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    Forex Glossary

    A

    Adjustment

    Is an official action normally by either a change in the internal economic policies or in the official currency rate to correct a payment imbalance.

    American Option

    An option that can be exercised at any valid business date throughout the life of the option.

    Appreciation

    A currency is said to 'appreciate' when it strengthens in price in response to market demand.

    Arbitrage

    The purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market, in order to take advantage of small price differentials between markets.

    Ask price

    This is the price at which a currency pair or security is offered for sale; the quoted price at which an investor can buy a currency pair. This is also known as the 'offer', 'ask price', and 'ask rate'.

    Asset

    In the context of foreign exchange, it is the right to receive an amount of currency from a counterparty, either in respect of a balance sheet asset (e.g. a loan) or at a specified future date, in respect of an unmatched forward or spot deal.

    At Best

    An instruction given to a dealer to buy or sell at the best rate that can be obtained.

    At or Better

    An order to deal at a specific rate or a better one then that.

    Aussie

    Australian Dollar

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    B

    Back Office

    Is the department that deals with financial transactions of a company like settlement and related processes.

    Balance of Payments

    A systematic record of the economic transactions during a given period for a country.
    (1) The term is often used to mean either:
    (i) balance of payments on "current account"; or
    (ii) the current account plus certain long term capital movements.
    (2) The combination of the trade balance, current balance, capital account and invisible balance, which together make up the balance of payments total.
    Prolonged balance of payment deficits tend to lead to restrictions in capital transfers, and or decline in currency values.

    Balance of Trade

    Is the value of a country’s exports minus its imports

    Bank Rate

    The rate at which a central bank is prepared to lend money to its domestic banking system.

    Bar Chart

    A type of chart which consists of four significant points: the high and the low prices, which form the vertical bar, the opening price, which is marked with a little horizontal line to the left of the bar, and the closing price, which is marked with a little horizontal line of the right of the bar.

    Base Currency

    In terms of foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. The base currency is the currency against which exchange rates are generally quoted in a given country. Examples: USD/CHF, the US Dollar is the base currency; EUR/USD, the EURO is the base currency.

    Basis point

    Is one per cent of one per cent.

    Basket

    A group of currencies normally used to manage the exchange rate of a currency. Sometimes it is also referred to as a unit of an account.

    Bear Market

    A market distinguished by declining prices.

    Bid

    The price at which a buyer has offered to purchase the currency or instrument.

    Big Figure

    The first two or three digits of a foreign exchange price or rate.

    Bonds

    Bonds are tradable instruments (debt securities) which are issued by a borrower

    Bretton Woods Agreement of 1944

    Is an agreement that established fixed foreign exchange rates for major currencies, provided for central bank intervention in the currency markets, and pegged the price of gold at US $35 per ounce. The agreement lasted until 1971, when President Nixon overturned the Bretton Woods agreement and established a floating exchange rate for the major currencies.

    Broker

    An agent, who executes orders to buy and sell currencies and related instruments either for a commission or on a spread. Brokers are agents working on commission and not principals or agents acting on their own account. In the foreign exchange market brokers tend to act as intermediaries between banks bringing buyers and sellers together for a commission paid by the initiator or by both parties. There are four or five major global brokers operating through subsidiaries affiliates and partners in many countries.

    Bull market

    A prolonged period of rising prices.

    Bundesbank

    Is the Reserve Bank of Germany.

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    C

    Cable

    A term used in the foreign exchange market for the US Dollar/British Pound rate. It got its name because in the mid 1800’s the rate was transmitted through a transatlantic cable.

    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

    This is the income or the interest cost of financing securities or other financial instruments held for the same period of time.

    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 particular 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 is known as a contract.

    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 that issued by the government like 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 are known as current account. 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.

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    D

    Day Order

    A buy or sell order that will expire automatically at the end of the trading day on which it is entered.

    Day Trade

    A trade opened and closed on the same trading day.

    Day Trader

    A trader who buys and sells on the basis of small short-term price movements.

    Day Trading

    Refers to a style or type of trading where trade positions are opened and closed during the same day.

    Dealer

    An individual or a firm that acts as a principal or counterpart to a transaction. Principals take one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party. In contrast, a broker is an individual or firm that acts as an intermediary, putting together buyers and sellers for a fee or commission.

    Deficit

    A negative balance of trade or payments.

    Deflator

    Is the difference between real and nominal Gross National Product, which is equivalent to the overall inflation rate.

    Delivery

    This is the settlement of a transaction by receipt or tender of a financial instrument or currency.

