ICCH-International Commodity Settlement Corporation
International Commodities Clearing Corporation, a clearing house located in London, operates in many futures markets around the world.
International Foreign Exchange General Agreement.
IMF-International Monetary Fund
International Monetary Fund-Founded in 1946, it provides short- and medium-term international settlements and encourages exchange rate liberalization. The International Monetary Fund can provide the necessary loans to help its members overcome the balance of payments problem.
IMM-International Money Market
International Money Market-part of the Chicago Mercantile Exchange, which offers many currency and financial futures.
It is a measure of the price range of the underlying currency futures expected by the market based on the premium of the traded option.
The interest rate determined by calculating the difference between spot and forward exchange rates.
Options benefit from the difference between the price of the underlying financial instrument and the exercise/strike price.
If the price of the underlying currency is higher than the strike price/strike price, the right to buy is "in the price." If the price of the underlying financial instrument is lower than the strike price/strike price, the put option is "in the price".
Currency that cannot be exchanged for other currencies may be due to the restrictions of the foreign exchange system, or because this currency has experienced severe fluctuations and is no longer considered a safe choice for depositing funds.
The price of market makers is not very stable.
Industrial production index. A synchronized indicator that measures the volume and output of manufacturing, mining, and utilities.
The overall price level continues to rise, while the purchasing power is relatively declining. Sometimes it also refers to this excessive movement of price levels.
The exchange rate provided for information purposes only.
The initial mortgage deposit required to enter the position is used to guarantee future performance.
The foreign exchange rate quoted by a large international bank to another large international bank. Usually the public and other companies cannot use these exchange rates.
Interest Rate Risk
The possibility of loss due to changes in interest rates.
Interest Rate Swaps
An agreement to exchange interest rate risk from a floating interest rate to a fixed interest rate or vice versa. The principal is not exchanged. The principal amount is the nominal amount, and only the cash flows related to the interest payment (payment or receipt) are exchanged at the end of the term.
The central bank’s entry into the market affects the value of its currency.
In India, the Reserve Bank of India is limited to intervening in the event of severe fluctuations.
Intra Day Limit
The limit on the size of the same-day position of each dealer set by the bank management agency.
Intra Day Position
Open positions run by traders in a day. Usually flat when closed.
IOM-Index and Options Market
Index and options markets-part of the Chicago Mercantile Exchange.
ISDA (International Securities Dealers Association)
An organization composed of foreign exchange banks that manages the interbank market and exchanges.
J Curve – J curve effect
A term describing the expected effect of devaluation on a country’s trade balance. It expects that import bills of exchange will increase before export orders and collections increase.
Common name for the New Zealand dollar.
The process of starting a boundary option (European style) when the underlying spot price is in the money.
Corresponds to knock-in, although the option may never exist again.
Perform a trade in the market to offset a previous trade and return to a flat position.
Underdeveloped countries, it is often used in the secondary debt market.
It is considered to be a statistical indicator that precedes economic growth and changes in all business activities, such as factory orders.
Leads and Lags
The impact of the expected movement of the exchange rate on the foreign exchange trade balance is generally a devaluation. Importers speed up payment for imported goods, exporters delay accepting payment for exports.
In foreign exchange terms, the obligation to deliver a certain amount of currency to the counterparty should be based on the balance sheet held on the designated forward date, or the unexpired forward or spot transaction.
LIBOR (London Inter Bank Offer Rate)
The British Bankers Association's average bank lending rate for US dollar deposits in the London market based on the quotations of 16 major banks. This interest rate is valid for contracts signed within 2 days after the date the interest rate is obtained.
London International Financial Futures Exchange.
Limit Order – Reserved Day Trading Deal
Execute an order for a day transaction at the exchange rate predetermined by the customer, if such exchange rate appears in actual market time. The limit price exchange rate is higher than the existing interest rate at the time of reservation.
The reserved order is valid within the period determined by the customer, and the necessary collateral shall be provided to assist the potential transaction. In the case of initiation, the transaction shall be subject to the predetermined terms.
It means that residents of a country are prohibited from buying other currencies, but non-residents can buy and sell the currency of this country completely freely, and foreign institutional investors can also freely buy and sell stocks on the stock exchange of that country.
Any transaction that offsets or settles a previously established position.
The ability of the market to accept large transactions without any impact on interest rates.
A position in which the number of instruments purchased is greater than the number of instruments sold. Accordingly, if the market price rises, then the position increases.
