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Assessment of consumer sentiment toward the economy based on telephone interviews of several hundred adults. The survey queries people on their personal financial situation and current willingness to spend.
Agree to specified terms, as in a contract.
Financial relationship between two parties involving a transfer of funds, and an agreement to hold them. An Account is also summary of all financial transactions between those parties, the record tracks income, expenses, adjustment, credits and debits over a period of time.
The amount of money in an account
Any document designed to summarize and record all transaction activity in a given accounting period, usually annual or monthly.
An account at a brokerage firm or a bank which generates more activity and transactions then normal.
Money and coins that are circulated in the hands of consumers and businesses. Non-Active Money is not in circulation, for example federal reserve requirements, reserve requirement for commercial banks
An individual who participates in a retirement plan sponsored either by his/her employer or, if self-employed, by himself or herself. A person would be considered an active participant if his/her account balance in the retirement plan has received any contributions at all in a given year.
The volume of a stock or exchange over a given period of time.
Any interest rate that changes on a periodic basis.
The cash-price equivalent reflected in the price of a futures contract.
A person or organization employed by an individual or mutual fund to manage assets or provide investment advice.
A firm or individual that places transactions for securities in the place of clients.
The total amount of goods and services demanded in the economy at a given overall price level and in a given time period.
The total supply of goods and services produced within an economy at a given overall price level in a given time period.
A notification, often by email or pager, of a market event such as a stock reaching a target price.
The examination and evaluation of the relevant information to select the best course of action from among various alternatives.
Profit made from a price discrepancy between markets when securities are purchased on one market and then immediately sold on another market.
The lowest price that any investor or dealer has declared that he/she will sell a given security or commodity for. For over-the-counter stocks, the ask is the best quoted price at which a Market Maker is willing to sell a stock.
The price at which a security or commodity is offered for sale on an exchange or in the over-the-counter market.
The administrative functions at a brokerage that support the trading of securities, including trade confirmation and settlement, recordkeeping, and regulatory compliance.
The amount of money in an account. An account statement will be able to provide the balance as well as the full record of all transactions that lead to the current balance.
A country’s exports minus its imports; the largest component of a country’s balance of payments.
The temporary closing of a bank in the event that its obligations exceed its resources.
A non-interest-bearing promissory note of a Federal Reserve Bank which is payable to the bearer on demand and can be used as cash.
The interest rate charged by a bank for loans.
An arbitrage strategy usually consisting of the purchase of a particular security and the sale of a similar security (often the purchase of a security and the sale of a corresponding futures contract).
An investor who believes that a security, a sector, or the overall market is about to fall. opposite of bull.
A prolonged period in which investment prices fall, accompanied by widespread pessimism. If the period of falling stock prices is short and immediately follows a period of rising stock prices, it is instead called a correction. Bear markets usually occur when the economy is in a recession and unemployment is high, or when inflation is rising quickly.
An individual, institution, trustee, or estate which receives, or may become eligible to receive, benefits under a will, insurance policy, retirement plan, annuity, trust, or other contract.
The highest price a dealer will pay at any given time to purchase a currency pair or a financial instrument.
The Bid-Ask Spread, also known as the Bid-Offer Spread, is the quote of the price at which participants in a market are willing to buy or sell a good or security. Specifically, the bid price is the price at which a party is willing to purchase, while the ask (or offer) price is the price at which the same person or another party is willing to sell the same good or security.
The price at which a financial instrument cost is equal to the proceeds acquired by exercising this financial instrument.
Technical analysis term used to describe price action rising above resistance or dropping below support.
An individual or firm which acts as an intermediary between a buyer and seller, usually charging a commission. For securities and most other products, a license is required.
A prolonged period in which investment prices rise faster than their historical average. Bull markets can happen as a result of an economic recovery, an economic boom, or investor psychology.
Gold, silver, platinum, or palladium, in the form of bars or ingots.
To obtain ownership of a security or other asset in exchange for money or value.
A strategy in options or futures where a spread is established by entering both a long and short position at the same time on the same underlying asset but with different expiration dates.
