IMM International Monetary Market, the Chicago-based currency futures market, that is part of the Chicago Mercantile Exchange.
IMM futures A traditional futures contract based on major currencies against the US dollar. IMM futures are traded on the floor of the Chicago Mercantile Exchange.
IMM session 8:00am - 3:00pm New York.
INDU Abbreviation for the Dow Jones Industrial Average.
Industrial production Measures the total value of output produced by manufacturers, mines and utilities. This data tends to react quickly to the expansions and contractions of the business cycle and can act as a leading indicator of employment and personal income data.
Inflation An economic condition whereby prices for consumer goods rise, eroding purchasing power.
Initial margin requirement The initial deposit of collateral required to enter into a position.
Interbank rates The foreign exchange rates which large international banks quote to each other.
Interest Adjustments in cash to reflect the effect of owing or receiving the notional amount of equity of a CFD position.
Intervention Action by a central bank to affect the value of its currency by entering the market. Concerted intervention refers to action by a number of central banks to control exchange rates.
Introducing broker A person or corporate entity which introduces accounts to a broker in return for a fee.
INX Symbol for S&P 500 index.
IPO A private company’s initial offer of stock to the public. Short for initial public offering.
ISM manufacturing index An index that assesses the state of the US manufacturing sector by surveying executives on expectations for future production, new orders, inventories, employment and deliveries. Values over 50 generally indicate an expansion, while values below 50 indicate contraction.
ISM non-manufacturing An index that surveys service sector firms for their outlook, representing the other 80% of the US economy not covered by the ISM Manufacturing Report. Values over 50 generally indicate an expansion, while values below 50 indicate contraction.
Japanese economy watchers survey Measures the mood of businesses that directly service consumers such as waiters, drivers and beauticians. Readings above 50 generally signal improvements in sentiment.
Japanese machine tool orders Measures the total value of new orders placed with machine tool manufacturers. Machine tool orders are a measure of the demand for companies that make machines, a leading indicator of future industrial production. Strong data generally signals that manufacturing is improving and that the economy is in an expansion phase.
JPN225 A name for the NEKKEI index.
Keep the powder dry To limit your trades due to inclement trading conditions. In either choppy or extremely narrow markets, it may be better to stay on the sidelines until a clear opportunity arises.
Kiwi Nickname for NZD/USD (New Zealand Dollar/U.S. Dollar).
Knock-ins Option strategy that requires the underlying product to trade at a certain price before a previously bought option becomes active. Knock-ins are used to reduce premium costs of the underlying option and can trigger hedging activities once an option is activated.
Knock-outs Option that nullifies a previously bought option if the underlying product trades a certain level. When a knock-out level is traded, the underlying option ceases to exist and any hedging may have to be unwound.
Last dealing day The last day you may trade a particular product.
Last dealing time The last time you may trade a particular product.
Leading indicators Statistics that are considered to predict future economic activity.
Level A price zone or particular price that is significant from a technical standpoint or based on reported orders/option interest.
Leverage Also known as margin, this is the percentage or fractional increase you can trade from the amount of capital you have available. It allows traders to trade notional values far higher than the capital they have. For example, leverage of 100:1 means you can trade a notional value 100 times greater than the capital in your trading account.*
Leveraged names Short-term traders, referring largely to the hedge fund community.
Liability Potential loss, debt or financial obligation.
LIBOR The London Inter-Bank Offered Rate. Banks use LIBOR as a base rate for international lending.
Limits/limit order An order that seeks to buy at lower levels than the current market or sell at higher levels than the current market. A limit order sets restrictions on the maximum price to be paid or the minimum price to be received. As an example, if the current price of USD/JPY is 117.00/05, then a limit order to buy USD would be at a price below the current market, e.g. 116.50.
Liquid market A market which has sufficient numbers of buyers and sellers for the price to move in a smooth manner.
Liquidation The closing of an existing position through the execution of an offsetting transaction.
London session 08:00 – 17:00 (London).
Long position A position that appreciates in value if market price increases. When the base currency in the pair is bought, the position is said to be long. This position is taken with the expectation that the market will rise.
Longs Traders who have bought a product.
Loonie Nickname for the Canadian dollar or the USD/CAD (U.S. Dollar/Canadian Dollar) currency pair.
