PCM Glossary

[PCMAnalyst]

Jawbone

Announcements and statements by politicians or monetary authorities to influence decisions by business, consumer, or trade union sectors, often associated with forecasts and policy implications.


Job-to-applicant ratio

The job-to-applicant ratio shows how many positions are available to a job seeker


Jobber

A trader who trades for small, short-term profits during the course of a trading session, rarely carrying a position overnight.


Jobless Claims Change

Measures the number of people who claim unemployment benefits, but are actively seeking work. Released with the Claimant Count report, Jobless Claims Change serves as a barometer for the health of the UK labor market. It is similar to the Claimant Count except the headline figure is as an actual number, whereas the Claimant Count is a percentage. Higher job growth accompanies economic expansion and could spark inflationary pressures.


Jurisdiction Risk

(1) The risk inherent in placing funds in the Centre where they will be under the jurisdiction of a foreign legal authority. (2) The risk in making a loan subject to the laws of another country.


Juristiction

The geographical area over which a court or government body has the power and right to exercise authority.

[PCMAnalyst]

Key currency

One of the national currencies (dollar, euro, yen, etc.) or IMF's special drawing rights (SDR) used by a country to hold its foreign currency reserves and gold for settling international trade transactions and other obligations. Also called reserve currency.

Kiwi

Slang for the New Zealand dollar.

[PCMAnalyst]

Labor Cash Earnings - Japan

The average amount of pre-tax earnings per regular employee, including overtime pay and bonuses. Though the report does not take into account all sources of household income (accumulated wealth and capital gains from financial assets are omitted), Labor Cash Earnings accurately reflects the spending ability of domestic consumers, one of the driving forces behind economic growth. Because growth in wages fuels higher consumption, rising Labor Cash Earnings generally lead to higher inflation.

Labour Productivity - Canada

Average productivity level of Canadian workers. Labour Productivity is calculated by dividing the gross domestic product (GDP) by the number of hours worked, yielding output per hour, which is the key measure of productivity growth. The availability of better technology and higher levels of education among the workforce are factors commonly attributed to increased productivity. Growth in labour productivity is usually seen as a sign of a healthy economy because higher productivity allows higher output for a fixed population. Rising Labour Productivity can also offset inflationary pressures associated with economic growth and spending. Economic expansion attributed to increased Labour Productivity will not result in inflation, meaning that central banks will not need to increase interest rates during times of high growth.

Large Company

In the manufacturing sector, all companies with total employment of 50 or more were included in the large company partition. In the nonmanufacturing sector, all companies with total employment of 15 or more were included in the large company partition.

Large Retailers' Sales

The total value of goods sold in large department stores, chain convenience stores, and supermarkets in a particular month. The report serves as a direct gauge of consumption and consumer confidence. Consumer spending is one of the most important leading indicators for the Japanese economy. An increasing number of sales can signal consumer confidence and economic growth, but higher consumption can also leads to inflationary pressures.

Last Trading Day

The day on which trading ceases for an expiring contract.

Layoff

The elimination of jobs, often without regard to employee performance, usually when a company is experiencing financial difficulties.

lb

Abbreviation for poundin English-speaking countries) an avoirdupois unit of weight equal to 7000 grains, divided into 16 ounces (0.453 kg), used for ordinary commerce. Abbreviation: lb., lb. av.

LDC

Less developed countries, often used with respect to secondary debt market.

Lead

Payment of a financial obligation earlier than is expected or required.
Indicator Index">
Leading Indicator Index

Leading indicator index brings together a number of economic indicators that tend to precede the rest of the economy.
Indicators">
Leading Indicators

Statistics that are considered to predict future economic activity.

Leads and Lags

The effect on foreign trade payments of an anticipated move in the exchange rate, normally a devaluation. The importers speeden up the payment for the imports and exporters delay recieving payment for the exports.

Left-hand Side

Taking the left hand side of a two way quote i.e. selling the quoted currency

Letter of Credit

A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase the bank will be required to cover the full or remaining amount of the purchase.

Often used in international transactions to ensure that payment will be received. Due to the nature of internation dealings such as distance, differing laws in each country, and difficulty in knowing each party personally the use of letters of credit has become a very important aspect of international trade. The bank also acts on behalf of the buyer (holder of letter of credit) where the supplier will not be paid until the supplier confirms to the bank that the goods have been shipped.

Leverage

The degree to which an investor or business is utilizing borrowed money. Companies that are highly leveraged may be at risk of bankruptcy if they are unable to make payments on their debt; they may also be unable to find new lenders in the future. Leverage is not always bad, however; it can increase the shareholders' return on their investment and often there are tax advantages associated with borrowing. also called financial leverage

For example, suppose a trader puts down $1,000 as a margin in order to control $100,000. In this case, the trader's leverage would be 100:1 because the trader controls one-hundred times what he put down. Likewise, his level of margin would be 1% because only 1% was required to open the larger position

Liability

A company's legal debts or obligations that arise during the course of business operations. These are settled over time through the transfer of economic benefits including money, goods or services.

Recorded on the balance sheet (right side), liabilities include loans, accounts payable, mortgages, deferred revenues and accrued expenses. Liabilities are a vital aspect of a company's operations because they are used to finance operations and pay for large expansions. They can also make transactions between businesses more efficient. For example, the outstanding money that a company owes to its suppliers would be considered a liability.

Outside of accounting and finance this term simply refers to any money or service that is currently owed to another party. One form of liability, for example, would be the property taxes that a homeowner owes to the municipal government.

Current liabilities are debts payable within one year, while long-term liabilities are debts payable over a longer period.

LIBOR

London Interbank Offered Rate
a.An interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. The LIBOR is fixed on a daily basis by the British Bankers' Association. The LIBOR is derived from a filtered average of the world's most creditworthy banks' interbank deposit rates for larger loans with maturities between overnight and one full year.
b.The LIBOR is the world's most widely used benchmark for short-term interest rates. It's important because it is the rate at which the world's most preferred borrowers are able to borrow money. It is also the rate upon which rates for less preferred borrowers are based. For example, a multinational corporation with a very good credit rating may be able to borrow money for one year at LIBOR plus 4 or 5 points. The LIBOR is the world's most widely used benchmark for short-term interest rates. It's important because it is the rate at which the world's most preferred borrowers are able to borrow money. It is also the rate upon which rates for less preferred borrowers are based. For example, a multinational corporation with a very good credit rating may be able to borrow money for one year at LIBOR plus 4 or 5 points.
Countries that rely on the LIBOR for a reference rate include the United States, Canada, Switzerland and, of course, England.
IBOR - London Inter Bank Offer Rate">
LIBOR - London Inter Bank Offer Rate

British Bankers' Association average of interbank offered rates for dollar deposits in the London market based on quotations at 16 major banks. Effective rate for contracts entered into two days from date appearing.

Life of Contract

The period between the beginning of trading in a particular future and the expiration of trading.

LIFFE

London International Financial Futures Exchange.

Limit

A maximum or minimum amount

Limit Down

Maximum price drop allowed on a futures contract in a single trading day.

Limit Move

The largest price change allowed for a given futures contract in a single day, as determined by the exchange. also called maximum price fluctuation.

