Forex Glossary of Terms N to O
US term for five basis points.
A foreign currency current account maintained with another bank. The account is used to receive and pay currency assets and liabilities denominated in the currency of the country in which the bank is resident.
Not Held Basis Order
An order whereby the price may trade through or better than the client’s desired level, but the principal is not held responsible if the order is not executed.
A financial instrument consisting of a promise to pay rather than an order to pay or a certificate of indebtedness.
The rate at which a dealer is willing to sell the base currency.
Official Settlements Account
A US balance of payments measure based on movement of dollars in foreign official holdings and US reserves. Also referred to as reserve transaction account.
The operations of a financial institution which although physically located in a country, has little connection with that country’s financial systems. In certain countries a bank is not permitted to do business in the domestic market but only with other foreign banks. This is known as an off shore banking unit.
Old lady of Threadneedle Street, a term for the Bank of England.
One Cancels Other Order
Where the execution of one order automatically cancels a previous order also referred to as OCO or ‘One cancels the other’.
Open Market Operations
The central bank operations in the markets to influence exchange and interest rates.
Any deal which has not been settled by physical payment or reversed by an equal and opposite deal for the same value date. It can be termed as a high risk, high return proposition.
A contract conferring the right but not the obligation to buy (call) or to sell (put) a specified amount of an instrument at a specified price within a predetermined time period.
All options of the same type – calls or puts -listed on the same underlying instrument.
All options of the same class having the same exercise/strike price and expiration date.
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.
A forward deal that is not part of a swap operation.
Foreign exchange transaction involving either the purchase or the sale of a currency for settlement at a future date.
The forward rate of a foreign exchange deal based on spot price plus forward discount/premium.
Over The Counter (OTC)
A market conducted directly between dealers and principals via a telephone and computer network rather than a regulated exchange trading floor. These markets have not been very popular because of the risks both the parties face in case the other party fails to honour the contract. They were never part of the Stock Exchange since they were seen as “unofficial”.
Is an economy on a high growth rate trajectory placing pressure on the production capacity resulting in increased inflationary pressures and higher interest rates.
Net long or short position in one or more currencies that a dealer can carry over into the next dealing day. Passing the book to other bank dealing rooms in the next trading time zone reduces the need for dealers to maintain these unmonitored exposures.
Forex Glossary of Terms U to Z
Under-Valuation An exchange rate is normally considered to be undervalued when it is below itsRead More
Forex Glossary of Terms S to T
Selling Rate Rate at which a bank is willing to sell foreign currency. Settlement ActualRead More