Currency and coins on hand, bank balances, and negotiable money orders and checks.
A requirement of certain futures contracts that the underlier should not be delivered to the buyer at maturity, and instead the value of the underlier should be paid out.
Chicago Board of Trade. An exchange where grain, gold, and Treasury Bond futures and options are traded.
A negotiable certificate in bearer form issued by a commercial bank as evidence of a deposit with that bank which states the maturity value, maturity rate and interest rate payable.
A chart is a collection of historical price action that is represented visually in a graph form.
A person who uses charts to aid in technical analysis.
A transaction which leaves the trade with a zero net exposure to the market with respect to a particular currency.
CME. An exchange where financial futures, foreign currency futures, commodity futures, and futures options are traded.
Commodity Exchange. The leading U.S. exchange for metals futures and options trading.
A fee charged by a broker or agent for his/her service in facilitating a transaction, such as the buying or selling of securities.
A basic good, such as food, grains, and metals, which is interchangeable with other commodities of the same type, and which investors buy or sell, usually through futures contracts.
An agreement to buy or sell a specified amount of a particular currency on OTC, future or option basis for a specified month in the future.
The last trading date of a futures or options contract.
A futures contract expires during this month. Delivery may also take place in this month, dependent upon the terms of the contract. This month is sometimes referred to as the contract month or the delivery month.
The party that takes the other side of an exchange transaction.
To repurchase a previously sold contract. also called short cover.
A contractual agreement in which a borrower receives something of value now, in exchange for the promise to repay the lender at a later date–typically with interest.
Rates between two currencies neither of which is the US Dollar or the base currency.
The net balance of a country’s balance of payments (BOP) and contains the import and export items of goods and services as well as transfer payments and net investment income.
The highest price achieved by a tradable security or commodity during a given day.
The lowest price achieved by a tradable security or commodity during a given day.
An order to buy or sell a security which automatically expires if it is not executed during the same trading session.
The primary method of recording the basic information of a transaction.
An individual or entity that acts as a principal and stands ready to buy and sell for its own account. More generally, a dealer sells products and holds inventory.
A desk where transactions for buying and selling securities occur.
A decline in general price levels, often caused by a reduction in the supply of money, higher interest rates, and lack of credit.
The month of expiration for a futures contract. Delivery may take place during this month according to the terms of the contract. It is also called the contract month.
A formal notification of the delivery of products on a specified date.
Transaction involving the transfer of funds from one party to another for a particular purpose.
A financial instrument whose characteristics and value depend upon the characteristics and value of an underlier, such as a commodity, bond, equity or currency.
A small, short-term decline in price.
A technical analysis term used to describe a chart on which the price of a security has made two approximately equal bottoms over a period of time.
A technical analysis term for two successive rises to the same price level.
Downward price movement of a security or the overall market over a period of time.
The purchasing and selling of products and services by businesses and consumers over the internet.
European Central Bank (ECB). The central bank empowered to manage monetary policy for the Euro-zone – the group of countries that use the Euro single-currency.
An instrument that signifies an ownership position, or equity, in a corporation, and represents a claim on its proportionate share in the corporation’s assets and profits.
Abbreviation for the European Union.
A system of controlling inflows and outflows of foreign exchange.
The month in which an option expires.
A country’s exports reflect the value of goods and services that were shipped to another country.
The condition of being subjected to a source of risk.
Dollar volume of new orders, shipments, unfilled orders and inventories as reported by domestic manufacturers.
The United States Federal Reserve. The 7-member Board of Governors that oversees Federal Reserve Banks, establishes monetary policy, and monitors the economic health of the country.
The 7-member Board of Governors that oversees Federal Reserve Banks. Its members are appointed by the President subject to Senate confirmation, and serve 14-year terms. Also called the Fed.
The Fibonacci sequence, named for its discoverer Leonardo Fibonacci, forms the basis for Elliott Wave theory used in trading financial markets. Out of Elliott Wave theory comes Fibonacci retracements and Fibonacci arcs discussed below. The Fibonacci sequence is 1,1,2,3,5,8,13,21,,34,55,89… to infinity. The sum of two consecutive numbers equals the next number. The ratio of any number to its next highest number approaches .618. The ratio of alternating numbers approaches .382. Also, 1 – .618 = .382. The midpoint of .382 and .618 is .50. This is why .382, .50, and .618 are used.