    Delivery date

    The date of maturity of the contract, when the exchange of the currencies is made. This date is more commonly known as the value date in the FX or Money markets.

    Depreciation

    A fall in the value of a currency due to market forces.

    Derivative

    A contract that changes in value in relation to the price movements of a related or underlying security, future or other physical instrument. An Option is the most common derivative instrument.

    Devaluation

    The deliberate downward adjustment of a currency's price, normally done by an official announcement.

    Direct quotation

    Quoting in fixed units of foreign currency against variable amounts of the domestic currency.

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    E

    Economic Indicator

    A government issued statistic that indicates current economic growth and stability. Common indicators include employment rates, Gross Domestic Product (GDP), inflation, retail sales, etc.

    EDI

    Electronic Data Interchange.

    Effective Exchange Rate

    An attempt to summarize the effects on a country's trade balance of its currency changes against other currencies.

    EFT

    Electronic Fund Transfer.

    European Central Bank (ECB)

    The Central Bank for the new European Monetary Union.

    EURO

    The currency of the European Monetary Union (EMU). It is a replacement for the European Currency Unit (ECU).

    Execution

    Is the Process of completing an order or deal.

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    F

    Federal Reserve (Fed)

    The Central Bank of the United States.

    First In First Out (FIFO)

    An open position is closed based to the FIFO accounting rule. All positions opened within a particular currency pair are liquidated in the order in which they were originally opened.

    Fill

    The process of completing a customer's order to buy or sell a currency pair.

    Fisher Effect

    The relationship that exists between interest rates and exchange rate movements, so that in an ideal situation interest rate differentials would be exactly off set by exchange rate movements. See interest rate parity.

    Fixed exchange rate

    Official rate set by monetary authorities. Often the fixed exchange rate permits fluctuation within a band.

    Flat

    A term describing a trading book with no market exposure.

    FOMC

    Federal Open Market Committee, the committee that sets money supply targets in the US which tend to be implemented through Fed Fund interest rates etc.

    Foreign Exchange

    The purchase or sale of a currency against sale or purchase of another currency.

    Forex

    This term is commonly used when referring to the foreign exchange market.

    Forward

    The pre-specified exchange rate for a foreign exchange contract settling at some agreed future date, based upon the interest rate differential between the two currencies involved

    Forward Points

    The pips added to or subtracted from the current exchange rate to calculate a forward price.

    Forward Rates

    The net price resulting from calculating the forward points and subtracting them from the existing spot rate. This is the rate at which a currency can be purchased or sold for delivery in the future.

    FRA - Forward Rate Agreements

    FRAs are transactions that allow one to borrow/lend at a stated interest rate over a specific time period in the future.

    Fundamental Analysis

    Is the analysis of economic and political information with the objective of determining future movements in a financial market.

    Futures Contract

    An obligation to exchange a good or instrument at a set price on a future date. The primary difference between a Future and a Forward is that Futures are typically traded over an exchange (Exchange- Traded Contacts - ETC), versus forwards, which are considered Over The Counter (OTC) contracts. An OTC is any contract NOT traded on an exchange.

    FX

    Foreign Exchange.

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    G

    G5

    The five leading industrial countries, being US, Germany, Japan, France, UK.

    G7

    The seven leading industrial countries, being US, Germany, Japan, France, UK, Canada, Italy.

    GDP - Gross Domestic Product

    Total value of a country's output, income or expenditure produced within the country's physical borders.

    Going long

    The purchase of a stock, commodity, or currency for investment or speculation.

    Going short

    The selling of a currency or instrument not owned by the seller.

    Gold Standard

    The original system for supporting the value of currency issued. The was that where the price of gold is fixed against the currency it means that the increased supply of gold does not lower the price of gold but causes prices to increase.

    GNP - Gross National Product

    Gross domestic product plus income earned from investment or work abroad.

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    H

    Head and Shoulders

    A pattern in price trends which chartist consider indicates a price trend reversal. The price has risen for some time, at the peak of the left shoulder; profit taking has caused the price to drop or level. The price then rises steeply again to the head before more profit taking causes the price to drop to around the same level as the shoulder. A further modest rise or level will indicate that a further major fall is imminent. The breach of the neckline is the indication to sell.

    Hedge

    A position or combination of positions that reduces the risk of your primary position.

    Hit the bid

    Acceptance of purchasing at the offer or selling at the bid.

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    I

    Implied Rates

    The interest rate determined by calculating the difference between spot and forward rates.

