Alphabet R

 

Rally - A recovery in price after a period of decline. 

 

Range - When a price is trading between a defined high and low, moving within these two boundaries without breaking out from them. 

 

Rate - The price of one currency in terms of another, typically used for dealing purposes. 

 

RBA - Reserve Bank of Australia, the central bank of Australia. 

 

RBNZ - Reserve Bank of New Zealand, the central bank of New Zealand. 

 

Real money - Traders of significant size including pension funds, asset managers, insurance companies, etc. They are viewed as indicators of major long-term market interest, as opposed to shorter-term, intraday speculators. 

 

Realized profit / loss - The amount of money you have made or lost when a position has been closed. 

 

Resistance level - A price that might act as a ceiling. The opposite of support. 

 

Retail investor - An individual investor who trades with money from personal wealth, rather than on behalf of an institution. 

 

Retail sales - Measures the monthly retail sales of all goods and services sold by retailers based on a sampling of different types and sizes. This data provides a look into consumer spending behavior, which is a key determinant of growth in all major economies. 

 

Revaluation - When a pegged currency is allowed to strengthen or rise as a result of official actions; the opposite of a devaluation. 

 

Rights issue - A form of corporate action where shareholders are given rights to purchase more stock. Normally issued by companies in an attempt to raise capital. 

 

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

 

Risk management - The employment of financial analysis and trading techniques to reduce and/or control exposure to various types of risk.

 

Rollover - A rollover is the simultaneous closing of an open position for today's value date and the opening of the same position for the next day's value date at a price reflecting the interest rate differential between the two currencies. 

 

In the spot forex market, trades must be settled in two business days. For example, if a trader sells 100,000 Euros on Tuesday, then the trader must deliver 100,000 Euros on Thursday, unless the position is rolled over. As a service to customers, all open forex positions at the end of the day (5:00 PM New York time) are automatically rolled over to the next settlement date. The rollover (or swap) adjustment is simply the accounting of the cost-of-carry on a day-to-day basis.

 

Round trip - A trade that has been opened and subsequently closed by an equal and opposite deal. 

 

Running profit / loss - An indicator of the status of your open positions; that is, unrealized money that you would gain or lose should you close all your open positions at that point in time. 

 

RUT - Symbol for Russell 2000 Index.

 

Alphabet S

 

SEC - Securities and Exchange Commission. 

 

Sector - A group of securities that operate in a similar industry. 

 

Sell - Taking a short position in expectation that the market is going to go down. 

 

Settlement - The process by which a trade is entered into the books, recording the counterparts to a transaction. The settlement of currency trades may or may not involve the actual physical exchange of one currency for another. 

 

SHGA.X - Symbol for Shanghai A Index. 

 

Short position - An investment position that benefits from a decline in market price. When the base currency in the pair is sold, the position is said to be short. 

 

Short squeeze - A situation in which traders are heavily positioned on the short side and a market catalyst causes them to cover (buy) in a hurry, causing a sharp price increase. 

 

Short-covering - After a decline, traders who earlier went short begin buying back. 

 

Shorts - Traders who have sold, or shorted, a product, or those who are bearish on the market. 

 

Sidelines, sit on hands - Traders staying out of the markets due to directionless, choppy, unclear market conditions are said to be ‘on the sidelines’ or ‘sitting on their hands’. 

 

Simple Moving Average (SMA) - A simple average of a pre-defined number of price bars. For example, a 50 period daily chart SMA is the average closing price of the previous 50 daily closing bars. Any time interval can be applied. 

 

Slippage - The difference between the price that was requested and the price obtained typically due to changing market conditions. 

 

Slippery - A term used when the market feels like it is ready for a quick move in any direction. 

 

Sloppy - Choppy trading conditions that lack any meaningful trend and/or follow-through. 

 

SNB - Swiss National Bank, the central bank of Switzerland. 

 

Sovereign names - Refers to central banks active in the spot market. 

 

Spot market - A market whereby products are traded at their market price for immediate exchange. 

 

Spot price - The current market price. Settlement of spot transactions usually occurs within two business days. 

 

Spot trade - The purchase or sale of a product for immediate delivery (as opposed to a date in the future). Spot contracts are typically settled electronically. 

 

Spread - The difference between the bid and offer prices. 

 

Square - Purchase and sales are in balance and thus the dealer has no open position. 