To execute an order or buy or sell a security or commodity.
In finance, leverage is the general term used to describe the ratio between an investor’s market exposure to borrowed funds.
The first day that a buyer of a futures contract can be called upon to take delivery.
Official rate set by monetary authorities. Often the fixed exchange rate permits fluctuation within a band.
An exchange rate where the value is determined by market forces.
The profit/loss that may only be realized if the open contracts are liquidated (settled).
An exchanges trading area. May also be used as the lower limit of an option or an interest rate.
Abbreviation for Federal Open Market Committee.
FX and Forex refer to Foreign Exchange, the exchange of one currency for another. Foreign Exchange is traded over the counter on an inter-bank system, a network of several thousand banks, although most trading is done by a few hundred such institutions.
A cash market transaction in which a seller agrees to deliver a specific cash commodity to a buyer at some point in the future. In contrast to futures contracts, forward contracts are privately negotiated and are not standardized.
A transaction consisting of a purchase or sale (often of foreign currency) with settlement to occur at a specified future date. Such a transaction will state the specific amount of the asset to be delivered at the specific time, as well as the unit price at which it will be delivered.
The activities carried out by the dealer.
For a currency trader, fundamental analysis focuses on key underlying economic and political factors to determine the direction of a currency’s value. There are a number of fundamental indicators traders may follow that reflect how an economy is changing and gleam insight into Forex market prices to come.
A standardized, transferable, exchange-traded contract that requires delivery of a commodity, bond, currency, or stock index, at a specified price, on a specified future date. In contrast to options, futures convey an obligation to buy.
Abbreviation for the Group of Seven, or the seven largest industrialized countries, including the United States, Japan, Great Britain, France, Germany, Italy, and Canada.
The group of G-7 countries, plus Russia.
The significant price movement of a security or commodity between two trading sessions, such that there is no overlap in the trading ranges for the two days.
A ratio that is used to account for the effect of inflation on the GDP figure.
Acronym for Gross National Product, which refers to the total value of all final goods and services produced within a nation in a particular year, plus income earned by its citizens (including income of those located abroad), minus income of non-residents located in that country.
A monetary system that backs its currency with a reserve of gold, and allows currency holders to convert their currency into gold.
The total amount before anything is deducted.
Measures the value of goods and services produced with in a country . GDP is the most comprehensive overall measure of economic output and provides key insight as to the driving forces of the economy.
A technical analysis term referring to a chart formation in which a price exhibits three successive rallies, the second one being the highest. The name derives from the fact that on a chart the first and third rallies look like shoulders and the second looks like a head.
A hedge is a type of protective investment designed to offset adverse price movements in a given asset. Typically, a hedge is an offsetting position taken in a related security.
The greatest value that a security or currency hit during a specific period of time.
Gauges the change in the number of new houses beginning construction. Housing Starts are one of the earliest indicators of the housing market, only trailing Building Permits in timeliness.
A period of rapid inflation that leaves a country’s currency virtually worthless.
The IMF, or International Monetary Fund, was established after World War II in December 1946. Its goals included promoting free trade, stabilizing exchange rates, and overseeing international monetary policy.
International Monetary Market is part of the Chicago Mercantile Exchange that lists a number of currency and financial futures contracts.
A theoretical value designed to represent the volatility of the underlying instrument as determined by the price of the option. The factors that affect implied volatility are the exercise price, the rate of return, maturity date and the price of the option.
A call option is in-the-money if the price of the underlying instrument is higher than the exercise/strike price. A put option is in-the-money if the price of the underlying instrument is below the exercise/strike price. Such options have intrinsic value.
Data which provide information about or predict the overall health of the economy or the financial markets; examples are inflation, interest rates, employment, volume, and insider trading.
Measures changes in the volume of output produced by the manufacturing, mining, and utility sectors.
