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Friday, August 29, 2008
FOREX GLOSSARY
Factory Orders
An economic indicator which refers to the total orders of durable and nondurable goods. The nondurable goods orders consist of food , clothing , light industrial products and products designed for the maintenance of the durable goods.
FASB #8 (Financial Accounting Standards Board's Statement Number 8
The original accounting rules regarding foreign exchange were standardized in 1975, which set the procedures for foreign currency translations into US Dollars in the consolidated balance sheets of US multinational corporations.
Fast market
The rapid movement of prices or rates in a market caused by disequilibria in supply and demand conditions from buyers and/or sellers. In such circumstances rates or prices may not be readily available to clients until orderly markets resume.
Fed Fund Rate
The short term (overnight) rate pegged by the Federal Reserve Bank used to conduct monetary policy and affect changes in the money supply that causes changes in the level of activity in the United States economy.
Fed Funds
Cash balances held by banks with their local Federal Reserve Bank.
Fed - Federal Reserve
The Central Bank for the United States.
Federal Deposit Insurance Corporation (FDIC )
The regulatory agency responsible for administering bank depository insurance in the US.
Federal Reserve Board
The board of the Federal Reserve System, appointed by the US President for 14 year terms, one of whom is appointed for four years as chairman.
Federal Reserve System
The central banking system of the US comprising 12 Federal Reserve Banks controlling 12 districts under the Federal Reserve Board. Membership of the Fed is compulsory for banks chartered by the Comptroller of Currency and optional for state chartered banks.
Fedwire
An automated communications and settlement system linking the Federal Reserve banks with other banks and with depository institutions.
Fill or Filled
A deal that has been executed on behalf of a Customer's Account given a Customer's Order. Once filled, an Order cannot be canceled, amended or waived by Customer.
Fill Price
The price at which a buy or sell order was executed.
Financial Risk
The risk that a firm will be unable to meet its financial obligations.
Finex
A currency market part of the New York Cotton Exchange (NYCE), the oldest futures exchange in New York. The exchange lists futures on the European Currency Unit and the USDX a basket of 10 currencies.
Firm Quotation
A verbal price given in response to a request for a firm rate at which the quoting party is willing to execute a deal for a reasonable amount for spot settlement.
First In First Out (FIFO)
Open positions are closed according to the FIFO accounting rule. All positions opened within a particular currency pair are liquidated in the order in which they were originally opened.
Fiscal Policy
Use of taxation as a tool in implementing monetary policy
Fixed dates
The monthly calendar dates similar to the spot. There are two exceptions. For detailed description see value dates.
Fixed Exchange Rate (Representative Rate )
An official exchange rate set by monetary authorities for one or more currencies. In practice, even fixed exchange rates fluctuate between definite upper and lower bands, leading to intervention.
Fixing
A method of determining rates by normally finding a rate that balances buyers to sellers. Such a process occurs either once or twice daily at defined times. Used by some currencies particularly for establishing tourist rates.
Flat (Square, Balanced)
To be neither long nor short is the same as to be flat or square. One would have a flat book if he has no positions or if all the positions cancel each other out.
Flexible exchange rate
Exchange rates with a fixed parity against one or more currencies with frequent revaluations. A form of managed float.
Floating exchange rate
An exchange rate where the value is determined by market forces. Even floating currencies are subject to intervention by the monetary authorities. When such activity is frequent, the float is known as a dirty float.
FOMC - Federal Open Market Committee
The Federal Reserve monetary committee. The body of individuals that decide the course of monetary policy that will be conducted in United States. The FOMC is directly responsible for pegging the Federal Funds rate and the Discount Rate. Both rates are influential in controlling the levels of money supply growth and the levels of economic activity in the United States.
Forex - Foreign Exchange
The simultaneous buying of one currency and selling of another in an over-the-counter market. Most major FX is quoted against the US Dollar.
Forex Club
Groups formed in the major financial centers to encourage educational and social contacts between foreign exchange dealers, under the umbrella of Association Cambiste International.
Forward
The pre-specified exchange rate for a foreign exchange contract settling at some agreed future date, based upon the interest rate differential between the two currencies involved.
