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Forex Terms > Forex Terms > Flashcards

Forex Terms Flashcards

1
Q

barrier option

A

A type of option whose payoff depends on whether or not the underlying asset has reached or exceeded a predetermined price. A barrier option can be a knock-out, meaning it can expire worthless if the underlying exceeds a certain price, limiting profits for the holder but limiting losses for the writer. It can also be knock-in, meaning it has no value until the underlying reaches a certain price.

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2
Q

BBA

A

British Banker’s Association

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3
Q

bear

A

Someone who things that a particular asset or market will decrease in price

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4
Q

BID

A

A buy order placed at or below the market; Price a dealer/trader is prepared to pay

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5
Q

Bid/Offer Spread

A

The difference between the bid price and the offer (sale) price

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6
Q

Bio

A

Billion

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7
Q

BIS

A

Bank of International Settlements. An international organization which fosters monetary and financial cooperation and serves as a bank for central banks. Often as agent in the forex market

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8
Q

bnp

A

BNP Paribas

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9
Q

Bobl

A

Medium-term debt Instrument issued by Germany (4.5 to 5.5 years)

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10
Q

BOC

A

Bank of Canada

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11
Q

Boe, BOE

A

Bank of England. The UK analogue to the US Federal Reserve.

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12
Q

BOJ

A

Bank of Japan. The Japanese analogue to the US Federal Reserve.

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13
Q

bounce

A

Upward price movement after a decline

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14
Q

Bps, pips

A

Basis POints

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15
Q

btmu

A

Bank of Tokyo Mitsubishi UFJ

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16
Q

BTPs

A

Italian government bonds

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17
Q

buba

A

Bundesbank - German Federal Reserve Bank

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18
Q

bucket

A

Refers to the grouped timing of particular cash flow or derivative or price at a particular time, e.g. July Bucket

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19
Q

bull

A

Someone who thinks that a particular asset or market will increase in proce

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20
Q

Bund’s

A

Long-term debt instrument issued by Germany (8.5 to 10.5 years). German 10-year government bonds. The Bobl is the 5 year and Schatz the 2-year

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21
Q

Butterflies (butterfly spread)

A

The butterfly strategy is a known strategy used in forex, which can be implemented while using both call or put options. Trading strategy where a trader is buying at price A and C whilst selling an appropriately weighted amount at price B where price B is between price A and C (or selling at A-C and buying at B)

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22
Q

Cable, cbl

A

GBP/USD. GPB/USD Exchange rate; also refers to GBP generally.

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23
Q

CAC

A

The french stock index, the CAC 40

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24
Q

cad

A

Canadian Dollar

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25
Q

Call option, call

A

The right (but not the obligation) to buy an underlying asset from the counterparty at a fixed price

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26
Q

Candle.Candlestick

A

Tools for charting movement in FX. For instance, you can have bullish and bearish candlesticks

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27
Q

carry

A

Returns realized from an asset minus the cost of the holding asset

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28
Q

chf, francs, swiss, swissies, sfr

A

Swiss franc

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29
Q

Commercial Paper, cp

A

An unsecured, short-term money market security sold by banks and other corporations to raise funds.

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30
Q

Condor

A

A four-part option strategy using calls and puts

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31
Q

copper

A

Futures contracts which settle on IMM dates ten years from the date quoted

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32
Q

Corporates

A

The finance and treasury departments of large multinational corporations that typically contract with big wirehouse providers like UBS in FX. They must hedge their currency exposures to try and offset currency risk.

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33
Q

cosmo

A

cosmorex, swiss broker

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34
Q

Cost of carry

A

The cost of carrying or holding a position less any income received on the asset would be used interchangeably with carry where carry is negative.

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35
Q

Counterparty

A

The other party to trade or contract

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36
Q

cp

A

commercial paper

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37
Q

Cross surrency swap

A

An interest rate swap where the payment legs are made in two different currencies

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38
Q

cs

A

Credit Suisse

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39
Q

Currency Swap

A

A present exchange of one currency for equal value in a different currency; see also FOREX

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40
Q

Curve: Flatten, steepen, invent

A

The graph showing future price projected at present time. These are typically built by each trader using a variety of sources of information to asset them in pricing their trades.

Slopes up less steeply, slopes up more steeply, slopes down

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41
Q

Custody Bank / Custodian

A

A bank which holds securities in custody for other financial institutions. For instance, Bank of New York Mellon and State Street.

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42
Q

DAX

A

German stock index

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43
Q

Deferred Swap

A

Agreement to enter into a swap at some time in the future (also a forward swap)

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44
Q

Delta

A

The ratio comparing the change in the price of the underlying asset to the corresponding change in the price of a derivative. Sometimes referred to as the “hedge ration”

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45
Q

Depo

A

Deposit. Deposit rate offered on particular currency

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46
Q

dkk

A

Danish Krone

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47
Q

Dove

A

Proponent of lower rates

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48
Q

Dovish

A

A statement related to monetary policy which implies looser policy (lower rates)

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49
Q

Easy (easing)

A

Refers to monetary policy trending towards lower interest rates. Monetary authorities ( a central bank) will want easy monetary policies (lower interest rates and even perhaps a program like quantities easing, in order to encourage economic growth)

50
Q

ebf

A

European banking federation

51
Q

EBS

A

Electronic Broking Services.

A wholesale electronic trading platform used to trade between interbank dealers, It’s like an ECN for banks.

52
Q

ECB

A

Eurpoean Centeral Bank. The Euro analogue to the US federal Reserve

53
Q

Ecofin

A

A council consisting of the economy and finace ministers of the EU. They meet once a month.

