Big Figure - Jargon referring to the first digits of an exchange rate. These digits barely vary in normal market fluctuations, and are usually omitted in dealer quotes.

Basis Point - One hundredth of a percent.

Bear Market - A market characterised by a prolonged series of declining prices. Generally a sign of pessimism.

Bid - The price that a buyer is prepared to pay to purchase a given currency and sell another.

Bull Market - A market characterised by a prolonged series of rising prices. Generally a sign of optimism.

Cable - Common terminology for the British Pound against the US dollar exchange rate.

Central Bank - A Government institution in control of the nation's monetary policy and the printing of that nation's currency.

Clearing - The process of settling a trade.

Counterparty - A participant with whom a financial transaction is made.

Cross Rates - An exchange rate between two currencies known as nonstandard in the country where the currency pair is quoted. For example, USD/JPY in the UK .

Dealer - One who acts as a principal or counterpart to a transaction; places the order to buy or sell.

Euro - The currency of the European Monetary Union (EMU).

Fixed Exchange Rate - An official exchange rate set by monetary authorities for one or more currencies.

Forward - A contract fixing the exchange rate for future delivery at a date to be agreed by both participants. A deposit is usually required in forward transactions.

Forward Points - The pips added to or subtracted from the current spot rate to calculate a forward price.

GTC - Good Till Cancelled. A contingent order put in the market to buy or sell at a fixed price. A GTC order will remain in place until executed or cancelled.

Interbank Rates - The Foreign Exchange rates at which large international banks quote other large international banks.

Leading Indicators - Economic aggregates that influence future economic activity such as unemployment rate, Consumer Price Index...

Limit Order - An order to buy at or below a specified price or to sell at or above a specified price.

Liquid and Illiquid Markets - The ability of a market to buy and sell at ease with no impact on price stability. A market is described as liquid when the large presence of buyers and sellers allows the spread between the bid and the offer to be small. Illiquid markets have few players, hence, wider dealing spreads. In some cases of illiquid market, there sometimes are 2 distinctive rates: inshore and offshore.

Margin Call - A requirement from a broker or dealer for additional funds or other collateral to bring the margin up to a required level to guarantee a minimum level of security on a position that has moved against the customer.

Market Maker - An institution (and its employees) who supplies prices and is prepared to buy or sell at those stated bid and ask prices. Market makers are generally large financial institutions.

Market Order - An order to buy/sell at the best price available when the order reaches the market.

Maturity - Generally the date a forward becomes due for settlement. Date at which the currency purchased will be delivered.

Money Markets - Refers to investments that are short term (i.e. under one year) and generally only open to banks and other financial institutions.

Offer - The price, or rate, that a willing seller is prepared to sell at.

Moving Averages - The moving average is probably the best known, and most versatile, indicator in the analysts tool chest. It can be used with the price of your choice (highs, closes or whatever) and can also be applied to other indicators, helping to smooth out volatility. As the name implies, the Moving Average is the average of a given amount of data. For example, a 14 day average of closing prices is calculated by adding the last 14 closes and dividing by 14. The result is noted on a chart. The next day the same calculations are performed with the new result being connected (using a solid or dotted line) to yesterday's. And so forth. Variations of the basic Moving Average are the Weighted and Exponential moving averages.

One Cancels Other Order (O.C.O. Order) - A contingent order which will be cancelled by any new instruction concerning the said contract.

Open Position - A deal not yet settled and subject to exchange rate movements.

Over The Counter (OTC) - Any transaction that is not conducted over an exchange.

Pip (or Points) - The term used in currency market to represent the smallest incremental move an exchange rate can make.

Resistance - A term used in technical analysis indicating a specific price level at which a currency will have difficulty to cross above. Failure to cross such line is generally a bearish sign.

Support - A term used in technical analysis indicating a specific price level at which a currency will have difficulty to cross below. Failure to cross such line is generally a bullish sign.

Rollover - The settlement of a deal is rolled forward to another value date with the cost of this process based on the interest rate differential of the two currencies.

Settlement - The final stage of a transaction, the trade and the counterparts are entered into the books.

Short - Characteristic of having sold an instrument without actually owning it, and to hold such position with expectations that the price will decline in order to buy it back in the future at a profit.

Spot - Generally describes a transaction which will come to settlement in two days.

Spot Price - The current market price for a spot transaction.

Stop Order - An order to buy/sell at an agreed price. An open position is automatically liquidated when a specified price is reached or passed.

Spread - The difference between the bid and offer prices.

Transaction Date - The date on which the trade occurs.

Value Date - The date that both parties of a transaction agree to exchange payments.