Forward Deal
A deal with a value date greater than the spot value date.
Forward Margins
Discounts or premiums between spot rate and the forward rate for a currency. Normally quoted in points.
Forward Operation
Foreign exchange transactions, on which the fulfillment of the mutual delivery obligations is made on a date later than the second business day after the transaction was concluded.
Forward Outright
A commitment to buy or sell a currency for delivery on a specified future date or period. The price is quoted as the spot rate minus or plus the forward points for the chosen period.
Forward Points
The pips added to or subtracted from the current exchange rate to calculate a forward price.
Forward Rate/Forward Price
Forward rates are quoted in terms of forward points, which represents the difference between the forward and spot rates. In order to obtain the forward rate from the actual exchange rate the forward points are either added or subtracted from the exchange rate.
The decision to subtract or add points is determined by the differential between the deposit rates for both currencies concerned in the transaction. The base currency with the higher interest rate is said to be at a discount to the lower interest rate quoted currency in the forward market. Therefore, the forward points are subtracted from the spot rate. Similarly, the lower interest rate base currency is said to be at a premium, and the forward points are added to the spot rate to obtain the forward rate.
FRA - Forward Rate Agreements
FRA`s are transactions that allow one to borrow/lend at a stated interest rate over a specific time period in the future.
Fundamentals
The macro economic factors that are accepted as forming the foundation for the relative value of a currency, these include inflation, growth, trade balance, government deficit, and interest rates.
FX
FX" is a popular acronym for Foreign Exchange. Foreign Exchange generally refers to off exchange trading in foreign currency. It may also refer to currency trading on exchanges such as the IMM at the Chicago Mercantile Exchange.
Fundamental Analysis
Analysis of economic and political information with the objective of determining future movements in a financial market.
Futures Contract
An obligation to exchange a good or instrument at a set price on a future date. The primary difference between a Future and a Forward is that Futures are typically traded over an exchange (Exchange- Traded Contacts - ETC), versus forwards, which are considered Over The Counter (OTC) contracts. An OTC is any contract NOT traded on an exchange.
An economic indicator which refers to the total orders of durable and nondurable goods. The nondurable goods orders consist of food , clothing , light industrial products and products designed for the maintenance of the durable goods.
FASB #8 (Financial Accounting Standards Board's Statement Number 8
The original accounting rules regarding foreign exchange were standardized in 1975, which set the procedures for foreign currency translations into US Dollars in the consolidated balance sheets of US multinational corporations.
Fast market
The rapid movement of prices or rates in a market caused by disequilibria in supply and demand conditions from buyers and/or sellers. In such circumstances rates or prices may not be readily available to clients until orderly markets resume.
Fed Fund Rate
The short term (overnight) rate pegged by the Federal Reserve Bank used to conduct monetary policy and affect changes in the money supply that causes changes in the level of activity in the United States economy.
Fed Funds
Cash balances held by banks with their local Federal Reserve Bank.
Fed - Federal Reserve
The Central Bank for the United States.
Federal Deposit Insurance Corporation (FDIC )
The regulatory agency responsible for administering bank depository insurance in the US.
Federal Reserve Board
The board of the Federal Reserve System, appointed by the US President for 14 year terms, one of whom is appointed for four years as chairman.
Federal Reserve System
The central banking system of the US comprising 12 Federal Reserve Banks controlling 12 districts under the Federal Reserve Board. Membership of the Fed is compulsory for banks chartered by the Comptroller of Currency and optional for state chartered banks.
Fedwire
An automated communications and settlement system linking the Federal Reserve banks with other banks and with depository institutions.
Fill or Filled
A deal that has been executed on behalf of a Customer's Account given a Customer's Order. Once filled, an Order cannot be canceled, amended or waived by Customer.
Fill Price
The price at which a buy or sell order was executed.
Financial Risk
The risk that a firm will be unable to meet its financial obligations.
Finex
A currency market part of the New York Cotton Exchange (NYCE), the oldest futures exchange in New York. The exchange lists futures on the European Currency Unit and the USDX a basket of 10 currencies.
