Forex Trading, Forex Tools, Currency Trading, Forex Tips, Forex Resources » forexglossary

L

admin — Thu, 26 Nov 2009 18:13:51 +0000

1. Ladder Option

An option that locks in gains as the underlying asset reaches predetermined price levels, In this way, these levels are like rungs of a ladder. The gains are locked in even if the asset More…

2. Lagging Indicator

Economic indicators that change after the overall economy has changed, used to confirm effects of Fed policy. An example is the Consumer Price Index (CPI).

3. Leading Indicators

Economic indicators used to predict future economic activity, such as the levels of the S&P 500 index.

4. Left-Hand Side

Refers to the bid quote, which is the price at which customers who are long a currency pair sell it.

5. Leverage

The ratio of margin to the maximum position size. With a deposit of $5000 and a leverage of 50, a trader could enter a position with a face value of $250,000. Leveraging allows you to More…

6. Liability

The obligation to deliver currency as part of a spot transaction. In speculative forex trading, currency is not delivered. All profits and losses are subtracted from margin deposits.

7. LIBOR

London Interbank Offered Rate – The rate that banks use when borrowing from one another. See also: London Interbank Offered Rate

8. LIFFE

London International Financial Futures Exchange

9. Limit Order

An order to transact at a specified price or better. See Buy Limit Order and Sell Limit Order.

10. Limit Price

The specified price as part of a limit order.

11. Line Chart

The simplest form of charting, a line chart plots a series of lines connecting the various price levels over a specified time period.

12. Liquid

Term used to describe a market where there are lots of buyers and sellers generating a great deal of volume.

13. Liquidation

This is what happens as a result of a margin call. All positions are closed to prevent further loss. At margin call, the value of the account is not sufficient to sustain the position size. More…

14. Liquidity

Term used to describe a market where there are lots of buyers and sellers generating a great deal of volume.

15. London Interbank Offered Rate

The London Interbank Offered Rate or LIBOR is a daily reference rate based on the interest rates at which banks borrow unsecured funds from other banks in the London wholesale money market More…

16. Long

When a currency pair is long, the first currency is bought while the second currency is sold short. To go long on a currency means that you buy it. A long position is expressed in terms of More…

17. Long Call

An option which gives its holder the right, but not the obligation, to buy the underlying asset.

18. Long Position

When a currency pair is long, the first currency is bought while the second currency is sold short. To go long on a currency means that you buy it. A long position is expressed in terms of More…

19. Long Put

An option which gives its holder the right, but not the obligation, to sell the underlying asset.

20. Lookback Option

An option that lets the holder look back at the prices of the underlying asset during the life of the option and select the ideal price to exercise at.

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K

admin — Thu, 26 Nov 2009 18:11:40 +0000

1.K A Nasdaq stock symbol specifying that the stock has no voting rights. 2. Key Currency For smaller countries, the act of orienting their currency to that of a major trading partner. 3. Kill or Fill An order that does not permit partial filling. If it cannot be completely filled, [...]

J

admin — Thu, 26 Nov 2009 18:10:07 +0000

1. Japanese Housewives A term coined by the financial press to refer to the Japanese households that speculated on the carry trade and became a major seller of yen, thereby driving the currency against the levels More…
2. Japanese yen The yen is the Japanese currency unit. It is the third most-traded currency in the foreign exchange market after United States dollar and the Euro. See also: JPY
3. Jean Claude Trichet President of the European Central Bank, appointed November, 2003.
4. Jim Cramer A financial market analyst, host of CNBC’s Mad Money, and co-founder of TheStreet.com.
5. Jobber A trader who trades for small, short-term profits during the course of a trading session, rarely carrying a position overnight.
6. JPY Japan’s currency code. This entry identifies the national medium of exchange and, in parenthesis, gives the International Organization for Standardization (ISO) 4217 alphabetic More…
7. Jurisdiction Risk The risk that funds will be lost when placed under the jurisdiction of a foreign authority.

forexglossary.com

I

admin — Thu, 26 Nov 2009 18:08:53 +0000

1. IFEMA – International Foreign Exchange Master Agreement
2. IM – International Monetary Market. See also: International Monetary Market.
3. IMF – See International Monetary Fund.
4. Indicative Quote – A market maker’s price. It is not dealable, but is for information purposes only. See also: Firm Quote
5. Inflation – A rise in prices or a drop in the purchasing power of money.
6. Initial Margin – The first deposit by a customer which determines a corresponding maximum trade size.
7. Initial Margin Requirement – When entering a position, the minimum amount that must be paid in cash.
8. Interbank Market – A market in which financial institutions can trade. The term refers to short term money or foreign exchange markets that are only accessible to banks or financial institutions. There is no More…
9. Interday Trading – Positions that are opened and closed within the same trading day.
10. Interdealer Market – Same as Interbank Market.
11. Interest Rate – The rate charged or paid for the use of money. An interest rate is expressed as an annual percentage of the principal. Interest rates often change as a result of inflation and Central Bank More…
12. Interest Rate Swap – A swap that exchanges the revenue generated by the two legs of the agreement. One party pays an agreed-upon fixed interest rate for the notional amount in exchange for the interest that More…
13. International Monetary Fund – Supranational organization established in 1946 to provide international liquidity and loans to member countries.
14. International Monetary Market – The futures trading arm of the Chicago Mercantile Exchange.
15. International Organization for Standardization – The organization responsible for developing the standardized forex trading codes used by traders, such as EUR for Euros or CAD for the Canadian Dollar.
16. Intervention – See Central Bank Intervention.
17. Intra Day Position – Positions that are opened and closed within the same trade day.
18. Introducing Broker – A person or firm that introduces customers to a market maker often in return for commission or a portion of the spread.
19. ISO – See International Organization for Standardization.
20. ISO 4217 – ISO 4217 is the international standard describing three-letter codes (also known as the currency code) to define the names of currencies established by the International Organization for More…

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