Lot A unit to measure the amount of the deal. The value of the deal always corresponds to an integer number of lots.
Macro The longest-term trader who bases their trade decisions on fundamental analysis. A macro trade’s holding period can last anywhere from around six months to multiple years.
Manufacturing production Measures the total output of the manufacturing aspect of the Industrial Production figures. This data only measures the 13 sub-sectors that relate directly to manufacturing. Manufacturing makes up approximately 80% of total Industrial Production.
Margin call A request from a broker or dealer for additional funds or other collateral on a position that has moved against the customer.
Market maker A dealer who regularly quotes both bid and ask prices and is ready to make a two-sided market for any financial product.
Market order An order to buy or sell at the current price.
Market-to-market Process of re-evaluating all open positions in light of current market prices. These new values then determine margin requirements.
Maturity The date of settlement or expiry of a financial product.
Medley report Refers to Medley Global Advisors, a market consultancy that maintains close contacts with central bank and government officials around the world. Their reports can frequently move the currency market as they purport to have inside information from policy makers. The accuracy of the reports has fluctuated over time, but the market still pays attention to them in the short-run.
Models Synonymous with black box. Systems that automatically buy and sell based on technical analysis or other quantitative algorithms.
MoM Abbreviation for month-over-month, which is the change in a data series relative to the prior month's level.
Momentum A series of technical studies (e.g. RSI, MACD, Stochastics, Momentum) that assesses the rate of change in prices.
Momentum players Traders who align themselves with an intra-day trend that attempts to grab 50-100 pips.
NAS100 An abbreviation for the NASDAQ 100 index.
Net position The amount of currency bought or sold which has not yet been offset by opposite transactions.
New York session 8:00am – 5:00pm (New York time).
No touch An option that pays a fixed amount to the holder if the market never touches the predetermined Barrier Level.
NYA.X Symbol for NYSE Composite index.
Offer/ask price The price at which the market is prepared to sell a product. Prices are quoted two-way as Bid/Offer. The Offer price is also known as the Ask. The Ask represents the price at which a trader can buy the base currency, which is shown to the right in a currency pair. For example, in the quote USD/CHF 1.4527/32, the base currency is USD, and the ask price is 1.4532, meaning you can buy one US dollar for 1.4532 Swiss francs. In CFD trading, the Ask represents the price a trader can buy the product. For example, in the quote for UK OIL 111.13/111.16, the product quoted is UK OIL and the ask price is £111.16 for one unit of the underlying market.*
Offered If a market is said to be trading offered, it means a pair is attracting heavy selling interest, or offers.
Offsetting transaction A trade that cancels or offsets some or all of the market risk of an open position.
On top Attempting to sell at the current market order price.
One cancels the other order (OCO) A designation for two orders whereby if one part of the two orders is executed, then the other is automatically cancelled.
One touch An option that pays a fixed amount to the holder if the market touches the predetermined Barrier Level.
Open order An order that will be executed when a market moves to its designated price. Normally associated with good 'til cancelled orders.
Open position An active trade with corresponding unrealized P&L, which has not been offset by an equal and opposite deal.
Option A derivative which gives the right, but not the obligation, to buy or sell a product at a specific price before a specified date.
Order An instruction to execute a trade.
Order book A system used to show market depth of traders willing to buy and sell at prices beyond the best available.
Over the counter (OTC) Used to describe any transaction that is not conducted via an exchange.
Overnight position A trade that remains open until the next business day.
Paid Refers to the offer side of the market dealing.
Pair The forex quoting convention of matching one currency against the other.
Paneled A very heavy round of selling.
Parabolic A market that moves a great distance in a very short period of time, frequently moving in an accelerating fashion that resembles one half of a parabola. Parabolic moves can be either up or down.
Partial fill When only part of an order has been executed.
Patient Waiting for certain levels or news events to hit the market before entering a position.
Personal income Measures an individual’s total annual gross earnings from wages, business enterprises and various investments. Personal income is the key to personal spending, which accounts for 2/3 of GDP in the major economies.
Pips The smallest unit of price for any foreign currency, pips refer to digits added to or subtracted from the fourth decimal place, i.e. 0.0001.
Political risk Exposure to changes in governmental policy which may have an adverse effect on an investor's position.