 

SPX500 - A name for the S&P index. 

 

Sterling - Nickname for GBP/USD. Also known as Pound or British Pound. 

 

Stock exchange - A market on which securities are traded. 

 

Stock index - The combined price of a group of stocks - expressed against a base number - to allow assessment of how the group of companies is performing relative to the past. 

 

Stop loss hunting - When a market seems to be reaching for a certain level that is believed to be heavy with stops. If stops are triggered, then the price will often jump through the level as a flood of stop-loss orders are triggered. 

 

Stop order  - A stop order is an order to buy or sell once a pre-defined price is reached. When the price is reached, the stop order becomes a market order and is executed at the best available price. It is important to remember that stop orders can be affected by market gaps and slippage, and will not necessarily be executed at the stop level if the market does not trade at this price. A stop order will be filled at the next available price once the stop level has been reached. Placing contingent orders may not necessarily limit your losses. 

 

Stop entry order - This is an order placed to buy above the current price, or to sell below the current price. These orders are useful if you believe the market is heading in one direction and you have a target entry price. 

 

Stop loss order - This is an order placed to sell below the current price (to close a long position), or to buy above the current price (to close a short position). Stop loss orders are an important risk management tool. By setting stop loss orders against open positions you can limit your potential downside should the market move against you. Remember that stop orders do not guarantee your execution price – a stop order is triggered once the stop level is reached, and will be executed at the next available price. 

 

Stops building - Refers to stop-loss orders building up; the accumulation of stop-loss orders to buy above the market in an upmove, or to sell below the market in a downmove. 

 

Strike price - The defined price at which the holder of an option can buy or sell the product. 

 

Support - A price that acts as a floor for past or future price movements. 

 

Support levels - A technique used in technical analysis that indicates a specific price ceiling and floor at which a given exchange rate will automatically correct itself. Opposite of resistance. 

 

Suspended trading - A temporary halt in the trading of a product. 

 

Swap - A currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate. 

 

SWISSIE - The nickname for USD/CHF.

 

Alphabet T

.

T/P  - Stands for “take profit.” Refers to limit orders that look to sell above the level that was bought, or buy back below the level that was sold. 

 

Takeover -  Assuming control of a company by buying its stock. 

 

Technical analysis - The process by which charts of past price patterns are studied for clues as to the direction of future price movements. 

 

Technicians or Techs - Traders who base their trading decisions on technical or charts analysis. 

 

Ten (10) yr. - For example: US 10-year note – US government issued debt which is repayable in ten years. 

 

Thin - Illiquid, slippery, or choppy market environment. A light volume market that produces erratic trading conditions. 

 

Thirty (30) yr. - For example: UK 30-year gilt – UK government issued debt which is repayable in 30 years. 

 

Tick (size) -  A minimum change in price, up or down. 

 

Time to maturity - The remaining time until a contract expires. 

 

Tokyo session - 09:00 – 18:00 (Tokyo). 

 

Tomorrow next (Tom/Next) - Simultaneous buying and selling of a currency for delivery the following day. 

 

Trade balance - Measures the difference in value between imported and exported goods and services. Nations with trade surpluses (exports greater than imports), such as Japan, tend to see their currencies appreciate, while countries with trade deficits (imports greater than exports), such as the US, tend to see their currencies weaken. 

 

Trade size-  The number of units of product in a contract or lot. 

 

Trading bid - A pair is acting strong and/or moving higher; bids keep entering the market and pushing prices up. 

 

Trading halt -   postponement to trading that is not a suspension from trading. 

 

Trading heavy - A market that feels like it wants to move lower, usually associated with an offered market that will not rally despite buying attempts. 

 

Trading offered - A pair is acting weak and/or moving lower, and offers to sell keep coming into the market. 

 

Trading range -  The range between the highest and lowest price of a stock usually expressed with reference to a period of time. For example: 52-week trading range. 

 

Trailing stop - A trailing stop allows a trade to continue to gain in value when the market price moves in a favorable direction, but automatically closes the trade if the market price suddenly moves in an unfavorable direction by a specified distance. Placing contingent orders may not necessarily limit your losses. 

 

Transaction cost - The cost of buying or selling a financial product. 

 

Transaction date - The date on which a trade occurs. 

 

Trend - Price movement that produces a net change in value. An uptrend is identified by higher highs and higher lows. A downtrend is identified by lower highs and lower lows. 

