Selling Rate

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

Settlement

Actual physical exchange of one currency for another.

Settlement Date

It means the business day specified for delivery of the currencies bought and sold under a forex contract.

Short

A market position where the client has sold a currency he does not already own. Usually expressed in base currency terms.

SITC

Standard International Trade Classification. A system for reporting trade statistics in a common manner.

SOFFEX

Swiss Options and Financial Futures Exchange, a fully automated and integrated trading and clearing system.

Soft Market

More potential sellers than buyers, which creates an environment where rapid price falls are likely.

Spot

(1) The most common foreign exchange transaction.
(2) Spot refers to the buying and selling of the currency where the settlement date is two business days forward.

Spot Next

The overnight swap from the spot date to the next business day.

Spot Price/Rate

The price at which the currency is currently trading in the spot market.

Spread

(1) The difference between the bid and ask price of a currency.
(2) The difference between the price of two related futures contracts.
(3) For options, transactions involving two or more option series on the same underlying currency.

Stable Market

An active market which can absorb large sale or purchases of currency without having any major impact on the interest rates.

Stagflation

Recession or low growth in conjunction with high inflation rates.

Standard and Poors (S&P)

A US firm engaged in assessing the financial health of borrowers. The firm also has generated certain stock indices i.e. S&&P 500.

Sterilization

Central Bank activity in the domestic money market to reduce the impact on money supply of its intervention activities in the forex market.

Sterling

British pound, otherwise known as cable.

Stop Loss Order

Order given to ensure that , should a currency weaken by a certain percentage, a short position will be covered even though this involves taking a loss. Realize profit orders are less common.

Stop Out Price

US term for the lowest accepted price for Treasury Bills at auction.

Straddle

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

Strike Price

Also called exercise price. The price at which an option holder can buy or sell the underlying instrument.

Strip

A combination of two puts and one call.

Structural Unemployment

Unemployment levels inherent in an economic structure.

Support Levels

A price level at which the buying is expected to take place.

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 is a clearing system for international trading.

Swissy

Market slang for Swiss Franc.

T-Bill

Treasury Bill..

Technical Analysis

The study of the price that reflects the supply and demand factors of a currency. Common methods are flags, trend-lines spikes, bottoms, tops, pennants, patterns and gaps.

Technical Correction

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

Terms of Trade

The ratio between export and import price indices.

Theta

A measure of the sensitivity of the price of an option to a change in its time to expiry.

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.

TIBOR

Tokyo Inter-bank Offered Rate.

Tick

A minimum change in price, up or down.

TIFFE

Tokio International Financial Futures Exchange.

Tomorrow Next (Tom next)

Simultaneous buying and selling of a currency for delivery the following day and selling for the next day or vice versa.

Trade Date

The date on which a trade occurs.

Tranche

A portion of, specifically used for borrowings from the IMF.

Transaction

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

Transaction Date

The date on which a trade occurs.

Transaction Exposure

Potential profit and loss generated by current foreign exchange transactions