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Jargon Buster


“BEAR MARKET”
A MARKET WITH A DOWNWARD TREND INDICATING LOWER PRICES

“BULL MARKET”
MEANS A MARKET WHERE THE PRICE IS MOVING HIGHER

EMS
EUROPEAN MONETARY SYSTEM

EMU
EUROPEAN MONETARY UNION

“EXCHANGE RATE”
MEANS HOW MUCH OF A FOREIGN CURRENCY YOU WILL GET FOR 1 UNIT OF YOUR OWN CURRENCY

FOREX OR FX
THESE TERMS ARE USED AS AN ABBREVIATION OF FOREIGN EXCHANGE

“FORWARD RATE”
THIS IS THE RATE WHICH IS FIXED ON THE DAY FOR A SPECIFIC DATE IN THE FUTURE

“INTERBANK RATE”
THIS IS THE TERM FOR THE RATES TRADED EXSCLUSIVELY BETWEEN INTERNATIONAL BANKS AROUND THE WORLD AND IS NOT AVAILABLE TO THE PUBLIC DOMAIN

“MARGIN”
THE DEPOSIT REQUIRED TO TRADE A FORWARD TRANSACTION

“MATURITY”
THE DATE OF SETTLEMENT AND EXCHANGE OF FUNDS

“SPOT RATE”
WHEN A DEAL IS TRANSACTED ON THE DAY FOR SETTLEMENT IN 2 WORKING DAYS

“SETTLEMENT”
ACTUAL EXCHANGE OF FUNDS ON THE DAY OF MATURITY

“VALUE DATE”
THE DATE OF SETTLEMENT FOR EITHER A SPOT OR FORWARD CONTRACT