Adjustable Peg - Term for an exchange rate regime where a country's exchange rate is "pegged" (i.e. fixed) in relation to another currency, often the dollar, but where the rate may be changed from time to time. This was the basis of the Bretton Woods Agreement. Adjustment
An exchange rate regime where a country’s exchange rate is “pegged” (i.e. fixed) in relation to another currency, often the dollar, but where the rate may be changed from time to time. Agent Bank
A bank acting for a foreign bank. In the Euro market - the agent bank is the one appointed by the other banks in the syndicate to handle the loan administration. Aggregate Demand
Total demand for goods and services in the economy. It includes private and public sector demand for goods and services within the country and the demand of consumers and firms in other countries for goods and services. Aggregate Risk
Size of exposure a bank to a single customer for both spot and forward contracts. Appreciation
A rise in a currency's value. A currency is said to ‘appreciate’ when its price increases against a specific currency or group of currencies in response to market demand. Arbitrage
The simultaneous purchase and sale of identical or equivalent financial instruments in order to benefit from a price discrepancy/differential. Ask
Also called “offer.” The rate at which a financial instrument if offered for sale. Asset
In the context of foreign exchange is the right to receive from a counterparty an amount of currency either in respect of a balance sheet asset (e.g. a loan) or at a specified future date in respect of an unmatched forward Forward or spot deal. Asset Allocation
Division of funds among different markets, instruments or investments to diversify risk and/or create exposure to areas considered attractive, consistent with an investor’s objectives. At Best
An instruction given to a dealer to buy or sell at the best market rate. Authorized Dealer
A financial institution or bank authorized to deal in foreign exchange. Average daily volume
Equals volume for a specified time period divided by the number of business days within that same time period.
B
Back Office
The departments and processes related to the settlement of financial transactions. Balance of Trade
The value of a country’s exports less its imports. Base Currency
The first currency in a Currency Pair. It shows how much the base currency is worth as measured against the second (counter) currency. For example, if the USD/CAD rate equals 1.0015 then one USD is worth CAD 1.0015 In the FX markets, the US Dollar is normally considered the 'base' currency for quotes, meaning that quotes are expressed as a unit of $1 USD per the other currency quoted in the pair. The primary exceptions to this rule are the British Pound, the Euro and the Australian Dollar. Bar chart
A graph of prices, volume and open interest for a specified time period used by the chartist to forecast market trends. A daily bar chart plots each trading session's high, low and settlement prices. Bear
One who believes prices will move lower. Bear Market
A market in which prices decline. Bid Rate
The rate at which a trader will buy a currency. Bid/Ask Spread
The difference between the bid and offer price, and the most widely used measure of liquidity. Big Figure
The first few digits of an exchange rate, as referred to by dealers for simplicity. These digits change relatively slowly, and are omitted in dealer quotes, especially in times of high market activity when time is tight. For example, a USD/JPY rate might be 102.02/102.07, but would be quoted verbally without the first three digits i.e. “02/07”. Bretton Woods Agreement of 1944
The agreement that established fixed foreign exchange rates for major currencies, provided for central bank intervention in the currency markets, and pegged the price of gold at US$35
per ounce. The agreement lasted until 1971, when President Nixon overturned the Bretton Woods agreement and established a floating exchange rate for the major currencies. Bollinger Bands
A quantitative method which combines a moving average with the instrument's volatility. The bands were designed to gauge whether the prices are high or low on relative basis. They are plotted two standard deviations above and below a simple moving average. The bands look like an expanding and contracting envelope model. Book
A record of all the positions that a trader is holding. This record shows the total amount of long and short position that the trader has undertaken. Broker
An individual or firm that acts as an intermediary, putting together buyers and sellers for a fee or commission. In contrast, a ‘dealer’ commits capital and takes one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade. Brokerage house
A firm that handles orders to buy and sell futures and options contracts for customers. Bull market
A market in which prices rise. Bundesbank
Germany’s Central Bank.
