What is Forex? Flashcards
What is Forex, Foreign Exchange Market, or FX?
The decentralized Over-the-Counter (OTC), or “interbank” global market that allows the exchange of one currency for another.
When is forex traded?
24 hours/5 days a week. Opens on Sunday 5 pm EST (10:00 pm GMT), closes on Friday 5 pm EST
(10:00 pm GMT).
What is the daily traded volume?
$5 TRILLION. $300-400 billion from retail traders.
What is a currency pair? Ex: EUR/USD
One currency that is bought, while the other is sold.
What are the “Major Currency Pairs” or “Majors”?
The pairs that contain “USD” on one side.
What are the “Cross-Currency Pairs” or “Crosses”?
The pairs that don’t contain “USD” on one side.
What are the “Minor Currency Pairs” or “Minors”?
The major crosses or pairs that contain EUR, JPY, or GBP.
What are the “Exotic Currency Pairs” or “Exotics”?
The pairs that are made up of one major currency paired with the currency of an emerging economy.
What are the “G10 Currencies”?
Ten of the most heavily traded and most liquid currencies in the world.
What is “BRIICS”?
The acronym coined for an association of five major emerging national economies: Brazil, Russia, India, Indonesia, China and South Africa.
What is Liquidity?
The amount of buying and selling volume happening at any given time.
What are Futures?
Standardized contracts, that are traded on a centralized exchange, to buy or sell a certain asset at a specified price on a future date.
What are Option?
A financial instrument, that is traded on a centralized exchange, that gives the buyer the right or the option, but not the obligation, to buy or sell an asset at a specified price on the option’s expiration date.
What are ETFs or Exchange-traded funds?
Currencies that are bought and held in a fund by financial institutions. They are offered to the public as shares, that are traded on an exchange.
What is the Spot Forex Market?
The market where currencies are traded immediately or “on the spot”, using the current market price.
