Scorpion / Profile

Back Office Place where data pertaining to financial transactions of forex and futures is processed. Backtesting Testing a particular trading strategy on past data, to evolve a future prognosis as most technical analysis is done. This obviates the

Bid/Ask spread Price differential between the bid and offer (ask) price. Also known as “Bid” Related Terms: B Big figure Indicative of initial 2 or 3 digits of currency exchange price. Example: If EUR/USD price is 0.9525/30 the big figure is 0.95

Cable A popular slang for exchange rate between US dollar and British Pound. Another word for the British Pound Sterling, originating from the fact that dollars/pound sterling exchange rate used to be transmitted through transatlantic cable in the

Central Bank Entity responsible for the monetary policy of a country. Also called Reserve bank Central Bank has supervisory power over other banks within the country. Related Terms: Reserve Bank Centralized Market A situation where all market orders

Closing a Position The process of squaring up a forex trade position by liquidating the buy or sell order as the case may be. Closing Market Rate The Market price of a currency at the end of trading hours on any trading day. Closing Range The high

Contract Market A designated exchange for trading a specific option or futures contract. Example: The S&P 500 Index options and futures contracts are designated to be traded in the contract market Chicago Mercantile Exchange. Related Terms

Cross-Hedging Hedging a particular futures contract position in one commodity with an offsetting futures contract position in another commodity, with both commodities futures having similar price movements. The hedging instrument differs from the

Daily Cutoff Time stipulated by a forex dealer marking the end of a particular trading day and the beginning of a new trading day in order to facilitate the recording of date of trades and to resolve settlement periods. Day order A foreign currency

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

Discretionary Account Forex Currency trading account in the name of an individual or entity controlled and operated by a designated person other than the owner of the said account. Also called managed account. Discretionary Account Future An options

Point & Figure Chart A type of chart that does not show the passage of time, but rather shows rising and falling prices as either circles or crosses. This type of chart is used to determine critical support and resistance levels. Political Risk

Price gap When the price of a security jumps to a higher or lower level without any overlapping trading. Price limit The high and low prices that an option or commodity is allowed to reach during a trading session. When the price limit is reached, no

Quantitative analysis Mathematical analysis of price movements using advanced mathematical and statistical models and tools. See Also: Technical Analysis Quantitative Easing Increasing the money supply (by the central bank) to encourage spending

Rainbow Option A type of option where there is more than one underlying asset. For the option to be profitable, all underlying assets must be in the money. See Also: Options Rally A period of trading that makes the price surge upwards. Rate The price

Retail FX Market The part of the forex market aimed at individuals and offered by brokers. Retail Sales Sales of retail goods in a country or region. In the United States the retail sales report is released monthly for the previous month by the

Same Day Transaction Opening and closing a position on the same day. Samurai Market Slang term for the Japanese stock market . Scalper A forex trader that makes many small trades a day. A scalper is a forex trader that chooses to follow a strategy of

Short Covering Closing a short position by buying the exact same amount of a currency pair that was previously sold short. Short Position Selling a security. Short selling is selling a borrowed asset with the intent to buy it back at a lower price

Squeeze When the central bank retracts the money supply to increase the price of money. See Also: Monetary Policy Stable Market A market that is large enough to accommodate heavy trading without too big swings. An example would be the EUR/USD forex

Take Profit Order A limit order set to close a position if the price reaches a predetermined level in order to realize profits. Take Profits Closing a position with unrealized profits. Take The Offer A verbal agreement to accept a dealer's offer on

Tier One The highest possible credit strength rating, give by the Bank of International Settlements. Time Value The value that an option has besides intrinsic value. Time value represents the value that an option will have from the possibility of an