Limit Order

To avoid buying or selling a stock at a price higher or lower than you wanted, you need to place a limit order rather than a market 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. When you place a market order, you can't control the price at which your order will be filled. For example, if you want to buy the stock of a "hot" IPO that was initially offered at $9, but don't want to end up paying more than $20 for the stock, you can place a limit order to buy the stock at any price up to $20. By entering a limit order rather than a market order, you will not be caught buying the stock at $90 and then suffering immediate losses if the stock drops later in the day or the weeks ahead. Remember that your limit order may never be executed because the market price may quickly surpass your limit before your order can be filled. But by using a limit order you also protect yourself from buying the stock at too high a price. Some firms may charge you more for executing a limit order than a market order.

Limit Up

Maximum price increase allowed on a futures contract in a single trading day.

Limited Convertibility

When residents of a country are prohibited from buying other currencies even though non-residents may be completely free to buy or sell the national currency and the foreign institutional investors also have the liberty to buy and sell shares on the stock exchange of that country.

line of credit

An arrangement in which a bank or vendor extends a specified amount of unsecured credit to a specified borrower for a specified time period. also called credit line.

Liquid and Illiquid Markets

The ability of a market to buy and sell at ease with no impact on price stability. A market is described as liquid if the spread between the bid and the offer is small. Another measure of liquidity is the presence of buyers and sellers, with more players creating tighter spreads. Illiquid markets have fewer participants; thus, the spreads are wider and the risk to the short-term trader are greater.

Liquidity

1 Liquid Market - the degree to which market participants are willing to buy and sell at every price level.
Liquid markets are characterized a high level of trading actively preformed by a diverse group of traders (hedgers, corporations, governments, speculators).
Liquid markets are usually described as safer, since investors are more certain that they are able to get into or out of a trade in any market condition.

2 Liquid Asset - the degree to which an asset is able to be converted into quickly into cash. The classic examples of liquid assets are Money Market Accounts and Certificate of Deposits or in equities, Blue Chip stocks.


Liquidity Risk

The risk stemming from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize a loss.

Local

A futures trader who normally trades on an exchange on his/her own account.

Locked Market

A market is locked when the bid price equals the asked price.
IBOR)">
London Inter Bank Offer Rate (LIBOR)

British Bankers' Association average of interbank offered rates for dollar deposits in the London market based on quotations at 16 major banks. Effective rate for contracts entered into two days from date appearing.

Long

In foreign exchange, when a currency pair is bought, it is understood that the primary currency in the pair is 'long', and the secondary currency is 'short'.

Long - Position

A position that was obtained by buying in anticipation of an increase in price.

Long Hedge

The purchase of futures contracts for price protection purposes, as a defensive position against an increase in cash prices, or falling interest rates. The purchase of a futures contract or call option to protect a short position against possible increases in the prices of commodities, currencies, indexes, or securities. For example, an investor might purchase a futures contract on fixed-income securities to protect against a decline in interest rates. Also called buying hedge.

Long/Short

A trader is in a LONG POSITION when she buys a currency pair.
Shorting is the opposite of going long. The trader is in a SHORT POSITION when she sells a currency pair.

For example, when a trader buys EUR/USD, she is "longing" the Euro while at the same time "shorting the US dollar. If she were to decide to sell EUR/USD, she is "shorting" Euros and "Longing" the US dollar.

Lot

A unit to measure the amount of the deal. The value of the deal always corresponds to an integer number of lots.

LSE

London Stock Exchange

[PCMAnalyst]

M0

Cash in circulation . Only used by the UK.

M1

Cash in circulation plus demand deposits at commercial banks. There are variations between the precise definitions used by national financial authorities.

machin tool

A machine tool is a powered mechanical device, typically used to fabricate metal components of machines by machining, which is the selective removal of metal. The term machine tool is usually reserved for tools that used a power source other than human movement, but they can be powered by people if appropriately set up. Many historians of technology consider that the true machine tools were born when direct human involvement was removed from the shaping or stamping process of the different kinds of tools. For instance, they consider that lathe machine tools were invented around 1751 by Jacques de Vaucanson because he was the first to mount the cutting instrument on a mechanically adjustable head, taking it out of the hands of the operator

Maintenance

A set minimum margin that a customer must maintain in his margin account

Majors

These are the most popular currency pairs available for trading and include EUR/USD, GBP/USD, USD/JPY, USD/CHF, USD/CAD and AUD/USD. Less traded pairs are known as 'Exotics'.

Make a Market

A dealer is said to make a market when he quotes both the bid and offer prices at which he stands ready to buy and sell.

Managed Float

When the monetary authorities intervene regularly in the market to stabilise the rates or to push the exchange rate in a required direction. It is also called the dirty float which we have in India.

Manufacturing I/S Ratio - Canada

The ratio of inventory to shipments at Canadian manufacturing firms. By examining inventories and shipments, the figure is able to gauge to what degree manufacturing firms are satisfying market demand. Inventories include goods not yet sold by firms. Growing inventories are a sign of declining demand as unsold goods pile up in warehouses. Shipments data, on the other hand, is indicative of market demand.
Accordingly, a Manufacturing I/S Ratio greater than 1 suggests an inventory build-up and decreasing demand for manufactured goods, while a ratio less than 1 suggests an inventory reduction and increasing demand for manufactured goods. The I/S Ratio can also be interpreted as an estimate of the time (in months) that it would take to exhaust inventories, holding shipments constant.

Manufacturing Shipments

The ratio of inventory to shipments at Canadian manufacturing firms. By examining inventories and shipments, the figure is able to gauge to what degree manufacturing firms are satisfying market demand. Inventories include goods not yet sold by firms. Growing inventories are a sign of declining demand as unsold goods pile up in warehouses. Shipments data, on the other hand, is indicative of market demand.
Accordingly, a Manufacturing I/S Ratio greater than 1 suggests an inventory build-up and decreasing demand for manufactured goods, while a ratio less than 1 suggests an inventory reduction and increasing demand for manufactured goods. The I/S Ratio can also be interpreted as an estimate of the time (in months) that it would take to exhaust inventories, holding shipments constant.
The data used to calculate the I/S ratio can be found in the monthly survey of manufacturing released by Statistics Canada each month. The I/S ratio is also a component of the Canadian Leading Indicator Index.


Margin

Margin is a good faith deposit that a trader puts up as collateral to hold a position. The amount of margin that the trader puts up determines his leverage. For example, suppose a trader puts down $1,000 as a margin in order to control $100,000. In this case, the trader's leverage would be 100:1 because the trader controls one-hundred times what he put down. Likewise, his level of margin would be 1% because only 1% was required to open the larger 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 (or sold short).

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

Recording the price or value of a security, portfolio, or account on a daily basis, to calculate profits and losses or to confirm that margin requirements are being met.

Market Close

This refers to the time of day that a market closes. In the 24 hour-a-day foreign exchange market, there is no official market close. 5:00 PM EST is often referred to and understood as the market close because value dates for spot transactions change to the next new value date at that time.

Market Maker

A dealer 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 to buy or sell a stock immediately at the best available current price.

Market Rate

The current quote of a currency pair.

Market Risk

The risks that occur when general market pressures cause the value of an investment to fluctuate.

Market Timing

Attempting to predict future market directions, usually by examining recent price and volume data or economic data, and investing based on those predictions.

Market Value

1.Market value of a forex position at any time is the amount of the domestic currency that could be purchased at the then market rate in exchange for the amount of foreign currency to be delivered under the forex Contract.