Cash in circulation. Only used in the UK.
Cash in circulation plus demand deposits in commercial banks. There are some differences in the definition of Huai defined by national financial authorities.
Includes demand deposits, time deposits, and money market mutual funds, but excludes large CDs.
In the UK, it is M1 plus public and private fixed deposits and demand deposits held by the public sector.
In the US it is M2 plus a transferable CD.
Make a Market
When a dealer quotes both the buying price and the selling price, and Huai prepares for buying and selling, it is called "making the market."
When necessary, the monetary authorities often intervene in the market to stabilize the exchange rate or push the exchange rate to fluctuate in the required direction. In India, we also call it "dirty float".
(1) The difference between the buying and selling exchange rate is also used to indicate the discount or premium between spot or forward.
(2) For options, it is the amount of deposit required by the option seller.
(3) For futures, it is the deposit given to the clearing house when establishing a futures position account.
(4) The Federal Reserve requires a certain percentage of funds to be reserved as credit guarantee for initial transactions.
Additional funds are required to fill the position.
The risks associated with the overall market cannot be diversified by hedging or holding multiple securities.
Traders calculate their respective holding positions in the following two ways: natural growth or adjusted to market prices. The natural growth system only calculates the capital flow that has occurred, so it only represents the realized gains or losses. The market price adjustment method uses the closing exchange rate or revaluation exchange rate at the end of each trading day to calculate the dealer’s book asset value. All profits or losses are recorded in the account, and the dealer will hold the net position the next day transaction.
For foreign exchange positions, the market value is usually the amount of domestic currency that can be purchased at the market exchange rate at the time, in exchange for the amount of foreign exchange that should be delivered under the foreign exchange contract.
The date on which the transaction is cleared when the contract is signed.
Ministry of International Trade and Industry of Japan.
Money Supply-money supply
The amount of money in economic activities can be measured in different ways. In India, we have 4 methods of measuring money supply: M1, M2, M3, M4.
An investment company with an open term. Equivalent to the British Trust Company.
Five-basis American term.
It's actually "our" account. A foreign exchange current account maintained by another bank. This account is used to receive and pay accounts denominated in the currency of the country where the bank is located.
Not Held Basis Order
The price can be traded at the customer's ideal price or better, but if the order is not executed, the principal will not be responsible.
A financial deed consisting of a payment promise, not a payment order or proof of debt.
A trader is willing to sell the exchange rate of Jihuai currency.
Official Settlements Account
A measure of the balance of U.S. balance of payments based on the movement of U.S. dollars between official foreign holdings and U.S. reserves. Also refers to the reserve trading account.
A financial institution that is actually located in a certain country, but its operations have nothing to do with that country’s financial system. In some countries, a bank cannot conduct business in the domestic market but can only conduct business with other foreign banks. Later it was also called an offshore banking unit.
The "old woman" on Threadneedle Street is a term referring to the Bank of England.
One Cancels Other Order
The execution of an order automatically cancels the previous order, also known as OCO or "one or the other".
Open Market Operations
Operations performed by the central bank in the market that affect exchange rates and interest rates.
Any transaction that has not been actually paid, or has not been reversed by an equal and opposite exchange on the same delivery date. Can be interpreted as high-risk, high-return positions.
All options of the same type listed under the same underlying instrument name-call or put.
All options of the same category with the same exercise/strike price and contract expiry date.
Within a predetermined period of time, a contract that grants rights but is not obliged to buy or sell a specified number of financial instruments at a specified price.
Over The Counter (OTC)
Used to describe any transaction that is not conducted on an exchange.
When an option is exercised, it is impossible to make a profit due to the price of the underlying financial instrument,
If the exercise/performance price is lower than the price of the underlying financial instrument, the put option is out of the price.
If the exercise/performance price is higher than the price of the underlying financial instrument, the call right is out of the price.
A forward transaction that is not a swap operation.
On a forward date, a foreign exchange transaction involving the purchase or sale of currency for liquidation.
A forward exchange rate based on a spot price foreign exchange transaction plus a discount/premium.
When the economy maintains a high parabolic growth and puts pressure on production capacity, it will lead to increased inflationary pressure and higher interest rates.
A trader can carry forward a net buying or selling position of one or more currencies to the next trading day. Passing the accounts to the trading room of another bank in the next transaction time zone reduces the need for traders to maintain these unmonitored outstanding payments.