E

Economic Exposure
Reflecting the potential impact of foreign exchange changes in the currency market on a company’s forward competitiveness, the judgment is based on the impact that this impact may affect the company’s future cash flow.

Economic Indicator
Statistics released by the government or non-government organizations that show the current economic growth rate and stability. General indicators include: gross domestic product (GDP), employment rate, trade deficit, industrial output value, and business catalogs, etc.

ECU-European Currency Unit
A basket of member currencies. As a composite index, ECU is composed of all European Community currencies, each of which is individually weighted. Created by the European Monetary System, the ultimate goal is to replace the currencies of the member states of the European Community.

Effective Exchange Rate
Try to summarize the impact of a country’s currency on its trade balance when it changes to another currency.

EFT
Electronic funds transfer.

Either Way Market
In the euro interbank deposit market, the market in which the purchase price and the bid exchange rate are the same within a specific period.

EMU
European Monetary Union.

EMS
European monetary system.

EOE
European Options Exchange.

Epsilon
A change in the price of an option is accompanied by a 1% change in implied volatility (mathematically, the first derivative of an option price with respect to volatility). Also called eta, vega, omega and kappa.

ERM
Exchange rate mechanism.

Euro Clear
A computerized clearing and deposit system for the custody, delivery and payment of Eurobonds.

European Union
The group of countries formerly known as the European Community.

Exchange Rate Risk
Potential losses that may be caused by unfavorable exchange rate fluctuations.

Exercise Price (Strike Price)
The price at which the option can be exercised.

Exotic-currency with low trading volume
Currency that is not widely traded.

Expiry Date
The last date on which the holder of the option can exercise the purchase or sale of the underlying securities.

Expiration Date
(1) Option-After this date, the option can no longer be exercised.
(2) Bond-the date on which the bond matures.

Expiration Month
The month in which the option expires.

Expiry Date
The last date an option can be purchased or sold.

Exposure
The total amount of money lent to a borrower or country. Banks set rules to prevent excessive exposure to any single borrower.
In trading operations, profits can be obtained from market price fluctuations, and losses may also be suffered.

F

Fast Market
Rapid market volatility caused by a large number of buyers and/or sellers buying and selling. -In this case, the price may be ignored, and the buying and bid prices may be too fast to be reported in time.

Fed
United States Federal Reserve System. Members of the Federal Reserve must accept membership of the Federal Deposit Insurance Corporation (FDIC). The group was once caught in a savings and loan crisis in the late 1980s.

Fed Funds
The cash balance held by the bank in the local Federal Reserve Bank. The normal transaction of these funds is an interbank sale of federal funds in one business day. Ordinary transactions are transactions of funds on an unguaranteed basis the next day.

Fed Fund Rate
The interest rate of federal funds. This is a short-term interest rate that has attracted much attention because it indicates the Fed's attitude towards the state of the country's money supply.

FEDAI-Association of Foreign Exchange Dealers of India
The Association of Foreign Exchange Dealers of India-the association of all foreign exchange dealers. It sets the basic pricing principles for commissions and other charges, and at the same time determines the rules and regulations for daily foreign exchange transactions in India. There are 38 trading currencies generally recognized by the Association of Foreign Exchange Dealers in India.

Federal National Mortgage Association
A privately owned but backed by the US government group, mainly engaged in residential mortgage transactions. The funding for its activities comes from the sale of financial instruments, often referred to as Fannie Maes.

Federal Reserve Board
The committees of the Federal Reserve System are appointed by the President of the United States for a term of 14 years, of which the chairman’s term is 4 years.

Federal Reserve System
The central banking system of the United States consists of 12 Federal Reserve Banks that are managed and controlled by the Federal Reserve Board in 12 regions. Membership of the Federal Reserve is mandatory for banks chartered by the Monetary Audit Office of the Ministry of the Treasury and optional for state chartered banks.

Fiscal Policy
Use taxation and government expenditures as tools to implement economic and monetary policies.

Fixed Exchange Rate
The official exchange rate set by the monetary authority for one or more currencies. In fact, even fixed exchange rates are allowed to fluctuate within the specified upper and lower floating range, which will cause the central bank to intervene.

Fixing
Find a way to balance the exchange rate between buyers and sellers to determine the exchange rate. Such a process is carried out once or twice a day at the agreed number of times. Some currencies are used specifically to establish tourist preferential exchange rates. This system is also used in the London gold market.

Flat/Square
If there is neither a long position nor a short position, it is equivalent to flat or flat. If the dealer does not have any positions, or if all positions held by him are offset by each other, then his accounts are flat.

Float
(1) See floating exchange rate.
(2) Cash in hand or cash being transferred between banks.
(3) The Federal Reserve Floating is caused by the system in which checks sent to the Federal Reserve Bank are credited to the lender before the deposit bank pays off the reserves.

Floating Exchange Rate
When the value of a currency is determined by the market forces that control the demand and supply of that currency.

Floor
(1) The agreement with the counterparty is the minimum limit on interest rates set by the purchasers on the trading floor at a specified time.
(2) The term for the foreign exchange trading area; usually the trading area in the commodity and futures markets is called the trading venue.

