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Forex terms V-W-X-Y-Z Letters

Value Date
The date that payment is exchanged between two parties.

Variation Margin
A call by a broker to increase the margin requirement of an account during a period of extreme market volatility.

Variance
Measures the volatility of a data set/data points from the mean. It is calculated by adding the squares of the standard deviations from the mean and dividing by the number of data points, i.e. taking the average of the standard deviations.

Volatility
Refers to the tendency of prices/variables to fluctuate over time. It is most commonly measured using the coefficient of variation (the standard deviation divided by the mean). The higher the volatility, the higher the risk involved.

Volume
The number of shares or contracts traded for a certain security or an exchange during a period.

Warrant
It is a right but not obligation to buy shares in a company at a future date and at a prearranged price. Warrants are tradable options.

Whipsaw
Term used to describe sharp price movements and reversals in the market. A whipsaw would be if shortly after you bought a stock the price plummeted.

Yard
Term for a billion JPY.

source: fx-charts.com

Forex terms T-U Letters

Technical Analysis
A technique used to try and predict future movements of a security, commodity or currency, based solely on past price movements and volume levels. It examines charts and historical performance.

Tick
A minimum price movement.

Ticker
Depicts current or recent history of a currency, usually in the form of a graph or chart.

Tomorrow Next (Tom/Next)
When a trade buys and sells a currency today for delivery tomorrow.

Trade Price Response
This term advises that price reaction to a certain level is critical. If this level breaks then the recommendation would be to run with the market direction (i.e. Buy a break above resistance level; sell a break below a support level). However, if a price stalls at this level and is rejected then the recommendation is to go with this also (i.e. Sell at a resistance level that is tested and holds, buy at a support level).

Transaction Costs
The costs that are incurred by a trader when buying or selling currencies, commodities, or currencies. These cost include broker commissions or spreads.

Transaction Date
The date a trade occurs.

Turnover
The number or volume of shares traded over a specific time period. The larger the turnover, the more commissions a broker will be making.

Two Way Price
A price that includes both the bid and offer price. The NASD requires that market makers have both bid and ask prices for any security, currency or commodity in which they make a market. This is called a two-sided market.

Uptick
A price quote that is higher than the preceding quote for the same currency.

Uptick Rule
A regulation requiring that if a security is to be traded short, the price in the trade prior to the short trade has to be lower than the price of the present short trade.

U.S. Prime Rate
The interest rate that the major US banks lend to major clients.

source: fx-charts.com

Forex terms Q-R-S Letters

Quote
The offer price of a security.

Rate
The price of one currency in terms of another (exchange rate).

Realized and Unrealized Profit
Unrealized profit is a gain from an increase in the price of an asset that has not been cashed in. Realized profits are made from the cashing in of the unrealized gain.

Repurchase (REPO)
Repos are short-term money market instruments. The trader sells a security (government security) and buys it back only after a short period of time, typically only overnight. Repos are primarily used raise short-term capital.

Resistance
A price level at which most investors expect prices to decline further. A price at which there is sufficient supply to turn a previously uptrend downward. With regards to the forex market, it is the level at which a currency cannot rise above.

Revaluation
An increase in the exchange rate for a currency as a result of central bank intervention. Opposite of Devaluation

Revaluation Rates
The market rates that are used by traders in the evaluation of the gains and losses in their accounts each day.

Risks
Uncertainty in the possible outcomes of an action, i.e. possible returns on an investment. Risk is most commonly measured from the variance of possible outcomes. Higher risks are associated with higher rates of returns, typically in order to induce investment in riskier ventures.

Risk Capital
The capital that an investor does not need to maintain his/her living standard.

Risk Management
Term to describe when a trader will use analysis and other trading techniques to avoid substantial risks to his portfolio.

Rollover
Refers to a process of reinvesting in which at the expiry the settlement is postponed until a later date. The cost of the process is measured by the interest rate differential between the two currencies.

Settlement
The actual finalization of a contract in which the goods, securities or currencies are paid for or delivered and the transaction is entered in the books.

Short
The selling of a borrowed security, commodity or currency. Traders sell when prices are expected to fall.

Short Position
A contract to sell securities, commodities or currencies at a future date and at a prearranged price. At the expiry date, if the spot price is below the contract price, the holder of the contract will make a profit and if the spot price is above the contract price, then there is the potential to make a huge loss.

Spot Market
A market in which commodities, securities or currencies are immediately delivered.

Spot Price
The current market price.

Spread
The difference between the bid and offer price that is offered by a market maker.

Sterling
Refers to the UK currency, the Pound.

Stop Order (Stop-Loss Order)
An order used to hedge against excessive loss in which a position is liquidated at a specific, prearranged price.

Support
A price level at which there is sufficient demand to turn a downtrend up.

Swap
When a trader exchanges one currency for another, holding it for only a short period. Swaps are typically used to speculate on interest rate movements. It is calculated using the interest differentials between the two currencies.

Swap Spread
The difference between the negotiated and fixed price of the swap. The size of the spread depends on market supply and participating parties' credit.

source: fx-charts.com