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Our forex glossary is comprised of both common and specialized or slang words. It will help you to analyze professional articles or trade dictionary and will shed some light upon the Forex market events.

The forex glossary will be of great use for both professional traders and beginners in their daily trading on Forex.

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  • Absolute advantage
    is an advantage in production of certain goods or services some country has over the others due to peculiarities of climate, education, labour resources and other factors. If a country has an absolute advantage in certain industries, it can produce corresponding goods and services at a lower cost per unit, than competitors.
  • Account
    a special personal account opened with the company by a client. This account is used to offset the obligations of the client and dealer, resulting from the deals concluded under the present agreement
  • Account history
    a full list of completed transactions and non-trading operations of a certain trading account
  • Accounting currency
    currency unit in which deposit/withdrawal operations are performed
  • Accrual
    Proportionate discounts and premiums for forward exchange transactions (orders) with respect to swap transactions during the period of the specific transaction.
  • Adjustment
    The decision of a central bank to adjust domestic economic policy aimed at eliminating imbalances of payments or determining an official exchange rate.
  • Adviser
    a trading account management algorithm in a form of a program engineered in MetaQuotes Language 4, that sends requests and orders to the server via the client terminal (platform)
  • American Depository Receipts
    Introduced to the financial markets in 1927, an American depositary receipt (ADR) is a stock that trades in the United States and is denominated in US dollars but represents a specified number of shares in a foreign corporation. ADRs are also freely traded on European markets. ADRs can also be listed on major exchanges. It is a tool for raising capital on the US and international markets. ADRs can have different names depending on the requirements of a particular market.
  • American Stock Exchange (AMEX)
    The stock exchange that had grown into the second largest securities market in the United States from a small securities house. Most of the securities listed on the AMEX are of small and medium sized companies. Its major indices are AMEX Major Market Index and AMEX Market Value Index.
  • AMIEU
    stands for Australian Meat Industry Employees' Union. The union represents the interests of workers in the meat industry.
  • Angela Merkel
    is a German politician, a leader of the Christian Democratic Union of Germany since April 10, 2000. Angela Merkel has been the Chancellor of the Federal Republic of Germany since November 22, 2005, when her party won the 2005 federal election. Merkel is the first woman to have become Chancellor of Germany.
  • Annual inflation
    is the increasing of the overall prices for goods and services during the period of one calendar year.
  • APEC (Asia-Pacific Economic Cooperation)
    is a forum of 21 Asia-Pacific countries that seeks to promote free trade, investment liberalisation and facilitation across the region, as well as to foster economic growth and strengthen the Asia-Pacific community.
  • Arbitrage
    The simultaneous purchase of an asset on one market and sale on another to profit from a temporary difference in the price.
  • Ask
    is the offer price; the price at which a seller is willing to sell the base currency.
  • Asset
    Any item of economic value which is the subject of a trade on a financial market. An asset can be a currency pair with an aim to profit from a difference in its exchange rate.
  • At best
    An order to a dealer or a broker to buy or sell a financial asset at the most desirable price available.
  • AК&M
    is an information and analytical agency focused on economics. AК&M was created in 1990. It has long been a leading informational portal in the field of economics and finance.
  • Balance
    the total financial result of all fully executed transactions and deposits/withdrawals to/from an account
  • Balance of payments
    shows the balance of a country’s overseas payments and payments incoming from abroad over a certain period of time.
  • Bank Stress Test
    is a compulsory condition for high estimation of the risk management system under the Direction of the Central Bank of Russia dd. January 16, 2004 No 1379 U "On assessment of the financial stability of the bank with the purpose to confirm it as sufficient for participating in the deposit insurance system".
  • Bar chart
    A style of chart on which the top of the vertical line indicates the highest price of an asset for the certain period, while the bottom represents the lowest price. The closing price is displayed on the right side of the bar, and the opening price is shown on the left side.
  • Barrel
    is a unit of liquid volume which is used on international oil market. Price for basic oil brands is estimated in dollars per barrel.
  • Base currency
    currency unit in which an account, balances, commission fees and payments are nominated and calculated
  • Base interest rate
    The rate of interest used by commercial banks as a basis for their lending rates. Determined by a country’s central bank, the base interest rate has a direct impact on the national currency’s exchange rate. This makes monitoring its changes a useful indicator for Forex traders.
