VZDĚLÁVACÍ CENTRUM

FOREXOVÝ SLOVNÍČEK

ABCDEFGHIKLMNOPQRSTUVW

A

Account Statement

The USG account statement will show the client's debit and credit activity over a user-specified time period.

Account Status Window

The account status window shows the USG margin monitor. It includes account balances and the unrealised profit and loss on open positions. It also shows numerical and graphical representations of USG margin levels for the client, given existing open positions.

Account Value

The current value of a customer's account, given the amount of money deposited and any changes resulting from profit and loss from existing and closed-out positions. The value also includes credits and debits from daily rollovers, commission, transfer fees or bank-related charges, if applicable.

Aggregate Demand

Total demand for goods and services in the economy. It includes private and public sector demand for goods and services locally, as well as internationally.

Aggregate Risk

Size of exposure of a single customer to a market-related movement.

Aggregate Supply

Total supply of goods and services in the economy from domestic sources (including imports) available to meet aggregate demand.

Agreement

The USG Customer Agreement. All clients must read and sign the USG Customer Agreement before opening an account with USG.

Application

The USG software program.

Appreciation

Describes a currency increasing or strengthening in response to a market reaction

Arbitrage

The simultaneous purchase and sale in different markets of the same or equivalent financial instruments to profit from price or currency differentials.

Asset Allocation

Dividing funds between different investment alternatives in order to attempt to achieve diversification or maximum return.

Ask

The price at which the currency or instrument is offered for sale by USG or another counter-party.

A specific instruction given to a dealer to buy or sell at the best rate that can be obtained. The term is synonymous with the term 'at the market' or is implied by the customer issuing a 'market order'.

An order to deal at a specific rate/price, or better.

Authorised Dealer

A third party to which the customer grants trading authority or control over their account. USG does not, by implication or otherwise, endorse or approve of the operating methods of the authorised agent. USG shall not be responsible with respect thereto.

Available Trading Power

Given a customer's account value and current position, the amount of incremental Foreign Exchange, expressed in a specified currency, that the customer could take. Mathematically, the Available Trading Power = (Account Value * Maximum Trading Leverage) Open Position Amount.

[ TOP ]

B

Back Office

USG's Customer Support interface, in charge of the setting up of accounts, fund transfers into and out of the customer's account, trade reconciliation issues, customer enquiries and any other activities that do not directly involve the buying or selling of a currency pair.

Balance of Payments

A systematic record of the real economic transactions during a given period for a particular country. Countries are either in a balance of payment excess or balance of payment deficit. Prolonged balance of payment deficits could lead to restrictions in capital transfers and/or decline in currency values.

Balance of Trade or Trade Balance

In general terms, this is the value of exports minus imports for a particular country. A balance of trade deficit is when a country imports more than it exports. A balance of trade surplus is when a country exports more than it imports. If a country is in prolonged trade deficit, the currency versus its trading partners could decline or weaken, making the cost of imports more expensive and exports cheaper for trading partners.

Bank Line

Line of credit granted by a bank to a customer, also known as a ' line'.

Banking Day (or Working Day)

Any day that commercial banks are open for business in the financial centre of the country on whose currency a position is taken.

Bank of Japan or BOJ

The Central Bank of Japan.

Base Currency

The first currency in a currency pair. In the currency pair EUR/USD, the base currency is the EUR. When entering into a contract with USG, the base currency remains constant at a contracted lot value. For example, if a lot is 100,000, the customer who transacts to buy 1 lot of EUR/USD at a currency rate of .9600 would be contracting to exchange EUR 100,000 for USD 96,000.

Base Rate

A term used predominantly in the UK for the rate used by banks to calculate the interest rate charged to borrowers. Top-quality borrowers will only pay a small amount over the base rate while lower-quality creditors will pay a much higher rate.

Basis Point

One per cent of one per cent. The difference between 3.75% and 3.76%.

Bear Market

A prolonged period when investment prices fall, accompanied by widespread pessimism.

Bear Squeeze

A change in market conditions that forces pessimistic investors attempting to profit from declining prices to buy back an investment at a higher price than they sold it for.

Bear

An investor who believes that price of an investment product is going to fall.