Portfolio A collection of investments owned by an entity.
Position The net total holdings of a given product.
Premium The amount by which the forward or futures price exceeds the spot price.
Price transparency Describes quotes to which every market participant has equal access.
Profit The difference between the cost price and the sale price, when the sale price is higher than the cost price.
Pullback The tendency of a trending market to retrace a portion of the gains before continuing in the same direction.
Purchasing managers index (PMI) An economic indicator which indicates the performance of manufacturing companies within a country.
Purchasing managers index services (France, Germany, Eurozone, UK) Measures the outlook of purchasing managers in the service sector. Such managers are surveyed on a number of subjects including employment, production, new orders, supplier deliveries and inventories. Readings above 50 generally indicate expansion, while readings below 50 suggest economic contraction.
Put option A product which gives the owner the right, but not the obligation, to sell it at a specified price.
Quantitative easing When a central bank injects money into an economy with the aim of stimulating growth.
Quarterly CFDs A type of future with expiry dates every three months (once per quarter).*
Quote An indicative market price, normally used for information purposes only.
Rally A recovery in price after a period of decline.
Range When a price is trading between a defined high and low, moving within these two boundaries without breaking out from them.
Rate The price of one currency in terms of another, typically used for dealing purposes.
RBA Reserve Bank of Australia, the central bank of Australia.
RBNZ Reserve Bank of New Zealand, the central bank of New Zealand.
Real money Traders of significant size including pension funds, asset managers, insurance companies, etc. They are viewed as indicators of major long-term market interest, as opposed to shorter-term, intra-day speculators.
Realized profit/loss The amount of money you have made or lost when a position has been closed.
Resistence level A price that may act as a ceiling. The opposite of support.
Retail investor An individual investor who trades with money from personal wealth, rather than on behalf of an institution.
Retail sales Measures the monthly retail sales of all goods and services sold by retailers based on a sampling of different types and sizes. This data provides a look into consumer spending behavior, which is a key determinant of growth in all major economies.
Revaluation When a pegged currency is allowed to strengthen or rise as a result of official actions; the opposite of a devaluation.
Rights issue A form of corporate action where shareholders are given rights to purchase more stock. Normally issued by companies in an attempt to raise capital.
Risk Exposure to uncertain change, most often used with a negative connotation of adverse change.
Risk management The employment of financial analysis and trading techniques to reduce and/or control exposure to various types of risk.
Rollover A rollover is the simultaneous closing of an open position for today's value date and the opening of the same position for the next day's value date at a price reflecting the interest rate differential between the two currencies. In the spot forex market, trades must be settled in two business days. For example, if a trader sells 100,000 Euros on Tuesday, then the trader must deliver 100,000 Euros on Thursday, unless the position is rolled over. As a service to customers, all open forex positions at the end of the day (5:00 PM New York time) are automatically rolled over to the next settlement date. The rollover adjustment is simply the accounting of the cost-of-carry on a day-to-day basis.
Round trip A trade that has been opened and subsequently closed by an equal and opposite deal.
Running profit/loss An indicator of the status of your open positions; that is, unrealized money that you would gain or lose should you close all your open positions at that point in time.
RUT Symbol for Russell 2000 index.
SEC The Securities and Exchange Commission.
Sector A group of securities that operate in a similar industry.
Sell Taking a short position in expectation that the market is going to go down.
Settlement The process by which a trade is entered into the books, recording the counterparts to a transaction. The settlement of currency trades may or may not involve the actual physical exchange of one currency for another.
SHGA.X Symbol for the Shanghai A index.
Short-covering After a decline, traders who earlier went short begin buying back.
Short position An investment position that benefits from a decline in market price. When the base currency in the pair is sold, the position is said to be short.
Short squeeze A situation in which traders are heavily positioned on the short side and a market catalyst causes them to cover (buy) in a hurry, causing a sharp price increase.
Shorts Traders who have sold, or shorted, a product, or those who are bearish on the market.
Sidelines, sit on hands Traders staying out of the markets due to directionless, choppy or unclear market conditions are said to be on the sidelines or sitting on their hands.
Simple moving average SMA A simple average of a pre-defined number of price bars. For example, a 50 period daily chart SMA is the average closing price of the previous 50 daily closing bars. Any time interval can be applied.