  • Bear
    is the market participant who opens sell trades and believes that a currency exchange rate is about to fall.
  • Bear market
    A market condition in which prices are falling.
  • BHP Billiton
    is the world’s largest mining company founded in 2011 with headquarters in Melbourne.
  • Bid
    is the demand price; the price at which a market participant is willing to buy the base currency.
  • Bid price
    The price at which an investor can sell an asset on financial markets. The bid price is a part of the formula which is used to calculate the expiry level of an asset.
  • Binary options
    A relatively new financial instrument with a fixed price, where profits and potential losses are known in advance. Binary options are a good instrument for novice traders as the possible profit is known before opening a trade and a position can be opened by simply choosing in what direction the price would go.
  • Bloomberg
    is an American mass media corporation which provides a range of informational services from world finance platforms.
  • Bloomberg Banks Stress Test Index
    tracks the US banks whose balance sheets will be reviewed by US regulators to see how much capital the banks will require to meet the standards in the current economic environment. Tests would be applied to banks posessing over $100 billion in assets.
  • BNP Paribas
    is a financial conglomerate, one of the world’s largest and reliable banks. According to Standard & Poor’s the bank’s current rating is AA. It has offices in 80 countries all over the world and headquarters in Paris, Geneva, and London with the total amount of employees totaling 200 thousands of people.
  • Brent
    is a standard oil brand which is sourced near the European shoreline in the North Sea. This brand is famous for low percentage of sulfur which makes it attractive for oil-processing companies. Brent is a pricing benchmark for almost 40% of all global oil brands. It is traded on international oil markets.
  • Broker
    the firm that provides crediting services and trader support
  • Brokerage
    is the fee or commission paid to a broker for the services rendered. The amount of the brokerage is usually proportionate to the deals’ value.
  • Bull
    traders that count on currency rate escalation
  • Bull market
    market that tends toward escalating rates
  • Business Climate Indicator (BCI)
    is a business climate indicator of a particular country which is based on the responses of business representatives. Index data has a direct impact on the market.
  • Capital account
    is the other component of the balance of payments directly related to the GNP. It represents the balance of public and private capital inflow and outflow as well as the amount of funds borrowed and lent.
  • Carry trade
    is a Forex trading strategy in which the profit is gained not from the price movement and closure of profitable position, but from holding position with a positive swap (see swap).
  • Cash
    The currency of a nation in its physical form. Cash is money (notes or coins) that is in free circulation and that is used in the turnover of goods and services
  • Caspian Pipeline Consortium (CPC)
    is oil-producing company which develops reserves in western area of Kazakhstan. Oil is transported by means of pipeline to the shores of the Black Sea for further transportation to Europe.
  • Central Bank of the Russian Federation
    is the primary bank of Russia, its main issuing monetary body. Together with the government, it develops and implements the monetary policy. The bank has broad powers. In particular, it is accredited to issue the national currency and regulate commercial banks. The central bank of the Russian Federation coordinates and regulates Russia’s entire credit system. It acts as economic regulator. The bank supervises lending institutions, grants and withdraws banking licences. The headquarters of the bank are in Moscow.
  • Chart
    Graphical representation of a particular currency’s price change over the given period of time. The chart types are: the line chart, the bar chart and the candlestick chart.
  • Chicago Board Options Exchange (CBOE)
    is the US options exchange located in Chicago. More than 2,200 companies 22 market indices and 140 market indices funds with the overall trade turnover of 1 billion contracts are listed in it.
  • Chicago Mercantile Exchange (CME)
    The Chicago Mercantile Exchange (CME) is an American financial and commodity derivative exchange. Originally established as a non-profit organization, the CME is a platform for futures and options trading and is also a regulatory authority, collecting and releasing information about the market and ensuring orderly clearing and settlement of executed trades.
  • Clearing
    The end of mutual settlements on a trade.
  • Client
    physical or legal party executing operations with the company
  • Client log file
    file, created by the client terminal, which records all requests and orders sent from the client to a dealer with 1 second accuracy
  • MetaTrader 4 or 5 software product that lets the client get information about financial market trades in real time mode (volume defined by the company), perform technical analysis of markets, operate, set/change/cancel orders and receive messages from the dealer and the company as well
  • Close position
    is a fixation of profits or losses on an open position; removal of a pending order.