Best-efforts Basis

The execution of an order at the next available price, taking into consideration the volume available to buy or sell at that price and the quantity and volume of orders that precede the customer's order.

Bid

The price at which USG (or another counter-party) offers to buy a currency pair from a customer.

Big Figure

Normally refers to the first three digits of a Foreign Exchange price quote. NOTE: A EUR/USD exchange rate of .9630 infers that '0' is the first figure. So, the price would be 0.9630, with the 'big figure' being 0.96.

Break or Break Out

Term used to describe a sudden or rapid fall in instrument pricing away from a consolidated range.

Broker

An agent who executes orders to buy and sell currencies and related instruments either for commission or on a spread.

Brokerage

Commission charged by a broker.

Bull Market

A prolonged period of generally rising prices for a particular investment product.

Bull

An investor who believes that prices of particular investment products are going to rise.

Bundesbank

The Central Bank of Germany.

Business Day

See Working Day

Buy Limit

Specifies the highest price at which the purchase of the base currency in a currency pair can be executed. The limit price in a buy limit order should be BELOW the current dealing ask price.

Buy Stop

A buy stop is a stop order that is placed ABOVE the current dealing ask price and is not activated until the market ask price is at, or above the stop price. The buy stop order, once triggered, becomes a market order to buy at the current market price.

[ TOP ]

C

Cable

A term used in the Foreign Exchange market for the US Dollar/British Pound rate.

Carry

The interest cost of financing securities or other financial instruments held.

Cash Delivery

Same-day settlement.

Cash

Normally refers to an exchange transaction contracted for settlement on the day that the deal is struck.

Cash on Deposit

Cash on deposit equals the amount of funds deposited in the account, plus or minus the realised closed position P/L and other debits or credits, such as rollovers and commission (if any).

Central Bank

A bank that is responsible for controlling a country's or region's monetary policy. The Federal Reserve is the Central Bank for the United States, the European Central Bank is the Central Bank for Europe, the Bank of England is the Central Bank for the United Kingdom and the Bank of Japan is the Central Bank for Japan.

Central Bank Intervention

The act by which a Central Bank, or Central Banks enter the spot Foreign Exchange market and attempt to influence unbalanced supply and demand forces through the direct purchase (or sale) of Foreign Exchange.

CFTC

The Commodity Futures Trading Commission, the US Federal regulatory agency for futures traded on commodity markets, including financial futures.

Chartist

An individual who studies graphs and charts of historical data in an attempt to find trends that will help predict the direction and magnitude of a particular investment product.

Client or Customer

A USG account holder. The client can be an individual, money manager, corporate entity, trust account, co-owner or any legal entity that has an interest in the value of the account.

Closed Position

A transaction that is opposite in direction and magnitude to an existing position and that has the effect of realising a gain or loss.

CME

Chicago Mercantile Exchange

Commission

The fee that a broker may charge clients for dealing on their behalf.

Confirmation

An electronic or printed notice that describes all the relevant details of a transaction.

Consumer Price Index

Monthly measure of the change in the prices of a defined basket of consumer goods, including food, clothing and transport. Countries vary in their approach to rents and mortgages.

Contract

An over-the-counter (OTC) agreement with USG to buy or sell a specified amount of a particular currency in return for a specified amount of another currency for settlement on a specified value date (normally the spot date). The contracted amounts are determined by the Foreign Exchange rate contracted to by the two parties.

Conversion Rate

The rate for a specific currency pair that is used to convert (or sweep) non-US Dollar profits/losses into dollars at the end of a trading day.

Co-owner

A person who has a co-interest in a USG Account. Co-owners are required to read, fill in and sign account application forms and corresponding documents, including, but not limited to the USG Risk Disclosure document and the W-8/W-9 forms.

Correspondent Bank

The foreign bank representative who regularly performs services for a bank that has no branch in the relevant centre, e.g. to facilitate the transfer of funds.

Counter-currency

The second currency in a currency pair. In the currency pair EUR/USD, the counter-currency is the USD.

Counter-party

The other entity or party with whom the exchange deal is being transacted.

Country Risk

The risk attached to a transaction by virtue of its association with a particular country. This involves examination of the economic, political and geographical factors of a particular country.

Cover

The act of performing a transaction that closes out a position.