2.The last reported sale price of a security, or the current bid and ask price in the context of an over-the-counter security. Also known as market price.

Market-Maker

A person or firm that provides liquidity making two-sided prices (bids and offers) in the market.

Markup



Maturity

The date on which payment of a financial obligation is due.

Maturity Date

(1) The last trading day of a futures contract. (2) Date on which a bond matures, at which time the face value will be returned to the purchaser. Sometimes the maturity date is not one specified date but a range of dates during which the bond may be repaid.

MBA

Mortgage Bankers Association of America

Merchandise Trade Balance

The Merchandise Trade Balance is a measure of "visible" trade, which is trade in goods like cars and electronics. Specifically it is the difference between Japan 's imports of goods and exports of goods, excluding services. A positive value indicates a trade surplus (exports exceed imports) while a negative value indicates a trade deficit (imports exceed exports). Movements in the Merchandise Trade Balance reflect altered demand for Japanese Yen, which can move the value of the currency. Positive growth in the trade balance may lead to a future appreciation of the Yen due to steady demand in exchange for Japanese exports. The Merchandise Trade report itself gives insight into changing trends regarding Japanese trade. Such developments are especially important for Japan , which is an export-oriented economy that has historically experienced large trade surpluses, any affect on this could have dramatic affect on the domestic economy. The headline figure is expressed as a percentage change from the last equivalent period, and a positive percentage change can indicate that export growth has exceeded import growth.

Micro economics

The study of the behavior of small economic units, such as that of individual consumers or households. opposite of macroeconomics.

Microcredit

A.the lending of very small amounts of money at low interest, esp. to a start-up company or self-employed person.

B.An extremely small loan given to impoverished people to help them become self employed. Also known as "microlending."

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.

Mine and Yours

Terms used by floor traders to signify buying and selling. Mainly used in forex transactions

If a trader wanted to buy something, he/she would type or say "Mine," as in "It's mine." If the trader wanted to sell, he/she would type or say "Yours," as in "It's yours."

Minimum price fluctuation

The smallest increment of market price movement possible in a given futures contract.

Mio

Million

MITI

Japanese ministry of International Trade & Industry.

MM

Money Markets

MOF

Ministry Of Finance

Momentum

The tendency of a currency pair to continue movement in a single direction.

Monetary Base-Japan

Currency supplied by the Bank of Japan. The Monetary Base includes all banknotes and coins in circulation plus all currency held as deposits by the Bank of Japan. As an official measure of the Japanese money supply, the Monetary Base will show the immediate impacts of monetary policy actions and can give an indication into the future direction of inflation. An expansion in the monetary base is generally inflationary while a decline will likely have the opposite effect.

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, transactions occur in large amounts and thus participants are mainly banks and other large financial institutions.

Money market Instuments

Short-term, high grade (low risk) financial instruments such as bankers' acceptance, certificates of deposit (CDs), commercial paper, and treasury bills.

Money Supply

The total supply of money in circulation in a given country's economy at a given time. There are several measures for the money supply, such as M1, M2, and M3. The money supply is considered an important instrument for controlling inflation by those economists who say that growth in money supply will only lead to inflation if money demand is stable. In order to control the money supply, regulators have to decide which particular measure of the money supply to target. The broader the targeted measure, the more difficult it will be to control that particular target. However, targeting an unsuitable narrow money supply measure may lead to a situation where the total money supply in the country is not adequately controlled.

mortgage-backed security (MBS)

In finance, a mortgage-backed security (MBS) is an asset-backed security whose cash flows are backed by the principal and interest payments of a set of mortgage loans. Payments are typically made monthly over the lifetime of the underlying loans.

Moving Average

A technical analysis term meaning the average price of a security over a specified time period (the most common being 20, 30, 50, 100 and 200 days), used in order to spot pricing trends by flattening out large fluctuations. This is perhaps the most commonly used variable in technical analysis. Moving average data is used to create charts that show whether a stock's price is trending up or down. They can be used to track daily, weekly, or monthly patterns. Each new day's (or week's or month's) numbers are added to the average and the oldest numbers are dropped; thus, the average "moves" over time. In general, the shorter the time frame used, the more volatile the prices will appear, so, for example, 20 day moving average lines tend to move up and down more than 200 day moving average lines.

MPC-Marginal Propensity To Consume

A component of Keynesian theory, MPC represents the proportion of an aggregate raise in pay that is spent on the consumption of goods and services, as opposed to being saved.

Let's illustrate this with an example. Suppose you receive a bonus with your paycheck, and it's $500 on top of your normal annual earnings. You suddenly have $500 more in income than you did before. If you decide to spend $400 of this marginal increase in income on a new business suit, your marginal propensity to consume will be 0.8 ($400 divided by $500).

Mutual fund



An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. mutual funds raise money by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most mutual funds, shareholders are free to sell their shares at any time, although the price of a share in a mutual fund will fluctuate daily, depending upon the performance of the securities held by the fund. Benefits of mutual funds include diversification and professional money management. Mutual funds offer choice, liquidity, and convenience, but charge fees and often require a minimum investment. A closed-end fund is often incorrectly referred to as a mutual fund, but is actually an investment trust. There are many types of mutual funds, including aggressive growth fund, asset allocation fund, balanced fund, blend fund, bond fund, capital appreciation fund, clone fund, closed fund, crossover fund, equity fund, fund of funds, global fund, growth fund, growth and income fund, hedge fund, income fund, index fund, international fund, money market fund, municipal bond fund, prime rate fund, regional fund, sector fund, specialty fund, stock fund, and tax-free bond fund.

[PCMAnalyst]

n.s.a

not seasonally adjusted

NAB

National Australia Bank

NAHB

National Association of Home Builders.

NAPM

National Association of purchasing management-An Affiliate of Institute for Supply Management

NAPM-Chicago

The National Association of Purchasing Management - Chicago compiles a survey and a composite diffusion index of business conditions in the Chicago area. Manufacturing and non-manufacturing firms are both surveyed, but until recently, market players have believed that the survey primarily covers the manufacturing sector. Readings above 50 percent indicate an expanding business sector. The NAPM - Chicago is considered a leading indicator of the ISM manufacturing index.

NAR

The National Association of Realtors

NBNZ

National Bank of New Zealand

Negative or bearish divergence

Occurs when the direction of the price of a currency disagrees with the condition of a technical indicator.

Net Position

The amount of currency bought or sold which have not yet been offset by opposite transactions.

Net Worth

Amount of assets which exceed liabilities; May also be known as stockholders equity or net assets. For an individual, the total value of all possessions such as houses, stocks, bonds, currencies and other securities, minus all outstanding debts, such as mortgage and loans.

New Housing Price Index - Canada

A component of the Consumer Price Index (CPI) that measures changes in prices for new homes. Higher housing prices suggest stronger consumer demand and growth in the housing market. At the same time, higher housing prices that accompany economic expansion often lead to inflationary pressures. The headline number is the percentage change in the index.

Note: The New Housing Price Index takes into account the quality and features of the new homes sold. For example, if selling prices for new homes are unchanged, but the features and quality of housing have increased (e.g. added swimming pool and better construction materials), then the price for new homes is considered to have fallen.

Nickel

US term for five basis points.

NIESR

National Institute of Economic and Social Research (Britain)

Noise

Price and volume fluctuations which do not provide meaningful information about the market's direction.

nominal

A quantity that is not adjusted for inflation.