The amount of cash collateral required by a brokerage firm to be deposited before buying or selling on margin.
The bid and offer rates at which international banks place deposits with each other.
An option contract whose underlying security is a debt obligation.
Action taken by a central bank to affect the value of its currency.
An open position that is usually squared off by the close of the day.
A person or organization which is able to perform all the functions of a broker except for the ability to accept money, securities, or property from a customer.
A monthly measure of the change in purchases by corporate executives. One hundred and seventy-five managers distributed among different regions and sectors are asked: “Are your purchases higher, the same, or lower than the previous month” A headline value above 50 indicates an increase in purchases from the previous month and a value below 50 indicates a decrease.
A type of account controlled and maintained by two or more people
An accounting record, outlining all business transactions. A journal details which transactions occurred and what accounts were affected.
Slang for the New Zealand dollar.
Where a barrier option becomes active as the underlying spot price hits the barrier level.
Where a barrier option ceases to exist as the underlying spot price hits the barrier level.
The most recent trade of a security.
The final day during which trading in a particular option contract is permitted.
A leading indicator is an economic gauge that records changes before the overall economy experiences them. They are used to forecast financial and economic trends.
The London Interbank Bid Rate; the rate charged by one bank to another for deposits.
Acronym for London Inter-Bank Offer Rate. The interest rate that the banks charge each other for loans (generally in Eurodollars).
Acronym for London International Financial Futures and Options Exchange. The three largest UK futures markets.
A Limit, is an order to close a trade when the market moves a specified amount to the advantage of a position.
The maximum price drop allowed on a futures contract in a single trading day.
An Entry Order is an order to enter the market at a specified price.
The standard chart type, on which a given distance always represents the same absolute change in price.
Liquid Market – the degree to which market participants are willing to buy and sell at every price level.
To convert (inventory, securities, or other assets) into cash.
Buying futures to hedge against the sale of a cash commodity. also called buying hedge.
A decline in the value of an investment.
Multiple shares held or traded together, usually in units of 100.
M1 is the narrowest definition of the money supply and includes all coins and currency held by the public, plus travelers checks, checking account balances, and other checkable deposits consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions.
The M2 measure of the U.S. money supply consists of M1, plus certain overnight repurchase agreements and certain overnight Eurodollars, savings deposits (including money market deposit accounts), time deposits in amounts of less than $100,000 and balances in money market mutual funds (other than those restricted to institutional investors).
M3 measure of the U.S. money supply consists of M2, plus large-denomination time deposits of $100,000 or more at all depository institutions, term repurchase agreements in amounts of $100,000 or more issued by all depository institutions, certain term Eurodollars (overnight and term) held by U.S. residents at foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom and Canada, and balances in money market mutual funds restricted to institutional investors (money funds with minimum initial investments of $50,000 or more)
Maintenance, also referred to as “minimum maintenance” or “maintenance requirement”, refers to the absolute minimum amount of equity that an investor must maintain in their margin account at all times.
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.
A demand for additional funds to be deposited in a margin account to meet margin requirements because of adverse price movements.
A brokerage or bank that maintains a firm bid and ask price in a given security by standing ready, willing, and able to buy or sell at publicly quoted prices.
A buy or sell order in which the broker is to execute the order at the best price currently available. Also known as at the market.
A branch of economics, studying the behavior of small economic units (i.e. individual consumers or households. opposite of macroeconomics.
The smallest increment of market price movement possible.
Market for short-term debt securities with maturity of one year or less, and often 30 days or less.
The total supply of money in circulation in a given country’s economy at a given time.
An open-ended fund operated by an investment company that raises money from shareholders and invests in a group of assets in accordance with a stated set of objectives.
A computerized system established by the NASD to facilitate trading by providing broker/dealers with current bid and ask price quotes on over-the-counter stocks and some listed stocks.
The futures delivery month with the soonest delivery date, or the option delivery month with the soonest expiration date. Also known as nearest month.
The difference between total open long and open short positions in a given security held by an individual.
Report on the efficiency of industrial workers. Key figures released in this report include Productivity and Unit Labor Costs.