Credit Risk

The risk that a debtor will not repay; more specifically, the risk that the counter-party does not have the currency that it promised to deliver.

Cross-currency Contract

A spot contract to purchase or sell one foreign currency in exchange for another specified foreign currency. The currencies exchanged are not the US Dollar.

Currency

A foreign currency or the US Dollar.

Currency Pair

The two currencies in a Foreign Exchange transaction. The EUR/USD is an example of a currency pair.

Customer Account Application

The USG application that all clients and customers must fill in and submit for acceptance by USG before a transaction may take place.

[ TOP ]

D

Daily Cut-off (or Close of Working Day)

The single point in time that signifies the end of that working day. The trade date of any contract entered into after the daily cut-off shall be considered executed on the next working day. The daily cut-off will occur at a time selected on any working day solely by USG and may be changed at the discretion of USG.

Day Order

An order that, if not executed on a specified day, is automatically cancelled.

Day Trader

A speculator who takes positions in investment products, which are then liquidated prior to the close of the same trading day.

Deal Blotter

A listing of all the deals that were executed over a specified time period, usually the trading day.

Deal Date

The date upon which a transaction is agreed.

Deal Ticket

The primary method of recording the basic information relating to a transaction.

Dealer

An individual or firm acting as a principal, rather than as an agent, in the purchase and/or sale of Foreign Exchange. Dealers trade for their own account and at their own risk.

Dealing Desk

Generally speaking, the group of dealers working for USG that facilitates the pricing and execution of customers' orders.

Default

Generally speaking, a breach of contract.

Depreciation

A fall or decline in the value of a currency due to market forces.

Depth of Market

A measure of the volume available for transaction purposes for a particular currency pair at a specific point in time.

Details

All the information required to finalise a Foreign Exchange transaction, i.e. name, rate and dates.

Devaluation

The deliberate downward adjustment of a currency against its fixed parities or bands, normally initiated by a formal announcement by a country.

Discretionary Income

Net of tax and fixed personal spending commitments.

DM, Dmark

Deutschmark.

Domestic Rates

The interest rates applicable to deposits in the country of origin.

Down Tick

The sale of a security (usually an equity or stock) at a price lower than the previous one.

[ TOP ]

E

Easing

A decline in interest rates initiated by the Central Bank.

ECU

European Currency Unit.

Either-way Market

Used in the Euro inter-bank deposit market, where both bid and offer rates for a particular period are the same.

Escrow Account

Money deposited with USG is deposited in an FDIC-insured escrow account at the HSBC Bank USA, NA.

Euro

The exchange currency of the European Union.

Euro Rates

The interest rates quoted for Euro-currencies over specific periods.

Euro-currency

A currency deposited outside its country of origin.

Eurodollars

US Dollars deposited in a bank (US or non US) located outside the USA.

European Union

The group formerly known as the European Community

Event Notifications Window

A USG window that summarises the transactions that have taken place in a client's account over the course of a working day.

Excess Margin Deposits

Money deposited with USG that is not used for margin against an existing open position.

Exchange

A physical location where instruments are traded and often regulated. Examples: the New York Stock Exchange and the London Stock Exchange.

Exchange Control

A system of controlling the movement of currency between countries. Devices include the licensing of multiple currencies, quotas, auctions, limits, levies and surcharges.

Exotic

A less broadly traded currency.

[ TOP ]

F

Fast Market

The rapid movement of prices or rates in a market caused by disequilibrium in supply and demand conditions from buyers and/or sellers. In such circumstances, rates or prices may not be readily available to clients until orderly markets resume.

Fed Fund Rate

The short-term (overnight) rate pegged by the Federal Reserve Bank used to conduct monetary policy and effect changes in the money supply to facilitate a change in the level of activity in the United States economy.

Fed Funds

Cash balances held by banks with their local Federal Reserve Bank.

Fed

The United States Federal Reserve Bank.

Federal Open Market Committee

Also known as the FOMC. The body of individuals that decides the course of monetary policy in the United States. The FOMC is directly responsible for pegging the Federal Funds rate and the Discount Rate. Both rates are influential in controlling the levels of money-supply growth and the levels of economic activity in the United States.

Federal Reserve Board

The Board of the Federal Reserve System, appointed by the US President for 14 yearly terms, one of whom is appointed Chairman for four years.

