When we trade financial products, the number one barrier is terminologies. In addition, even general terms we use in our lives in the financial world such as stock, forex, cryptocurrencies may have different meanings. In such a case, this site has prepared a convenient term dictionary. It’s a small thing, but please refer to it when you want to find out glossaries with one hand for all investors from beginners who have just started trading to experienced people.
- Same Day Transaction
- Sandwich Spread
- Selling Rate
- Settlement Date
- Settlement Price
- Settlement Risk
- Short Position
- Short Contracts
- Short Covering
- Short Forward Date/Rate
- Short Sale
- Short-Term Interest Rates
- Soft Market
- Split Date
- Spot Month
- Spot Next
- Spot Price/Rate
- Spot Week
- Squawk Box
- Stable Market
- Standard and Poor’s (S&P)
- Stop Loss Order
- Stop Out Price
- Straight Date
- Strike Price
- Structural Unemployment
- Support Levels
- Swap Price
- Swap Rate
Same Day Transaction
A transaction that matures on the day the transaction takes place.
Same as a butterfly spread.
A strategy of buying at the bid and selling at the offer as soon as possible.
Special Drawing Right. A standard basket of five major currencies in fixed amounts as defined by the IMF.
Rate at which a bank is willing to sell foreign currency.
All options of the same class which share a common strike price and expiration date.
Actual physical exchange of one currency for another.
It means the business day specified for delivery of the currencies bought and sold under a Forex contract.
The official closing price for a future set by the clearing house at the end of each trading day.
Risk associated with the non-settlement of the transaction by the counterparty.
A market position where the client has sold a currency he does not already own, usually expressed in base currency terms.
A shortage of assets in a particular currency. See Short Sale.
Contracts with up to six months to deliver.
Buying to unwind a shortage of a particular currency or asset.
Short Forward Date/Rate
The term short forward refers to a period of up to two months, although it is more commonly used with respect to maturities of less than one month.
The sale of a currency futures not owned by the seller at the time of the trade. Short sales are usually made in expectation of a decline in the price.
= Short Forward Date/Rate
Short-Term Interest Rates
Normally the 90 day rate
Standard International Trade Classification. A system for reporting trade statistics in a common manner.
Swiss Options and Financial Futures Exchange, a fully automated and integrated trading and clearing system.
More potential sellers than buyers, which creates an environment where rapid price falls are likely.
(1) The most common foreign exchange transaction.
(2) Spot refers to the buying and selling of the currency where the settlement date is two business days forward.
The contract month closest to delivery.
The overnight swap from the spot date to the next business day .
The price at which the currency is currently trading in the spot market.
A standard period of one week swap measured from the current value date of the currency spot rate.
(1) The difference between the bid and ask price of a currency.
(2) The difference between the prices of two related futures contracts.
(3) For options, transactions involving two or more option series on the same underlying currency .
Purchases and sales are in balance and thus the dealer has no open position.
A speaker connected to a phone, often used in broker trading desks.
Action by a central bank to reduce supply in order to increase the price of money.
An active market which can absorb large sales or purchases of currency without having any major impact on the interest rates.
Recession or low growth (stagnation) in conjunction with high inflation rates.
A term referring to certain normal amounts and maturities for dealing.
Standard and Poor’s (S&P)
A US firm engaged in assessing the financial health of borrowers. The firm also lends its name to the S&P 500 Stock Index.
Central Bank activity in the domestic money market to reduce the impact on money supply of its intervention activities in the Forex market.
British pound, otherwise known as cable.
Market slang for Swedish Krona.
Stop Loss Order
Order given to ensure that, should a currency weaken by a certain percentage, a short position will be covered even though this involves taking a loss. Realize profit orders are less common.
Stop Out Price
US term for the lowest accepted price for Treasury Bills at auction.
The simultaneous purchase/sale of both call and put options for the same share, exercise/strike price and expiry date.
A bond with unquestioned right to repayment of principal and interest at the specified dates with no additional further rights or bonuses.
= fixed dates
A combination of two calls and one put.
Also called exercise price. The price at which an option holder can buy or sell the underlying instrument.
A combination of two puts and one call.
Unemployment levels inherent in an economic structure.
A price level at which the buying is expected to take place. When an exchange rate depreciates or appreciates to a level where (1) Technical analysis techniques suggest that the currency will rebound, or not go below; (2) The monetary authorities intervene to stop any further downward movement. See Resistance Point.
The simultaneous purchase and sale of the same amount of a given currency for two different dates, against the sale and purchase of another. A swap can be a swap against a forward. In essence, swapping is somewhat similar to borrowing one currency and lending another for the same period. However, any rate of return or cost of funds is expressed in the price differential between the two sides of the transaction.
A price as a differential between two dates of the swap.
= Forward Margin
An option to enter into a swap contract.
Society for Worldwide Interbank Financial Telecommunications is a Belgian based company that provides the global electronic network for settlement of most foreign exchange transactions.
Market slang for Swiss Franc.
Options or futures that create a position that is able to be achieved directly, but is generated by a combination of options and futures in the relevant market. In foreign exchange a SAFE combines two forward contracts into a single transaction where settlement only involves the difference in values.
＊These glossaries are based on easyMarkets educational tools.