Know the meaning of a dozen expressions used by investors who deal in the forex market.
The UK is the great center of forex trading, followed by the US with a share of 14% of the trading volume and then Japan. Therefore it is not surprising that much of the vocabulary used is of Anglo-Saxon origin. The Economic Daily shows you 10 of the most commonly used expressions in the forex market never to feel lost in this market.
Ask: Retail price that a currency pair is quoting. It is thus the price the investor will pay to buy the currency pair. It is also known as ‘ask price’, ‘offer’ and ‘ask rate’.
Bid: This is the price at which the currency will be sold by the investor and therefore always less than the ‘ask price’. It is also described as’ bid price ‘(purchase price) and’ bid rate (buying rate).
Cable: expression used to sterling and to describe the exchange rate of the British currency against the US dollar (GBP / USD). This term was born as a result of the buy and sell orders of these two currencies be held originally in the mid-1800s, via a transatlantic cable.
Carry (Interest-Rate Carry): income or cost associated with maintaining an open foreign exchange position from one day to the other. This scenario occurs when the coins ‘cross’ negotiated have different interest rates for the same period of time.
Greenback: Term used to describe the US dollar (USD). It is also recurrent use the expression ‘buck’.
‘Good Till Cancelled Order’ (GTC): It consists of a purchase order or sales that stays open until it is held or canceled.
Jobber: Name given to the ‘Trader’s negotiating lower amounts, realize capital gains in a short time during a trading session and rarely leave open positions from one day to the other.
Margin: Trading on margin means that an investor can take a much higher exposure than allowed by its capital account. Some brokers allow leverage up to 400% is therefore crucial that the investor knows manage margin used with caution.
PIP: term used to represent the smallest variation in exchange rate. For example, if the ‘cross’ EUR / USD is quoting at a purchase price (‘bid’) of 1.3827 and a selling price (‘ask’) of 1.3830, the deferential between the two prices It is 3 pips.
Yang: it is a slang used by ‘traders’ to identify large amounts of money, usually associated with unity billion, or’ billions in the English version.