Good ‘til Cancelled (GTC)
- An order to buy or sell at a specified price. This order remains open until filled or until the client cancels.
H
Hedging
- A hedging transaction is a purchase or sale of a financial product, having as its purpose the elimination of loss arising from price fluctuations. With regards to currency transactions it would protect one against fluctuations in the foreign exchange rate. (see Forward Contract)
I
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.
L
Leading Indicators
- Statistics that are considered to predict future economic activity. 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 102.00/05, then a limit order to buy USD would be at a price below 102. (ie 101.50)
Line Charts
- The Line Chart connects single prices for a selected time period.
Liquidity
- The ability of a market to accept large transaction with minimal to no impact on price stability. Liquidation - The closing of an existing position through the execution of an offsetting transaction. Long position - A position that appreciates in value if market prices increase. When one buys a currency, their position is long.
M
Margin
- The required equity that an investor must deposit to collateralize a position