  • Closed transaction
    consists of two opposite trading operations of equal volume (the position opening and closing): buying followed by selling or selling followed by buying
  • COMEX (Commodity Exchange)
    is a leading exchange market of valuable metals, department of New York commodity market. Futures contracts are concluded for any month, including the current month. Schedules for trading sessions of every futures contract are individual, but in overall the instruments are trading from Monday to Friday from 8:00 till 13:30. Electronic trading session is hold daily from Sunday to Friday from 6:00 till 17:15.
  • Commerzbank
    is a German group of banking companies established in 1870. The headquarters of Commerzbank are located in Frankfurt am Main. Total assets of Commerzbank are about 600 billion euros. Its staff are 360,000 people, and the number of customers amounts to 8 billion in more than 40 countries. It is Germany's second-largest bank by assets.
  • Comparative advantage
    is an economic law referring to the ability of an individual or a country to demonstrate the best performance producing goods and services in the sphere they are the most competent, qualified or experienced.
  • Concealed Unemployment
    is not reflected in official statistics. It relies on data on how many people receive unemployment benefits in a country. Apart from this group of people, there are other categories of employable citizens: those who are almost out of work, but do not get any jobless benefits; those employed part-time; and those who have not claimed for any benefits for some reason.
  • Consolidation
    is a period during which a price action fluctuates in a certain range without establishing a trend either up or down. Consolidation is believed to be followed by a breakout in one direction or the other.
  • Consumer Confidence
    indicates how consumers feel about current economic conditions in their country. The index is calculated on the basis of a monthly survey. The survey respondents are asked to assess economic prospects of their country. The index does not tend to affect the markets much, because it provides a subjective vision of the economy, rather than a real picture. A rising index augurs well for the national currency.
  • Continuous Linked Settlement (CLS)
    is a global multi-currency payment system founded in 1997 by the largest brokerage Forex companies for cash remittances on currency deals.
  • Contract specifications
    general trading conditions (such as spread, lot size, minimal trading operation volume, trading operation volume increment, initial margin, lock margin etc.) for each instrument
  • Convergence
    A situation in trading when the price of an underlying asset is moving to the price of a futures contract and vice versa.
  • Correction
    A reverse price movement, or its sideways movement after the previous uptrend or downtrend weakened, which led to positions’ closing or profit taking by market participants as they considered the price too high or low for further trading.
  • Counter currency
    The currency used as the second currency in a currency pair. It is also known as the quote currency. Units of the counter currency are expressed in terms of a single unit of a base currency.
  • CPI (Consumer Price Index)
    indicates changes in retail prices for goods and services the market basket comprises. The index is based on cost of food, clothes, education, housing and household utilities, leisure and entertainment, charges for health care services and transportation fares. The index is calculated monthly. It is a key measure of inflation in any country.
  • Credit (credit relationship)
    is a relationship between subjects arising from cost flow. There are various forms of credit: commercial and banking borrowing, loaning, leasing, factoring etc.
  • Credit rating
    measures the creditworthiness of an individual, firm, region, or a country. Ratings are calculated based on past and current financial performance of market participants as well as on the estimated amount they borrowed and obligations incurred. The estimates are supposed to provide potential lenders/investors with insight into probability of on time repayment.
  • Cross rate
    is the currency exchange rate between two currencies, both of which are not the official currencies of the country in which the exchange rate quote is given in.
  • Currency basket
    A selected group of currencies in which the weighted average is used as a measure of the value of a currency not included in the group. Depending on its purpose, the currency basket can include currencies in different relative amounts, a currency’s inclusion on a constant basis or changing depending on different Forex market factors.
  • Currency code
    The three-letter alphabetic code, where the first two letters represent the country of a currency, while the third one stands for the name of the currency. The currency codes are specified by the International Organization for Standardization (ISO).
  • Currency intervention
    is a significant one-time and direct central bank’s intervention in the currency market and the currency rate implemented by means of buying and selling of large amount of foreign currency. Currency intervention is used to regulate the course of foreign currencies in the interest of the government
  • two currencies which make up a foreign exchange rate, for example, EUR/USD
  • Currency risk
    Potential adverse movements of currency rates.
  • Current account balance
    is one of the two components of the balance of payments referring to net revenue on exports minus payments for imports, net revenue on investments and net transfer payments.