54
Q

Ed/ed

A

Euro dollars

55
Q

eonia

A

Euro OverNight Index Average

56
Q

ESFS

A

European Financial Stability Facility.

A legal instrument agreed by the 27 member states of the EU on May,, 9, 2012, aiming at preserving finiancial stability in Europe by providing finacial assitance to euro zone states in difficulty. Colloquially known as ‘euro SPV’ or ‘euro TARP’

57
Q

ETF

A

Exchange Traded Fund

58
Q

Euro

59
Q

Eurodollar

A

A Eurodallar refers to a US dollar on deposit at banks outside the US. Similaryl

60
Q

Eurodlaar, ED, eu$, e$, eurused, edollar

A

Any US dollar on deposit in Europe.

61
Q

Eurogroup

A

A group of finance ministers of countries who are members of the euro

62
Q

Euroyen, eurjpy

A

Any yen on deposit in Europe (not to be confused with EUR/JPY currency swp)

63
Q

Fade

A

To trade counter to

64
Q

Fed

A

Ferderal Reseerve. The central bank for the US

65
Q

Fibonacci Level

A

A preice deermined by charting techniques which some traders regard as particularly significant

66
Q

Fibonacci retracements

A

A useful tool for traders as markets correct during trends. Technicians look for supprt on pullbacks at 38.2% of the uptrend or rebounds in a downtredn, 50% and 61.8%. Dervied from the “golden ratio” of Ialian mathematician Fibonacci

67
Q

Fix or Fixing

A

The official market rate set for a currency pair or the ecexution date of a currency trade.

68
Q

Flatten, steepen, Invent

69
Q

FOMC

A

Federal OPen Market Committee

70
Q

Footsie or FTSE

A

UK Stock index. ie FTSE 100

71
Q

FOREX, fx

A

Foriegn Exchange. The cheif open market of currency swaps, highly liquid and pegged at nearly $4 trillion in volume

72
Q

Forward Guidance

A

Forward guidance is a central bank suggesting monetary policy they intend to implement prior to execution.

73
Q

Forward Swap

A

See deferred swap

74
Q

FRA

A

Forward rate agreement. BIlateral contract to make a cash settlement payment based on the difference between a fxed interest rate for a single future period and the actual market rate set for that period.

75
Q

4 bells

A

4:00 pm fixing

76
Q

8AMERS

A

Traders who start working around 8am

77
Q

AAA

A

Asian Centeral Bank

78
Q

ADP

A

Private-sector employment report

79
Q

AGG

A

An electronic trading platform [?] OR internal UBS system [?]

80
Q

Aussie

A

AUD/USD (Australian Dollar to US Dollar exchange rate)

81
Q

B9yer

A

possibly a code word

82
Q

Back Book

A

See prop book

83
Q

Bail

84
Q

Barney

85
Q

Barrier Order

A

Trading orders placed by the FX options desk with the FX spot desk in order to prevent a currency pair from reaching the options strike price.

86
Q

BBIL

A

Barclays Capital

87
Q

Bells

A

Fixing. for example, 4 bells refers to the 4pm fixing

88
Q

Betty

A

EUR/RUB or GBP/USD

89
Q

Bgt

90
Q

Bid

A

Price at which a party is willing to buy

91
Q

Big B

A

BNP Paribas

92
Q

Big Figure

A

The second decimal point. Exchange rates are generally quoted to four or five decimal points. All but the most significant or long term movements in price are refelcted in fluctuations in the third and fourth decimal points, so the Big Figure is a significant number, opten understood (and therefore unspoken) by traders in the parket. In an exchange rate of 1.3265, 2 is this big figure.

93
Q

Big Run Up

A

See Bob Willis

94
Q

Blx

95
Q

Bob Willis

A

Euphmism for a big rum up to the fixing, meaning a rtrader or bank executes a seried of trades (usually in the hour or half prior to the fixing, rather than just within the 1 minute fixing window) to create momentum in the market for a price movembent in one direction or another to suit their trading positions. Named for an English Cricket player who took a notably long run up when bowling.

96
Q

Break

A

When the market hits support or resistance levels

97
Q

Bull/Bully

A

50 million

98
Q

Carry

A

Returns from holding an asset (less costs)

99
Q

Cable

100
Q

Charity Trade

A

See wash trade

101
Q

Chase

102
Q

Cheese

A

USD/CHF or profit

103
Q

250 mio

A

Chop…See stop.

104
Q

Chunnel

105
Q

Clr

A

Clear, possibly nuetral or flat

106
Q

CME

A

Chicago Mercantile Exchange

107
Q

Comp

A

Compensation OR dompetition ot in comparisson

108
Q

Corp

A

Corporate referring to large corporations that transact in the market and through banks

109
Q

Cross

A

Cross currency

110
Q

CS

A

Credit Suisse

111
Q

Deuce/Duece

A

Flat (nuetral or fully matched out positon - see matched( OR a volume indication

112
Q

Dogeater

A

A code word used to refer to the Korean Central Bank

113
Q

Dorrar

114
Q

Drive-by

A

An unexpectedand concerted burst of trading activity (sometimes inmplying an ambush on the market by a trader)

115
Q

Dump

116
Q

EBS

A

Electronic brokering Sustem - an electronic trading platform on which traders can concludetrades directly with counterparies on an anonymous instantaneous basis.

117
Q

ECB

A

European Central BAnk. Also refers to the ECB fixing

118
Q

E-Comm

A

E-Commerence trading and payment tool

119
Q

EFP

A

Euro Dollar

120
Q

EUR/USD

121
Q

Fixing Trades

A

Orders by clients for FX spot trades ata particular fixing rate

Forex Terms (1 decks)

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