Glossary. Forex with Alpari

A market condition in which futures prices are lower in the distant delivery months than in the nearest delivery month.

A record of all international transactions made between one particular country and all other countries during a specified period of time. Balance of export and import money receipts.

Balance of trade

The difference between exports and imports of a country for a definite period (usually one year). A country has a trade deficit if it imports more than it exports; the opposite scenario is a trade surplus. Trade surplus and trade deficit decrease strengthen the national currency.

Base interest rate (benchmark interest rate)

The minimum interest rate investors will demand for investing in a non-Treasury security. The total level of interest rates fixed by the bank depends on its amount.

Basis

Difference between the futures contract prices and basic asset prices.

Basis point

The smallest measure used for quoting yields. Each percentage point of yield in bonds equals 100 basis points. Basis points also are used for interest rates.

Bear

A speculator, trader or investor who believes a stock or the overall market will decline.

Beneficiary

Person who receives the benefits of a trust or property priorities.

Bid

The price an investor will accept to buy a security. Bid-asked spread – the difference between the bid and the asked prices.

Big Board

A nickname for the New York Stock Exchange (NYSE).

Block house

Brokerage firm that helps to find potential buyers or sellers of large block trades

Blue-chip

Stock of a well-established and financially sound company with a history of growth and dividend payments.

Blue-sky laws

State regulations designed to protect investors against securities fraud by requiring sellers of new issues to register their offerings and provide financial details. This allows investors to base their judgments on trustworthy data. The term is said to have originated in the early 1900s when a Supreme Court justice declared his desire to protect investors from speculative ventures that had "as much value as a patch of blue sky."

Branch

An operation in a foreign country incorporated in the home country.

Break

Quick and sharp price fall.

Brettonwoods Agreement

An agreement signed by the United Nations members in 1944 that established the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (IBRD), gold-exchange standard of and the post-World War II international monetary system of fixed exchange rates.

Broker

An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor. Floor broker – an employee of a member firm who executes trades on the exchange floor on behalf of the firm's clients.

Budget deficit

The amount by which government spending exceeds government revenues.

Bull

A speculator, trader or investor who thinks the market, a specific security or an industry will rise.

Bulldog market

The foreign market in the United Kingdom.

Buy

To purchase an asset; taking a long position.

Buy on close

Buying at the end of the trading session at a price within the closing range.

Buying Power

The amount of money available to buy securities, determined by adding the total cash held in brokerage accounts and the amount that could be spent if securities were margined to the limit.

Glossary

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