C
Cable
A term used in the foreign exchange market for the USD/GBP rate. Candlestick Chart
A chart indicating the trading range for the period as well as the opening and closing price. If the open price is higher than the close price, the rectangle between the open and close price is shaded. If the close price is higher than the open price, that area of the rectangle is not shaded. Carry
The income or cost associated with keeping a foreign exchange position overnight. This is derived when the currency pairs in the position have different interest rates for the same period of time. Carry-Over Charge
A finance charge associated with the storing of commodities (or foreign exchange contracts) from one delivery date to another. Cash settlement
Final disposition of open positions on the last trading day of a contract month. Occurs in markets where there is no actual delivery. Central Bank
A government bank which regulates a country’s banks and manages a nation’s monetary policy. The Federal Reserve is the central bank in the United States, while the European Central Bank (ECB) is the central bank of the European Monetary Union. Central Rate
Exchange rates against the ECU adopted for each currency within the EMS. Currencies have limited movement from the central rate according to the relevant band. CFTC
Acronym for the Commodity Futures Trading Commission as created by the Commodity Futures Trading Commission Act of 1974. This government agency currently regulates the nation's commodity futures industry. Charting
The use of graphs and charts in the technical analysis of futures markets to plot trends of price movements, average movements of price, and volume and open interest. Chartist
An individual who studies graphs and charts of historic data to find trends and predict trend reversals which include the observance of certain patterns and characteristics of the charts to derive resistance levels, head and shoulders patterns, and double bottom or double top patterns which are thought to indicate trend reversals. Clearing
The process of settling a trade. Closed position
A transaction which leaves the trade with a zero net commitment to the market with respect to a particular currency. Contagion
The likelihood of significant economic booms or economic crises. Collateral
Something given to secure a loan or as a guarantee of performance. Commission
The fee that a broker may charge clients for dealing on their behalf. Confirmation
A memorandum to the other party describing all the relevant details of the transaction. Contract
The standard unit of trading. Correlation
A statistical measure referring to the relationship between two or more variables (events, occurrences etc.). A correlation between two variables suggests some causal relationship between these variables. Typically the Swiss Franc is closely correlated with the German Mark. Cost of Carry
The interest rate parity, where the forward price is determined by the cost of borrowing money in order to hold the position. Counterparty
The other side to a deal (customer, or bank) with which a foreign exchange deal is executed. Country Risk
The risk attached to a borrower by virtue of its location in a particular country. This involves examination of economic, political and geographical factors. Various organizations generate country risk tables. Cross Rate
The exchange rate between any two currencies that are considered non-standard in the country where the currency pair is quoted. For example, in the US, a AUD/JPY quote would be considered a cross rate, whereas in Australia or Japan it would be one of the primary currency pairs traded. Currency
Any form of money issued by a government or central bank and used as legal tender and a basis for trade. Currency Risk
The possibility of an unfavourable change in exchange rates.
D
Day order
An order that if not executed at the end of the trading day, will automatically be cancelled. Day trader
Speculators who take and liquidate their positions prior to the close of the same trading day. Day Trading
Refers to taking positions which are opened and closed on the same trading day. Deal date
The date on which a transaction is agreed upon. Deal Ticket
The primary method of recording the basic information relating to a transaction. Dealer
A firm or individual who puts up capital and takes one side of a position, seeking to earn a spread (profit) through closing out the position in another trade with a different party. Deficit
A shortfall in the balance of trade, balance of payments, or government budgets. Delivery
An FX trade where both sides make and take actual delivery of the currencies traded. Delivery date
The date of maturity of the contract, when the final settlement of transaction is made by exchanging the currencies. The date is commonly known as value date. Delivery Risk
A term to describe when a counterparty will not be able to complete his side of the deal. This risk is very high in case of over-the-counter transactions where there is no exchange which can stand as a guarantee to the trade between the two parties to the contract. Depreciation
A fall in the value of a currency against another currency or group of currencies Devaluation (of currency)
The deliberate downward adjustment of a currency against its fixed parities or bands, normally by an official announcement. Downtrend
A price trend characterized by a series of lower highs and lower lows.