Non Resident Bond Holdings - New Zealand

The monetary value of bonds held by non residents of New Zealand . Non Resident Bond Holdings measure the willingness of foreigners to finance New Zealand 's economy and government. A high value is indicative of a budget deficit and debt, suggesting that foreign investments are required to finance New Zealand 's continued patterns of spending.

Non-farm payroll

The non-farm payrolls report is one of the key indicators of the labor market in the US. The report tends to include information on salaries, wages, bonuses and net pay after deductions. A strong payrolls number indicates that companies are keeping a solid base of employees and is therefore perceived as positive for the economy.
Account">
Nostro Account

A foreign currency current account maintained with another bank. The account is used to receive and pay currency assets and liabilities denominated in the currency of the country in which the bank is resident.

A bank account that one bank holds with another bank in a foreign country. This account is usually held in the foreign country's currency, and is used to carry out transactions that are denominated in that foreign currency.

Note

A financial instrument consisting of a promise to pay rather than an order to pay or a certificate of indebtedness.

NYSE

New York Stock Exchange

NZIER

New Zealand Institute of Economic Research

[PCMAnalyst]

OCO - One Cancels the Other Order

A designation for two orders whereby one part of the two orders is executed the other is automatically cancelled.For example, an investor with limited funds may place an order to buy both stocks and bonds and specify that it's a "one-cancels-the-other-order." In other words, if the market favors stocks and they are bought, the order to buy bonds will be canceled. Conversely, if the market suggests bonds are the way to go, the order will be to buy bonds and the order to buy stocks will be canceled

OCR-Official Cash Rate

The Official Cash Rate (OCR) is the interest rate set by the Reserve Bank to meet the inflation target specified in the Policy Targets Agreement. The agreement signed in September 2002, between the Minister of Finance and the Governor of the Reserve Bank, requires the Reserve Bank to keep inflation, on average over the medium term, at between 1 and 3 percent per annum.

Lot">Odd Lot

A non standard amount for a transaction.

ODPM

Office of the Deputy Prime Minister (UK)

OECD

Organization for Economic Cooperation and Development

Off-Balance Sheet

Financing or the raising of money by a company that does not appear on the company's balance sheet, such as Interest Rate Swaps and Forward Rate Agreements.

Off-Shore

The operations of a financial institution which although physically located in a country, has little connection with that country's financial systems. In certain countries a bank is not permitted to do business in the domestic market but only with other foreign banks. This is known as an off shore banking unit.

Offer

The price at which a currency pair or security is for sale; the quoted price at which an investor can buy a currency pair. This is also known as the 'ask', 'ask price', and 'ask rate'.

Offer - ask

The rate at which a dealer is willing to sell a currency. See Ask (offer) price

Official Reserve Assets - Japan

The wealth controlled by the Bank of Japan. Japan holds enormous reserves of foreign currencies, currently holding the largest foreign reserve of American Dollars in the world. Central Banks have recently moved to diversify their currency reserves; the shift has been away from the traditionally favored Dollar toward other currencies like the Euro. Because of the size and influence of the Bank of Japan's huge Reserve Assets, adjustments can radically alter the supply of a currency in the market and sway other banks to act. Long term trends in the Bank's reserve asset figures merit close attention.

All these assets help Japan ensure its financial well-being when faced with economic or geo-political issues. In particular, large foreign currency reserves give the BOJ the freedom to exert a measure of control over its exchange rate by manipulating the supply of foreign currencies.

official reserves

Holdings of gold and foreign currencies by official monetary institutions.

Offset

The closing-out or liquidation of a futures position.

The elimination or reduction of a current long or short position by making a transaction with the same security in the opposite direction. Also known as close out or even up.

Offsetting transaction

A trade which serves to cancel or offset some or all of the market risk of an open position.

Offshore

The operations of a financial institution which although physically located in a country, has little connection with that country's financial systems. In certain countries a bank is not permitted to do business in the domestic market but only with other foreign banks. This is known as an off shore banking unit.

Old Lady

Old lady of Threadneedle Street, a term for the Bank of England.

One Cancels Other Order

Where the execution of one order automatically cancels a previous order also referred to as OCO or 'One cancels the other'.

One Cancels the Other Order - OCO

A designation for two orders whereby one part of the two orders is executed the other is automatically cancelled.

Open Market Operations

The central bank operations in the markets to influence exchange and interest rates.

Open Order

Buy or sell order that remains in force until executed or cancelled by the customer.

Option

A contract conferring the right but not the obligation to buy (call) or to sell (put) a specified amount of an instrument at a specified price within a predetermined time period.

Option Premium

The option premium is the price the buyer of the options contract pays for the right to buy or sell a security at a specified price in the future.

Option Class

All options of the same type - calls or puts -listed on the same underlying instrument.

Option Series

All options of the same class having the same exercise/strike price and expiration date.

Options

An agreement that allows the holder to have the option to buy/sell a specific currency at a certain price within a certain time. Two types of options – call and put. A call is the right to buy while a put is the right to sell. One can write or buy call and put options. Options do not have as much liquidity as the underlying (spot) currency.

Order

A customer's instructions to buy or sell currencies.

OTC - Over the Counter

Used to describe any transaction that is not conducted over an exchange.

A security that is not traded on an exchange, due to an inability to meet listing requirements. For such securities, brokers and dealers negotiate directly with one another over computer networks and by phone, and their activities are monitored by the NASD. Also known as unlisted.

Out-of-the-Money

A put option is out-of-the-money if the exercise/strike price is below the price of the underlying instrument. A call option is out-of-the money if the exercise/strike price is higher than the price of the underlying instrument.

Outperform

In general, this means to do better than some particular benchmark. Mutual Fund XYZ is said to outperformthe S&P500 if its return exceeds the S&P500 return. However, this language does not take risk into account. That is, one might have a higher return than the benchmark in a particular year because of higher risk exposure. Outperform is also a term used by analysts to describe the prospects of a particular company. Usually, this means that the company will do better than its industry average. Related: underperform.

Output

1.Manufacturing: Amount of energy, work, goods or services, etc. produced by a machine, factory, firm, or an individual in a period.

2.Contracting: Desired result from a project or contractor.

Over the Counter - OTC

A decentralized market (as opposed to an exchange market) where geographically dispersed dealers are linked by telephones and computer screens.

Overall Household Spending

A survey of both wage-earning and non-working households, such as those classified as single-member, unemployed, or retired. The headline figure is the percentage change in average spending per household from the previous year. Increases in household spending are favorable for the Japanese economy because high consumer spending generally leads to higher levels of economic growth. Higher spending is also a sign of consumer optimism, as households confident in their future outlook will spend more. At the same time accelerated growth exerts inflationary pressure, which can lead to interest rate increases in the future.

Overbought

A term used to characterize a market in which currency prices have risen at a pace that is above typical market acceleration, and hence is due for a retracement.

Overheated /Economy

Is an economy on a high growth rate trajectory placing pressure on the production capacity resulting in increased inflationary pressures and higher interest rates.

Overnight Limit

The maximum amount of a net long or short position that a dealer can carry over into the next dealing day.

Overnight Position

Trader's long or short position in a currency at the end of a trading day.