A short-term debt security, generally with a maturity of five years or less.
Acronym for New York Stock Exchange. The oldest and largest stock exchange in the U.S., located on Wall Street in New York City.
Acronym for Organization for Economic Cooperation and Development, which refers to an organization that acts as a meeting ground for thirty countries which believe strongly in the free market system,
The lowest price for which an investor or dealer is willing to sell a given security or commodity.
The elimination or reduction of a current long or short position by making a transaction with the same security in the opposite direction.
A brokerage that provides trading services to its clients over the Internet.
The total number of outstanding option or futures contracts that have not been closed out by offset or fulfilled by delivery
The buying and selling of government securities by a central bank (i.e. the Federal Reserve Bank in the U.S.).
The right, but not the obligation, to buy (call) or sell (put) a specific amount of a given stock, commodity, currency, index or debt at a specified price (the strike price) during a specified period of time.
Over-the-Counter – a security which is not traded on an exchange.
A call option whose strike price is higher than the market price of the underlying, or a put option whose strike price is lower than the market price of the underlyin.
A deal from today until the next business day.
Net long or short position in one or more currencies that a dealer can carry over into the next dealing day.
Acronym for profit and loss statement.
The date on which a dividend, mutual fund distribution, or bond interest payment is scheduled to be made.
List of employees that a company is paying. 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.
Survey conducted by the Philadelphia Fed questioning manufacturers in the Third Federal Reserve District on general business conditions. Conducted since 1968, the “Philly Fed” survey is an established report, valued for its timeliness, scope of coverage and tendency to forecast developments in the market moving ISM Manufacturing figure.
Pip or “percentage in point,” refers to the very last digit of a currency price.
Price changes are normally quoted in percentage points and are often denoted using the percent sign.
The amount by which a bond or stock sells above its par value.
PPI; an inflationary indicator published by the U.S. Bureau of Labor Statistics to evaluate wholesale price levels in the economy.
Producing or tending to produce goods and services having exchange value.
Statement of the price of an item.
Quantity of shares being offered for purchase at the bid price.
A substantial rise in the market price following a decline
Range refers to the area between high and low prices a currency pair tends to trade between during a given period of time.
An options strategy in which long-term options are bought and a greater amount of short-term options are sold.
An options strategy in which some options are bought and a different amount are sold.
Real GDP reflects Gross Domestic Product that has been controlled for the effects of inflation.
A contract in which the seller of securities, such as Treasury Bills, agrees to buy them back at a specified time and price.
The amount in assets kept in case of urgent need for liquidity. For central banks, reserves are the total amount in assets held by the bank in order to guarantee the authority’s solvency and ability to conduct open market operations.
The price level in which a currency pair has difficulty trading above. At resistance, price action tends to stall before breaking above, or reverse in the opposite direction.
A measure of inflation used for wage bargaining and other purposes.
A system for screen based trading between banks in operation since the early 1980s
Change in the general direction of a market, such as a rally. also called trend reversal.
The process of analyzing exposure to risk and determining how to best handle such exposure.
Standard & Poor’s 500. A basket of 500 stocks that are considered to be widely held. The S&P 500 index is weighted by market value, and its performance is thought to be representative of the stock market as a whole
To trade quickly for small gains, often holding a position for less than a day.
Special Drawing Right. An artificial currency unit based upon several national currencies. The Special Drawing Right serves as the official monetary unit of several international organizations including the International Monetary Fund, and acts as a supplemental reserve for national banking systems.
Specific instructions made by an individual to a broker, bank, market maker, or financial institution to sell a currency, commodity, or security.
Rate at which a bank is willing to sell foreign currency
The date by which an executed securities transaction must be settled, by paying for a purchase or by delivering a sold asset; usually three business days after the trade was executed .
Buying to unwind a short position
The difference between the price a trader expects to be filled at, and the price they are actually filled at.
Swiss Options and Financial Futures Exchange, a fully automated and integrated trading and clearing system.
Speculation is the practice of selecting investments (exposing one’s self to risk) with the intention of profiting from price fluctuations.