Federal Reserve System

The central banking system of the US, comprising 12 Federal Reserve Banks controlling 12 districts under the Federal Reserve Board. Membership of the Fed is compulsory for banks chartered by the Comptroller of Currency and optional for state-chartered banks.

Fill or Filled

A deal that has been executed on behalf of a customer's account, given a customer's order. Once filled, an order cannot be cancelled, amended or waived by the customer.

Firm Quotation

A verbal price given in response to a request for a firm rate at which the quoting party is willing to execute a deal for a reasonable amount for spot settlement.

Fiscal Policy

Use of taxation as a tool in the implementation of monetary policy.

Fixed Dates

Monthly calendar dates similar to the spot. There are two exceptions. For a detailed description, see Value Dates.

Fixed Exchange Rate

Official rate set by monetary authorities. Often, the fixed exchange rate permits fluctuation within a band.

Fixing

A method of determining rates, usually by finding a rate that balances buyers to sellers. Such a process occurs either once or twice daily at defined times. Used by some currencies particularly for establishing tourist rates.

Floating Exchange Rate

An exchange rate where the value is determined by market forces. Even floating currencies are subject to intervention by monetary authorities. When such activity is frequent, the float is known as a 'dirty float'.

FOMC

Federal Open Market Committee, the committee that sets money-supply targets in the US that tend to be implemented through Fed Fund interest rates, etc.

Foreign Exchange

The term 'Foreign Exchange' generally refers to off-exchange trading in foreign currency. It may also refer to currency trading on exchanges such as the IMM at the Chicago Mercantile Exchange.

USG does not make physical delivery of foreign currency into foreign bank accounts.

Forex

Forex' is a popular short form for Foreign Exchange and generally refers to off-exchange trading in foreign currency.

Forward Deal

A deal with a value date after the spot value date.

Forward/Forward

A forward/forward deal is one where both legs of the deal have value dates after the current spot value date.

Forward Rate

Forward rates are quoted in terms of forward points, which represent the difference between the forward and spot rates. In order to obtain the forward rate from the actual exchange rate, the forward points are either added or subtracted from the exchange rate.

The decision to subtract or add points is determined by the differential between the deposit rates for both currencies concerned in the transaction. The base currency with the higher interest rate is said to be at a discount to the lower interest rate currency quoted in the forward market. Therefore, the forward points are subtracted from the spot rate. Similarly, the lower interest rate base currency is said to be at a premium, and the forward points are added to the spot rate to obtain the forward rate.

Front Office

The activities carried out by the dealer - normal trading activities.

Fundamentals

The macro-economic factors that are accepted as forming the foundation for the relative value of a currency. These include inflation, growth, trade balance, government deficit and interest rates.

FX

FX' is a popular acronym for Foreign Exchange. Foreign Exchange generally refers to off-exchange trading in foreign currency.

[ TOP ]

G

G7

The seven leading industrial countries, these being the US, Germany, Japan, France, UK, Canada and Italy.

G10

G7, plus Belgium, the Netherlands and Sweden, a group associated with IMF discussions. Switzerland is sometimes peripherally involved.

Going Long

The act of buying a currency pair. For example, if a client bought EUR/USD, he would be 'going long' the Euro.

Going Short

The act of selling a currency pair. For example, if a client sold EUR/USD, he would be 'going short' the Euro.

Good Til Cancelled (GTC order)

A specific instruction to a broker that, unlike normal practice, does not expire at the end of the trading day, although it normally terminates at the end of the trading month.

GTC

See Good Til Cancelled.

[ TOP ]

H

Buyer of a currency pair.

[ TOP ]

I

Indicative quote

A market maker's price, which is not 'firm' or a 'firm quotation'.

Inter-bank Market

The inter-bank market is the over-the-counter market of dealers who market Foreign Exchange to one another.

Intervention

Buy or sell action by a Central Bank in an attempt to affect the value of its currency. Concerted intervention refers to action by a number of Central Banks to influence the value of exchange rates.

Intra-day position

Open positions run by a USG client within the day. Usually squared by the close.

Introducing Broker

A person or legal entity that introduces customers to USG, often in return for compensation, such as a fee per transaction. Introducing Brokers are prevented from accepting margined funds from their clients.

