Glossary. Forex with Alpari

Cable

The exchange rate between the British pound sterling and the U.S. dollar. “Cable” can be used to refer to the British pound sterling.

Call option

An option contract that gives its holder the right to purchase a specified number of shares of the underlying stock at the given strike price, on or before the expiration date of the contract.

Cash

The value of assets that can be converted into cash immediately. Usually includes bank accounts and shares in circulation.

Cash and carry

Purchase of a security and simultaneous sale of a future, with the balance being financed with a loan or repo.

CFD

An arrangement made in a futures contract whereby differences in settlement are made through cash payments, rather than the delivery of physical goods or securities.

Chicago Board Options Exchange (CBOE)

A securities exchange created in the early 1970s for the public trading of standardized option contracts.

Chicago Mercantile Exchange (CME)

A not-for-profit corporation, which primary functions are to provide a location for trading futures and options, collect and disseminate market information, maintain a clearing mechanism and enforce trading rules.

Clearing

The system of mutual noncash securities settlement, based on recording of mutual financial requirements and obligations. A kind of countertrade.

Clearing house

An adjunct to a futures exchange, which is charged with the proper conduct of stock market trading and other operations.

Closing purchase

A transaction in which the purchaser's intention is to reduce or eliminate a short position in a stock, or in another financial instrument.

Commission

The fee paid to a broker to execute a trade.

Common shares (common stock)

Securities that represent equity ownership in a company.

Complete Transaction

Consist of two opposite trade operations with the equal volume (position opening, position closing): buying with the following selling, selling with the following buying.

Confirmation

A document confirming a trade. Contains description of a trade, short or long position.

Consumer Price Index (CPI)

The U.S. monthly index which reflects the pace of the prices of consumer goods and services. This is the main inflationary index, published by the U.S. Department of Labor.

Contango (Cgo)

A market condition in which futures prices are higher in the distant delivery months.

Convergence

The movement of the price of a futures contract toward the price of the underlying cash commodity.

Cover

The purchase of a contract to offset a previously established short position.

Cross rates

The exchange rate between two currencies expressed as the ratio of two foreign exchange rates that are both expressed in terms of a third currency.

Currency basket

A selected group of currencies used as a basis for setting the market value of another currency. Weighted average of each currency is specified with regard to the country share in the foreign trade.

Currency Intervention

Intervention of the State (the Central Bank) into the operations on the Forex by means of the foreign currency or gold buying-selling for the purpose of the national or foreign currency decreasing (raising).

Glossary

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