1. Currency pair CURRENCY PAIR
Currency is a country-customized currency. The eight currencies most commonly traded (US Dollar USD, Euro EUR, JPY JPY, British Pound GBP, Swiss Franc CHF, Canadian Dollar CAD, Australian Dollar AUD, New Zealand Dollar NZD) are called major currencies, all other currencies are called times. Want money. The currency pair is the exchange rate quoted by the intersection of two currencies, for example EUR/USD (EUR/USD).
2, direct DIRECT TRADE
In the international foreign exchange market, a country's currency is directly exchanged with the US dollar. It is simple to understand that any direct connection with the US dollar is straight, for example: EUR/USD (EUR/USD), USD/ CAD (US$/CAD), etc.
3. Cross currency pair / crossover CROSS PAIR/CROSS TRADE
There is no cross-currency exchange rate quoted in US dollars, that is, not linked to the US dollar, such as EUR/GBP (EUR/GBP), GBP/JPY (GBP/JPY).
4, exchange rate EXCHANGE RATE
The foreign exchange rate (FXRate, Foreign Exchange Rate) is the price of the national currency in another country's currency. If the USD/CHF exchange rate is 1.0022, it means that 1 US dollar is equal to 1.022 Swiss francs.
5, large number BIG FIGURE QUOTE
Refers to the first few digits of the exchange rate. These numbers rarely change in normal market volatility and are therefore often omitted from traders' quotations, especially when market activity is frequent. For example, the USD/JPY exchange rate is 107.30/107.35, but there is no first three digits when quoted orally, only "30/35".
6, fixed exchange rate FIXED EXCHANGE RATE
The fixed exchange rate is based on the gold content of the currency and forms a fixed ratio between the exchange rates. This kind of established exchange rate is either regulated by the input and output of gold, or fluctuated within the legal range under the control of the monetary authorities, and thus has relative stability. It is basically fixed, and exchange rate fluctuations are limited to a specified range of exchange rates.
7, floating exchange rate FLOATING EXCHANGE RATE
Floating exchange rates (floating exchange rates) refer to the exchange rate of a country's currency according to the supply and demand of the market currency, allowing it to freely rise and fall. Governments and central banks do not impose restrictions in principle, nor do they assume obligations to maintain exchange rate stability. The exchange rate is the floating exchange rate system. Its formal implementation was initiated after the dollar crisis intensified in the late 1970s.
8, cross rate CROSS RATE
After the basic exchange rate is established, the exchange rate of the local currency against other foreign currencies can be calculated through the basic exchange rate. The exchange rate thus obtained is the cross exchange rate, also known as the hedge exchange rate (also called the crossover). Foreign exchange transactions often involve two non-US dollar currencies, while international financial market quotes are mostly quoted from the US dollar to another currency. In this case, exchange rate calculations are required.
9. Inter-bank exchange rate INTER-BANK RATE
Also known as the inter-bank exchange rate, it refers to the exchange rate when inter-bank foreign exchange trading. It is higher than the buying exchange rate, lower than the selling exchange rate, and is generally a middle price between the two. The foreign exchange bank determines the exchange rate to the customer after adding a certain difference to the inter-bank exchange rate. The bank exchange rate is the wholesale price, and the customer exchange rate is the retail price.
10. Base currency/price currency BASE CURRENCY/ QUOTED CURRENCY
According to the definition of exchange rate, it is expressed as the unit price of one unit of the base currency, that is, the fixed amount of money under the various price methods is called the base currency, and the currency with the quantity changes is the quoted currency (Quoted). Currency). For example: EUR/USD EUR/USD quote is expressed in terms of 1 Euro equal to USD, so the base currency is EUR Euro and the quote currency is USD USD.
11, Direct quotation DIRECT QUOTATION
Also called the price payable, which means that the foreign currency of a certain unit (usually 1) is used as a standard to calculate the quotation of how much domestic currency to pay. That is, the national currency is used as the list currency, and the foreign currency is used as the base currency. Most countries in the world use the direct price method, for example USD/JPY 113.307, which means 1 dollar = 113.307 yen.
12, indirect price INDIRECT QUOTATION
Also called the receivable price, which means that the domestic currency of a certain unit (usually 1) is used as a standard to calculate the quotation of how much foreign currency should be collected. That is, the national currency is used as the base currency, and the foreign currency is used as the list currency. For example, GBP/USD 1.06025, which means 1 pound = 1.06025 USD
13, interest rate swap INTEREST RATE SWAP
Interest rate swap refers to the exchange of fixed interest rates and floating interest rates for two funds with the same currency, the same amount of debt (same principal) and the same term. This exchange is for both parties. For example, Party A exchanges the fixed interest rate for Party B's floating interest rate, and Party B exchanges the floating interest rate for Party A's fixed interest rate. The purpose of the swap is to reduce capital costs and interest rate risk.