[ TOP ]

K

Slang for the New Zealand Dollar.

[ TOP ]

L

Left-hand Side

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

Leverage

The control of a large notional position through the use of a small amount of capital.

Limit Order

A limit order is a customer order to buy or sell a specific amount of a currency pair at a specific user-defined price. A limit order does not guarantee execution; rather it guarantees only that, if execution occurs, it will be at the stated limit price. Note that sometimes the market briefly touches a limit price, only to retreat immediately from the limit price level with very little, if any, volume traded. Under such circumstances, the limit order may not have been executed and will remain in effect until such time as the order can be executed or until the customer cancels the order. A limit order specifies that execution should be attempted after the market reaches or goes through a set price level - the limit price. Once issued, the limit order will be held pending until the limit price is reached. Once the market hits or goes through the limit price, the order is triggered and the USG dealer attempts to execute the order at the limit price.

Limit Price

The price that the client specifies when entering a limit order.

Liquid

The market condition where there is ample volume to buy or sell.

Liquidation

Any transaction that offsets or closes out a previously established position.

Liquidation Level

The account value level that initiates the liquidation of all the client's open positions at the best price or exchange rate available at that moment. Liquidation occurs when the account value is not sufficient to maintain the current open position(s). A client can prevent liquidation by depositing additional margin into the account or by closing out existing open positions.

Liquidity

The term used to describe the amount of volume available to buy or sell at a given point in time.

Long

The term used to describe a client who has opened a new position by buying a currency pair.

Loss in Excess of Their Margin Deposit

A situation where an opportunity exists for clients to lose more than the margin that they initially pledged to open and maintain a position.

[ TOP ]

M

Maintenance Margin

The minimum margin that an investor must keep at USG to maintain an open position.

Margin Call

A demand for additional funds to be deposited in a margin account to meet margin requirements because of adverse exchange rate movements.

Margin

The aggregate amount of customer cash pledged against the aggregate open position(s). The margin pledged is a function of the maximum trading leverage ratio. The higher the leverage, the lower the pledged margin. The lower the leverage, the higher the margin needed to carry the position.

Mathematically, Margin = Open Position Amount/Maximum Trading Leverage Ratio. For example, a USD/CHF USD 100,000 position at a maximum trading leverage ratio of 50:1 will require pledged margin equal to 100,000/50, or USD 2,000.

NOTE: To calculate margins for currency pairs where the USD is NOT the base (first) currency (e.g. EUR/USD, GBP/USD…) and crosses (EUR/JPY, GBP/JPY…), the counter-currency amount is first converted into USD using the average exchange rate(s).

Example: The customer buys 1 lot of EUR/USD when the price is .9600 9604. The average exchange rate is .9602. Therefore, EUR 100,000 equals USD 96,020. USD 96,020/50 Leverage Ratio = USD 1,920.40

Mark to Market

The daily adjustment of an account to reflect unrealised profit and loss.

Market Maker

A market maker is a person or firm authorised to create and maintain a market in an instrument.

Maximum Trading Leverage Ratio

Leverage expressed as a ratio, available to open new positions. For example, a leverage ratio of 50:1 allows a client the ability to control a USD 100,000 lot position with USD 2,000 of margin (USD 100,000/50 = USD 2,000).

Maximum Trading Power

Mathematically, the Maximum Trading Power = Account Value * Maximum Trading Leverage Ratio.

Moving Average

A way of smoothing a set of price/rate data by taking the average price of the data range of values.

[ TOP ]

N

Net Interest Rate Differential

The difference in interest rates between countries with two different currencies. For example, if the spot/next rate for the Euro is 3.25% and the spot/next rate in the US is 1.75%, the interest differential is 1.50% (3.25% - 1.75% = 1.50%).

Netting

The method of settling under which only the differences in the traded currencies are settled at the close.

[ TOP ]

O

OCO Order (One Cancels the Other Order)

A one cancels the other order is a stop and limit order set simultaneously, whereby once either one is executed, the other is cancelled. For example, an OCO may be placed to close an existing position either with a limit (take profit), or with a protective stop (stop loss).

Offer

The price at which a dealer is willing to sell. The offer is also called the ask, or ask price.

Offered Market

Temporary situation where offers exceed bids.