  • DAX (Deutsche Akzien Index)
    The benchmark index for the German equity market. It tracks the performance of 30 selected German blue chip stocks traded on the Frankfurt Stock Exchange. There is also the DAX 100 index, which includes reinvested dividends to show the overall return available to investors. The index was introduced in 1987. It is calculated using the Xetra technology.
  • Day trading
    Trading on a financial market during one session within a day. This means that positions opened this day are kept overnight to the next day and the next trading session.
  • Dealing
    non-cash currency trading
  • Dealing center
    company that provides access to the money market
  • Deflator
    is a statistical tool used to convert a national currency into inflation-adjusted national currency.
  • Delivery
    A deal on Forex under which a currency is tendered to and received by the buyer.
  • Demo account (Demonstration account)
    is a virtual trading account rendered by a broker to review and test the trading systems features on financial markets without the risk of losing real funds. As a rule, the demo account interface is similar to that of a live account.
  • Depreciation
    A decrease in the value of a currency as a result of market forces.
  • Derivatives
    Financial instruments with a price that is derived from one or more underlying assets (bonds, options, shares, futures contracts). Derivatives are often used for hedging and also for speculative purposes. Leverage is applied in buying these financial instruments, thus allowing traders to buy derivatives at a price much higher than they can afford.
  • Developer
    “MetaQuotes Software Corp.” is the trading platform developer
  • Dinghong Fund
    is China's first privately offered wine equity fund. The fund was founded by Ling Zhijun, a banking professional and wine enthusiast who manages Pacific Asset Management of Beijing, and French winemaker Jean-Pierre Moueix's China representative Zhang Yanzhi.
  • Direct quote
    A foreign exchange rate quoted as the domestic currency per unit of the foreign currency.
  • Discount rate
    An interest rate charged to financial institutions for loans received from a country’s central bank.
  • Divergence
    is the difference between two correlative instruments. For instance, intermarket divergence happens when one of the markets reaches cyclical/session/history price extremes (highs or lows) when the correlated market does not do so. Divergence quite often signifies a price reversal; (it) is used by traders as a trading signal
  • Diversification
    is the distribution of invested or loanable money assets among different investments with the purpose of smoothing out potential losses.
  • DJIA
    is Dow Jones Industrial Average index, the oldest stock index in the USA which is a simple arithmetic average of price growth of 30 top industrial U.S. companies’ shares.
  • Double bottom
    is a classic pattern of technical analysis where the price reaches two consecutive lows placed at the same level; it signifies a reversal
  • Double top
    is a classic pattern of technical analysis used to depict two consecutive price rises placed at the same level; it signifies a reversal
  • Downtick
    A stock market transaction at a price below the previous transaction.
  • Downtrend
    Downtrend is the forex market term meaning gradual decline of a currency price at a certain period of time.
  • ECB
    European Central Bank which carries out EU is monetary policy.
  • ECB (European Central Bank)
    was established on June 1, 1998. The ECB headquarters are situated in Frankfurt am Main, Germany. The General Council of the European Central Bank includes representatives of all the EU countries. The ECB is independent from other EU authorities.
  • Economic integration
    is the development of stable relations among neighbouring countries into unification of economies. This process is usually accompanied by coordinated interstate economic policy.
  • Economy Watchers Survey
    assesses current economic conditions in a country.
  • Elliot Wave theory
    The theory on the basis of which analysis and forecast of price movement is made. According to the theory, the psychology and behavior of market participants influences financial markets’ trends. It can be identified and serve as a guide in trading decisions.
  • Equity
    the secured part of the client account, including open positions, that is bound to the Balance and the Floating rate (profit/loss) by the following formula: Balance + Floating + Swap, i.e. the funds on the client account minus the current loss of the open positions, plus the current profit of the open positions
  • ESM
    stands for European Stability Mechanism. It is a joint financial fund of the Eurozone countries replacing the two existing EU funding programmes.
  • ETF (Exchange Traded Fund)
    investment funds much like securities which serve as certificates for share portfolio. ETF may consist of securities of different companies and share funds. On legal basis, ETF is a type of share funds.
  • Euribor
    is a rate European banks use to borrow funds from peers for three months.
  • Exchange rate
    The price of a nation's currency in terms of another currency.