Overnight trading

The buying or selling of currencies between 9pm and 8am local time. This type of transaction occurs when an investor takes a position at the end of the trading day in a foreign market that will be open while the local market is closed. The trade will be executed sometime that evening or early morning.

Oversold

The opposite of overbought; exists when the price of a currency decelerates at an abnormally fast rate, and hence is due for an upwards reversal.

A situation arising in the market after prompt and significant downturn of the price (Forex rate).

[PCMAnalyst]

Package Deal

An order that contains a number of exchange or deposit items that must be completed simultaneously, or not at all. Package deals allow traders to ensure specific prices or times to maturity for multiple assets.

A trader may want to participate in a package deal to properly execute an investment strategy. For example, let's say an investor wants to enter into a long-short strategy, where he or she purchases one stock and short sells another. Making this order a package deal will protect the investor in case either stock is not immediately available for purchase or sale. The investor may not want the exposure of being only long or short for the period of time required to complete the second transaction.

Par

(1) The nominal value of a security or instrument. (2) The official value of a currency.

Parities

The value of one currency in terms of another.

Parity

Official rates in terms of SDR or other pegging currency.

Participation Rate

A measure of the participating portion of an economy's labor force.

The participation rate is important in determining the number of individuals who are willing to work, are working, or are actively looking for work. Those who have no interest in working are not included in the participation rate.

payroll

1 Total amount a business pays periodically for its workers.

2 List of employees, including information on salaries, wages, bonuses, and net pay after deductions.

Pegging

A form of price stabilization; typically used to stabilize a country’s currency by making it fixed to the exchange rate with another country. A method of stabilizing a country's currency by fixing its exchange rate to that of another country.

Pending Home Sales Index

The National Association of Realtors developed the pending home sales index as a leading indicator of housing activity. As such, it is a leading indicator of existing home sales, not new home sales. A pending sale is one in which a contract was signed, but not yet closed. It usually takes four to six weeks to close a contracted sale.

Pending Order

Pending order is an instruction to open a position when the current price reaches the order level.
There are four types of pending orders:
Buy Stop - an order to open a Buy position at a price higher than the price at the moment of placing the order
Sell Stop - an order to open a Sell position at a price lower than the price at the moment of placing the order
Buy Limit - an order to open a Buy position at a lower price than the price at the moment of placing the order
Sell Limit - an order to open a Sell position at a price higher than the price at the moment of placing the order

Performance

The results of activities of an organization or investment over a given period of time.

Permitted Currency

It means a foreign currency which is freely convertible i.e a currency which is permitted by the rules and regulations of the country concerned to be converted into major reserve currencies and for which a fairly active and liquid market exists for dealing against the major currencies.

Personal Consumption Expenditure

A measure of price changes in consumer goods and services. It consists of the actual and imputed expenditures of households and includes data pertaining to durables, non-durables, and services. It is essentially a measure of goods and services targeted towards individuals and consumed by individuals

Personal Consumption Expenditure (PCE) - United States

Comprehensive measure of how much consumers spend each month, counting expenditures on durable goods, consumer products, and services. Personal Consumption is a comprehensive measure of GDP; consequently the figure is watched as an indicator for economic trends. Spending also has direct affect on inflationary pressures.

Pip

The smallest increment of change in a foreign currency price, either up or down.

Pips

The smallest unit of price for any foreign currency. Digits added to or subtracted from the fourth decimal place, i.e. 0.0001. Also called Points.

Platform

The word platform is used in several different contexts, usually referring to some kind of standing surface used to support things, give them stability, or visibility

PMI

purchasing managers' index

PMI-New Zealand

"PMI" usually stands for Purchasing Managers' Index. United States and Euro-Zone PMI is different from the New Zealand PMI, which stands for Performance of Manufacturing Index.

Point

(1) 100th part of a per cent, normally 10,000 of any spot rate. Movement of exchange rates are usually in terms of points. (2) One percent on an interest rate e.g. from 8-9%. (3) Minimum fluctuation or smallest increment of price movement.

Political Risk

Exposure to changes in governmental policy which will have an adverse effect on an investor's position.

Position

To buy or sell securities in order to establish a net long or a net short position.

Position - Long

A position that was obtained by buying in anticipation of an increase in price.

PPI

Producer Price Indices. See wholesale price indices.

Premium

1.The amount by which a bond or stock sells above its par value.

2.The amount that the buyer of an option pays to the seller.

Price

The price at which the underlying currency can be bought or sold.

Price Transparency

The ability of all market participants to "see" or deal at the same price.

Primary market

Where a newly issuedsecurity is first offered. All subsequent trading of this security occurs is done in the secondary market.

Prime Rate

The interest rate that commercial banks charge their most creditworthy borrowers, such as large corporations. The prime rate is a lagging indicator. also called prime.

Prime Rate -US

The interest rate that commercial banks charge their most reliable borrowers (i.e. large corporations). The prime rate is a lagging indicator. Also known as prime.

Principal

A dealer who buys or sells stock for his/her own account.


Principal Value

The original amount invested by the client.

Private Capital Expenditure

The value of actual and expected purchases of new capital. Capital purchases are investments in productive capacity like new machinery, plants, or improvements & additions to existing assets. Such purchases are made by companies optimistic that costs will be surmounted by future demand. For instance, Gold mines may purchase new Gold mining equipment to increase productivity in order to meet rising demand for Gold. Private Capital Expenditures generally indicate higher business confidence and reflect a healthy economy

Private Consumption - Germany - Euro-zone

Represents household spending on all goods and services. Fluctuations in Private Consumption reflect the country's spending mood. As this figure trends positive it indicates that consumers are stimulating the economy by spending more. However, one cannot size up economic growth solely based on this report. Individuals can increase consumption unsustainably if not matched by income growth.


Producer & Import Prices-switzerland

Tracks inflation in producer and import prices in Switzerland . The headline figure is the percentage change in the index from the previous period. Changes in this index will generally precede changes in the consumer price index, as higher import costs and producer prices tend to eventually be passed to consumers. As with any indicator of inflation, increases in producer and import prices tend to act as an appreciating weight for the Swiss franc because inflationary pressures are almost always met with interest rate increases from the Swiss central bank.


Producer Price Index (Input) - UK

A monthly survey that measures change in input prices as incurred by UK manufacturers. Input prices include the cost of materials used plus operation costs of running the business. The index can be used as a measure of inflation, given that higher input costs will likely be passed on from producers to consumers in the form of higher retail prices. Th e figure is also calculated as Core Input PPI, which excludes volatile inputs such as food and energy that may distort the data. As such, the core figure is a more appropriate measure of inflation.

Producer Price Index (Output) - UK

A monthly survey that measures the price changes of goods produced by UK manufacturers. The figure is also known as "Factory Gate Price" because it usually matches the price of goods when they first leave the factory. Increased prices in manufacturing typically lead to higher retail prices for consumers. However, it is also likely that higher output prices are caused by manufacturers charging a higher premium due to higher demand for their goods. Consequently, market trends in consumption should be considered with Output PPI to avoid data misinterpretation.

productivity

A measure of how much an employee produces for each hour of work

Profit Taking

The action of selling stock to cash in on a sharp rise. This action pushes prices down temporarily. When traders are profit taking, the implication is that there is an upward trend in the security.

PSNCR

Public Sector Net Cash Requirements

public finances-UK

The amount of money financed to the UK government. A higher value indicates a worsening fiscal condition for the British Government as the public sector is unable to maintain its spending patterns without further financing. As with any economy, budget deficits are unfavorable and viewed as bearish for the Pound.