 

Turnover- The total money value or volume of all executed transactions in a given time period. 

 

Two-way price - When both a bid and offer rate is quoted for an FX transaction. 

 

TYO10 - Symbol for CBOE 10-Year Treasury Yield Index.

 

Alphabet U

 

Ugly - Describing unforgiving market conditions that can be violent and quick. 

 

UK100 - A name for the FTSE 100 index. 

 

UK average earnings including bonus/ Excluding bonus - Measures the average wage including/excluding bonuses paid to employees. This is measured QoQ from the previous year. 

 

UK claimant count rate - Measures the number of people claiming unemployment benefits. The claimant count figures tend to be lower than the unemployment data since not all of the unemployed are eligible for benefits. 

 

UK HBOS house price index - Measures the relative level of UK house prices for an indication of trends in the UK real estate sector and their implication for the overall economic outlook. This index is the longest monthly data series of any UK housing index, published by the largest UK mortgage lender (Halifax Building Society/Bank of Scotland). 

 

UK jobless claims change - Measures the change in the number of people claiming unemployment benefits over the previous month. 

 

UK manual unit wage costs - Measures the change in total labor cost expended in the production of one unit of output. 

 

UK OIL* - A name for Brent Crude Oil. 

 

UK producers price index input - Measures the rate of inflation experienced by manufacturers when purchasing materials and services. This data is closely scrutinized since it can be a leading indicator of consumer inflation. 

 

UK producers price index output - Measures the rate of inflation experienced by manufacturers when selling goods and services. 

 

Underlying - The actual traded market from where the price of a product is derived. 

 

Unemployment rate - Measures the total workforce that is unemployed and actively seeking employment, measured as a percentage of the labor force. 

 

University of Michigan's consumer sentiment index - Polls 500 US households each month. The report is issued in a preliminary version mid-month and a final version at the end of the month. Questions revolve around individuals’ attitudes about the US economy. Consumer sentiment is viewed as a proxy for the strength of consumer spending. 

 

Unrealized gain/loss - The theoretical gain or loss on open positions valued at current market rates, as determined by the broker in its sole discretion. Unrealized Gains/Losses become Profits/Losses when the position is closed. 

 

Uptick - A new price quote at a price higher than the preceding quote. 

 

Uptick rule - In the US, a regulation whereby a security may not be sold short unless the last trade prior to the short sale was at a price lower than the price at which the short sale is executed. 

 

US30 - A name for the Dow Jones index. 

 

US OIL* - A name for WTI Crude Oil. 

 

US prime rate - The interest rate at which US banks will lend to their prime corporate customers.  

 

Alphabet V

 

Value date - Also known as the maturity date, it is the date on which counterparts to a financial transaction agree to settle their respective obligations, i.e., exchanging payments. For spot currency transactions, the value date is normally two business days forward. 

 

Variation margin - Funds traders must hold in their accounts to have the required margin necessary to cope with market fluctuations. 

 

VIX or Volatility index - Shows the market's expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. The VIX is a widely-used measure of market risk and is often referred to as the "investor fear gauge." 

 

Volatility - Referring to active markets that often present trade opportunities.

 

Alphabet W

 

Wedge chart pattern - Chart formation that shows a narrowing price range over time, where price highs in an ascending wedge decrease incrementally, or in a descending wedge, price declines are incrementally smaller. Ascending wedges typically conclude with a downside breakout and descending wedges typically terminate with upside breakouts. 

 

Whipsaw - Slang for a highly volatile market where a sharp price movement is quickly followed by a sharp reversal. 

 

Wholesale prices - Measures the changes in prices paid by retailers for finished goods. Inflationary pressures typically show earlier than the headline retail. 

 

Working order - Where a limit order has been requested but not yet filled. 

 

WSJ - Stands for The Wall Street Journal.

 

Alphabet X

 

XAG/USD - Symbol for Silver Index. 

 

XAU/USD - Symbol for Gold Index. 

 

XAX.X - Symbol for AMEX Composite Index.

 

Alphabet Y

 

Yard - A billion units. 

 

Yield - The percentage return from an investment. 

 

YoY - Abbreviation for year over year. 

 

Yuan - The Yuan is the base unit of currency in China. The Renminbi is the name of the currency in China, where the Yuan is the base unit.