    In-the-Money

    A call option is in-the-money if the price of the underlying instrument is higher than the exercise/strike price. A put option is in-the-money if the price of the underlying instrument is below the exercise/strike price.

    Inflation

    An economic condition whereby prices for consumer goods rise, eroding purchasing power.

    Initial Margin

    The initial deposit of collateral required to enter into a position as a guarantee on future performance.

    Interbank Rates

    The Foreign Exchange rates at which large international banks quote each other.

    Interest Arbitrage

    Switching into another currency by buying spot and selling forward, and investing proceeds in order to obtain a higher interest yield. Interest arbitrage can be inward, i.e. from foreign currency into the local one or outward, i.e. from the local currency to the foreign one. Sometimes better results can be obtained by not selling the forward interest amount. In that case some treat it as no longer being a complete arbitrage, as if the exchange rate moved against the arbitrageur, the profit on the transaction may create a loss.

    Interest parity

    One currency is in interest parity with another when the difference in the interest rates is equalized by the forward exchange margins. For instance, if the operative interest rate in Japan is 3% and in the UK 6%, a forward premium of 3% for the Japanese Yen against sterling would bring about interest parity.

    Interest Rate Swaps

    An agreement to exchange interest rate exposures from floating to fixed or vice versa. There is no swap of the principal. The principal amount is notional as at the end of the tenure only cash flows related with the interest payments (whether payment or receipt) are exchanged.

    Intervention

    Action by a central bank to effect the value of its currency by entering the market. Concerted intervention refers to action by a number of central banks to control exchange rates.

    IMF - International Monetary Fund

    The IMF is an international organization of 184 member countries. It was established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment.

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    J

    Junk bond

    A high-risk, non-investment-grade bond with a low credit rating, usually BB or lower; as a consequence, it usually has a high yield. It’s the opposite of an investment-grade bond.

    JASDAQ

    Japanese Association of Securities Dealers Automated Quotation System

    J-curve

    Theory that says a country’s trade deficit will initially worsen after its currency depreciates because higher prices on foreign imports will more than offset the reduced volume of imports in the short-run

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    K

    Kiwi

    Slang for the New Zealand dollar.

    Knock-out option

    An option that becomes worthless in the event that the underlying commodity or currency crosses a certain price level.

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    L

    Leading Indicators

    Economic variables that are considered to predict future economic activity (i.e. Retail Sales, Personal Income, Prime Rate, Discount Rate, and Federal Funds Rate).

    Leverage

    Also called margin. The ratio of the amount used in a transaction to the required security deposit.

    Liability

    In terms of foreign exchange, the obligation to deliver to a counterparty an amount of currency either in respect of a balance sheet holding at a specified future date or in respect of an un-matured forward or spot transaction

    LIBOR

    The London Inter-Bank Offered Rate. Banks use LIBOR when getting loans from another bank.

    Limit Order

    An order to execute a transaction at a specified price (the limit) or better. A limit order to buy would be at the limit or lower, and a limit order to sell would be at the limit or higher.

    Liquidity

    Refers to the relationship between transaction size and price movements. For example, a market is "liquid" if large transactions can occur with only minimal price changes.

    Liquidation

    The closing of an existing position through the execution of an offsetting transaction.

    Long position

    A position that appreciates in value if market prices increase. When the base currency in the pair is bought, the position is said to be long. Lot a unit to measure the amount of the deal. The value of the deal always corresponds to an integer number of lots.

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    M

    Margin

    The required equity that an investor must deposit to collateralize a position.

    Market Maker

    A dealer who regularly quotes both bid and ask prices and is ready to make a two-sided market for any financial instrument.

    Market Order

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

    Margin Call

    A request from a broker or dealer for additional funds or other collateral to guarantee performance on a position that has moved against the customer.

    Maturity

    Date for settlement of the transaction which is decided at the time of entering into the contract.

    Money Market

    Refers to investments that are short-term (i.e. under one year) and whose participants include banks and other financial institutions. Examples include Deposits, Certificates of Deposit, Repurchase Agreements, Overnight Index Swaps and Commercial Paper. Short-term investments are safe and highly liquid.

    Monetary Base

    Currency in circulation plus banks' required and excess deposits at the central bank.

    Moving Average

    A way of smoothing a set of data, widely used in price time series.

    Momentum

    The tendency of a currency pair to continue movement in a single direction.

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    N

    Net Position

    The amount of currency bought or sold which have not yet been offset by opposite transactions.