FOMC
The Federal Open Market Committee, which sets a domestic money supply target in the United States, which is generally achieved through the federal funds rate.

Foreign Exchange
The purchase or sale of one currency relative to the sale or purchase of another currency.

Foreign Position
One party agrees to buy or sell a position in the agreed amount of foreign exchange to the other party.

Forex
The English abbreviation of foreign exchange.

Forex Deal
The purchase or sale of one currency relative to the sale or purchase of another currency. The maximum time for a transaction is defined as the transaction can end at any time until the effective date and time when the transaction is open. Due to technical reasons, a transaction cannot be completed within the first 3 minutes.

Forward Contract
Sometimes used as a synonym for "forward trading" or "options." Specifically refers to an arrangement that has the same effect as a forward transaction between a bank and a customer.

Forward Cover Taking
A forward contract that prevents losses due to exchange rate fluctuations.

Forward Deal
A transaction whose delivery date is greater than the spot delivery date.

Forward Points
The difference in interest rates between the two currencies is expressed in exchange rate points. Forward points are points added or subtracted from the spot exchange rate for calculating forward or direct quotations. The addition or subtraction depends on whether the currency forward is in a premium or discount state.

Forward Rate
The exchange rate on the day of the performance of the forward contract determined when the foreign exchange contract is signed.
The addition or subtraction of points depends on the difference between the deposit rates of the two currencies in the transaction.
In the forward market, the base currency with a higher interest rate is said to be a discount to the quote currency with a lower interest rate. Therefore, forward points are subtracted from the spot exchange rate.
Similarly, the Kihuai currency with a lower interest rate is said to be a premium against the quote currency with a higher interest rate, and the forward interest rate is obtained by adding the forward points to the spot exchange rate.

Free Reserves
The total reserves held by the bank minus the reserves required by the banking authorities.

Front Office
Normal trading activities carried out by dealers.

Fundamental Analysis
Analysis based on economic and political factors.

Fundamentals
The macroeconomic factors that form the basis for the relative value of currencies include inflation, growth, trade balances, government deficits, and interest rates.

Funds
USD/Canadian dollar/alternative terms. Financial instruments that are legally equivalent, fungible and exchangeable. It can also be applied to currency contracts traded on certain exchanges based on a certain amount of foreign exchange.

Futures Contract
A way of trading financial instruments, currencies, or commodities at a specific price on a certain date in the future. The main difference from forward trading is that futures are traded on the over-the-counter market. One-counter trading is any contract that is not traded on an exchange.

Futures Exchange-Traded Contracts
Refers to an agreement between companies to deliver (or withdraw) a certain amount of goods at a predetermined price on a specific date. Futures trading involves currencies, money market deposits, bonds, stocks and commodities. Futures are traded on exchanges that have clearing group guarantee contracts. In addition, the transaction is completed at market value.

FX
Foreign exchange.

G

G5
Group of Five. Five leading industrial countries: the United States, Germany, Japan, France, and the United Kingdom.

G7
Seven leading industrial countries: the United States, Germany, Japan, France, the United Kingdom, Canada and Italy.

G10
G7 plus Belgium, the Netherlands, and Sweden; groups participating in discussions at the International Monetary Fund (IMF). Switzerland sometimes participates in neighboring talks.

Gamma
The rate at which the delta changes over time or the price of the underlying property changes by one unit.

GNP Deflator
Remove inflation from the national means of production. It is usually expressed as a percentage and based on indicator data.

GNP Gap
The difference between actual real and potentially real gross national product. If the gap is negative, it means the economy is overheating.

Gross Domestic Product (GDP)
The total value of output, income, and production expenditures of the entire country within the geographic boundaries of the country.

Gross National Product (GNP)
Gross domestic product plus "overseas factor income"-income earned from overseas investment or work.

Gold Standard
Support the original system of issuing currency value. This system was popular before 1973, because fixed exchange rates were commonly used at that time.

GTC "Good Till Cancelled"
An order that allows traders to buy or sell at a fixed price. The order remains valid until cancelled by the customer.

H

Hard Currency
A currency whose price is expected to be more stable or increase in value compared with other currencies.

Head and Shoulders
The price trend is considered by chart experts to indicate the shape of the price trend reversal. The price rose for a while and reached the peak of the left shoulder. Then, profitable selling causes prices to fall or flatten, forming a right shoulder. Before more profitable selling causes the price to fall to the same level around the shoulder, the price quickly rises to the top again. A further moderate rise or flattening indicates that a further major decline will come soon. When the neckline is reached, it indicates that it should be sold.

Hedge
The purchase or sale of options or futures as a temporary substitute for transactions to be implemented later. It usually involves opposing positions in the cash, futures or options markets.

Hedging
The main purpose of using hedging transactions is to protect (hedging) property or debt from losses due to exchange rate fluctuations, rather than profit from exchange rate fluctuations.

Hyperinflation
Very high and self-supporting inflation. Another definition is a period in which inflation exceeds 50% before falling to the previous level for more than 12 months.