A

Appreciation

A currency is said to appreciate when price rises in response to market demand; an increase in the value of an asset.

Arbitrage

Taking advantage of countervailing prices in different markets by the purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market to profit from small price differentials.

B

Back Office

The departments and processes related to the settlement of financial transactions (i.e. written confirmation and settlement of trades, record keeping).

Balance of Trade

The value of a country’s exports minus its imports.

C

Candlestick Chart

The departments and processes related to the settlement of financial transactions (i.e. written confirmation and settlement of trades, record keeping).

Central Bank

The value of a country’s exports minus its imports.

Chartist

An individual who uses charts and graphs and interprets historical data to find trends and predict future movements. Also referred to as Technical Trader.

D

Day Trading

Opening and closing the same position or positions within the same trading session.

Dealer

An individual or firm that acts as a principal or counterpart to a transaction. Principals take one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party. In contrast, a broker is an individual or firm that acts as an intermediary, putting together buyers and sellers for a fee or commission.

Deficit

A negative balance of trade or payments.

Delivery

An actual delivery where both sides transfer possession of the currencies traded.

E

ECB - European Central Bank

Opening and closing the same position or positions within the same trading session.

End Of Day (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.