Glossary
C
Cable
A term used in the foreign exchange market for the US Dollar/British Pound rate.
Call Option
A call option confers the right but not the obligation to buy stock, shares or futures at a specified price.
Candlestick Chart
A 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.
Carry
The interest cost of financing securities or other financial instruments held.
Cash market
The market in the actual financial instrument on which a futures or options contract is based.
Central Bank
A bank which is responsible for controlling a countries monetary policy. It is normally the issuing bank and controls bank licensing, and any foreign exchange control regime.
Chartist
An individual who studies graphs and charts of historic data to find trends and predict trend reversals which include the observance of certain patterns and characteristics of the charts to derive resistance levels, head and shoulders patterns, and double bottom or double top patterns which are thought to indicate trend reversals.
Clearing
The process of settling a trade.
Closed Position
Exposures in Foreign Currencies that no longer exist. The process to close a position is to sell or buy a certain amount of currency to offset an equal amount of the open position. This will 'square' the position.
Collateral
Something given to secure a loan or as a guarantee of performance.
Commission
A transaction fee charged by a broker.
Confirmation
A document exchanged by counterparts to a transaction that states the terms of said transaction
Contract
The standard unit of trading.
Counter Party
The participant, either a bank or customer, with whom the financial transaction is made.
Country Risk
Risk associated with a cross-border transaction, including but not limited to legal and political conditions.
Cover
(1) To take out a forward foreign exchange contract.
(2) To close out a short position by buying currency or securities which have been sold.
Covered Arbitrage
Arbitrage between financial instruments denominated in different currencies, using forward cover to eliminate exchange risk.
Covered Margin
The interest rate margin between two instruments denominated in different currencies after taking account of the cost of forward cover.
Crawling peg
A method of exchange rate adjustment; the rate is fixed/ pegged, but adjusted at certain intervals in line with certain economic or market indicators.
Credit Risk
The risk that a debtor will not repay; more specifically the risk that the counterparty does not have the currency promised to be delivered.
Cross Currency Pairs
A pair of currencies that does not include the U.S. dollar. For example: GBP/JPY or EUR/CHF.
Currency
Money issued by a government. Coins and paper money. It is a form of money used as a unit of exchange within a country.
Currency Basket
Various weightings of other currencies grouped together in relation to a basket currency(e.g. ECU or SDR). Sometimes used by currencies to fix their rate often on a trade weighted basket.
Currency Pair
The two currencies that make up a foreign exchange rate. For Example, EUR/USD
Currency Risk
The risk of incurring losses resulting from an adverse change in exchange rates.
Current Account
The net balance of a country's international payment arising from exports and imports together with unilateral transfers such as aid and migrant remittances. It excludes capital flows.
Current Balance
The value of all exports (goods plus services) less all imports of a country over a specific period of time, equal to the sum of trade and invisible balances plus net receipt of interest, profits and dividends from abroad. | 