  • Expiry time
    A predetermined deadline for a binary option which a trader can choose prior to opening a trade. At the time of a binary option expiration, the financial result of the trade is fixed and traders either receive the profit known in advance, or they suffer a loss in case of an incorrect forecast.
  • Export
    means delivering (or shipping) goods or capital abroad.
  • Federal Reserve Bank
    is a regional bank of Federal Reserve System of the USA. A network of 12 Reserve Banks carry out money management of the government.
  • Federal Reserve System
    is the U.S. banking system which fulfils functions of country’s Central Bank.
  • Financial instruments
    Various types of financial market products, including securities, bonds, forex, futures, options, etc.
  • Financial Transaction Tax
    allows regulating financial markets, in particular, the market of derivatives.
  • Fitch Ratings
    is one of the largest rating agencies which provide analytical data of financial markets and estimates companies’ borrowing power.
  • Flat
    is the situation on the currency market characterized by the absence of an uptrend or downtrend; also known as non-trend or sideways movement
  • Flexible exchange rate
    An exchange rate which fluctuates depending on the supply and demand of a currency in relation to other currencies on the forex market. It is also called floating exchange rate.
  • Floating profit/loss
    Unrecorded gains/losses on the opened positions at current rates values.
  • Force major circumstances
    occurrences which could not be foreseen or prevented. These include: natural disasters; wars; acts of terrorism; government actions, actions of executive and legislative government authority, hacker attacks, and other unlawful acts toward servers
  • Forecast
    Assesment of future market conditions on Forex within a short-term, medium-term and long-term framework.
  • Forex (foreign exchange market)
    is a segment of the financial market for interbank currency exchange at non-fixed rates.
  • Forex indicator
    is a software-based analytical tool that can be used to receive and visualize additional information (or information transformed into more understandable format) about the price chart
  • Forex trend
    It occurs when the price moves in an identifiable direction over a specific period. There is an uptrend, downtrend and a sideways trend.
  • Forward contract
    A contract that specifies the price and quantity of an asset to be delivered in the future. Although delivery is made in the future, the price is determined on the day of the transaction.
  • Free margin
    determines the state of an account. Calculated according to the formula: Equity - Margin = Free margin
  • FSSS
    stands for Federal State Statistics Service of Russia.  It is a federal executive institute responsible for official statistical data on social, economic, demographic, and ecological conditions in Russia. In addition, FSSS controls and supervises state statistics in the Russian Federation.
  • Fundamental analysis
    A popular way of forecasting price behavior on the forex market. The fundamental analysis is based on the analysis of the world’s leading economies’ indicators and reports on economic sectors released by major countries. The fundamental analysis also includes important political and financial news that can have impact on prices. Based on the analyzed information, experts say in what direction an asset’s price will move.
  • Futures contract
    An agreement to buy or sell a predetermined amount of a financial asset or a commodity at a specific price on a specific date in the future. Futures contracts are characterized by strict conditions on the type and quantity of assets, involving only minor discrepancies. These contracts also have certain terms of payment of invoices or transportation costs.
  • Gap
    is a break between prices which may happen as a result of sharp fluctuations on the market or during the weekends (between the closing price of one week and opening price of the other)
  • Gasprom
    is a natural gas supply and distribution company which is the largest in Russia and the entire world. The company possesses the most extensive gas pipeline system.
  • GDP (Gross Domestic Product)
    is a macroeconomic indicator measuring the market value of output produces within a year in all the economic sectors of a country, for consumption, exporting and hoarding, regardless of the producer's nationality.
  • Goldman Sachs (GS)
    is a huge commercial bank, financial conglomerate, established in 1869 by Marcus Goldman and Samuel Sachs in order to perform stock market operations. Currently, the bank’s activity includes investment banking business together with exchange business, as well as management of securities and assets.
  • Hard currency
    The term denoting a currency that can be easily exchanged (i.e. widely accepted around the world) with a stable rate. Hard currencies generally come from developed nations with strong economies. Because of its liquidity, a hard currency is considered to be a good investment instrument.
  • HDFC Bank Limited
    is the Indian financial services company located in Mumbai and registered in 1994. The fifth largest bank in India by volume of assets, and the second largest by market capitalization. The bank was supported by Housing Development Finance Corporation, which is the main real estate investment company (established in 1977) in India.
