SecuritySecurity is a financial instrument representing financial value. It’s broadly categorized into:
- Debt securities such as:
o Banknotes and bonds
- Derivatives contracts:
o like forwards, futures, options.
- Equity securities
Same day transactionA transaction that matures on the day the transaction takes place.
Specifies the lowest price at which the sale of Base Currency in a Currency Pair can be executed. The limit price in a Sell limit order should be ABOVE the current ASK price.
A Sell Stop is a Stop Order that is placed BELOW the current Bid price and is not activated until the market Bid price is at or below the stop price. The sell stop order, once triggered, becomes a market order to sell at the current market price.
The date by which an executed order must be settled by the transference of instruments or currencies and funds between buyer and seller.
Having an open position that was created by selling a currency. If the client sold the EURUSD, he is said to be “Short” the currency pair (sold the base currency). If a client bought the EURUSD, he would be long the currency pair, but short USD currency. Foreign exchange transactions assume being long one currency and short another.
Buying to unwind a short position of a particular currency pair
Sophisticated Foreign Exchange Investor
Investor possessing sufficient knowledge, experience and/or capitalization to trade in Foreign Exchange market or other financial markets. The investor has to decide for him/herself if CFD on foreign exchange, CFD on spot metals, CFD on stock, CFD on futures and other financial derivatives are suitable investment vehicle for his or her purposes.
(1) Risk of default on a sovereign loan; (2) Risk of appropriation of assets held in a foreign country.
Trading CFD is speculative in that there is no guarantee that those who invest in Foreign Exchange or other derivatives will make any money. The conditions also exist that the client can lose his entire deposited margin making trading FX highly speculative. Those who trade Foreign Exchange or other derivatives should only risk that capital which is considered risk capital, defined as the amount of which if lost would not, change the Customer's lifestyle or the Customer's family's lifestyle.
Spot or Spot date refers to the spot transaction value date that is two business days from the deals Trade Date. In instances where there is holiday, weekend or other day when the banks in the countries represented by the currencies in the currency pair are closed, the spot date will be adjusted forward to the next value date where the banks are open. In the case of US Dollar versus the Canadian dollar, the spot date is 1 business day forward from the Trade Date.
The price at which a currency pair is currently trading in the spot market.
Spot Settlement Basis
The standardized settlement procedure for foreign exchange transactions that sets the value date 2 business days forward from the Trade Date (see: Spot).
The difference between the bid and ask price for a CFD on foreign currency price, stocks, metals, commodities, indexes and etc.
The condition whereby the client's purchases and sales are in balance and there is no open position.
A speaker connected to a phone often used in broker trading desks.
British pound, otherwise known as cable.
Stop loss order
A specific order entered by the client to close out a position if the price moves in the opposite direction of the position by a certain amount of pips. In most cases Stop Orders are executed as soon as the market reaches or goes through the Customer set Stop Price level. Once issued, the stop order will be held pending until the stop price is reached. Stop orders may be used to close out a position (Stop Loss), to reverse a position, or open a new position. The most common use is to protect an existing position (by limiting losses or protecting unrealized gains). Once the market hits or goes through the stop price, the order is activated (triggered) and PAXFOREX will execute the order at the next available price. Unlike a Limit Order, a Stop Order does not guarantee execution at the stop price. Market conditions including volatility and lack of volume may cause a Stop order to be executed at a price different than the order.
Stop Price Level
The client entered price that activates a Stop Loss Order.
The stock of business entity represents the original capital paid into or invested in the business by its founders.
Stop out level/ Margin Call
Such condition of the Forex account when the open positions are forcedly closed by the Company at current prices.
SWAP or Rollover
At the end of each business day, PAXFOREX will automatically debit or credit, all existing open positions, depending on the interest rate differential between the base currency and the counter currency and the direction of the client's position. For example, if the client is long a currency pair where the overnight rate for the base currency is higher than the counter currency, the client will earn a small credit for positions held overnight. If the opposite is true, the client Forex account will be debited for the difference in the interest rate differential. The fundamental reason is if a client is long a higher yielding currency, he should benefit from being able to invest and earn a higher return overnight than what he has to pay for being short the lower yielding currency.
The credit (in base currency terms) added to a client's Forex account that is long a higher yielding currency overnight.
The debit subtracted from a client's Forex account that is long a lower yielding currency overnight.
Society for World-wide Interbank Telecommunications is Belgian based company that provides the global electronic network for settlement of most foreign exchange transactions. The society is also responsible for the standardization of the currency codes used for confirmation and identification purposes (i.e.. USD = US Dollars, EUR = The Euro, JPY = Japanese Yen)
Market slang for Swiss Franc.