14. Currency swap CURRENCY SWAP
Currency swaps (also known as currency swaps) refer to the exchange of two funds with the same amount, the same maturity, the same method of calculating interest rates, but different currencies, and currency swaps for different interest amounts. To put it simply, the currency swaps exchange money with each other, and their respective creditor-debtor relations have not changed.
15. Currency Warrant CURRENCY WARRANT
There are currently 6 currency warrants on the market, including AUD/USD AUD/USD, USD/JPY USD/JPY subscription card (C) and PIN (P). For example, USYEN@EC809, US stands for US dollars, YEN stands for Japanese yen, C is for subscription, if it is a subscription card, it is optimistic about the US dollar, and bearish the yen; the certification card is a bearish dollar, optimistic about the yen. Optimistic about one while representing a bearish one.
16, transaction cost TRANSACTION COSTS
The difference between the bid price and the ask price is also the cost of a trade round. A trade round is a buyer (or sell) transaction of the same quantity, the same currency pair, and a sell (or buy) transaction for offsetting. In the EUR/USD example in Table 4.1, the transaction cost is three points. The formula for calculating the transaction cost is: transaction cost = selling price - buying price
17. Rollover ROLLOVER
Rollover is the process of extending the original delivery date of one transaction to another. The cost of this process is determined by the interest rate spread between the two currencies.
Using margin to conduct foreign exchange trading can increase your purchasing power. If you have $2,000 in your margin account and the allowed leverage is 100:1, you can buy up to $2,000,000 in foreign exchange, because you only have to pay one percent of the purchase price as a mortgage. . In other words, you have a purchasing power of $2,000,000.
18, Counterparty COUNTERPARTY
In a foreign exchange market transaction, if you want to buy a product, you must have another person to sell the product at the same time, and the transaction can be achieved. This supply and demand relationship forms a liquidity, and the receiver of the order becomes a counterparty. That is to say, when you make money, the counterparty loses money; when you lose money, the counterparty wins. When the broker becomes the client's counterparty, it is the B-book mode; when the broker's upper-level liquidity provider: medium-sized bank, market maker bank, etc. becomes the customer's counterparty, it is A-Book.
19, A-BOOK/B-BOOK
When the broker becomes the client's counterparty, it is the B-book mode; when the broker's upper-level liquidity provider: medium-sized bank, market maker bank, etc. becomes the customer's counterparty, it is A-Book.
20, pending order PENDING ORDER
Pending order transaction refers to the transaction currency, the amount and the target price of the transaction. Once the quotation reaches or exceeds the price specified by the customer, the customer's instruction is executed and the transaction is completed. The transaction price is the bank's real-time quotation. The pending order exchange rate should be better than the immediate exchange rate of our bank, otherwise, it will be traded at the instant exchange rate. The pending order is valid on the day of the order. Before the transaction, the customer can also voluntarily withdraw the unfilled order. After the customer makes a pending order transaction, the amount of the pending order is immediately frozen, and the amount cannot be used for payment or other purposes during the trading day unless the transaction is cancelled.
There are four types in pending orders: buy limit buy limit, sell limit sell limit, buy stop buy stop loss, sell stop sell stop loss.
Sell stop: If you think that the exchange rate will drop to the x price level and then determine the downtrend, continue to go down, you can short at the x price, when the price goes to the x price, the system will automatically complete the transaction.
Buy stop: If you think that the exchange rate will rise to the x price level and then determine the uptrend, continue to go higher, you can do more at the x price, when the price goes to the x price, the system will automatically complete the transaction.
Sell limit: If you think that the exchange rate will rise to the x price level and then rebound downward, you can short the price at the x price. When the price goes to the x price level, the system will automatically complete the transaction.
Buy limit: If you think that the exchange rate will rebound after falling to the x price level, you can do more at the x price. When the price goes to the x price, the system will automatically complete the transaction.
21, slippage SLIPPAGE
Slippage refers to a transaction phenomenon in which a transaction or pending order transaction has a difference between the actual order transaction price and the preset price. Because trading through the Internet, there will inevitably be a slippage of investor-server-bank one-time or even multiple price confirmations. At the same time, the lack of liquidity, the volatility of the market, and the release of big data are also the cause of slippage.