Slippage The difference between the price that was requested and the price obtained typically due to changing market conditions.
Slippery A term used when the market feels like it is ready for a quick move in any direction.
Sloppy Choppy trading conditions that lack any meaningful trend and/or follow-through.
SNB Swiss National Bank, the central bank of Switzerland.
Sovereign names Refers to central banks active in the spot market.
Spot market A market whereby products are traded at their market price for immediate exchange.
Spot price The current market price. Settlement of spot transactions usually occurs within two business days.
Spot trade The purchase or sale of a product for immediate delivery (as opposed to a date in the future). Spot contracts are typically settled electronically.
Spread The difference between the bid and offer prices.
SPX500 A name for the S&P index.
Square Purchase and sales are in balance and thus the dealer has no open position.
Sterling A nickname for the British pound or the GBP/USD (Great British Pound/U.S. Dollar) currency pair.
Stock exchange A market on which securities are traded.
Stock index The combined price of a group of stocks - expressed against a base number - to allow assessment of how the group of companies is performing relative to the past.
Stop entry order This is an order placed to buy above the current price, or to sell below the current price. These orders are useful if you believe the market is heading in one direction and you have a target entry price.
Stop-loss hunting When a market seems to be reaching for a certain level that is believed to be heavy with stops. If stops are triggered, then the price will often jump through the level as a flood of stop-loss orders are triggered.
Stop loss order This is an order placed to sell below the current price (to close a long position), or to buy above the current price (to close a short position). Stop loss orders are an important risk management tool. By setting stop loss orders against open positions you can limit your potential downside should the market move against you. Remember that stop orders do not guarantee your execution price – a stop order is triggered once the stop level is reached, and will be executed at the next available price.
Stop order A stop order is an order to buy or sell once a pre-defined price is reached. When the price is reached, the stop order becomes a market order and is executed at the best available price. It is important to remember that stop orders can be affected by market gaps and slippage, and will not necessarily be executed at the stop level if the market does not trade at this price. A stop order will be filled at the next available price once the stop level has been reached. Placing contingent orders may not necessarily limit your losses.
Stops building Refers to stop-loss orders building up; the accumulation of stop-loss orders to buy above the market in an upmove, or to sell below the market in a downmove.
Strike price The defined price at which the holder of an option can buy or sell the product.
Support A price that acts as a floor for past or future price movements.
Support levels A technique used in technical analysis that indicates a specific price ceiling and floor at which a given exchange rate will automatically correct itself. Opposite of resistance.
Suspended trading A temporary halt in the trading of a product.
Swap A currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate.
Swissie The nickname for the Swiss franc or the USD/CHF (U.S. Dollar/Swiss Franc) currency pair.
Takeover Assuming control of a company by buying its stock.
Technical analysis The process by which charts of past price patterns are studied for clues as to the direction of future price movements.
Technicians/Techs Traders who base their trading decisions on technical or charts analysis.
Ten (10) yr US government-issued debt which is repayable in ten years. For example, a US 10-year note.
Thin A illiquid, slippery or choppy market environment. A light-volume market that produces erratic trading conditions.
Thirty (30) yr UK government-issued debt which is repayable in 30 years. For example, a UK 30-year gilt.
Tick (size) A minimum change in price, up or down.
Time to maturity The time remaining until a contract expires.
Tokyo session 09:00 – 18:00 (Tokyo).
Tomorrow next (tom/next) Simultaneous buying and selling of a currency for delivery the following day.
T/P Stands for “take profit.” Refers to limit orders that look to sell above the level that was bought, or buy back below the level that was sold.
Trade balance Measures the difference in value between imported and exported goods and services. Nations with trade surpluses (exports greater than imports), such as Japan, tend to see their currencies appreciate, while countries with trade deficits (imports greater than exports), such as the US, tend to see their currencies weaken.
Trade size The number of units of product in a contract or lot.
Trading bid A pair is acting strong and/or moving higher; bids keep entering the market and pushing prices up.
Trading halt A postponement to trading that is not a suspension from trading.
Trading heavy A market that feels like it wants to move lower, usually associated with an offered market that will not rally despite buying attempts.
Trading offered A pair is acting weak and/or moving lower, and offers to sell keep coming into the market.