Public Sector Net Borrowing - UK

The amount of new debt held by the UK governments. In the long run, the public sector account must be in balance in order for the economy to be sustainable. If the UK spends more than what it earns, it must finance this budget deficit with an increase in Net Borrowing. Because budget deficits are generally unfavorable for the economy, growth in Net Borrowing is considered bearish for the Pound. Likewise, if Net Borrowing is negative, it means the UK is running a budget surplus and, rather than borrowing money, is a net lender. The headline number is the net borrowing for the previous month in billions of Pounds.

Purchasing Power Parity

The theory that, in the long run, identical products and services in different countries should cost the same in different countries. This is based on the belief that exchange rates will adjust to eliminate the arbitrage opportunity of buying a product or service in one country and selling it in another. For example, consider a laptop computer that costs 1,500 Euros in Germany and an exchange rate of 2 Euros to 1 U.S. Dollar. If the same laptop cost 1,000 dollars in the United States, U.S. consumers would buy the laptop in Germany. If done on a large scale, the influx of U.S. dollars would drive up the price of the Euro, until it equalized at 1.5 Euros to 1 U.S. Dollar - the same ratio of the price of the laptop in Germany to the price of the laptop in the U.S. The theory only applies to tradable goods, not to immobile goods or local services. The theory also discounts several real world factors, such as transportation costs, tarrifs and transaction costs. It also assumes there are competitive markets for the goods and services in both countries.

Put Call Parity

The equilibrium relationship between premiums of call and put options of the same strike and expiry.

Put Option

A put option confers the right but not the obligation to sell currencies, instruments or futures at the option exercise price within a predetermined time period.

[PCMAnalyst]

Quanto option

An option in which the foreign exchange risk in the underlying instrument has been removed.

Quote

A simultaneous bid and offer in a currency pair.

QV=Quotable Value New Zealand, Ltd

Quotable Value Limited (QV) is New Zealand's largest valuation and property information company. QV operates from 22 offices throughout New Zealand and with subsidiary companies in three states of Australia.
QV was formed in July 1998. The establishment of the company has led to three unique areas of operation: Valuations, Online Services and Rating and Taxation, each dedicated to meeting and exceeding the needs of customers in specific markets.

[PCMAnalyst]

Rally

A recovery in price after a period of decline.
A substantial rise in the price of a security, commodity, or overall market, following a decline.

Range

The difference between the highest and lowest price of a future recorded during a given trading session.

Rate

Price at which a currency can be purchased or sold against another currency.


Rate of Inflation

The Consumer Price Index is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly changes in the CPI represent the rate of inflation.

RBA

Reserve Bank of Australia

RBNZ

Reserve Bank of New Zealand

RBNZ Official Cash Rate

The Official Cash Rate (OCR) is the interest rate set by the Reserve Bank to meet the inflation target specified in the Policy Targets Agreement. The agreement signed in September 2002, between the Minister of Finance and the Governor of the Reserve Bank, requires the Reserve Bank to keep inflation, on average over the medium term, at between 1 and 3 percent per annum.

The OCR was introduced in March 1999 and is reviewed eight times a year by the Bank. Monetary Policy Statements are issued with the OCR on four of those occasions. Unscheduled adjustments to the OCR may occur at other times in response to unexpected or sudden developments, but to date this has occurred only once, following the 11 September 2001 attacks on the World Trade Centre in New York.

The OCR influences the price of borrowing money in New Zealand and provides the Reserve Bank with a means of influencing the level of economic activity and inflation. An OCR is a fairly conventional tool by international standards. In the past, the Reserve Bank used a variety of tools to influence inflation, including influencing the supply of money and signalling desired monetary conditions to the financial markets. Such mechanisms were more indirect, more difficult to understand, and less conventional.

Reaction

A decline in prices following an advance.
Realized and Unrealized Profit">
Realized and Unrealized Profit

Unrealized profit is a gain from an increase in the price of a currency that has not been closed or cashed in. Realized profits are made from the cashing in of the unrealized gain.

Recession

A decline in business activity. Often defined as two consecutive quarters with a real fall in GNP.

Recovery

A period in a business cycle following a recession, during which the GDP rises.

Rectangle

In technical analysis, a chart pattern in which the price of a security bounces back and forth between two horizontal lines. Because a rectangle is thought to occur when stock is being distributed or accumulated by knowledgeable investors, a major price movement is expected once the stock breaks out of the rectangle formation
A rectangle describes a price pattern where supply and demand are in approximate balance for an extended period of time. The shares move in a narrow range, hitting resistance at the rectangle's top and finding support at its bottom. It is a pattern of indecision, one in which the bulls and bears are approximately equally powerful. Ultimately, one side or the other wins the tug of war and the shares break out or break down. Typically, the breakout or breakdown can be measured by the height of the rectangle.

Red book

The Redbook Index measures same-store sales at general-merchandise retailers representing about 9,000 locations. The sales are considered an industry benchmark because they exclude results from new or closed locations.

The Johnson Redbook Index is a proprietary indicator of growth in retail sales, and provides advanced estimates of trends in retail sales ahead of official releases and company reports in an easy-to-read four-page report. The weekly indicator is made public every Tuesday morning, with clients receiving notice via conference call, e-mail or fax prior to public release.

REINZ=Real Estate Institute of New Zealand

The Real Estate Institute of New Zealand is the professional body for the real estate industry in New Zealand.

Relative Return

The return that an asset achieves over a period of time compared to a benchmark. The relative return is the difference between the absolute return achieved by the asset and the return achieved by the benchmark.

Relative returns are most often used when reviewing the performance of a mutual fund manager. Because holders of mutual funds are charged management fees, they expect a manager to achieve returns higher than the benchmark index. For example, if the fund you are holding achieves an absolute return of 12% over the past year while the benchmark index provides a return of 15%, then the fund has achieved a relative return of -3% for the year.

Relative Strength Index - RSI

The RSI is a price-following oscillator that ranges between 0 and 100. A popular method of analyzing the RSI is to look for a divergence in which the price of the currency is making a new high, but the RSI is failing to surpass its previous high. This divergence is an indication of an impending reversal. When the RSI then turns down and falls below its most recent trough, it is said to have completed a "failure swing." The failure swing is considered a confirmation of the impending reversal in the price of the currency.


REPO -Repurchase

This type of trade involves the sale and later repurchase of an instrument, at a specified time and date. Occurs in the short-term money market.


Repurchase -REPO

This type of trade involves the sale and later repurchase of an instrument, at a specified time and date. Occurs in the short-term money market.

Reserve Currency

One of the national currencies (dollar, euro, yen, etc.) or IMF's special drawing rights (SDR) used by a country to hold its foreign currency reserves and gold for settling international trade transactions and other obligations. Also called reserve currency.

Reserve Requirements

Requirements regarding the amount of funds that banks must hold in reserve against deposits made by their customers. This money must be in the bank's vaults or at the closest Federal Reserve Bank.

Reserves

Funds held against future contingencies, normally a combination of convertible foreign currency, gold, and SDRs. Official reserves are to ensure that a government can meet near term obligations. They are an asset in the balance of payments.

Resistance

Price level at which technical analysts note persistent selling of a currency.