E
Easing
Modest decline in price. Economic Exposure
The change in future earning power and cash flow arising from a change in exchange rates. In effect, it represents a change in the value of a company holding a foreign currency. Economic Indicator
A government-issued statistic on the state of an economy, which might affect market prices. Common indicators include employment rates, Gross Domestic Product (GDP), inflation, retail sales, etc. Euro
The currency of the European Monetary Union (EMU). A replacement for the European Currency Unit (ECU). European Central Bank (ECB)
The European Monetary Union’s central bank, which governs monetary policy for member countries. ECU
European Currency Unit. European Monetary Union (EMU)
The EMU created the single European currency called the Euro, which replaced the national currencies of the member EU countries in 2002. The current members of the EMU are Germany, France, Belgium, Luxembourg, Austria, Finland, Ireland, the Netherlands, italy, Spain and Portugal. Effective Exchange Rate
An attempt to summarize the effects on a country's trade balance of its currency's changes against other currencies. Efficient Markets
Markets where assets are traded in which the price is indicative of all current and relevant information and thus it is impossible to have undervalued assets. Efficient Market Theory
The theory that the current market price reflects all information and expectations regarding the currency pair in question. The theory also assumes that the market cannot overprice or underprice an asset, and hence the current price is the correct valuation at the time. EFT
Electronic Fund Transfer. Elliot Wave Theory
A theory based on the notion that the market moves in waves, which consist of trends followed by partial corrections. The Elliot Wave Theory states that there are 5 waves within an overall trend. EMS
European Monetary System. End Of Day (or Mark to Market)
Traders account for their positions in two ways: accrual or mark-to-market. An accrual system accounts only for cash flows when they occur, hence, it only shows a profit or loss when realized. The mark-to-market method values the trader`s book at the end of each working day using the closing market rates or revaluation rates. Any profit or loss is booked and the trader will start the next day with a net position. Envelopes
While Bollinger Bands place boundary lines based on standard deviation, envelopes place lines at fixed percentage points above and below a moving average line. The upper and lower limits specify entry and exit points for currency traders. Equilibrium
A price region that suggests a balance between demand and supply for an currency pair in the marketplace. Euro
The currency of the European Monetary Union (EMU) which replaced the European Currency Unit (ECU). European Central Bank
The Central Bank for the European Monetary Union. European Monetary System
A system designed to stabilize if not eliminate exchange risk between member states of the EMS as part of the economic convergence policy of the EU. It permits currencies to move in a measured fashion (divergence indicator) within agreed bands (the parity grid) with respect to the ECU and consequently with each other. European Monetary Union
An institution of the EU, whose primary goal is to establish a single currency (the euro) for the entire EU. Exchange control
A system of controlling inflows and outflows of foreign exchange, devices include licensing multiple currencies, quotas, auctions, limits, levies and surcharges. Exotic
A less broadly traded currency. Exponentially Weighted Moving Average (EMA)
While the simple moving average distributes weight equally across the data series, exponentially weighted moving averages place greater weight to more recent data. As a result, they tend to provide a faster signal. Exposure
In foreign exchange, a potential for gain or loss because of movement in foreign exchange rate.
F
Fast market
Term used to define unusually hectic market conditions. Federal Deposit Insurance Corporation (FDIC)
The regulatory agency responsible for administering bank depository insurance in the US. Federal Reserve (Fed)
The central bank of the United States which governs monetary policy and derives its authority from the U.S Congress. Forward
The pre-specified exchange rate for a foreign exchange contract settling at some agreed future date, based upon the interest rate differential between the two currencies involved. Forward points
The pips added to or subtracted from the current exchange rate to calculate a forward price. Fundamental analysis
Analysis based on economic and political factors. Futures Commission Merchant (FCM)
An individual, association, partnership, corporation or trust that solicit or accept orders for the execution of a commodity transaction on and pursuant to the rules of a futures contract market and which accept payment from or extend credit to customers. Futures Contract
A contract traded on a futures exchange that requires the delivery of a specified quality and quantity of a commodity, currency or financial instruments within a specified future month, if not liquidated before the contract matures.
G
G7
The seven leading industrial countries: The United States, Germany, Japan, France, United Kingdom, Canada, and Italy. Gap
The price difference between consecutive trading ranges (i.e. the low of the current range is higher than the high of the previous range) Gold Standard
The original system for supporting the value of currency issued. The way that where the price of gold is fixed against the currency it means that the increased supply of gold does not lower the price of gold but causes prices to increase. Good-till-cancelled (GTC) order
Also known as open order. An order that remains good until filled, or until the client cancels. Gross Domestic Product
Total value of a country's output, income or expenditure produced within the country's physical borders.
