– Current Account – the total sum of the net factor income, including interest and dividends, the balance of trade, which includes the export values minus import amounts of goods and services, and the net transfer payments, like foreign aid payments.
– Day Order – An order of buy or sell that would automatically expire as the trading day on which it was entered ends.
– Day Trade – A trade which was opened and closed on the same trading day.
– Day Trader – This is a trader who takes positions in articles of trade, which are then liquidated before the same trading day ends. A speculator who buys and sells on the basis of small short-term price movements.
– Dealer – Can either be a firm or an individual that buys and sells assets. Can either act as a principal or counterpart to a trade transaction?
– Depreciation – this is the decline in the value of a currency due to several market factors
– Devaluation – The government’s deliberate act to reduce the value of a currency. The calculated and intentional downward adjustment of the value of a currency, usually by official announcement.
– Euro – Effective as of January 1, 1999, this is the currency adopted by eleven European countries: France, Finland, Germany, Belgium, Ireland, Luxembourg, the Netherlands, Austria, Spain, Portugal and Italy.
– European Central Bank (ECB) – This is the official central bank for the new European Monetary Union.
– Federal Deposit Insurance Corporation (FDIC) – the agency in charge of regulating and administering insurance for bank deposits in the United States
– Federal Reserve (Fed) – The official central bank of the United States of America.
– Fill – It is the act of completing the order of a customer to buy or sell a currency pair.
– Fill Price – It is the price at which a buy or sell order from a customer was carried out.
– Financial Risk – The probability of a business to be incapable of complying with its financial obligations.
– Flat – Refers to a trading book that has zero market exposure.
– Forex – foreign exchange or FX. It is basically the buying of a currency and selling of another.
– Forward – Refers to a transaction that would be settled at a future date.
– Forward Points – The pips that are added to or subtracted from the current spot rate to calculate the forward rates to be used for a forward foreign exchange transaction. Forward points are based on the price differences between the two currency pairs’ interest rates.
– Forward Rate – The value of the pre-specified exchange rate, which resulted from computing the forward points and subtracting them from the existing exchange rate.
– Good Till Cancelled Order (GTC) – This refers to a buy or sell order, which would remain open unless it is canceled or until it is filled.
– Hedge – Refers to a transaction that lessens the financial risk on an existing investment position.
– Inflation – The condition of the economy when prices for consumer goods increase, grinding down the purchasing power of consumers.
– Initial Margin – Refers to the value or amount of deposit a customer has to make before being allotted a trading limit as guarantee in future performance.
– Initial Margin Requirement – The minimum amount of buying a new security, which must be paid for in cash by the investor.
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