Forex eBook

Forex Glossary C

Forex Word Meaning
CableTrader jargon referring to the Sterling/US Dollar exchange rate. So called because the rate was originally transmitted via a transatlantic cable beginning in the mid 1800’s.
Candlestick ChartA chart that indicates the trading range for the day as well as the opening and closing price. If the open price is higher than the close price, the rectangle between the open and close price is shaded. If the close price is higher than the open price, that area of the chart is not shaded.
Central BankA government or quasi-governmental organization that manages a country’s monetary policy. For example, the US central bank is the Federal Reserve, and the German central bank is the Bundesbank. others include the ECB, BOE, BOJ.
Carry Tradein Forex, holding a position with a positive overnight interest return in hope of gaining profits, without closing the position, just for the central banks interest rates difference.
CCI (Commodity Channel Index) — a cyclical technical indicator that is often used to detect overbought/oversold states of the market.
CFD a Contract for Difference — special trading instrument that allows financial speculation on stocks, commodities and other instruments without actually buying.
Cable a Forex traders slang word GBP/USD currency pair.
CPI consumer price index the statistical measure of inflation based upon changes of prices of a specified set of goods.
ChartistAn individual who uses charts and graphs and interprets historical data to find trends and predict future movements. Also referred to as Technical Trader.
Choice MarketThe rate at which a financial instrument if offered for sale (as in bid/ask spread).
ClearingThe process of settling a trade.
ContagionThe tendency of an economic crisis to spread from one market to another. In 1997, political instability in Indonesia caused high volatility in their domestic currency, the Rupiah. From there, the contagion spread to other Asian emerging currencies, and then to Latin America, and is now referred to as the ‘Asian Contagion’.
Collateral Something given to secure a loan or as a guarantee of performance.
CommissionA transaction fee charged by a broker.
ContagionThe tendency of an economic crisis to spread from one market to another. In 1997, financial instability in Thailand caused high volatility in its domestic currency, the Baht, which triggered a contagion into other East Asian emerging currencies, and then to Latin America. It is now referred to as the Asian Contagion
ConfirmationA document exchanged by counterparts to a transaction that states the terms of said transaction.
ContractThe standard unit of trading.
Contract (Unit or Lot)The standard unit of trading on certain exchanges.
CounterpartyOne of the participants in a financial transaction.
Country RiskRisk associated with a cross-border transaction, including but not limited to legal and political conditions such as war etc.
Cross RatesThe exchange rate between two currencies expressed as the ratio of two foreign exchange rates that are both expressed in terms of a third currency. Foreign exchange rate between two currencies other than the U.S. dollar, the currency in which most exchanges are usually quoted.
CurrencyAny form of money issued by a government or central bank and used as legal tender and a basis for trade.
Currency Riskthe probability of an adverse change in exchange rates.
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