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Jargon Buster

Helping you make sense of the market!


Alert
Our servers will work currency price Alerts in the markets for you 24/7. You can either work a firm order to buy or sell currency at a predetermined level – or we can simply send you an email or an SMS once the market reaches your desired level. You can then log online and trade, or call our Dealing desk to trade. Now that’s EASY!


BACS
Money transfer service from an automated clearing house providing mainly retail payment services that include direct debit, standing order and direct credit (e.g. salary payments).


Base Currency
The reference currency against which other currencies are quoted. The primary Global base currency is currently the US Dollar


Bear Market
Is a market in which prices generally decline, and the Press is pessimistic.


Bid
This is the price at which you can sell to a currency dealer


Bull Market
Generally the market goes up, and people feel happy!


Broker
An agent who facilitates a currency transaction on your behalf


Cable
This is the market name for the GBP vs the US $. In the old days there was a cable under the Atlantic connecting the tickertape machines in New York and London - hence the term.


CHAPS
A real time funds clearing system used to process payments.


Client Trust Account
A segregated bank account which ensures that client funds are not co-mingled with company funds.


Bid price
This is the rate at which you can sell currency


Convertible Currency
A Currency which can be freely exchanged for other currencies or gold without special authorisation from the appropriate central bank.


Counterparty
These are the parties involved in the transaction


Cross Rate
This is the rate of exchange between two currencies at which you can buy and sell


Day Trading
Speculators who trade during the day and go home with no position


e-Moneyware
This powers our proprietary eFX system that connects you to the InterBank market. It connects to Swift and many other Financial institutions to seamlessly manage your trades and payments electronically. It also handles all of our automated emails and our SMS Gateway. We also White Label this technology to firms like the Post Office. We make their life EASY! We are constantly expanding our eFX reach to continually provide the best services to you.


ECB
European Central Bank


Federal Reserve / FED
The American central bank


Flat / Square
A trader reduces his net exposure to zero so has no more market risk


Floating Exchange Rate
When the value of currency is determined by supply and demand.


FOMC
The Federal Open Market Committee which sets US interest rates.


Forex
Foreign Exchange abbreviated


Forward exchange rates
The forward exchange rate is the rate for a given time in the future. The forward price is calculated using the Spot price and adjusting by the interest rate differential between the two Countries up to the date of the Forward contract.


GTC
"Good Till Cancelled." An order that is worked in the market by our servers until you cancel it


High/Low
Usually the highest traded price and the lowest traded price for the underlying instrument for any given trading day. Have a look at our charts to see more.


IBAN
Short for International Bank Account Numbers. This is a standard notation in Europe.


Interbank Rates
The rates that Institutions trade with each other in the FX market. EasyFX is able to access the Interbank Market directly and provide you with better rates.


Limit Order
Our servers will work an order in the FX market for you to achieve a targeted exchange rate. Limits are also a very good tool for risk management.


Long
You buy a currency and will then make money if it's value increases


Margin
A forward transaction will require a "margin" deposit which is normally a % of the contract. This deposit may cover potential losses due to adverse movements in FX rates, but it will be used in part settlement of the contract on Value date. Our online system will show you any margins on your trades.


Margin Call
If you agree a future exchange rate and the market moves against this rate, then additional margin will be called as a deposit against this contract.


MPC
The Bank of England committee which sets UK interest rates.


Offer
This is the price at which you can buy from a currency dealer.


Open Position
This is a contract that you have entered into and has not settled yet.


Pip or Points
One hundredth of a percentage point. The term used in currency markets to represent the smallest incremental move in an exchange rate. Although a small number, a very important detail to make sure you get the best price!


Settlement
Actual physical or electronic exchange of one currency for another. All trades have to be settled at some point.


Short
If you sell a currency that you do not own you are "short". If this currency then weakens and you buy back you make a profit. Only advisable for seasoned traders.


Spread
The difference between the buying price and selling price.


Spot exchange rates
The spot exchange rate is the rate existing in the market at any given moment in time. If you want to buy currency now then this is the rate you will trade at.


Stop Loss Order
If you have entered into a contract in anticipation that the price may go up or down, then a stop loss order is placed (at a worse price that the one you contracted at) in the market to limit the losses that you might make on that position. This can be used as a risk management tool.


Swap
A transaction where an open trade is effectively rolled to another date (normally later).


Swift
A cooperative owned by the Banks supplying global messages for the settlement of Institutional foreign exchange transactions.


Technical Analysis
Is an analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. EasyFX offers free technical indicators on our free charts


TT
A telegraphic transfer, wire transfer or same day international Swift message. The quickest way to send funds - but normally a little more expensive.


Value Date
Settlement date of a spot or forward deal


Volatility
A measure of the risk in a financial instrument. A higher volatility is associated with higher price movements.