  • Hedge fund
    The funds that are managed much more aggressively than their mutual fund counterparts. The strategies applied for increasing the yield include trading with leverage, swaps, and arbitrage.
  • Hedged margin
    Collateral necessary to cover open position.
  • operation that protects an asset or liability against a fluctuation in the foreign exchange rate
  • HICP
    stands for Harmonized Consumer Price Index. HICP is an indicator of inflation, a single cornerstone in the statistical system for the EU countries. The index is particularly important in the periods of interest rate increases, as its growth provokes further monetary tightening and consequently the national currency upswing.
  • High-Frequency Trading, HFT
    is a type of trading which applies technical tools and computer algorithms (high-speed servers) to trade securities with high speed. In contrast to usual trading, High-Frequency Trading uses powerful computers to execute a greater number of trading operations. Usually, a computer analyzes the markets and executes operations based on its own trading strategy. The number of operations generated via High-Frequency Trading daily is counted in tens of thousands
  • IMF (International Monetary Fund)
    international organization established by the UN and grants loans to member countries to meet balance of payments needs.
  • Import
    is delivery of goods or capital into the country from abroad.
  • Import substitution
    is fostering domestic production of goods rather than importing foreign goods.
  • Indicative quote
    A quote serving for information about the current price of an asset. It is not used for making market orders.
  • Industrial Production Index
    is an economic indicator published by the Federal Reserve Board of the United States. It is based on the most significant categories of industrial goods. Since this index reflects changes in output of mineral resources, energy efficiency, gas and water usage as well as manufacturing production, it can be regarded as a GDP constituent.
  • Inflation
    is the process of increase in prices for goods and services. Due to inflation, a certain amount of money sufficient for purchase of some good or service at present will not be sufficient anymore in a while.
  • Initial margin
    An amount necessary to open a position that serves as a trader’s guarantee of fulfillment of obligations towards a broker. The margin largely depends on leverage. The higher the leverage, the lower the margin required to open a position.
  • Initial public offering (IPO)
    It is the first time that the stock of a private company is offered to the public for sale. As a rule, an IPO is made when a company wants to attract attention of shareholders. If you invest in the stock of such companies, you should be ready for risks.
  • Insider
    A person who belongs to a group or organization and has special knowledge about it unknown to ordinary traders and related to financial markets.
  • Instant execution
    The mechanism of providing a client with quotes without prior request. Clients see live streaming forex rates of a dealer, based on which they can send an order to execute a trading operation at any time.
  • International division of labour
    implies that each country produces certain goods because it has everything necessary to produce them as compared to other countries. By specializing in suitable production, the country satisfies its own needs yet relying on foreign trade. Thus, international division of labour is a principle of the world economy where every country has its own specializations, exports the goods produces while importing the goods other countries specialize in.
  • International reserves
    refer to a country’s external highly liquid assets, namely gold and currency, controlled by the monetary authorities. International reserves are meant for financing the current account deficit, currency interventions etc.
  • International trade
    is a system of relations implying exchange of goods and services across international borders.
  • trade oriented at gaining profit within one day
  • Investments
    Assets purchased with the idea that they will provide income in the future or will be sold at a higher price for profit. However, an investment not always results in a financial gain, unless it is made in profitable projects or shares. So it is crucial to determine potential risks. As a rule, investing in high-yield assets is more risky.
  • IPO (Initial Public Offering)
    is the initial public offering of joint-stock company shares for selling.
  • ISM Service Index
    surveys supply managers in the field of services with an aim to trace changes in this field. The index tends to be sensitive to psychological factors, rather than an actual situation. New readings of the index are published at the beginning of every month at 10:00 EST (NY).
  • Jefferies & Co
    is an American global investment banking firm. Jefferies & Co is the largest independent bank in the USA.
  • Leading index
    shows an average of leading economic indicators such as Factory Orders, Initial Jobless Claims, Money Supply, Average Workweek, Building Permits, quotes of common stocks, Durable Goods Orders and Consumer Confidence. The leading index is believed to predict the pace of economic growth over the next six months. The index is calculated at the beginning of every month and released at 10:00 EST (NY).
  • Leverage
    An amount of money a broker is ready to give to a trader to trade on financial markets with larger trading volume. Using the leverage, traders increase their deposits tenfold and even more. Leverage is expressed in the ratio between the trader's own funds and those funds borrowed from the broker: 1:10, 1:100, 1:500, etc. If traders use the leverage, their own money serves as collateral.
