Glossary

Technical analysis indicator commonly used with time series data to smooth out short-term fluctuations and highlight longer-term trends or cycles, that gives equal weight to all data points.

Global electronic network for forex settlement, known for a code that uniquely identifies financial institutions for the purpose of transfers and settlement.

The risk that a government will either default on its obligations or will impose regulations restricting the ability of issuers in that country to meet their obligations, such as foreign currency restrictions.

Financial action that does not promise safety of the initial investment along with the return on the principal sum.

The act of buying or selling forex based on current (spot) prices, with settlement taking place two days later.

Difference between the bid and ask price for a given currency pair. Also known as Bid-Ask Spread.

Spread betting is a type of speculation that involves betting on the price movement of a currency pair without actually purchasing or selling lots.

Period of economic recession or low growth combined with high price inflation.

Official term for the British Pound.

Technical analysis tool designed to compare the closing price of a currency to its price range over a given time period.

The price at which a stop order is triggered. For purchases, the stop price acts as a minimum price you will pay if an investment is made. For sales, the stop price acts as the maximum price you will receive if a holding is sold.

Type of derivative in which two parties agree to exchange one stream of cash flows against another.

Central Bank for Switzerland, whose action directly influences the value of the Swiss Franc (CHF).

Slang term for the Swiss Franc.

The risk that derivatives permit the transmission of risk across previously unrelated markets, thus making it more likely that a large shock in one will be transmitted to others.