Financial markets – Vocabulary and Phrases
FX/forex – the abbreviation used for foreign exchange rates or markets
The FX market exists wherever one currency is traded for another.
interbank – the FX markets between banks
spot market – the FX market for transactions settled on that day for the retail market, and within three days for the wholesale market
The spot market is a real-time commodity market for instant sale and delivery of energy.
futures market – the FX market for agreed currency exchanges which will take place in the future
Although many traders know how to use volume in their technical analysis of stocks, interpreting volume in the context of the futures market may require more understanding: considerably less research has been conducted on the volume of futures than that of stocks.
speculator – a person who is engaged in commercial or financial speculation.
He's been a commodities speculator all his life.
dealer – a person who buys and sells articles without altering their condition; trader or merchant, esp. a wholesaler
I got a dealer's discount on this coat.
broker – an agent who buys or sells for a principal on a commission basis without having title to the property.
trader – a person who trades; a merchant or businessperson.
stock exchange – a building or place where stocks and other securities are bought and sold.
stock market – a stock market is a market for the trading of company stock, and derivatives of same; both of these are securities listed on a stock exchange as well as those only traded privately.
commercial paper – corporate promissory notes, usually short-term and unsecured, sold in the open market.
The daily commercial paper release will usually be available before 11:00am EST.
bond – a certificate of ownership of a specified portion of a debt due to be paid by a government or corporation to an individual holder and usually bearing a fixed rate of interest.
Deficit-laden governments across the world use bonds as a way to finance their operations.
commodity – an article of trade or commerce, esp. a product as distinguished from a service.
securities – a security is a fungible, negotiable instrument representing financial value.
Issuers of securities include commercial companies, government agencies, local authorities and international and supranational organizations (such as the World Bank).
index/indexes or indices – A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is an imaginary portfolio of securities representing a particular market or a portion of it. Each index has its own calculation methodology and is usually expressed in terms of a change from a base value.
bull market – A financial market of a certain group of securities in which prices are rising or are expected to rise. The term "bull market" is most often used in respect to the stock market, but really can be applied to anything that is traded, such as bonds, currencies, commodities, etc.
bear market – A prolonged period in which investment prices fall, accompanied by widespread pessimism.
The use of "bull" and "bear" to describe markets comes from the way in which each animal attacks its opponents. That is, a bull thrusts its horns up into the air, and a bear swipes its paws down. These actions are metaphors for the movement of a market: if the trend is up, it is considered a bull market. And if the trend is down, it is considered a bear market.
stock market collapse – very serious drop in the value of shares on the market, with serious economic consequences
share – a unit of account for various financial instruments including stocks, mutual funds, limited partnerships,
derivatives – financial instruments which have value because they are based on another financial instrument, which is called the prime instrument
The derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset.
exposure – the level of financial risk a company faces
The key question for investors is: What is Yahoo's financial exposure to Adware and Spyware?
risk management – the positive management of risk
Have you read Risk Management Guide to IT Systems?
volatility – the unpredictability or changeability of a situation
Volatility is typically expressed in annualized terms, and it may either be an absolute number ($5) or a fraction of the initial value (5%).
credit risk – the risk that a person or company will not pay back a loan or debt
Ford's credit program ranks customers on a scale from level one, the best credit risk, to level four, the worst credit risk.
FX/foreign exchange risk – the possibility of making a loss on a sale, deal etc because of changes in the value of one currency in relation to another
Most exporters would like to avoid exchange risk by invoicing in their own currency.
country risk – the risk that a foreign government will not pay back a loan or keep a promise to enter into a business deal
market risk – the risk of investing in a specific type of investment such as shares, bonds etc.
These shares have low systematic risks and are expected to earn a return of 10%.
to take a risk – to accept risk and take action
The quicker the profit you wish to make, the greater the risk you need to take.
to play safe – not to risk
She played safe and agreed on a fixed rate of interest
swap sth for sth – an exchange of one investment for another
Investors have doubled their money after swapping the bonds for a package of cash and shares.
currency swap – an exchange of the interest payments when two lenders have made loans in different currencies with the same interest rate. This happens so that each lender receives the interest in the currency of the other loan
interest-rate swaps, currency swaps and other instruments known as derivatives that allow corporate clients to protect themselves against financial risks
to fall against – to decrease comparing to
The dollar has fallen against the yen today.
to strengthen against – to increase comparing to
The British pound has strengthened against the yen during today's trading.
at the close of trading – the end of transactions
At the close of trading today the Euro was worth less than it was at yesterday's close.