Resistance Point or Level

A price recognized by technical analysts as a price level which a currency pair has trouble breaking through it to the upside, but which is likely to result in a significant price increase if broken. There are different levels of resistance levels for different time frames.

Retail Outlet

retail outlet

Retail Price Index

Measurement of the monthly change in the average level of prices at retail, normally of a defined group of goods.

Retail Trade

The total value of goods and services sold each month at retail outlets. The report serves as a direct gauge of consumption and consumer confidence. Consumer spending is one of the most important leading indicators for the Japanese economy. An increasing number of sales signal consumer confidence and economic growth, but higher consumption also leads to inflationary pressures. The headline figure they release is a year-on-year percentage change in the nominal value of items sold.

Retail Trade Monthly - Japan

The total value of goods and services sold each month at retail outlets. The report serves as a direct gauge of consumption and consumer confidence. Consumer spending is one of the most important leading indicators for the Japanese economy. An increasing number of sales signal consumer confidence and economic growth, but higher consumption also leads to inflationary pressures. The headline figure they release is a year-on-year percentage change in the nominal value of items sold.

Retracements

Synonymous with the term correction; 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.

Reuter Dealing

One electronic, screen-based currency trading platform.

Revaluation

To increase the legal exchange value of (a nation's currency) relative to other currencies.

Revenue

1.The total amount of money received by a company for goods or services sold before deducting expenses.

2.government income due to taxation


Reversal

Change in the general direction of a market, such as a rally. also called trend reversal.

RICS

Royal Institution of Chartered Surveyors
The Royal Institution of Chartered Surveyors (RICS) is the official representative professional body which regulates property professionals and surveyors.
The institution was founded in the United Kingdom after a meeting of 20 surveyors at the Westminster Palace Hotel on 23 March 1868. The institution is still based in the United Kingdom, however, as at 2005 the institution is represented or affiliated in excess of 120 countries and boasts a 136,000 strong worldwide membership.
The institution was founded in London in 1868 as the "Institution of Surveyors" and has occupied headquarters on the corner of Great George Street and Parliament Square since that date. The institution received its Royal Charter in 1881 and became the "Institution of Chartered Surveyors" in 1930. In 1946 the institution became a royal institution entitled to add "Royal" to its name and, thereby, achieved its present name.
The majority of members are based in the United Kingdom, however there is a strong international membership in many Commonwealth countries such as Canada, Hong Kong and Australia, and membership is growing rapidly in the United States and across Europe, Asia and Africa. The RICS has close links with many national surveying institutions and is a member association of the International Federation of Surveyors (FIG).
Outside of the UK (and particularly in non-Commonwealth countries), the institution generally avoids the use of the full name including "Royal" and styles itself as "RICS".


RICS House Price Balance

Gauge for costs of homes in the United Kingdom. The figure is based on surveyors' opinions on the state of the market, calculated as is the percent of surveyors reporting a rise in prices minus those reporting a fall. A rise in house prices indicates a strong housing market, which generally reflects a strong overall economy.

Risk

Exposure to uncertain change, most often used with a negative connotation of adverse change.

Risk Capital

The capital that an investor does not need to maintain his/her living standard.

Risk Management

The employment of financial analysis and use of trading techniques to reduce and/or control exposure to financial risk.

Risk Position

An asset or liability, which is exposed to fluctuations in value through changes in exchange rates or interest rates.

Risk Premium

Additional sum payable or return to compensate a party for adopting a particular risk.

Risk-Adjusted Return

A measure of how much risk a fund or portfolio takes on to earn its returns, usually expressed as a number or a rating.

Risks

There are risks associated with any market. It means variance of the returns and the possibility that the actual return might not be in line with the expected returns. The risks associated with trading foreign currencies are: market, exchange, Interest rate, yield curve, volatility, liquidity, forced sale, counter party, credit, and country risk.

Roll-Over

The process of extending the settlement value date on an open position forward to the next valid value date.

Rolling over

The substituting of a far option for a near option of the same underlying stock at the same strike/exercise price.

Rollover

A charge that is incurred by Forex investors who roll over their positions to the following delivery date
The fee arises from the difference in interest rates between the two currencies underlying a transaction. Sometimes investors can earn a credit if they are purchasing the currency with the higher of the two interest rates. Investors are often required to maintain certain margin positions with their brokers to earn a credit from rollover

Round trip

Buying and selling of a specified amount of currency.

Rounding Top and Bottom

Similar to a Cup and Handle pattern, a rounding top signifies a rounded resistance line and a bearish overall trend. Alternatively, a rounding bottom is a bullish for which the bottom curve can serve as a support line. Both patterns are best-suited to longer-term analyses.

RPI-Retail Price Index

Retail Price Index measures changes in the prices of goods and services bought for household consumption in the UK. The RPI takes a large sample of retail goods including food, tobacco, household goods and services, transport fares, motoring costs, clothing, and leisure goods and services. An increase in the index means that prices have increased on average (inflation) while a decrease means that prices on the whole have fallen (deflation).

RSI - Relative Strength Index

Relative Strength Index. A technical analysis indicator which measures the magnitude of gains over a given time period against the magnitude of losses over that period. The equation is RSI = 100 - 100 / (1 + RS) where RS = (total gains / n) / (total losses / n) and n = number of RSI periods. The value can range from 1 to 100. Some technical analysts believe that a value of 30 or below indicates an oversold condition and that a value of 70 or above indicates an overbought condition.

[PCMAnalyst]

S&P - Standard and Poors

A US firm engaged in assessing the financial health of borrowers. The firm also has generated certain stock indices i.e. S&&P 500.

s.a

seasonally adjusted

Same day transaction

A transaction that matures on the day the transaction takes place.

same store sales

statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more.

SDR

International financing instrument created in 1970 by the International Monetary Fund (IMF) to coincide with the disfavor of the US dollar as the principal currency of the world trade. Also called paper gold, an SDR is neither paper nor gold but an accounting entry. It is not backed by any currency or precious metal, and is used only among governments and IMF for balance Of payments settlements. SDRs are a measure of a country's reserve assets with IMF and, whereas not 'money' in the strict sense, have several characteristics of money as interest bearing assets, store of value, and means of settling indebtedness. They are distributed among all member states of IMF in proportion to each member's quota of IMF dues based on the member's GNP. Used mainly to supplement gold and convertible (hard) currencies in maintaining stability of foreign exchange markets, SDRs are valued on the basis of the value of a basket of 16 major currencies with periodically adjusted weightage reflecting each currency's importance in global trade.

SEC

Securities & Exchange Commission A federal agency that regulates the US financial markets. The SEC also oversees the securities industry and promotes full disclosure in order to protect the investing public against malpractice in the securities markets.

SECO


The State Secretariat for Economic Affairs

Secured Loan

A loan which is backed by assets belonging to the borrower in order to decrease the risk assumed by the lender. The assets may be forfeited to the lender if the borrower fails to make the necessary payments.

Securitization

The process of creating a financial instrument by combining other financial assets and then marketing them to investors.

Sell Limit Order

An order to execute a transaction only at a specified price (the limit) or higher.

Sell Stop Order

A Sell Stop is a Stop Order that is placed BELOW the current dealing Bid price and is not activated until the market Bid price is is at or below the stop price. The sell stop order, once triggered, becomes a market order to sell at the current market price.