    Non-Client Order

    An order on an exchange that is made by a participant firm or on behalf of a partner, officer, director, or employee of the participant firm. A participant firm is a firm that is entitled to trade on the exchange, also known as a member firm. While these orders are allowed, priority must be given to client orders for the same securities.

    Note

    A financial instrument consisting of a promise to pay rather than an order to pay or a certificate of indebtedness.

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    O

    Offer (ask)

    The rate at which a dealer is willing to sell a currency. See Ask (offer) price

    Open Order

    Buy or sell order that remains in force until executed or cancelled by the customer.

    Open Position

    Any position (long or short) that is subject to market fluctuations and has not been closed out by a corresponding opposite transaction.

    Options

    An agreement that allows the holder to have the option to buy or sell a specific security at a certain price within a certain time. Two types of options – call and put. A call is the right to buy while a put is the right to sell. One can write or buy call and put options.

    Order

    A customer's instructions to buy or sell currencies.

    Out-of-the-Money

    A put option is out-of-the-money if the exercise/strike price is below the price of the underlying instrument. A call option is out-of-the money if the exercise/strike price is higher than the price of the underlying instrument.

    Over the Counter (OTC)

    Used to describe any transaction that is not conducted over an exchange.

    Overnight Position

    Trader's long or short position in a currency at the end of a trading day.

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    P

    Parities

    The value of one currency in terms of another.

    Points, Pips

    The term used in currency market to represent the smallest incremental move an exchange rate can make. Depending on context, normally one basis point (0.0001 in the case of EUR/USD, GBD/USD, USD/CHF and .01 in the case of USD/JPY).

    Position

    The netted total commitments in a given currency. A position can be either flat or square (no exposure), long, (more currency bought than sold), or short (more currency sold than bought).

    Political Risk

    The potential for losses arising from a change in government policy or due to the risk of expropriation (nationalization by the government).

    PPI

    Producer Price Indices, see wholesale price indices.

    Premium

    In the currency markets, it is the amount of points added to the spot price to determine a forward or futures price.

    Price

    The price at which the underlying currency can be bought or sold.

    Price Transparency

    The ability of all market participants to "see" or deal at the same price.

    Principal Value

    The original amount invested by the client.

    Profit Taking

    The unwinding of a position to realize profits.

    Purchasing Power Parity

    Model of exchange rate determination stating that the price of a good in one country should equal the price of the same good in another country, after adjusting the changes in the price due to the change in exchange rate. Also known as the law of one price.

    Put Option

    A put option confers the right but not the obligation to sell currencies, instruments or futures at the option exercise price within a predetermined time period.

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    Q

    Quanto option

    Is an option in one currency, but which pays out in another. Quanto options are usually used in cases when investors are confident of the underlying asset's performance, but are not confident of the performance of the currency which the underlying is denominated in.

    Quote

    An indicative market price, normally used for information purposes only.

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    R

    Rally

    A recovery in price after a period of decline.

    Range

    The difference between the highest and lowest price of a future recorded during a given trading session.

    Rate

    The price of one currency in terms of another, typically used for dealing purposes.

    Recession

    A decline in business activity, often defined as two consecutive quarters with a real fall in GNP.

    Reserves

    Funds held against future contingencies, normally a combination of convertible foreign currency, gold, and SDRs. Official reserves are to ensure that a government can meet near term obligations. They are an asset in the balance of payments.

    Resistance

    A term used in technical analysis indicating a specific price level at which analysis concludes people will sell.

    Retail Price Index

    Measurement of the monthly change in the average level of prices at retail. Normally of a defined group of goods.

    Revaluation

    Daily calculation of potential profits or losses on open positions, based on the difference between the settlement price of the previous trading day and the current trading day.

    Risk

    Exposure to uncertain change, most often used with a negative connotation of adverse change

    Risk management

    The identification and acceptance or offsetting of the risks threatening the profitability, or existence of an organization. With respect to foreign exchange involves among others consideration of market, sovereign, country, transfer, delivery, credit, and counterparty risk

    Risks

    There are risks associated with any market. It means variance of the returns and the possibility that the actual return might not be in line with the expected returns. The risks associated with trading foreign currencies are: market, exchange, Interest rate, yield curve, volatility, liquidity, forced sale, counter party, credit, and country risk.

    Roll-Over

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

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    S

    Same day transaction

    A transaction that matures on the day the transaction takes place.

    Selling Rate

    Rate at which a bank is willing to sell foreign currency.

