inlcude merchandise, services and
capital flows.
Base Currency -
The currency in which an investor or issuer maintains its book of accounts;
the currency that other currencies are quoted against. In the forex market, the
US Dollar is normally considered the `base` currency for quotes, meaning that
quotes are expressed as a unit of $1 USD per the other currency quoted in the
pair.
Basis - The
difference between the spot price and the futures price.
Basis Point -
One hundredth of a percent.
Bear - An
investor who believes that prices/the market will decline.
Bear Market -
A market distinguished by a prolonged period of declining prices accompanied
with widespread pessimism.
Bid - The
price that a buyer is prepared to purchase at; the price offered for a currency.
Bid/Ask Spread
- See spread
Big Figure -
Dealer phrase referring to the first few digits of an exchange rate. These
digits rarely change in normal market fluctuations, and therefore are omitted in
dealer quotes, especially in times of high market activity. For example, a USD/Yen
rate might be 107.30/107.35, but would be quoted verbally without the first
three digits i.e. "30/35".
Bonds -
Bonds are tradable instruments (debt securities) which are issued by a borrower
to raise capital. They pay either fixed or floating interest, known as the
coupon. As interest rates fall, bond prices rise and vice versa.
Book - In a
professional trading environment, a book is the summary of a trader`s or a
desk`s total positions.
Bretton Woods
Accord of 1944 - An agreement that established fixed foreign exchange rates
for major currencies, provided for central bank intervention in the currency
markets, and set the price of gold at US $35 per ounce. The agreement lasted
until 1971. See More on Bretton Woods.
Broker - An
individual, or firm, that acts as an intermediary, putting together buyers and
sellers usually for a fee or commission. In contrast, a `dealer` commits capital
and takes one side of a position, hoping to earn a spread (profit) by closing
out the position in a subsequent trade with another party.
Bull - An
investor who believes that prices/the market will rise.
Bull Market -
A market distinguished by a prolonged period of rising prices. (Opposite of
bear market)
Bundesbank -
The central bank of Germany
FOREX - "Foreign currency
Exchange", Often misspelled as : FORX, 4X, FourX.
Forex Trader - Person or company
who buys and sells currency to make a profit.
Spot - Another name for FOREX. As
in Spot Trader, Spot Market, Spot trading.
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