Old Lady

Old Lady of Threadneedle Street, a term for the Bank of England, the UK's Central Bank.

Omnibus Account

An account maintained by one broker with another in which all of the accounts of the former are combined and carried only in its name, rather than designated separately.

Open Position

The difference between assets and liabilities in a particular currency. This may be measured on a per-currency basis or on the position of all currencies when calculated in the base currency.

Open Position Window

The USG window that shows all the current client positions that are open.

Order(s)

Clients' instructions given electronically via the USG Internet Trading Platform, verbally or via an electronic chat application like DirectDealer, to enter into a specific Foreign Exchange contract with USG by buying or selling a specified currency pair immediately, or at a time when the price meets the client's specific requirements.

OTC Margined Foreign Exchange

Over-the-counter (off-exchange) Foreign Exchange markets in which market participants, such as USG and their customers, enter into privately negotiated contracts or other transactions directly with each other for which a margin is deposited and pledged against outstanding positions.

Overnight

A deal from one day until the next working day.

[ TOP ]

P

Pip

The smallest measure of movement for a Foreign Exchange rate.

Pending Orders Report

The pending orders report will show all the pending orders that the client has entered over user-specified dates, whether the pending order is executed or not. Any pending order that is cancelled by the client will still be displayed, giving the client a full audit trail of their orders.

Pending Orders Window

The USG window that shows all outstanding orders still pending or outstanding. Before the client closes USG, the application will warn the client of any orders still outstanding. Such orders will remain even though the client is logged out. However, they may be executed when the client is offline.

Position

The netted total commitments in a given currency. A position can either be flat or square (no exposure), long, (more currency bought than sold) or short (more currency sold than bought).

Principal

A dealer who buys or sells stock for their own account.

Profit Taking

The unwinding of a position to realise a profit.

[ TOP ]

Q

Quote

Consists of the bid and ask for a currency pair.

Quote Panel

The quote panel is the section in the USG window that displays the quotes for major currencies and crosses, and allows access to USG charts.

[ TOP ]

R

Range

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

Rate

The price of one currency in terms of another, normally against the USD.

Realised P/L

The profit and loss generated from closed positions.

Regulated Market

A market that is regulated, usually by a governmental agency that issues guidelines and restrictions designed to protect investors.

Reports Window

The USG reports window is where a client can access various account status reports that show their activity, in detail. There are 5 different reports, all of which can be customised by the client to a specific time period. These are the trading history, pending orders history, account history, session history and account statement.

Resistance Point or Level

A price recognised by technical analysts as a price that will usually stop the movement of a Foreign Exchange rate from going higher. If a resistance level is 'broken', the technician will conclude that the price movement of the instrument will continue to rise.

Right-hand Side

Corresponds to the ask or offer price of a Foreign Exchange rate. For example, given a price of .9630 - .9635, the right-hand side is .9635. The right-hand side is the side at which a client would buy.

Risk Capital

The amount of money that the client is willing to put at risk which, if lost, would not cause the client any undue hardship.

Rollover

At the end of each working day, USG will automatically roll over or swap all existing open positions into the next spot date. The mechanics, in effect, involve the simultaneous closing of an existing position and the opening of a new spot position. USG will debit or credit the client's account depending on the interest rate differential between the base currency and the counter-currency, and the client's position. For example, if the client is long a currency pair where the overnight rate for the base currency is higher than the counter-currency, the client will earn a small credit for positions held overnight. If the opposite is true, the client's account will be debited for the difference in the interest rate differential. The fundamental reasoning is that if a client is long a higher-yielding currency, they should benefit from being able to invest and earn a higher return overnight than the amount they would have to pay for being short the lower-yielding currency.

Rollover Credit

The credit (in base currency terms) added to a client's account that is long a higher-yielding currency overnight.

Rollover Debit

The debit subtracted from a client's account that is long a lower-yielding currency overnight.

Running a Position

The act of keeping open positions in hope of a speculative gain.

[ TOP ]

S

Same-day Transaction

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

Sell Limit

Specifies the lowest price at which the sale of the base currency in a currency pair can be executed. The limit price in a sell limit order should be ABOVE the current dealing bid price.

Sell Stop

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 at, or below the stop price. The sell stop order, once triggered, becomes a market order to sell at the current market price.

