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Forex Glossary

A - H C - E F - L M - Q R - S T - Y


R

Rally Recovery of the rates after a fall.
Rate

The price of one currency in terms of another.

Realized and Unrealized P/L Realized P/L is equal to the value in an investor/speculators balance minus the amount of funds he/she has transferred into the account. Unrealized P/L is the amount of profit or loss that is held in current open positions. If one were to clear all open positions, then this amount would be added to the Realized P/L amount.
Resistance level

A term used in technical analysis indicating a specific price level at which analysis concludes people will sell.

Risk The degree of uncertainty or exposure associated with an investment. Investments with greater inherent risk must promise higher expected returns if investors are to be attracted to them. The main types of foreign exchange risk are: 1) exchange rate risk 2) interest rate risk 3) credit risk (aka counterparty) 4) country risk (includes political). (each of these risks can be referred to in other sections of this document).
Risk Management The process of actively monitoring /controlling exposure to various types of risks while attempting to maximize returns. Typically involves utilizing a variety of trading techniques, models and financial analyses.
Roll-Over Process whereby the settlement of a deal is rolled forward to another value date. The cost of this process is based on the interest rate differential of the two currencies.
A rise in the price or value of a currency (or other asset) over time.


S

Settlement A trade is settled when the trade and its counterparts have been entered into the books/records. In regards to FX trading, it is important to note that settlement may or may not involve the actual physical exchange of currencies.
Short Position

An investment position that benefits from a decline in market price. When the base currency in the pair is sold, the position is said to be short.

Spot A transaction that occurs immediately, but the funds will usually change hands within two days after the transaction took place.
Spot Price

The current market price. Settlement of spot transactions usually occurs within two business days.

Spread Spread – the difference between the bid and ask prices.
Stochastic oscillator A technical indicator which compares a stock's closing price to its price range over a given period of time. The belief is that in rising market stocks will close near their highs, while in a falling market they will close near their lows.
Stop-Loss Order Order type whereby an open position is automatically liquidated at a specific price. Often used to minimize exposure to losses if the market moves against an investor’s position. As an example, if an investor is long USD at 156.27, they might wish to put in a stop loss order for 155.49, which would limit losses should the dollar depreciate, possibly below 155.49.
Stop Out

Condition when the Client is no longer able to manage their account and one or several of its open positions are compulsorily closed at any nearest available price for preserving a positive account balance. Stop Out takes place when the account balance percentage indicator (Margin Level) drops to 30% of the initial deposit or lower.

Support Level

A technique used in technical analysis that indicates a specific price level at which a currency will have the inability to cross below. Opposite of resistance.

Swap

The simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate that takes place during transmission of the position to the following day.

Swissy Slang for Swiss Franc.The departments and processes related to the settlement of financial transactions.

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