Gross National Product
Gross domestic product plus " factor income from abroad " - income earned from investment or work abroad. Gross Settlement
A process where full payment of each transaction is made rather than clearing a group of transactions as currently occurs in the FX market. A method designed to eliminate capital risk.
H
Hard Currency
A currency, usually from a highly industralised country, that is widely accepted around the world as a form of payment for goods and services. A hard currency is expected to remain relatively stable through a short period of time, and to be highly liquid in the forex market. Head and Shoulders
A pattern in price trends which chartist consider indicates a price trend reversal. The price has risen for some time, at the peak of the left shoulder, profit taking has caused the price to drop or level. The price then rises steeply again to the head before more profit taking causes the price to drop to around the same level as the shoulder. A further modest rise or level will indicate that a further major fall is imminent. The breach of the neckline is the indication to sell. Hedge
A transaction that reduces the risk of an existing trade position. Hedge Ratio
The number of futures or options required to hedge a given exposure in the cash market.
I
IMF
International Monetary Fund, established in 1946 to provide international liquidity on a short and medium term and encourage liberalization of exchange rates. The IMF supports countries with balance of payments problems with the provision of loans. IMM
International Monetary Market part of the Chicago Mercantile Exchange that lists a number of currency and financial futures. Implied Rates
The interest rate determined by calculating the difference between spot and forward rates. Implied Volatility
A measurement of the market's expected price range of the underlying currency futures based on the traded option premiums. Inconvertible Currency
Currency which cannot be exchanged for other currencies, either because this is forbidden by the foreign exchange regulations or the currency experiences extreme volatility that is not perceived to be a safe haven for parking the funds.
Indicative Quote
A market-maker's price which is not firm. Industrial Production Index
An indicator that shows the production output from industrial activities, such as manufacturing, mining and utilities. This data is released by the Federal Reserve Board each month. Inflation
An economic condition whereby prices for consumer goods and services are rising and 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 price that major banks quote each other for currency transactions.
Interest Arbitrage
Switching into another currency by buying spot and selling forward, and investing proceeds in order to obtain a higher interest yield. Interest arbitrage can be inward, i.e. from foreign currency into the local one or outward, i.e. from the local currency to the foreign one. Sometimes better results can be obtained by not selling the forward interest amount. In that case some treat it as no longer being a complete arbitrage, as if the exchange rate moved against the arbitrageur, the profit on the transaction may create a loss.
Interest Parity
One currency is in interest parity with another when the difference in the interest rates is equalised by the forward exchange margins. For instance, if the operative interest rate in Japan is 3% and in the UK 6%, a forward premium of 3% for the Japanese Yen against sterling would bring about interest parity. Interest Rate Floor
An agreement which provides the buyer of the floor with a minimum interest rate for future lending requirements. Interest Rate Swaps
An agreement to exchange interest rate exposures from floating to fixed or vice versa. There is no swap of the principal. The principal amount is notional as at the end of the tenure, only cash flows related with the interest payments or receipts are exchanged. Intervention
Action by a central bank to effect the value of its currency by entering the market. Concerted intervention refers to action by a number of central banks to control exchange rates.
Intrinsic Value
The amount by which an option is in-the-money. The intrinsic value is the difference between the exercise/strike price and the price of the underlying security. Inverted Market
Where short-term instruments are trading at premiums to long-term instruments. IOM
Index and Options Market part of the Chicago Mercantile Exchange.
K
Key currency
Small countries, which are highly dependent on exports, orientates their currencies to their major trading partners, the constituents of a currency basket. Kiwi
Slang for the New Zealand dollar.
L
Lagging Indicator
A measure of economic activity which tends to change after change has occurred in the overall economy e.g. CPI. Leading Indicators
Statistics that are considered to precede changes in economic growth rates and total business activity, e.g. factory orders. Leverage
The use of a small amount of assets to control a greater amount of assets. Limit order
A limit order is an order to buy or sell a security at a specific price. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. Liquidation
Any transaction that offsets or closes out previously established position. Liquidity
A condition which describes the depth of market orders. A liquid market is able to accept large orders to buy or sell a currency, with little change to the current price. London Interbank Offered Rate (LIBOR)
The rate charged by international banks for loans involving Eurodollars.. Long
One who has bought a forex contract to establish a market position and who has not yet closed out this position through an offsetting procedure.