  • Libor
    stands for London Interbank Offer Rate. Libor is a commonly recognized indicator of the cost of funds to banks. This is the rate that determines the cost of loans the world’s largest banks provide each other with on the London Interbank Exchange. Libor is one of the most widely used benchmarks for short-term interest rates. At present, it fixes rates for EUR, USD, GBP, JPY, CHF, CAD, AUD, DKK, and NZD. Libor is calculated for various borrowing periods, ranging from overnight to one year.
  • Light Sweet
    is a standard oil brand which is extracted in Texas (the USA). Due to low content of sulfur and relatively high output of useful products, it is used mainly for gasoline processing. This kind of oil is in high demand in the USA and China. Light Sweet Crude Oil is a pricing benchmark for world types of oil. It is traded on NYMEX (New York Mercantile Exchange).
  • Limit order
    is a type of a pending order (see pending order) that enables entering the market at the given potentially important level after which the reversal is expected. Limit order types are Buy limit and Sell limit
  • Liquidation
    Closing of an existing position by opening the opposite trade.
  • Liquidity
    is the degree to which an asset (currency, security, etc.) can be sold at the current market price. This term refers to market volatility and dynamics: a liquid market is a type of a market with large trading volumes where every trade incapable of making a significant impact
  • Locked positions
    Positions of the same asset and volume opened on one account in opposite directions (buy and sell).
  • Long position
    is the buying of a financial instrument
  • Loss
    is the fixed loss on the position
  • Lot
    is a trading unit on the market; the standardized quantity of goods making up a transaction, exchange-traded securities, a certain amount of currency on Forex. Lot also represents the trade volume (position, order)
  • Lot Size
    a quantity base currency in one lot, that is specified in the contract
  • Low price
    The lowest traded price for an underlying instrument for the specific period of time. On the stock market it is the lowest traded price for a security for one trading day.
  • M&A (Mergers and Acquisitions)
    is a buyout market. It is highly developed in the USA and in Euro area where in the history of every company information about its merging and absorption with other companies is stated.
  • Margin
    the required equity which an investor must deposit to collateralize a position equal to 1% (when leverage = 1:100) of an open position deposit
  • Margin level
    The ratio of equity to margin expressed in percentage. The margin level shows existing risks enabling a trader to prevent them. Looking at the margin level, a trader realizes whether he has enough funds to further open traders and keep orders open. The margin level is calculated using the following formula: Margin Level = (Equity Necessary Margin) × 100%.
  • Margin trading
    using borrowed money to buy securities, with the expectation of increasing profits. Margin trading can bring big returns, but is also risky
  • Mario Draghi
    is an Italian economist. He has been the ECB President since 2011. He also headed the Bank of Italy from 2005 to 2011.
  • Market
    A system with established rules of trade in financial assets or instruments, goods or services.
  • Market opening
    trade opening after a weekend, holidays or after an interval between trading sessions
  • Market opening price gap
    either of the following situations: – Market opening quote Bid is greater than market closing quote Ask; – Market opening quote Ask is less than market closing quoteBid
  • Market price
    the last posted bid and ask prices for a given asset, currently valid on the market
  • major banks and financial firms that pledge to provide liquidity by accepting the other side of a trade in a currency, security or futures contract
  • MICEX (Moscow Interbank Currency Exchange)
    is a Russian stock exchange where papers of more than 700 issues with the total capitalization of 10 trillion rubles are trading.
  • Minimum deviation
    An acceptable price range within one contract set by a stock exchange.
  • MSCI (Morgan Stanley Capital International)
    is a leading international analytical company which calculates global, national, and regional stock indices. Review of MSCI indices greatly influences stock markets.
  • MSCI Asia Pacific
    is Morgan Stanley capitalization composite index which unites 15 countries of Asia-Pacific region. Index with the reading of 100 notched at the end of December, 1987 is considered to be standard.
  • NASDAQ (National Association of Securities Dealers Automated Quotation)
    is the US stock market where shares of more than 4,000 hi-tech companies with the total capitalization of $6 trillion are trading.
  • Necessary margin
    The amount necessary to open the position of the needed volume. It is collateral a trader leaves on the account of a broker