| 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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