M
Maintenance Margin
The minimum margin which an investor must keep on deposit in a margin account at all times in respect of each open contract. Maturity
The date for settlement or expiry of a financial instrument. Margin
The required equity that an investor must deposit to collateralize a position. Margin call
A call for additional funds in a margin account either because the value of equity in the account has fallen below a required minimum (also termed a maintenance call) or because additional currencies have been purchased. Marginal Risk
The risk that a customer goes bankrupt after entering into a forward contract. In such an event the issuer must close the commitment running the risk of having to pay the marginal movement on the contract. Mark-to-market
Process of re-evaluating all open positions with the current market prices. These new values then determine margin requirements. Market Maker
A dealer/ firm who regularly quotes both bid and ask prices and is ready to make a two-sided market for any financial instrument. Market order
An order filled immediately at the best price available. Market Risk
Exposure to changes in market prices. Market value
The current value of all commodities held in a margin account. Member
Member or broker / trader registered with the Exchange. Mid-price or Middle Rate
The price half-way between the two prices, or the average of both buying and selling prices offered by the market makers. Monetary Base
Currency in circulation plus banks' required and excess deposits at the central bank. Monetary Policy
A central bank's management of a country's money supply. Economic theory underlying monetary policy suggests that controlling the growth of the amount of money in the economy is the key to controlling prices and therefore inflation. However, central banks' monetary capability is severely limited by global money movements. This forces them to use the indirect tool of exchange rate manipulation. Monetary Union
An agreement between countries to maintain a fixed exchange rate between their currencies. A process which the EMS is intended to lead to, especially after the Maastricht Treaty. Money Market
Highly liquid markets for short term investing in monetary instruments and debts, typically maturing in less than one year. Because of large transaction cost relative to potential interest, transaction occur in lage amounts and thus participants are mainly banks and other large financial institutions. Money Market Operations
Comprises the acceptance and re-lending of deposits on the money market. Moving Average
A way of smoothing a set of data, widely used in price time series.
N
National Futures Association (NFA)
A self-regulatory organization for the commodity futures industry that comprise of firms and individuals that conduct business with the public. Overseen by the Commodity Futures Trading Commission (CFTC).
O
Offer (or Ask, or sell)
The rate at which a dealer is willing to sell a currency. Offset
Taking a second futures or options on futures position opposite to the initial or opening position. Selling if one has bought, or buying is one has sold. One Cancels the Other Order (OCO)
Where the execution of one order automatically cancels a previous order. Open interest
Total number of futures or options on futures contracts that have not yet been offset or fulfilled for delivery. Open order
A Buy or Sell order that remains good until filled or cancelled. Open outcry
The method of verbally trading in an auction-like atmosphere so that each trader has a fair chance to buy or sell. Open position
Any deal which has not been settled with a physical payment or reversed by an equal and opposite deal for the same value date. It can be termed as a high risk, high return proposition. Opening
The beginning of the trading session. Over-the-Counter (OTC)
Used to describe any transaction that is not conducted over an exchange.
P
Pips
One unit of price change in the bid/ ask price of a currency. For most currencies, it denotes the fourth decimal place in an exchange rate that represents 1/100 of one percent (0.01%). Political Risk
Exposure to changes in governmental policy which will have an adverse effect on an investor’s position. Position
An interest in the market, either long or short, in the form of open contracts. Position trader
A trader who takes a position in the market and might hold that position over a long period of time. Price order
An order to sell or buy at a certain price or better. Price transparency
Equal access by all potential traders to current bid and ask prices in a marketplace.
Q
Quote
An indication of current bids and offers in the market on a particular instrument or spread.
