Glossary
Word/Phrase Explanation
Appreciation Describes a currency strengthening in response to market demand.
Ask The price at which the currency is offered for sale by TFI or another counterparty.
Base currency The first currency in a currency pair, for example if the currency pair is GBP/USD, the Base Currency is the GBP
Basis point 1/1000 of a unit. The difference between 4.71% and 4.72%.
Bear A speculator who sells a currency short in expectation that a devaluation or depreciation will take place before he has to buy back the currency.
Bid The price at which the TFI dealer (or another counter party) offers to buy the currency pair from a customer.
Big Figure

In an exchange rate quotation the first three digits, or even only the last one or two of these.
Broker A broker executes orders to buy and sell currencies and other related instruments either for a commission or on a spread.
Bull A speculator who buys a currency in the hope that it will revalue or appreciate enabling him to make a profit on re-sale.
Buy Limit Indicates the highest price at which point the purchase of the Base Currency in a Currency Pair can be executed. The limit price in a Buy limit order should be lower than the current dealing Ask price.
Buy Stop This is a Stop Order that is placed higher than the current dealing Ask price and is only activated when the market Ask price is at or above the Stop Price. The buy stop order, once triggered, becomes a market order to buy at the current market price.
Cable Dealers’ “jargon” for the GBP/USD exchange rate.
Closed position A transaction that is the exact opposite in direction and magnitude to an existing position and the end result is the realization of a gain or a loss.
Commission Charges made by a bank or some financial centers to execute a retail foreign exchange contract with a commercial organization.
Confirmation After transacting an FX deal on the platform or over the telephone TFI will send a confirmation giving full details of the transaction and TFI’s Bank instructions.
Cover The act of closing out a position.
Cross deal An exchange transaction that does not involve the US Dollar.
Cross rate The exchange rate between the two foreign currencies involved in a cross deal.
Currency Pair The two currencies in a foreign exchange transaction such as “GBP/USD”.
Deal Date The date on which a foreign exchange transaction is agreed.
Depreciation Currency, which loses in value against one or more other currencies, especially if this happens in response to natural supply and demand rather than by an official devaluation.
Exchange Rate Risk The potential loss that could be incurred from an adverse movement in exchange rates.
Exposure Used to describe the net position in a currency.
Fibonacci retracement A reversal in trend anticipated based on the calculations of Fibonacci. There are various ratios which occur in nature and which are replicated in the movement of markets.
Figures Regularly published economic statistics followed by the foreign exchange and money market to give a yardstick on a country’s economic performance.  The market reaction to figures will vary according to how optimistic or pessimistic the sentiment is, and on how the figures accord with the predictions of economic forecasters.
Foreign Exchange (FX) The buying and selling of currencies. The conversion of one currency into another.
Forward Deal A deal that is greater in value than the spot value date.
Going long When a currency pair is bought. For example, if a client bought the EUR/GBP, he/she would be “going long” the Euro.
Going short When a currency pair is sold. For example, if a client sold the EUR/GBP, he would be “going short” the Euro.
Initial Margin Requirement The minimum margin balance needed to establish a new Open Position.
Leverage Achieving the potential for profit and loss several times greater than the original investment.
Limit order A Limit Order is placed by a customer and it specifies the amount and the price for a currency pair to be bought or sold. A Limit Order only guarantees that if execution occurs, it will be at the stated Limit Price.
Lot A lot represents 100,000 units. For example if a client is long 5 lots EUR/USD he/she purchased 500,000 Euros in exchange for dollars. This is calculated as follows: 5*100,000= 500,000.
Maintenance Margin The minimum margin, which a client must always keep at TFI to maintain an open position. For example if a client with a 5% margin allows a customer with a EUR10, 000 deposit in TFI to hold a position worth up to EUR200, 000. For example EUR/USD200, 000 or EUR/GBP200, 000.
Margin The amount of customer cash pledge against an open Position.
Margin Call A demand to the client for additional funds to be deposited in a margin account to meet margin requirements because of adverse exchange rate movements. If additional funds are not deposited the position will be closed.
Moving Average In charting terminology, the average rate or price over a specified recent period, which is rolled forward daily. This is used to iron out fluctuations and identify trends. E.g. 14 day, 200 day.
Offer A dealer will sell to a client at the offer price. The Offer is also called the Ask or Ask Price.
Pip The smallest amount by which a foreign exchange rate can move (0.0001 of a unit).
Position The net aggregate commitments in a given currency. A position can be either flat or square (no exposure), long, (more currency bought than sold), or short (more currency sold than bought).
Profit Taking The unwinding of a position for the realization of a profit. For example if a client opens the following positions:

Purchase: Buy EUR/USD 500, 000 at 1.18475.
Margin requirement: 500, 000 * 5%=25 000
Closure of position: Sell EUR/USD 500, 000 at 1.18515.
Quote Consists of the Bid and Ask for a currency pair.
Realized PL

The profit and loss generated from closed positions.
Sell Limit The sell limit denotes the lowest price at which the sale of Base Currency in a Currency Pair can be executed. The limit price in a Sell limit order should be greater than the current dealing Bid price.
Spot Spot or Spot date refers to the spot transaction value date that is two business days from the deals Trade Date. In occasions when there is holiday, weekend or other day when the banks in the countries represented by the currencies in the currency pair are closed, the spot date will be adjusted forward to the next value date where the banks are open.
Spread The difference between the bid and ask price for a foreign currency price.
Square (Position) Purchases and sales of FX are equal. That is, no open or mismatch maturity position exists.
Stop loss order A specific order entered by the client to close out a position should the price move in the opposite direction of the position by a certain amount of pips. Most of the times stop orders are executed as soon as the market reaches or goes through the customer set Stop Price level. Stop orders may be used to close out a position (Stop Loss), to reverse a position, or open a new position. The order is activated when the market hits or goes through the stop price and TFI will execute the order at the next available price. Unlike a Limit Order, a Stop Order does not guarantee execution at the stop price due to market conditions such as lack of volume and volatility.
Stop Price Level A stop loss order is activated by this client-entered price.
Swap (FX) A simultaneously dealt set of two linked exchange transactions involving the purchase and sale of an identical amount of one currency against a counter currency with different maturities.
Value Date (Maturity Date) The day that the settlement between the contracting parties will have to be effected.









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