FOREX QUOTATIONS

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GLOSSARY

ARBITRAGE

Profiting from differences in the price of a single currency pair that is traded on more than one market.

ASK/OFFER Price

It means the price at which a specific currency can be bought.It can be found on the right side of the quotation. For example, in the quote EUR/USD 1.2701/05, the ask price is 1.2705; meaning you can buy one EURO for 1.2705 US Dollars.

Base Currency

-a currency listed first in a Currency Pair.For example, in EUR/USD, Euro is the base currency.

Bear Market

there is when the trend market is decreasing over a period of time.

BID PRICE

- the price at which specific currency can be sold and is found on the left side of the quotation. For example, in the quote EUR/USD 1.2701/05, the bid price is 1.2701; meaning you can sell one EURO for 1.2701 US Dollars.

BID/ASK SPREAD

- The difference between the bid and ask(offer) price.

BULL MARKET

-there is when the trend market is increasing over a period of time.

Call

An option that gives the holder the right to buy the underlying instrument at a specified price during a fixed period.

CANDLESTICK CHART

It is a type of chart that uses shaded bars to indicate trading range.

COUNTER CURRENCY

It is a currency listed second in a Currency Pair. For example, in EUR/USD, US Dollar is the counter currency.

CROSS CURRENCY PAIRS or CROSS RATE

- currency pair which doesn`t contain USD.For instance,EUR/JPY or GBP/CHF.

DAY ORDER

An order introduced for one specific day which will be automatically canceled if it is not executed on that day.

EXOTIC CURRENCY

A less broadly traded currency.e.g. CHF

Derivative

- A contract that changes in value in relation to the price movements of a related or underlying security, future or other physical instrument. An Option is the most common derivative instrument.

FED

it means the United States Federal Reserve.

FOREX

stands for Foreign Exchange Market(other terms:currency,Forex or just FX).

FORWARD CONTRACT

Sometimes used as synonym for "forward deal" or "future". More specifically for arrangements with the same effect as a forward deal between a bank and a customer.

Leverage or Margin

– Amount by which the notional amount traded exceeds the margin required to trade. For example, if the notional amount traded (also referred to as “lot size” or “contract value”) is $100,000 dollars and the required margin is $2,000, the trader can trade with 50 times leverage ($100,000/$2,000).

Limit Order

– An order to buy or sell when the price reaches a specified level.

P.I.P.

(percentage in point) -it is the smallest price unit for every currency

SPOT

-the act of buying and selling currency where the settlement date takes place two days later.

STOP LOSS ORDER

-It is an order which is given to ensure that, should a currency weaken by a certain percentage, a short position will be covered even though this involves taking a loss.

WORKING DAY

it occurs if the bank in both (all relevant currency centers in the case of a cross) are open.

Volatility

– A statistical measure indicating the tendency of sharp price movements within a period of time.

 
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