外汇术语

All or None - A limit price order that requires the entire order to be filled at the stated price or not at all.

Arbitrage - The simultaneous purchase and sale of an instrument in two different markets to profit from a temporary price disparity.

Base Currency - The currency against which other currencies are quoted. Example, the primary base currency is the u.s. dollar.

Basis - The spot price minus the futures price.

Best Effort - An order to be executed at the best available price. Discretion is given to the dealer as to when to execute the order.

Bid - The price for which a willing buyer will purchase the asset.

Broker - An individual who matches buy and sell orders in return for a commission. The bid and offer prices are those of the market participants and not of the broker, unlike market makers.

Cable - A market term used for the British Pound Sterling.

Covered Interest Rate Arbitrage - A transaction which consists of borrowing in currency A, in exchange for currency B, investing currency B and covering in the forward market. The transaction takes advantage of interest rate differentials.

Credit Line - The amount of foreign currency exposure a firm will allow a client to take.

Credit Risk - The idea that an outstanding currency position will not be repaid as agreed by the counterparty, either voluntarily or not. Also known as counterparty risk.

Cross Rates - Often referred to as the exchange rate between any two currencies not involving the u.s. dollar. In reality, however, all rates are technically cross rates.

Cost of Carry - The cost of borrowing money in order to maintain a position. It is based on the interest parity which determines the forward price.

Daylight Position Limit - Position limits on a currency or aggregate on a series of currencies that a trader can carry during regular trading hours.

Direct Dealing - An approach whereby dealers contact each other to transact without a broker.

Discount Forward Spread - The forward points that is subtracted from the spot to arrive at the forward price. This means that the foreign interest rate is lower than the u.s. rate for the period. Also known as swap points.

Exotic Currency - A currency with little liquidity and limited dealing, which is neither a major or minor currency.

Forward Outright - A foreign exchange deal with a maturity beyond the spot delivery date.

Forward Spread - Refers to the forward premium or discount that the forward price trades at. The forward price is calculated with the spot price, interest rate differential, and days to delivery.

Initial Margin - The margin paid initially to trade currency futures or margined otc forex. A traders loss may not exceed this margin per contract/lot.

Interest Rate - Interest rates may be determined by a simple rule using the bid and offer spread on an fx rate. If the rate quoted is in european terms and the offered price is higher than the bid, then you know that the interest rate is that nation is higher than the rate in the base nation for the particular time in question. If quoted in american terms, the opposite is true.
Example - usd/jpy quoted 105.75 to 105.65
Because the offered price is lower than the bid, then you know that rates are lower in japan than in the u.s.

Kiwi - A market term for the New Zealand Dollar.

Libor - London Interbank Offered Rate. This is the rate at which banks will lend to each other, set at 11:00 a.m. London time.

Major Currency - The euro, d-mark, swiss franc, british pound, and japanese yen.

Market Maker - One that consistently makes two way prices, providing both a bid and an offer. Unlike brokers, market makers trade their capital, although they will hedge.

Mark-to-Market - A system by which futures contracts and other markets are revalued using closing market prices to determine cash flow requirements for margin purposes.

Matching Systems - An electronic system that attempts to duplicate the brokers market. Bids and offers are available to any bank for execution. EBS is a matching system.

Minor Currency - The canadian dollar, the australian dollar, and the kiwi are minor currencies.

Negative Carry - A market position whereby the currency owned pays a lower rate of interest than that of the currency borrowed resulting in a negative cash flow.

Offer - The price for which a willing seller will sell the asset.

Overnight Position Limit - Position limits on a currency or aggregate on a series of currencies that a trader can carry during overnight trading hours. These limits are usually smaller than day light position limits.

Pip - The term used in the otc currency markets to denote the smallest incremental move an exchange rate can make.

Positive Carry - A market position whereby the currency owned pays a higher rate of interest than that of the currency borrowed, resulting in a positive cash flow.

Premium Forward Spread - The forward points that is added to the spot price to determine a forward price. A forward premium means that the foreign interest rate is higher than the u.s. rate for the period.

Purchasing Power Parity - This states that the price for a good in one nation should be equal to the price of the same good in any other nation, all things being equal, exchanged at the current rate.

Quotation American Terms - A quotation that reflects the number of usd units per foreign currency.

Quotation European Terms - A quotation that reflects the number of foreign currency units per us dollars.

Rollover - A transaction designed for spot deals whereby the delivery is extended and "exchanged" from the old spot delivery date to the current spot delivery date. Swap points are either subtracted or added reflecting either a positive cost of carry of negative.

Spot Deal - An fx deal whereby a party will deliver a certain currency against receiving a certain amount of another currency based on an agreed rate from another party, within 2 business days, 1 day for the cad which is the exception.

Spot Next - An fx deal which matures one business day past the spot date, thus, 3 business days to maturity.

Swap Deal - An fx deal which consists of a simultaneous purchase and sale for different maturity dates with the same counterparty.

Tom Next - Tommorrow next, is an fx deal which matures one day prior to a regular spot deal, thus maturity is the next business day.

Two-Way Price - A quotation with both the bid and offer price.

Variation Margin - The margin necessary to fully cover any losses by a trader. Variation margin is required to bring the account back up to the initial margin requirements.