forex glossary


Check our forex glossary in order to understand common words, phrases and terms used by forex traders.

Forex glossary

The dollar level of new orders for both durable and nondurable goods. This report is more in depth than the durable goods report which is released earlier in the month. 

The difference between the price of a derivative contract and the underlying cash market price. Fair value means there are no arbitrage opportunities between the two prices. 

When a market is so volatile and heavily traded that it can trade outside of the current 'screen' price. 

The Federal Reserve Bank, the central bank of the United States, or the FOMC (Federal Open Market Committee), the policy-setting committee of the Federal Reserve. 

Refers to members of the Board of Governors of the Federal Reserve or regional Federal Reserve Bank Presidents. 

Refers to the price quotation of '00' in a price such as 00-03 (1.2600-03) and would be read as 'figure-three.' If someone sells at 1.2600, traders would say 'the figure was given' or 'the figure was hit.' 

When an order has been fully executed. 

An order that, if it cannot be filled in its entirety, will be cancelled. 

All positions opened within a particular currency pair are liquidated in the order in which they were originally opened. 

One of approximately 5 times during the FX trading day when a large amount of currency must be bought or sold to fill a commercial customer’s orders. Typically these times are associated with market volatility. The regular fixes are as follows (all times NY): 

When you have no position.

Economic data readings matching the previous period's levels that are unchanged. 

Dealer jargon used to describe a position that has been completely reversed, e.g. you bought $500,000 and then sold $500,000, thereby creating a neutral (flat) position. 

Fresh buying or selling interest after a directional break of a particular price level. The lack of follow-through usually indicates a directional move will not be sustained and may reverse. 

Federal Open Market Committee, the policy-setting committee of the US Federal Reserve. 

Written record of FOMC policy-setting meetings are released 3 weeks following a meeting. The minutes provide more insight into the FOMC's deliberations and can generate significant market reactions. 

The simultaneous buying of one currency and selling of another. The global market for such transactions is referred to as the “forex” or “FX” market. 

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. 

The pips added to or subtracted from the current exchange rate to calculate a forward price. 

A name for the index of the top 40 companies (by market capitalization) listed on the French stock exchange. FRA40 is also known as CAC 40. 

The main Futures contract of a market in which most trading takes place.

The name of the UK 100 Index. 

The assessment of all information available on a tradable product to determine its future outlook and therefore predict where the price is heading. Often non-measurable and subjective assessments, as well as quantifiable measurements, are made in fundamental analysis. 

Refers to hedge fund types active in the market; also used as another term for USD/CAD pair. 

An agreement between two parties to execute a transaction at a specified time in the future when the price is agreed in the present. 

An obligation to exchange a good or instrument at a set price and specified quantity grade at 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.

Foreign exchange.

send message