R
Range
The high and low prices or high and low bids and offers recorded during a specified time. Rate
The price of one currency in terms of another, typically used for dealing purposes. Resistance
A term used in technical analysis indicating a specific price level at which analysis concludes people will sell. Resistance line
A price level above which prices tend not to rise due to selling pressure. Retracement
Used to denote a temporary reversal in the overall trend of the market to accommodate for excessive acceleration or deceleration of a movement in the price of a currency. Also known as
a price move in the opposite direction of a recent trend. Revaluation
An increase in the exchange rate for a currency as a result of central bank intervention. Opposite of Devaluation. 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. Roll-Over
Process whereby the settlement of a deal is rolled forward to another value date. The cost of this process is based on the interest rate differential of the two currencies.
S
Scalp
To trade for small gains. Scalping normally involves establishing and liquidating a position quickly, usually within the same day, hour or even just a few minutes. Settlement
The process by which a trade is entered into the books and records of the counterparts to a transaction. The settlement of currency trades may or may not involve the actual physical exchange of one currency for another. Short
A market position where the client has sold a currency he does not already own, usually expressed in base currency terms. Speculator
One who attempts to anticipate price changes and, through buying and selling forex contracts, aims to make profits. Spot price
The current market price of a currency that normally settles in 2 business days. Spread
The difference between the bid and offer prices. Stop Loss Order
Order type whereby an open position is automatically liquidated at a specific price. Often used to minimize exposure to losses if the market moves against an investor’s position. As an example, if an investor is long USD at 156.27, they might wish to put in a stop loss order for 155.49, which would limit losses should the dollar depreciate, possibly below 155.49. 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. Supply
The quantity of a commodity that producers are willing to provide to the market at a given price. Swap
A currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate.
T
Technical analysis
The study of historical market data and price patterns to help forecast future prices. Technical Correction
An adjustment to price not based on market sentiment but technical factors such as volume and charting. Terms of Trade
The ratio between export and import price indices. Theta
A measure of the sensitivity of the price of an option to a change in its time to expiry. Thin Market
A market in which trading volume is low and in which consequently bid and ask quotes are wide and the liquidity of the instrument traded is low. Trend
The general direction of the market. Tick
A minimum change in price, up or down. Tight Money
A condition where there is a shortage of credit as a result of monetary policy restricting the supply of credit normally through raising interest rates. Trade Deficit/Surplus
The difference between the value of imports and exports. Trade-weighted Exchange Rate
The changes in the exchange rate against a trade weighted basket including the currencies of the county's principal trading partners. Transaction Cost
The cost of buying or selling a financial instrument. Transaction Date
The date on which a trade occurs. Translation Exposure
The calculation of loss or profit resulting from the valuation of foreign assets and liabilities for balance sheet purposes, when consolidating into the base currency. Treasury Bills
Short-term obligations of a Government issued for periods of one year or less. Treasury bills do not carry a rate of interest and are issued at a discount on the par value. Treasury bills are repaid at par on the due date. In the UK they are normally for 91 days, and are offered at weekly tenders. In the US they are auctioned. Turnover
The total money value of currency contracts traded is calculated by multiplying size by the number of contracts traded. Two-Way Price
A quote in the foreign exchange market that indicates a bid and an offer rate. Two-Way Quotation
When a dealer quotes both buying and selling rates for foreign exchange transactions.
U
Uptick
A new price quote at a price higher than the preceding quote. Uptick Rule
In the U.S., 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. Uptrend
A price trend characterized by a series of higher highs and higher lows. US Prime Rate
The interest rate at which US banks will lend to their prime corporate customers.
V
Value at Risk
The expected loss from an adverse market movement. Value Date
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. Also known as maturity date. Value Spot
Normally settlement for two working days from today. Value Today
Transaction executed for same day settlement; sometimes also referred to as "cash transaction." Variation Margin
Funds a broker must request from the client to have the required margin deposited. The term usually refers to additional funds that must be deposited as a result of unfavourable price movements. Volatility
A statistical measure of a market’s price movements over time. Volume
The number of contracts in futures or options on futures made during a specified period of time.
W
Whipsaw
Slang for a condition of a highly volatile market where a sharp price movement is quickly followed by a sharp reversal.
Y
Yard
Market slang for a billion. Yield Curve
The graph showing changes in yield on instruments depending on time to maturity. A system originally developed in the bond markets is now broadly applied to various financial futures. A positive sloping curve has lower interest rates at the shorter maturities and higher at the longer maturities. A negative sloping curve has higher interest rates at the shorter maturities.
Home
