Forex Terms

Forex terms D:

Day Order: A buy or sell order that will expire automatically at the end of the trading day on which it is entered.

Day Trade: A trade opened and closed on the same trading day.

Day Trader: A trader who buys and sells on the basis of small short-term price movements.

Day Trading: Refers to a style or type of trading where trade positions are opened and closed during the same day.

Dealer: An individual or firm that buys and sells assets from their portfolio, acting as a principal or counterpart to a transaction.

Depreciation: A fall in the value of a currency due to market forces.

Desk: Term referring to a group dealing with a specific currency or currencies.

Devaluation: The act by a government to reduce the external value of its currency.

Direct quotation: Quoting in fixed units of foreign currency against variable amounts of the domestic currency.

Discretionary Account: An account in which the customer permits a trading institution to act on the customer's behalf in buying and selling currency pairs. The institution has discretion as to the choice of currency pairs, prices, and timing-subject to any limitations specified in the agreement.

Forex Terms E:

Euro: The single currency of the European Economic and Monetary Union (EMU) introduced in January 1999. This is the amalgamation of the following currencies, after Jan. 1, 2002 these currencies will be considered legacy currencies. Germany Deutsche Marks, Italy Lira, Austria Schillings, France Franc, Belgium Francs, Netherlands (Dutch) Guilders, Finland Markka, Portugal Escudo, Greece Drachmas, Ireland Punt, Luxembourg Francs, Spanish Pesetas.

European Central Bank (ECB): The Central Bank for the new European Monetary Union.

Execution: The Process of completing an order or deal.

Forex Terms F:

Fast Market Rapid movement in a market caused by strong interest by buyers and/or sellers. In such circumstances price levels may be omitted and bid and offer quotations may occur too rapidly to be fully reported.

Federal Deposit Insurance Corporation (FDIC): The regulatory agency responsible for administering bank depository insurance in the United States.

Federal Reserve (Fed): The Central Bank of the United States.

Federal Reserve System The central banking system in the United States.

Fill: The process of completing a customer's order to buy or sell a currency pair.

Fill Price: The price at which a buy or sell order was executed.

Financial Risk: The risk that a firm will be unable to meet its financial obligations.

Flat: Term describing a trading book with no market exposure.

FOMC Federal Open Market Committee, the committee that sets money supply targets in the US which tend to be implemented through Fed Fund interest rates etc.

Foreign Exchange: The purchase or sale of a currency against sale or purchase of another.

Forex: Term commonly used when referring to the foreign exchange market.

Forex Club:Groups formed in the major financial centers to encourage educational and social contacts between foreign exchange dealers, under the umbrella of Association Cambiste International.

Forward: A transaction that settles at a future date.

Forward Points: The points that are added to or subtracted from the spot rate to calculate the forward rates for a forward foreign exchange transaction. These points are based on the differential between the interest rates of the two currency pairs.

Forward Price: (See forward rates).

Forward Rates: The net price resulting from calculating the forward points and subtracting them from the existing spot rate. This is the rate at which a currency can be purchased or sold for delivery in the future.

Fundamental Analysis: Analysis of economic and political information with the objective of determining future movements in a financial market.

FX: Foreign Exchange.