Settlement Date

The date by which an executed order must be settled by the transfer of instruments or currencies and funds between buyer and seller.

Short

Having an open position that was created by selling a currency. If they have sold EUR/USD, the client is said to be 'short' the currency pair (sold the base currency). If the client has bought EUR/USD, they would be 'long' the currency pair, but 'short' USD currency. Foreign Exchange transactions assume being 'long' one currency and 'short' another.

Short Covering

Buying to unwind a short position of a particular currency pair

Sophisticated Foreign Exchange Investor

Investor possessing sufficient knowledge, experience and/or capitalisation to trade in the Foreign Exchange market. The investor has to decide for themselves if Forex is a suitable investment vehicle for their purposes.

Sovereign Risk

(1) Risk of default on a sovereign loan;
(2) Risk of appropriation of assets held in a foreign country.

Speculative

Trading Foreign Exchange is speculative in that there is no guarantee that investing in Foreign Exchange will make any money. The conditions also exist where the client might lose their entire deposited margin, making trading FX highly speculative. Those who trade Foreign Exchange should only risk such capital (known as risk capital) that would not cause the client undue hardship, if lost.

Spot Book

The USG spot book window shows the client's outstanding overnight positions, the deals that were executed during the course of the day and the client's existing open positions. The window includes relevant information about the items listed under each of the sections, including the deal rate, the current value of the deal, the current mark to market rate, the P/L, the time the deal was executed, etc.

Spot

Spot or spot date refers to the spot transaction value date two working days from the deal's trade date. When there is a Bank Holiday, over the weekend or on any other day when the banks in the countries represented by the currencies in the currency pair are closed, the spot date will be adjusted forwards to the next value date when the banks are open again. In the case of the US Dollar versus the Canadian Dollar, the spot date is 1 working day forwards from the trade date.

Spot Price/Rate

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

Spot Settlement Basis

The standardised settlement procedure for Foreign Exchange transactions that sets the value date 2 working days forwards from the trade date (see Spot).

Spread

The difference between the bid and ask price for a foreign currency price.

Square

The condition whereby the client's purchases and sales are in balance and there is no open position.

Squawk Box

A speaker connected to a phone, often used at brokerage trading desks.

Sterling

British Pound, otherwise known as 'cable'.

Stop-loss Order

A specific order entered by the client to close out a position, if the price moves in the opposite direction to the position by a certain amount of pips. In most cases, stop orders are executed as soon as the market reaches or goes through the stop-price level set by the client. Once issued, the stop order will be held pending until the stop price is reached. Stop orders may be used to close out a position (stop loss), to reverse a position or to open a new position. The most common use is to protect an existing position (by limiting losses or protecting unrealised gains). Once the market hits or goes through the stop price, the order is activated (triggered) and USG will execute the order at the next available price. Unlike a limit order, a stop order does not guarantee execution at the stop price. Market conditions, including volatility and lack of volume, may cause a stop order to be executed at a price different from the order.

Stop Price Level

The client-entered price that activates a stop-loss order.

Sweep/Sweeping

When a USG client has a P/L in a currency other than US Dollars, the P/L must be converted at the close of each working day into US Dollars at the exchange rate prevailing at the time (known as the conversion rate). This process is called sweeping. Note that until the P/L is swept, the client's account value may fluctuate slightly (up or down) as the exchange rate for the profit and loss currency changes. For example, if the client has a profit in yen, if the value of the yen rises after the position is closed but before the profit is swept into dollars, the account value will change. The change is only on the profit/loss amount, so the effect is minimal.

SWIFT

The Society for World-wide Inter-bank Telecommunications is a Belgian-based company that provides the global electronic network for settlement of most Foreign Exchange transactions. The society is also responsible for the standardisation of the currency codes used for confirmation and identification purposes (e.g. USD = US Dollars, EUR = Euro, JPY = Japanese Yen).

Swissy

Market slang for the Swiss Franc.

[ TOP ]

T

Technical Correction

An adjustment to price not based on market sentiment but technical factors, such as volume and charting.

Thin Market

A market condition in which trading volume and liquidity are low and in which bid and ask quotes are usually wider than normal.

Tick

A minimum change in price, up or down.