    Settlement

    The process by which a trade is entered into the books and records of the counterparts to a transaction. The settlement of currency trades may or may not involve the actual physical exchange of one currency for another.

    Short

    To go `short` is to have sold an instrument without actually owning it, and to hold a short position with expectations that the price will decline so it can be bought back in the future at a profit.

    Slippage

    It's the experience of not getting filled at (or even very close to…) your expected price when you place a market order or stop loss. This can happen because either: market price is simply moving too fast, the market is not liquid or you're talking to an unmotivated broker.

    Spot Price

    Is the current market price. Settlement of spot transactions usually occurs within two business days.

    Spread

    The difference between the bid and offer prices.

    Stop Loss Order

    An order to buy/sell at an agreed price. One could also have a pre-arranged stop order, whereby an open position is automatically liquidated when a specified price is reached or passed.

    Straddle

    The simultaneous purchase/sale of both call and put options for the same share, exercise/strike price and expiry date.

    Swap

    The simultaneous purchase and sale of the same amount of a given currency for two different dates, against the sale and purchase of another. A swap can be a swap against a forward. In essence, swapping is somewhat similar to borrowing one currency and lending another for the same period. However, any rate of return or cost of funds is expressed in the price differential between the two sides of the transaction.

    Swift Society for Worldwide Inter-bank Financial Telecommunication 

    A clearing system for international trading.

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    T

    T-Bill

    Treasury Bill.

    Technical Analysis

    An effort to forecast prices by analyzing market data, i.e. historical price trends and averages, volumes, open interest, etc.

    Technical Correction

    An adjustment to price not based on market sentiment, but technical factors such as volume and charting.

    Thin market

    A market in which trading volume is low and in which consequently bid and ask quotes are wide and the liquidity of the instrument traded is low.

    Tick

    A minimum change in price, up or down.

    Tomorrow Next (Tom/Next)

    Simultaneous buying and selling of a currency for delivery the following day.

    Transaction

    The buying or selling of securities resulting from the execution of an order.

    Transaction Cost

    The cost of buying or selling a financial instrument.

    Transaction Date

    The date on which a trade occurs.

    Turnover

    The total money value of all executed transactions in a given time period; volume.

    Two-Way Price

    When both a bid and offer rate is quoted for a FX transaction

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    U

    Uncovered

    Another term for an open position.

    Under-valuation

    An exchange rate is normally considered to be undervalued when it is below its purchasing power parity.

    Up tick

    A transaction executed at a price greater than the previous transaction.

    US Prime Rate

    The interest rate at which US banks will lend to their prime corporate customers.

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    V

    Value Date

    The date on which counterparts to a financial transaction agree to settle their respective obligations, i.e., exchanging payments. For spot currency transactions, the value date is normally two business days forward. Also known as maturity date

    Vanilla

    A simple option whose terms and conditions do not include any provisions other than exercise style, expiry and strike. To compare with exotic options, which have additional terms.

    Variation Margin

    Funds a broker must request from the client to have the required margin deposited. The term usually refers to additional funds that must be deposited as a result of unfavorable price movements.

    Vega

    Expresses the price change of an option for a one per cent change in the implied volatility.

    Volatility (Vol)

    A statistical measure of a market's price movements over time.

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    W

    Whipsaw

    Slang for a condition of a highly volatile market where a sharp price movement is quickly followed by a sharp reversal.

    Wholesale Money

    Money borrowed in large amounts from banks and institutions rather than from small investors. Wholesale Price IndexIt measures changes in prices in the manufacturing and distribution sector of the economy and tends to lead the consumer price index by 60 to 90 days. The index is often quoted separately for food and industrial products.

    Working day

    A day on which the banks in a currency's principal financial centre are open for business. For FX transactions, a working day only occurs if the bank in both financial center’s are open for business (all relevant currency centers in the case of a cross are open).

    World Bank

    A bank made up of members of the IMF whose aim is to assist in the development of member states by making loans where private capital is not available.

    Writer

    The seller of a position, also known as the grantor of the trade. "Writing a Currency" is to sell it.

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    Y

    Yield Curve

    The graph showing changes in yield on instruments depending on time to maturity. A system originally developed in the bond markets is now broadly applied to various financial futures. A positive sloping curve has lower interest rates at the shorter maturities and higher at the longer maturities. A negative sloping curve has higher interest rates at the shorter maturities.

    Yard

    Slang for a billion.

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    Z

    Zero Coupon Bond

    A bond that pays no interest. The bond is initially offered at a discount to its redemption value.