Selling Rate

Rate at which a bank is willing to sell foreign currency.

Selling Short

A situation where a currency has been sold with the intent of buying back the position at a lower price to make a profit.

Selloff

A sudden drop in price as a result of widespread selling.

Series

All options of the same class which share a common strike price and expiration date.

Session

Period of trading activity from the time a market opens until it closes. also called trading session.

Settlement

The actual delivery of currencies made on the maturity date of a trade.

Settlement Date

It means the business day specified for delivery of the currencies bought and sold under a forex contract.

Settlement Risk

The risk that one party will deliver and the counterparty will not be able to pay and vice versa.

Share

Certificate representing one unit of ownership in a corporation, mutual fund, or limited partnership.

Shop Price Index

A monthly indicator of price changes at the most popular retail outlets in the United Kingdom. The index takes into account five hundred of the most commonly purchased goods and gives insight into consumer-price inflation. Shop Prices differentiate themselves from British CPI by coming out days before the headline inflation figure. Increases in the BRC Shop Price Index are bullish for the Pound, given that the Bank of England usually raises interest rates to control inflation reflected in the BRC. Conversely, a falling BRC Shop Price Index suggests falling price pressures.

BRC appear in the headlines as the monthly percentage change for the BRC Shop Price Index.

Short

In foreign exchange, when a currency pair is sold, the position is said to be short. It is understood that the primary currency in the pair is 'short', and the secondary currency is 'long'.

Short position

In foreign exchange, when a currency pair is sold, the position is said to be short. It is understood that the primary currency in the pair is 'short', and the secondary currency is 'long'.

Short sale

The sale of a specified amount of currency not owned by the seller at the time of the trade. Short sales are usually made in expectation of a decline in the price.

Short Squeeze

The pressure on short sellers to cover their positions as a result of sharp price increases.

A situation in which the price of the stock rises and investors who sold short rush to buy it to cover their short position and cut their losses. As the price of the stock increases, more short sellers feel compelled to cover their positions. More common than the opposite, long squeeze.

Short-term interest rates

Normally the 90 day rate.

Sidelined

When there is above ordinary interest in a currency pair, other major currency pairs that are thinly traded as a result of this are considered "sidelined".

Sideways

A price which is neither rising or falling; here also called flat.

SITC

Standard International Trade Classification. A system for reporting trade statistics in a common manner.

SL

Order to buy or sell when a given price is reached or passed to liquidate part or all of an existing position.

Slippage

The difference between estimated and actual transaction costs.

SNB

Swiss National Bank

SOFFEX

Swiss Options and Financial Futures Exchange, a fully automated and integrated trading and clearing system.

Soft Market

More potential sellers than buyers, which creates an environment where rapid price falls are likely.

speculation

Speculation is the practice of selecting investments (exposing one's self to risk) with the intention of profiting from price fluctuations.

As opposed to hedging (where investors enter positions to reduce risk in another investment) or gambling (just risk), speculators make informed decisions before choosing to expose one's self to additional risk.

Spike

A large, quick, temporary rise or fall in price.

Spot

(1) Immediate delivery against cash payment, as opposed to future delivery against cash or credit payment

(2) Spot refers to the buying and selling of the currency where the settlement date is two business days forward.

Spot Market

A market in which commodities, such as grain, gold, crude oil, or RAM chips, are bought and sold for cash and delivered immediately. also called cash market.

Spot Commodity

Commodity bought or sold in a spot market, with the expectation that it will be actually delivered on the contracted date.

Spot Price

The current market price of a currency that normally settles in 2 business days (1 day for Dollar/Canada).

Spot Price/Rate

The price at which the currency is currently trading in the spot market.

Spread

This point or pip difference between the bid and ask price of a currency pair.

Square/Flat

Where a client has not traded in that currency or where an earlier deal is reversed thereby creating a neutral (flat) position. example: you bought $500,000 then sold $500,000 = FLAT

Squeeze

Action by a central bank to reduce supply in order to increase the price of a currency.

Stable Market

An active market which can absorb large sale or purchases of currency without having any major impact on the interest rates.

Stagflation

Recession or low growth in conjunction with high inflation rates.

Stake

In economics: a. A share or an interest in an enterprise, especially a financial share. b. Personal interest or involvement: a stake in her children's future.

Standard

A term referring to certain normal amounts and maturities for dealing.

Standard and Poors - S&P

A US firm engaged in assessing the financial health of borrowers. The firm also has generated certain stock indices i.e. S&&P 500.

Sterilization

Central Bank activity in the domestic money market to reduce the impact on money supply of its intervention activities in the forex market.

Sterling

Another term for the British currency, 'The Pound'.

Stock Index

Statistical indicator used in measurement and reporting of changes in the market value of a group of stocks/shares. Different stock indices (such as Dow Jones Industrial Average, Russell 1000, Standard And Poor’s 500) track the market differently depending on (1) which averaging method is used to establish the index, (2) whether the index is broad based or narrow based, and (3) whether the averaging method assigns weights on the basis of market price or market capitalization. Also called Share Index

Stocky

Market slang for Swedish Krona.

Stop (loss) Order

Order to buy or sell when a given price is reached or passed to liquidate part or all of an existing position.

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.

Stop Order or Stop

An order to buy or to sell a currency when the currency's price reaches or passes a specified level.

Stop Out Price

US term for the lowest accepted price for Treasury Bills at auction.

Stop-Loss order

A Stop Loss is an order to close a trade when the market moves a specified amount.

Straddle

The simultaneous purchase/sale of both call and put options for the same share, exercise/strike price and expiry date.

Strike Price

Also called exercise price. The price at which an option holder can buy or sell the underlying instrument.

Strike Price- Exercise Price

The price at which an option can be exercised.
The purchase or sale price of underlying stock that an option holder sees upon the exercising an option contract.

Strip

1.A combination of two puts and one call.

2. bond that is issued by the U.S. Treasury for which interest and repayment of principal are separated and sold individually as zero-coupon bonds. The letters STRIP compose an Acronym for Separate Trading of Registered Interest and Principal of Securities.

Structural Unemployment

Unemployment resulting from changes in the basic composition of the economy. These changes simultaneously open new positions for trained workers.

An example of structural unemployment is the technological revolution. Computers may have eliminated jobs, but they also opened up new positions for those who have the skills to operate the computers.

Support Levels

A price at which a currency or the currency market will receive considerable buying pressure.

SVME

Society for Veterinary Medical Ethics

The Society for Veterinary Medical Ethics was founded in 1994 by a group of veterinarians, biomedical researchers, and academics to promote discussion and debate about ethical issues arising in and relevant to veterinary practice. The Society presently has approximately 160 members, including veterinary school deans, officers of the AVMA and state veterinary medical associations, board-certified laboratory animal medicine specialists, biomedical scientists, officers of humane societies, clinical veterinary practitioners, members of veterinary school and university faculties, and veterinary-oriented students. The SVME publishes a newsletter, holds a plenary meeting with lectures and discussions at the AVMA annual convention, distributes information regarding recent publications relevant to veterinary ethics, and actively seeks to increase and elevate the level of discussion of issues in veterinary ethics. Although most members of the SVME are veterinarians, membership is not limited to veterinarians.

Swap

A transaction which moves the maturity date of an open position to a future date.

Swap price

A price as a differential between two dates of the swap.

Swissy

Market slang for Swiss Franc.