Tomorrow Next (Tom Next)

Simultaneous buying of a currency for delivery the following day and selling for the spot day, or vice versa.

Trade Date

The date on which a trade occurs.

Trading Margin Excess/Deficit

Remaining funds against which a customer can open new positions or increase the amount of existing positions = account value margin. It is a function of the position size and the profit and loss on the existing position. It is represented graphically as the top of the yellow level in the USG margin monitor.

Trading Platforms

A software application where a client can give an order for a transaction to be executed on their behalf. USG Trader and MetaTrader are both examples of trading platforms.

Transaction Date

The date on which a trade occurs.

Transaction

The buying or selling of Foreign Exchange amounts resulting from the execution of an order.

Two-way Quote

When a dealer quotes a bid and ask price for Foreign Exchange transactions to a customer.

[ TOP ]

U

Uncovered position

Another term for an open position.

Unrealised P/L

Unrealised P/L is the real-time profit or loss on the current open position(s) given the current exchange rate(s). NOTE: The unrealised P/L is calculated using the price that the client would need to deal on to liquidate the position. For example, if the client were long EUR/USD, the client would need to sell at the bid side of the current market. P/L is unrealised until the position is closed out. The P/L will then be added or subtracted from the cash on deposit to get the new cash on deposit amount.

Up Tick

A transaction executed at a price greater than the previous transaction.

US Dollar

The legal tender of the United States of America.

USG Demo Trading Platform

USG maintains a demo trading platform that is a full-feature replica of the USG Internet Trading Platform used by authorised USG margined clients to enter into contracts to buy and sell Foreign Exchange from USG. The demo trading platform allows potential USG clients to get used to the actual trading platform's functionality and features without risking their capital by executing contracted trades. As the platform does not involve actual deals or contracts, any profit or loss generated by using the platform does not accrue, nor are they an obligation of the demo customer. It is strictly for demonstration purposes only.

USG Internet Trading Platform

The software application used by authorised USG customers to contract Foreign Exchange transactions for the purpose of speculating on the direction of currency movements. It is also referred to simply as USG. Any transactions carried out on the USG Internet Trading Platform are a legally binding contract for which the client is responsible, as per the Customer Agreement and other documents presented to and signed by the client.

USG Menu Bar

The bar included in the USG window that allows the client to access, format and position the various USG windows, including the Customer Reports windows, Chart windows, Spot Book window, etc. It also gives the client access to the USG Help window.

USG Risk Disclosure Document

The USG Risk Disclosure outlines the risks associated with opening an account with USG. All clients who have a financial interest in USG are required to read and sign the document in order to open an account.

USG Title Bar

The bar at the top of the USG window showing the version number of the USG release and the world clocks.

USG Toolbar Icons

Icons automatically displayed in the USG window that allow the user to access the Event Notification, Account Status, Open Position, Pending Orders, Spot Book and Help windows with just one click.

USG Window

The term used to describe the entire space on a client's computer screen that is home to all the other USG windows. These allow the client to monitor positions, profit and loss, pending orders, the spot book, Chart window, etc.

[ TOP ]

V

Value Date

For exchange contracts, it is the day on which the two contracting parties exchange the currencies that are being bought or sold. For a complete description, please see the chapter on trading. For a spot transaction, it is two banking days forwards in the country of the bank providing quotations determining the spot value date. The only exception to this general rule is when the spot day in the quoting centre coincides with a Bank Holiday in the country or countries using those foreign currencies. The value date then moves forward a day. The enquirer is the party who must make sure that his spot day coincides with the one applied by the respondent. The forward month's maturity must fall on the corresponding date in the relevant calendar month. If the one-month date falls on a non-banking day in one of the centres, then the operative date would be the next working day that is common to both. The adjustment of the maturity for a particular month does not affect other maturities. These will continue to fall on the original corresponding date, if they meet the open-day requirement. If the last spot date falls on the last working day in a month, the forward dates will match this date by also falling due on the last working day. Also referred to as maturity date.

[ TOP ]

W

Working Day

Any day on which commercial banks are open for business other than Saturday or Sunday in the principal financial centre of the country on whose currency a position is taken.

[ TOP ]
O nás
Platformy
Typy účtů
Tržní nástroje
Vzdělávací centrum
Partneři a spolupracovníci