Forex


Active Money	Active money refers to the total amount of money currently in circulation in the economy. This excludes money held by banks and other financial institutions including the Federal Reserve. The amount of active money in circulation is a determining factor for the Federal Open Market Committee in determining the money supply for the economy.
Artificial Currency	Artificial currency is defined as any substitute for an actual currency that can be used in financial transactions. The best-known artificial currency is the Special Drawing Rights currency created by the International Monetary Fund (IMF) to allow its members to draw upon communal reserves and to pay required dues to the organization. Special Drawing Rights are based on a quota determined by the IMF and based upon the overall economic and political stability of the nation in question.
Authorized Forex Dealer History and Membership Requirements	An authorized forex dealer is any financial institution that has received approval from a regulatory body to act as a dealer for the act of buying and selling currencies.
Back To Back Loan	A proven method for avoiding the difficulties and risks of international currency trading is for companies located in different companies to execute a back-to-back loan transaction, also known as a parallel loan. Essentially, this allows companies to loan money to each other without worry about the current exchange rate; the rate of exchange is fixed at the time of the loan, and remains constant throughout its duration. This avoids the necessity for paperwork and calculations that could drastically increase or decrease the amount owed on the loan.
Base Currency Definition	The base currency is the first currency quoted in a currency pair. The base currency is often referred to as the parent currency and exchange rates are quoted in per unit of the base currency.
Basis Swap	Basis swaps are used in the FOREX market to protect companies against fluctuations in interest rates, currency values, and varying interest values over time; by hedging their investments against changes in these factors, companies can better protect their financial positions and avoid unfavorable results from investments and loans in the open market. For instance, a company that lends at a rate tied to the Federal Reserve prime rate, but borrows at the London Interbank Offer rate can find itself in a difficult financial position if the London rate is significantly higher than the Federal Reserve rate; by engaging in a basis swap of its London rate loans for loans tied to the Federal Reserve’s interest rate, the company can reduce its exposure and prevent financial losses.
Big Figure In Forex Exchange Quotes	The big figure is the stem, or whole dollar price, of a quote, often used in reference to foreign currencies or money markets. It references the non-pip portion of the price quote.
Blocked Currency Definition	A blocked currency is primarily used for domestic transactions and is not traded on the Forex.
Carry Over Charge	A carry-over charge is a finance charge assessed for storage of commodities or changes to the applicable date of foreign exchange contracts. Especially in FOREX transactions, carry-over charges allow contracts to be altered to provide more favorable terms, but require the agreement of both parties and typically come with a significant carry-over charge to the party requesting the change. There are a number of reasons why the original delivery date might need to be delayed, necessitating the payment of a carry-over charge by the party responsible for requesting the revision.
Circus Swap	One of the most common forms of FOREX transactions, the circus swap is a specialized type of currency coupon swap wherein one party trades a fixed-rate loan in one currency to the second party for a comparable floating rate loan in a different currency.
Convertible Currency
Covered Arbitrage
Crawling Peg
Cross Rate - Exchange Rate Between Two Currencies	The cross rate is the currency exchange rate between two currencies, where neither of the currencies are of the country in which the exchange rate is given.
Currency Basket - Benchmark for Regional Currencies	A currency basket is basically the mutual fund for currencies.
Currency Board
Currency Call Options
Currency Carry Trade Definition & Trading Strategy	The currency carry trade is created by simply borrowing funds at a low rate and investing these funds into higher yielding assets.
Currency Put Option
Currency Swap - Agreement to Exchange a Currency in the Future	A currency swap is an agreement between two parties to exchange a currency after a specified period of time.
Currenex	While most FOREX contracts are bought and sold over the counter by private agreement, Currenex is an independent exchange service that appears to be positioned to change that. Currenex is an institutional-grade software trading platform that offers a venue for FOREX buyers and sellers to perform trades, and offers streaming quotes and prices to its clients.
Denominated	Denominated financial instruments, including currency, are considered in terms of the currency they are held in. For instance, U.S. dollar-denominated bonds are expressed in U.S. dollars; while they can be converted into other currencies, the face value of denominated financial instruments is always referred to in their denominated currency. It is possible to hold currency in one country that is denominated as the currency of another country; Eurodollars, for instance, are U.S. dollar-denominated currencies that are held in foreign banks. Contrary to the name, Eurodollars need not be held in a European bank; the name derives from a time period when nearly all such deposits were made to European banking houses, but today refers to dollar-denominated deposits anywhere outside the United States.
Dollar Drain	A dollar drain is a specific type of trade deficit that occurs when a nation imports more than it is exporting in monetary terms. While the term dollar seems to refer to the United States specifically, any nation can experience a dollar drain; this situation can lead to reduced liquidity and dependence on foreign sources of goods and money.
Domestic Rate	The domestic rate of a currency is its interest rate in its home country, expressed in real terms. Domestic rates are used as benchmarks in FOREX markets in order to calculate interest rate parity between currencies and to help establish relative values for the currencies in question.
Dual Currency Bond	Dual currency bonds are defined as securities in which the principal is denominated in one currency while the interest is paid in another. Generally, there are three common types of dual currency bonds; each varies depending on which portion of the bond is denominated in the domestic currency of the investor or on the overall structure and method of earnings of the dual currency bond. Some dual currency bonds also specifically list the currency exchange rate to be used when making payments.
Euro Libor Definition	The Euro Libor is the Libor rate denominated in Euros.
Eurodollar	Eurodollars are U.S dollar denominated time deposits held in foreign bank accounts
Exotic Currency - Definition	Exotic Currency is a thinly traded currency. Examples of an exotic currency would be the Iraqi dinari or the Uruguay peso.
Forex Arbitrage Definition & Trading Example	Forex arbitrage is a trading strategy where a forex trader attempts to make small gains in a short period of time by exploiting the pricing inefficiencies of the currency pairs.
Forex Market - Beginners Guide	Learn about the basics of the Forex market before you begin trading. Define your Forex trading strategy and broker.
Forex Mini Trading & Margin Requirements	A forex mini account is a type of brokerage account capable of buying and selling a contract on forex at one-tenth the size of a standard lot.
Forex Trading Hours & Major Trading Blocks	The forex market trades 24 hours a day 5 days a week. There are four primary time brackets where the majority of trading on the forex takes place.
Forex Trading Introduction	Forex trading involves trading currency pairs involving the currency of the largest countries in the world.
US Dollar Currency	The US dollar is the currency of the United States. It is currently in a multi year bear market.
What is A PIP on the Forex Market?	PIP is an acronym for percentage in points. This percentage in point represents the smallest value of measurement for currencies on the Forex market.
Why Does the Forex Trade 24 Hours a Day?	The forex trades 24 hours per day due to the high demand for the market.
Xenocurrency	A xenocurrency is a currency which trades outside of its home country.