A large order which is broken into smaller pieces to be executed one at a time to avoid affecting the market price.
The closest delivery month on a futures contract.
The present delivery price of a given commodity being traded on the spot market. Also known as cash price.
The Spread refers to the difference between the sell and buy price for a security.
The practice of using open market operations to counteract the effects of exchange market intervention on a country’s monetary base.
An order to buy or sell a certain quantity of a certain security at a specified price or better, but only after a specified price has been reached.
This is when a position is closed due to the execution of a stop order.
This is when an investor purchases or sells an equal number of puts and calls, with the same strike price and expiration date.
The purchase or sale price of underlying stock that an option holder sees upon the exercising an option contract.
An exchange of different streams of payments over a given period of time, in response to prior specified terms. The most common swap is an interest rate swap. In such a swap, one party agrees to pay a fixed interest rate to the other company in exchange for receiving its adjustable rate.
The difference between the forward exchange rate and the spot rate of a currency. The spot rate is usually expressed in points.
A short-term obligated investment that is backed by the U.S. government. These bills have maturities of a month (four weeks), three months (13 weeks) or six months (26 weeks). This bill is often called a treasury bill.
The art of forecasting price movements through the study of chart patterns, indicator signals, sentiment readings, volume and open interest.
A short-term trend that analysts can use to forecast future price movements of securities and/or commodities. This investment tool is also called a technical.
The first currency quoted in a currency pair.
A market is thin when there are few bids and offers. Such a market condition is characterized by low liquidity, high spreads, and high volatility.
This is the smallest possible movement in the price of a security. A tick may also be called a minimum fluctuation.
The amount by which an option’s premium exceeds its intrinsic value. This is also called a time premium.
A country’s trade balance reflects the difference between exports and imports of goods and services. The trade balance is one of the biggest components of the Balance of Payment, giving valuable insight into pressures on country’s currency.
A negative balance of trade (i.e. imports exceed exports). Also known as a trade gap.
The trailing stop is a feature attached to stop-loss orders, where the stop (safety net) position is automatically moved to the trader’s advantage as the market moves to their advantage.
One of three types of Treasuries. Treasury Bonds have a maturity of more than 7 years. They are exempt from state and local taxes, and pay interest every 6 months at a fixed coupon rate.
One of three types of Treasuries. Treasury notes have a maturity of between 1 and 7 years.
A market in which the market makers are required to give both a bid price and an ask price for each security in which they make a market.
A position not covered by an offsetting position
An exchange rate is normally considered to be undervalued when it is below its purchasing power parity
The unemployment figure is typically calculated by dividing the number of out of work individuals in the labor force, by the total labor force.
A profit that has occurred but yet to be reflected in a transaction.
A transaction executed at a price greater than the previous transaction.
For exchange contracts it is the day on which the two contracting parties exchange the currencies which are being bought or sold. For a spot transaction it is two business banking days forward in the country of the bank providing quotations which determine the spot value date. The only exception to this general rule is the spot day in the quoting centre coinciding with a banking holiday in the country(ies) of the foreign currency(ies). The value date then moves forward a day
A term that refers to the uncertainty or risk change in an underlying security’s value. The higher volatility the more potential that the asset’s value can be spread out over a wider range of values.
Volume is the number of contracts, shares or any other unit of trade in a security over a certain period of time.
The name denoted for a narrow street in lower Manhattan , New York City, and considered to be the historical heart of the Financial District. It was the first permanent home of the New York Stock Exchange
The sale of goods in high quantities to non-consumers, with the purpose of reselling these goods.
a group of five international organizations responsible for providing finance in the form of loans to countries, with the objectives of economic development and eliminating poverty
Abbr. World Trade Organization. An international agency that facilitates trade between member nations, and administers global trade agreements.
The yield curve describes the relation between the interest rates and the maturity dates of debt instruments for a given currency (such as bonds and other related securities).
A German Firm, the Center for European Economic Research (ZEW), queries financial experts throughout Europe every month in order to make a medium-term forecast about Germany ‘s economic situation
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