301. Interest Rate Swap

A swap that exchanges the revenue generated by the two legs of the agreement. One party pays an agreed-upon fixed interest rate for the notional amount in exchange for the interest that same amount earns for the duration of the agreement

302. Interest Rate Swap

A swap that exchanges the revenue generated by the two legs of the agreement. One party pays an agreed-upon fixed interest rate for the notional amount in exchange for the interest that same amount earns for the duration of the agreement.

303. International Monetary Fund

Supranational organization established in 1946 to provide international liquidity and loans to member countries

304. International Monetary Market

The futures trading arm of the Chicago Mercantile Exchange.

305. International Organization for Standardization

The organization responsible for developing the standardized forex trading codes used by traders, such as EUR for Euros or CAD for the Canadian Dollar.

306. Internationalization

Refers to a widely used currency for trade and transactions. The US Dollar and the Euro are examples.

307. Intervention

See Central Bank Intervention

308. Intra Day Position

Positions that are opened and closed within the same trade day

309. Introducing Broker

A person or firm that introduces customers to a market maker often in return for commission or a portion of the spread

310. ISO

See International Organization for Standardization.

311. Japanese Housewives

A term coined by the financial press to refer to the Japanese households that speculated on the carry trade and became a major seller of yen, thereby driving the currency against the levels forecast by financial institutions.

312. Java Code

Java is a programming language originally developed by Sun Microsystems. It is used to enable interactive Web applications.

313. Jean Claude Trichet

President of the European Central Bank, appointed November, 2003.

314. Jim Cramer

A financial market analyst, host of CNBC’s Mad Money, and co-founder of TheStreet.com.

315. Jobber

A trader whose strategy is to enter and exit trades quickly for small but frequent profit, without carrying a position overnight.

316. Jurisdiction Risk

The risk that funds will be lost when placed under the jurisdiction of a foreign authority.

317. Key Currency

For smaller countries, the act of orienting their currency to that of a major trading partner

318. Kill or Fill

An order that does not permit partial filling. If it cannot be completely filled, then the order is to be canceled (i.e. “killed”).

319. Kiwi

Traders’ term for the New Zealand Dollar

320. Ladder Option

An option that locks in gains as the underlying asset reaches predetermined price levels, In this way, these levels are like rungs of a ladder. The gains are locked in even if the asset price should subsequently drop.

321. Lagging Indicator

Economic indicators that change after the overall economy has changed, used to confirm effects of Fed policy. An example is the Consumer Price Index (CPI).

322. Leading Indicators

Economic indicators used to predict future economic activity, such as the levels of the S&P 500 index.

323. Left-Hand Side

Refers to the bid quote, which is the price at which customers who are long a currency pair sell it.

324. Leverage

The ratio of margin to the maximum position size. With a deposit of $5000 and a leverage of 50, a trader could enter a position with a face value of $250,000. Leveraging allows you to profit quickly, but lose money just as fast.

325. Liability

The obligation to deliver currency as part of a spot transaction. In speculative forex trading, currency is not delivered. All profits and losses are subtracted from margin deposits.

326. LIBOR

See London Inter-Bank Offered Rate.

327. LIFFE

London International Financial Futures Exchange

328. Limit Order

An order to transact at a specified price or better. See Buy Limit Order and Sell Limit Order.

329. Limit Price

The specified price as part of a limit order.

330. Line Chart

The simplest form of charting, a line chart plots a series of lines connecting the various price levels over a specified time period

331. Liquid

Term used to describe a market where there are lots of buyers and sellers generating a great deal of volume.

332. Liquidation

This is what happens as a result of a margin call. All positions are closed to prevent further loss. At margin call, the value of the account is not sufficient to sustain the position size.

333. Liquidity

Term used to describe a market where there are lots of buyers and sellers generating a great deal of volume.

334. London Inter-Bank Offered Rate

The rate that banks use when borrowing from one another.

335. Long

When a currency pair is long, the first currency is bought while the second currency is sold short. To go long on a currency means that you buy it. A long position is expressed in terms of the base currency.

336. Long Call

An option which gives its holder the right, but not the obligation, to buy the underlying asset

337. Long Position

When a currency pair is long, the first currency is bought while the second currency is sold short. To go long on a currency means that you buy it. A long position is expressed in terms of the base currency.

338. Long Put

An option which gives its holder the right, but not the obligation, to sell the underlying asset.

339. Lookback Option

An option that lets the holder look back at the prices of the underlying asset during the life of the option and select the ideal price to exercise at.

340. Lots

Standardized method of trading in forex which requires a trade of 100,000 units of a particular currency. Trading with FXTrade occurs in units and trade sizes that can vary from 1 to 10,000,000 units.

341. M1

Money supply component which consists of all cash in circulation, plus all of the money held in checking accounts, as well as all the money in travelers checks

342. M2

Money supply component which consists of M1 plus all of the money held in money market funds, savings accounts, and small Certificates of Deposits.

343. M3

Money supply component which consists of M2 plus all of the large Certificates of Deposits.

344. Maintenance

See Maintenance Margin.

345. Maintenance Margin

The minimum margin that must be available in an account to support all open trades.

346. Make A Market

A dealer makes a market by providing a two-way quote—a bid and ask price—in which they stand ready to buy or sell. In this way, dealers are also known as market makers.

347. Managed Float

Exchange rate policy where central banks regularly intervene to stabilize and/or steer the direction of their currency.

348. Manual Trader

A trader that inputs his/her trades manually without an API

349. Margin

The minimum deposit required to maintain an open position. For example, with an open position of $250,000 and a leverage of 50, the required margin would be $5000.

350. Margin Account

An account that allows leverage buying and short selling on credit.

351. Margin Call

A notification that more funds must be deposited into an account because the value of the account has fallen below the minimum margin needed to cover the size of existing positions.