Trading range The range between the highest and lowest price of a stock usually expressed with reference to a period of time. For example: 52-week trading range.
Trailing stop A trailing stop allows a trade to continue to gain in value when the market price moves in a favorable direction, but automatically closes the trade if the market price suddenly moves in an unfavorable direction by a specified distance. Placing contingent orders may not necessarily limit your losses.
Transaction cost The cost of buying or selling a financial product.
Transaction date The date on which a trade occurs.
Trend Price movement that produces a net change in value. An uptrend is identified by higher highs and higher lows. A downtrend is identified by lower highs and lower lows.
Turnover The total money value or volume of all executed transactions in a given time period.
Two-way price When both a bid and offer rate is quoted for a forex transaction.
TYO10 Symbol for CBOE 10-Year Treasury Yield Index.
Ugly Describing unforgiving market conditions that can be violent and quick.
UK average earnings including bonus/excluding bonus Measures the average wage including/excluding bonuses paid to employees. This is measured quarter-on-quarter (QoQ) from the previous year.
UK claimant count rate Measures the number of people claiming unemployment benefits. The claimant count figures tend to be lower than the unemployment data since not all of the unemployed are eligible for benefits.
UK HBOS house price index Measures the relative level of UK house prices for an indication of trends in the UK real estate sector and their implication for the overall economic outlook. This index is the longest monthly data series of any UK housing index, published by the largest UK mortgage lender (Halifax Building Society/Bank of Scotland).
UK jobless claims change Measures the change in the number of people claiming unemployment benefits over the previous month.
UK manual unit wage loss Measures the change in total labor cost expended in the production of one unit of output.
UK OIL* A name for Brent Crude Oil.
UK producers price index input Measures the rate of inflation experienced by manufacturers when purchasing materials and services. This data is closely scrutinized since it can be a leading indicator of consumer inflation.
UK producers price index output Measures the rate of inflation experienced by manufacturers when selling goods and services.
UK100 A name for the FTSE 100 index.
Underlying The actual traded market from where the price of a product is derived.
Unemployment rate Measures the total workforce that is unemployed and actively seeking employment, measured as a percentage of the labor force.
University of Michigan's consumer sentiment index Polls 500 US households each month. The report is issued in a preliminary version mid-month and a final version at the end of the month. Questions revolve around individuals’ attitudes about the US economy. Consumer sentiment is viewed as a proxy for the strength of consumer spending.
Unrealized gain/loss The theoretical gain or loss on open positions valued at current market rates, as determined by the broker in its sole discretion. Unrealized gains/losses become profits/losses when the position is closed.
Uptick A new price quote at a price higher than the preceding quote.
Uptick rule In the US, a regulation whereby a security may not be sold short unless the last trade prior to the short sale was at a price lower than the price at which the short sale is executed.
US OIL A name for WTI Crude Oil.
US prime rate The interest rate at which US banks will lend to their prime corporate customers.
US30 A name for the Dow Jones index.
Value date Also known as the maturity date, it is the date on which counterparts to a financial transaction agree to settle their respective obligations, i.e., exchanging payments. For spot currency transactions, the value date is normally two business days forward.
Variation margin Funds traders must hold in their accounts to have the required margin necessary to cope with market fluctuations.
VIX or volatility index Shows the market's expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge."
Volatility Referring to active markets that often present trade opportunities.
Wedge chart pattern Chart formation that shows a narrowing price range over time, where price highs in an ascending wedge decrease incrementally, or in a descending wedge, price declines are incrementally smaller. Ascending wedges typically conclude with a downside breakout and descending wedges typically terminate with upside breakouts.
Whipsaw Slang for a highly volatile market where a sharp price movement is quickly followed by a sharp reversal.
Wholesale prices Measures the changes in prices paid by retailers for finished goods. Inflationary pressures typically show earlier than the headline retail.
Working order Where a limit order has been requested but not yet filled.
WSJ Acronym for The Wall Street Journal.
XAG/USD Symbol for Silver Index.
XAU/USD Symbol for Gold Index.
XAX.X Symbol for AMEX Composite Index.
Yard A billion units.
Yield The percentage return from an investment.
YoY Abbreviation for year over year.
Yuan The yuan is the base unit of currency in China. The renminbi is the name of the currency in China, where the Yuan is the base unit.