Futures and Forex Glossary Dictionary L2
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An account being closed due to margin calls. The account value cannot sustain a position. This most frequently happens when there is a large amount of leverage used on a losing trade.
Liquidity
Liquidity of a market refers to the volume of the current market, the liquidity is a term for how much buying and selling is taking place. The forex market is the most liquid market of all financial markets. A liquid market means positions can be executed faster and with less spread between the Bid and Ask price.
Liquidity (Liquid Market)
A term used to describe market conditions when there is a lot of buying and selling i.e. a 'liquid market'. See Also: Liquidity
Local
The type of futures trader who trades on the futures exchange on his/her personal account.
London Interbank Offered Rate (LIBOR)
The London Interbank Offered Rate, abbreviated LIBOR, is the rate at which banks can borrow from each other on the Interbank market (the wholesale money market). It compares roughly to the Federal Funds Rate in the U.S. The LIBOR is published by the BBA (British Bankers Association) and calculated by Thomson Reuters as an average of rates for Interbank deposit rates. It's not a tradable rate, but rather a benchmark.
London International Financial Futures Exchange (LIFFE)
The LIFFE is the London equivalent of Chicago Board of Trade and the Chicago Mercantile Exchange. It used to be the marketplace for futures, options and other commodities contracts, but was in 2002 purchased by Euronext and renamed to that.
Long
Long is the term used for a buying position. In forex this means that the first currency in a pair is bought, while the second is sold short. The term 'to go long' in a currency refers to buying that currency and is shows as the base currency in the currency pair.
Long Call
An option giving the holder of the option the right, not obligation, to buy the underlying asset at the agreed price. See Also: Option
Long Position
Long is the term used for a buying position. In forex this means that the first currency in a pair is bought, while the second is sold short. The term 'to go long' in a currency refers to buying that currency and is shows as the base currency in the currency pair.
Long Put
An option giving the holder of the option the right, not obligation, to sell the underlying asset at the agreed price. See Also: Option
Lookback Option
An option where the holder can choose which price to exercise at from previous prices. See Also: Option
Loonie
Slang term for the Canadian Dollar (CAD). Derived from the picture of a loon on the one side of the coin.
Lots
The standardized units of trade in forex. A lot is usually 100,000 units of a currency.
Low
In forex: The lowest price of the currency pair within a time period.