Futures and Forex Glossary Dictionary D2

 
Deflator

A factor facilitating conversion of current dollar purchasing power to inflation adjusted purchasing power for purposes of price comparison in 2 different time periods.

Delivery

Receipt of actual commodity or financial instrument or in the case of currency, the profit or losses credited or debited from a trading account, in settlement of a currency/financial contract.

Delivery Risk

Situation where the other party in a currency transaction is unable to affect his/her part of the deal although he/she has the intention to complete the deal.

Depreciation

Free cash flow accounted as a non-cash expense to amortize cost of long-term fixed assets over the useful life of the assets.

Depth of market

Extent of ‘buy’ and ‘sell’ orders in the market with respect to a particular currency pair that are about to be transacted at any point in t

Derivative

Financial contract which ‘derives’ its value from a stock, bond, commodity, or Market Index. Example: Indices Future

Designated Self-Regulatory Organization (DSRO)

Regulations and standards enforcement organizations of the futures market. Example: National Association of Securities Dealers in the U.S. Related Term: Canadian Capitals Market Association (CCMA)

Details

Essential information like currency pair, time, date, rate and quantity required to enter or affect a foreign currency deal.

Deutsche Aktien Xchange (DAX)

Primary stock index of Germany created in 1988 and representing 75% of the market capitalization of trade conducted through the Frankfurt Exchange. Related Term: Canada’s New Stock Exchange, Bundesban

Deutschemark (DM)

Erstwhile German currency that was in circulation prior to the introduction of Euro.

Devaluation

Governmental action in a fixed exchange regimen leading to decrease in the spot price of a country’s currency. Devaluation is done with the intention of facilitating a reduction in a country’s trade deficit. Related Term: Trade Defic

Diamond Top Formation

Uncommon diamond shaped currency chart pattern is a reversal pattern signaling end of uptrend wherein during a particular period, the price trend of a currency widens and then begins to narrow. Related Term: Head and Shoulder Pattern

Direct Quotation

Variable number of domestic currency needed to buy one unit of foreign currency. Related Term: American Currency Quotation

Dirty Float

Practice of pegging floating exchange rates to a country’s currency allowing periodical governmental intervention to change the direction of currency value. Also called ‘Managed Float” Related Term: Clean Fl

Disclosure Document

Document published by Option Clearing Corporation (OCC) meant to be compulsorily read by all first-time options traders to prepare them for the options market in term of options terminology, settling options, risks involved, and tax implications.

Discount Futures

An option trading below its intrinsic value, or a future trading below the price of the underlying security

Discount Spread

Bid price of a forward spread being lower than ask price.