Futures and Forex Glossary Dictionary F2

Trading of financial instruments at high volumes and prices far beyond its intrinsic value. Related Term: Economic Bubble

Whether the cash flow of an Issuer is sufficient to meet its obligations. Also called Additional Risk Related Term: Country Risk

New York Cotton Exchange’s financial futures and options division dealing in Finex Contracts

Nickname attributed to Finance Ministers of different countries attending global trade summit as coined by the financial press. Related Term: Eurozone

Dealer or market maker initiated price quote guaranteeing a bid or ask price up to amount quoted on a security which is other than a nominal quotation and hence not negotiable. Related Term: Ask

The first day of a notice issued by a clearing house to a buyer indicating an intention to deliver a commodity within the context of a given month’s futures contract

Government’s expenditure and tax policy designed to stabilize the economy

Impact of interest rates on international money movement. Example: Money moving into currencies paying higher interest rates.

Future’s market spread realized by setting up offsetting positions due to purchase of a future’s contract for 5-yr treasury notes and selling a future’s contract for 10-yr treasury bonds or vice ver

Exchange rate of a country’s currency which is fixed in relation to another country’s currency or gold or to a basket of currencies. Related Term: Bretton Woods Agreeme

Method of profiting from arbitrage opportunities by exploiting price differences in short term bonds.

Selection of a currency level which best balances buying and selling pressures and thereby determining rates. Example: London Gold Fixing.

A currency trader having no open position.

Currency trading portfolio with zero market exposure.

Fixed currency exchange rate subject to frequent revaluation.

Uncertainty in financial markets causing investors to shift capital from high risk investments to safe investments.