Trading Intl’s Forex Glossary
Hedge - A position or combination of positions that reduces the risk of your primary position.
"Hit the bid" - Acceptance of purchasing at the offer or selling at the bid.
Inflation - An economic condition whereby prices for consumer goods rise, eroding purchasing power.
Initial Margin - The initial deposit of collateral required to enter into a position as a guarantee on future performance.
Interbank Rates - The Foreign Exchange rates at which large international banks quote other large international banks.
Intervention - Action by a central bank to effect the value of its currency by entering the market. Concerted intervention refers to action by a number of central banks to control exchange rates.
Kiwi - Slang for the New Zealand dollar.
Leading Indicators - Statistics that are considered to predict future economic activity.
Leverage - Also called margin. The ratio of the amount used in a transaction to the required security deposit.
LIBOR - The London Inter-Bank Offered Rate. Banks use LIBOR when borrowing from another bank.
Limit order - An order with restrictions on the maximum
price to be paid or the minimum price to be received. As an example, if the current price of USD/YEN is 117.00/05, then a limit order to buy USD would be at a price below 102. (ie 116.50)
Liquidation - The closing of an existing position through the execution of an offsetting transaction.
Liquidity - The ability of a market to accept large transaction with minimal to no impact on price stability.
Long position - A position that appreciates in value if market prices increase. When the base currency in the pair is bought, the position is said to be long.
Lot - A unit to measure the amount of the deal. The value of the deal always corresponds to an integer number of lots. |