Firm Quotation
A verbal price given in response to a request for a firm rate at which the quoting party is willing to execute a deal for a reasonable amount for spot settlement.
First In First Out (FIFO)
Open positions are closed according to the FIFO accounting rule. All positions opened within a particular currency pair are liquidated in the order in which they were originally opened.
Fiscal Policy
Use of taxation as a tool in implementing monetary policy
Fixed dates
The monthly calendar dates similar to the spot. There are two exceptions. For detailed description see value dates.
Fixed Exchange Rate (Representative Rate )
An official exchange rate set by monetary authorities for one or more currencies. In practice, even fixed exchange rates fluctuate between definite upper and lower bands, leading to intervention.
Fixing
A method of determining rates by normally finding a rate that balances buyers to sellers. Such a process occurs either once or twice daily at defined times. Used by some currencies particularly for establishing tourist rates.
Flat (Square, Balanced)
To be neither long nor short is the same as to be flat or square. One would have a flat book if he has no positions or if all the positions cancel each other out.
Flexible exchange rate
Exchange rates with a fixed parity against one or more currencies with frequent revaluations. A form of managed float.
Floating exchange rate
An exchange rate where the value is determined by market forces. Even floating currencies are subject to intervention by the monetary authorities. When such activity is frequent, the float is known as a dirty float.
FOMC - Federal Open Market Committee
The Federal Reserve monetary committee. The body of individuals that decide the course of monetary policy that will be conducted in United States. The FOMC is directly responsible for pegging the Federal Funds rate and the Discount Rate. Both rates are influential in controlling the levels of money supply growth and the levels of economic activity in the United States.
Forex - Foreign Exchange
The simultaneous buying of one currency and selling of another in an over-the-counter market. Most major FX is quoted against the US Dollar.
Forex Club
Groups formed in the major financial centers to encourage educational and social contacts between foreign exchange dealers, under the umbrella of Association Cambiste International.
Forward
The pre-specified exchange rate for a foreign exchange contract settling at some agreed future date, based upon the interest rate differential between the two currencies involved.
Forward Deal
A deal with a value date greater than the spot value date.
Forward Margins
Discounts or premiums between spot rate and the forward rate for a currency. Normally quoted in points.
Forward Operation
Foreign exchange transactions, on which the fulfillment of the mutual delivery obligations is made on a date later than the second business day after the transaction was concluded.
Forward Outright
A commitment to buy or sell a currency for delivery on a specified future date or period. The price is quoted as the spot rate minus or plus the forward points for the chosen period.
Forward Points
The pips added to or subtracted from the current exchange rate to calculate a forward price.
Forward Rate/Forward Price
Forward rates are quoted in terms of forward points, which represents the difference between the forward and spot rates. In order to obtain the forward rate from the actual exchange rate the forward points are either added or subtracted from the exchange rate.
The decision to subtract or add points is determined by the differential between the deposit rates for both currencies concerned in the transaction. The base currency with the higher interest rate is said to be at a discount to the lower interest rate quoted currency in the forward market. Therefore, the forward points are subtracted from the spot rate. Similarly, the lower interest rate base currency is said to be at a premium, and the forward points are added to the spot rate to obtain the forward rate.
FRA - Forward Rate Agreements
FRA`s are transactions that allow one to borrow/lend at a stated interest rate over a specific time period in the future.
Fundamentals
The macro economic factors that are accepted as forming the foundation for the relative value of a currency, these include inflation, growth, trade balance, government deficit, and interest rates.
FX
FX" is a popular acronym for Foreign Exchange. Foreign Exchange generally refers to off exchange trading in foreign currency. It may also refer to currency trading on exchanges such as the IMM at the Chicago Mercantile Exchange.
Fundamental Analysis
Analysis of economic and political information with the objective of determining future movements in a financial market.
Futures Contract
An obligation to exchange a good or instrument at a set price on a future date. The primary difference between a Future and a Forward is that Futures are typically traded over an exchange (Exchange- Traded Contacts - ETC), versus forwards, which are considered Over The Counter (OTC) contracts. An OTC is any contract NOT traded on an exchange.
Labels: Forex Glossary