352. Mark-To-Market

For an open position, what its value would be if it were closed out at the current market rates.

353. Market Close

In the 24-hour forex market, the market never closes. For administrative purposes, many banks institute 5pm EST as the market close in order to differentiate between value dates, as well as mark delivery dates.

354. Market Maker

A dealer who provides a two-way quote—a bid and ask price—in which they stand ready to buy or sell. In this way, dealers are also known as market makers.

355. Market Order

An order for immediate execution at the best available price

356. Market Risk

The most current quote for a currency pair

357. Martingale System

A betting strategy where the gambler doubles his/her bet after every loss, so that the first win recovers all previous losses plus wins a profit equal to the original stake. This strategy may be seen as a sure thing by those who practice it, but will eventually bankrupt people reckless enough to try it because winning may require infinite wealth due to the exponential growth of betting amounts.

358. Maximum Leverage

The biggest position that a margin deposit would cover. At a leverage of 50, one could enter a maximum leveraged position of $100,000 by depositing $2,000 worth of margin.

359. Mean Reversion

A theory suggesting that prices and returns eventually move back towards the mean or average.

360. Mean Reversion

A theory suggesting that prices and returns eventually move back towards the mean or average.

361. MFN

See Most Favored Nation.

362. Mid

See Middle Rate.

363. Middle Rate

The price halfway between the bid and ask quote offered by dealers.

364. Mini Account

A special type of trading account where traders can trade partial lot sizes. With FXTrade, no distinction is made between regular and mini accounts. All clients can place trades ranging from 1 to 10 million units.

365. Module

A portion of a program that carries out a specific function and may be used alone or in combination with other modules of the same program

366. Momentum

The tendency of the market to continue moving in the same direction in which it is currently moving.

367. Monetarists

People who believe that money and monetary policy have a strong effect on capacity and growth in the economy. Monetarists focus on the work of Milton Friedman.

368. Monetary Base

Required and non-required deposits made at the central bank by member banks and the currency in circulation.

369. Monetary Base

When a central bank encourages spending by easing monetary controls. An example would be lowering interest rates.

370. Monetary Easing

When a central bank encourages spending by easing monetary controls. An example would be lowering interest rates

371. Monetary Policy

Central bank attempts to influence the economy through money supply levels.

372. Monetary Policy Committee

The Monetary Policy Committee (MPC) is a committee of the Bank of England that meets every month to decide the official interest rate in the United Kingdom.

373. Money Manager

A person who is responsible for the entire financial portfolio of an individual or other entity. A money manager receives payment in exchange for choosing and monitoring appropriate investments for the client

374. Money Manager

A person who is responsible for the entire financial portfolio of an individual or other entity. A money manager receives payment in exchange for choosing and monitoring appropriate investments for the client

375. Most Favored Nation

Preferential treatment in trade between World Trade Organization (WTO) members.

376. Moving Average

Method of smoothing out data on price charts so that trends are easier to spot. Average refers to a mathematical average or a statistical mean that is plotted over the original curve.

377. MXN

The currency symbol for the Mexican peso.

378. Naked Put

A put sold by someone who is not short the underlying asset.

379. Narrow Market

Also known as a thin market, where there is light trading.

380. NAV

Net Asset Value. The total value of an asset less liabilities. In the case of a trading account, the NAV is the balance of deposits, realized and unrealized profit/loss, and interest, minus withdrawals.

381. Negative Carry Pairs

A carry trade where you are long the lower interest currency and short the higher interest currency. This type of trade might be part of a hedging strategy.

382. Negative Sloping Yield Curve

A yield curve is a graph that plots the various yields (usually government bonds) beginning with short term rates on the left side of the graph and extending towards long term rates to the right. Negative sloping refers to the fact that on such a curve short term rates are actually higher than long term rates. This is contrary to normal yield curves as dictated by the time value of money.

383. Net Interest Rate Differential

The difference in the interest rates associated with two currencies.

384. Net Position

Currency positions that have not been offset with opposite positions

385. Netting

Settlement method where only the difference (profit or loss) is settled at the close.

386. News Trader

An investor who bases his/her decisions on the outcome of a news announcement and its impact on the market.

387. NFP

Non-Farm Payroll. Reported monthly, this figure represents the total number of paid U.S. workers of any business, excluding farm employees, general government employees, private household employees, and employees of nonprofit organizations that provide assistance to individuals. The NFP report also includes estimates of the average work week and average weekly earnings of all non-farm employees

388. Noise

The term used to describe market activity that does not always match overall market sentiment, resulting in a series of variables that, in reality, do not match their modeled counterparts. In general, the shorter the time frame, the more difficult it is to separate the meaningful market movements from the noise.

389. NOK

Currency symbol for the Norwegian Krone.

390. Nostro Account

An account held by a domestic bank with a foreign bank where the original bank has no branches. It is used for cash management purposes. Nostro means ours in Latin. See Vostro Account.

391. NYCE

New York Cotton Exchange

392. OCO

See One Cancels the Other Order.

393. Odd Lot

A non-standard transaction size. In forex, a standard lot is usually 100,000 units of a particular currency.

394. OECD

See Organisation of Economic Co-operation and Development.

395. Off-Shore

A business entity that may or may not be physically located in a country, but whose operations and regulation fall outside the country, primarily because it is incorporated elsewhere.

396. Offer

Also known as the Ask Price, it is the price at which a seller is willing to sell

397. Offer Price

See Offer.

398. Offer Rate

See Offer.

399. Old Lady

Term for the central bank of England.

400. Omnibus Account

An account that one futures commission merchant carries for another in which the transactions of multiple individual account holders are combined. The identities of the individual account holders are not revealed to the holding merchant.