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Right hand side
To do a deal on the right hand side of a two way quote, normally to buy the currency and sell dollars. See Left hand side.

Ring
An area on a trading floor where futures or equities are traded.

Risk factor
The risk factor (delta) indicates the risk of an option position relative to that of the related futures contract.

Risk management
The identification and acceptance or offsetting of the risks threatening the profitability or existence of an organisation. With respect to foreign exchange involves among others consideration of market, sovereign, country, transfer, delivery, credit, and counterparty risk.

Risk Position
An asset or liability, which is exposed to fluctuations in value through changes in exchange rates or interest rates.

Risk Premium
Additional sum payable or return to compensate a party for adopting a particular risk.

Risk reversal
A combination of purchasing put options with the sale of call options. The put limits downside, while the call limits the upside.

Rolling over
The substituting of a far option for a near option of the same underlying stock at the same strike/exercise price.

Rollover
An overnight swap, specifically the next business day against the following business day (also called Tomorrow Next, abbreviated to Tom-Next).

Rollover credit
Medium term credit with a variable interest rate, which is governed by the currently prevailing rates on the Euromarket.

Round trip
Buying and selling of a futures or options contract.

Round tripping
When a non financial company can borrow at lower than current short term rates and therefore can borrow and on lend at a profit.

RTStandard
Reuter Terminal for quote display.

Running a position
Keeping open positions in the hope of a speculative gain.





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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Same day transaction
A transaction that matures on the day the transaction takes place.

Sandwich spread
Same as a butterfly spread.

Savings ratio
The percentage of disposable income that is saved or used for debt repayment.

Scalping
A strategy of buying at the bid and selling at the offer as soon as possible.

SDR
Special Drawing Right. A standard basket of five major currencies in fixed amounts as defined by the IMF.

Seasonally Adjusted
A method of dealing with statistics to adjust for regular annual fluctuations in figures normally caused by non economic factors, e.g. school leavers' impact on unemployment, or rise in food prices in winter. The months data is divided by the percentage of the average monthly figure. As a simple arithmetic adjustment it does not deal with exceptional seasonal factors such as extreme winters.

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

Seller/grantor
Also known as the option writer.

Serial expiration
Options on the same underlying futures being contract which expire in more than one month.

Series
All options of the same class which share a common strike price and expiration date.

Settlement date
The date by which an executed order must be settled by the transference of instruments or currencies and funds between buyer and seller.

Settlement price
The official closing price for a future set by the clearing house at the end of each trading day.

Settlement Risk
Risk associated with the non settlement of the transaction by the counter party.

Short / Short Position
A shortage of assets in a particular currency. See short sale.

Short Contracts
Contracts with up to six months to delivery.

Short Covering
Buying to unwind a shortage of a particular currency or asset.

Short forward date/rate
The term short forward refers to period up to two months, although it is more commonly used with respect to maturities of less than one month.

Short sale
The sale of a currency futures not owned by the seller at the time of the trade. Short sales are usually made in expectation of a decline in the price.

Short-term interest rates
Normally the 90 day rate.

Shorts
see Short forward date/rate.

SIBOR
Singapore Inter-bank Offered Rate.

Sidelined
A major currency that is lightly traded due to major market interest being in another currency pair.

SIMEX
Singapore International Monetary Exchange.

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.

Sovereign immunity
Legal doctrine which means that the state cannot be sued or have its assets seized.

Sovereign risk
(1) Risk of default on a sovereign loan; (2) Risk of appropriation of assets held in a foreign country.

Split Date
See broken dates.

Spot
(1) The most common foreign exchange transaction. (2) Spot or Spot date refers to the spot transaction value date that requires settlement within two business days, subject to value date calculation.

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

Spot month
The contract month closest to delivery.

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

Spot week
A standard period of one week swap measured from the current value date of the currency spot rate.

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.

Square
Purchase and sales are in balance and thus the dealer has no open position.

Squawk Box
A speaker connected to a phone often used in broker trading desks.

Squeeze
Action by a central bank to reduce supply in order to increase the price of money.

Stable market
An active market which can absorb large sale or purchases of currency without major moves.

Standard
A term referring to certain normal amounts and maturities for dealing.

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

Stand by Credit
An arrangement with the IMF for draw downs on a "need " basis. The term is sometimes more generally used.

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

Sterling Index
A index based on the movement of sterling against the major currency.

Sterling
British pound, otherwise known as cable.

STIBOR
Stockholm Inter-bank Offered Rate.

Stocky
Market slang for Swedish Krona.

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.

Stagflation
Recession or low growth in conjunction with high inflation rates.

Straight
A bond with unquestioned right to repayment of principal and interest at the specified dates with no additional further rights or bonuses.

Straight date
See fixed dates.

Strap
A combination of two calls and one put.

Strike price
Also called exercise price. The price at which an options 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.

Supply side economics
The concept is that tax cuts will boost investment leading to an increase in the supply of goods in the economy. To be compared with demand led Keynesian economics.

Support levels
When an exchange rate depreciates or appreciates to a level where (1) Technical analysis techniques suggest that the currency will rebound, or not go below; (2) the monetary authorities intervene to stop any further down ward movement. See resistance point.

Swap as a percentage
Swaps expressed as an annualized percentage.

Swap margin
See forward margins.

Swap price
A price as a differential between two dates of the swap.

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

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.

Swaption
An option to enter into a swap contract.

SWIFT
Society for World-wide Interbank Telecommunications is Belgian based company that provides the global electronic network for settlement of most foreign exchange transactions.

Swissy
Market slang for Swiss Franc.

Switch
See Deposit Swap.

Synthetics
Options or futures that create a position that able to be achieved directly but is generated by a combination of options and futures in the relevant market. In foreign exchange a SAFE combines two forward contracts into a single transaction where settlement only involves the difference in values.





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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
T-Bill
see Treasury Bills.

Tagesgeld
German term for money lent until the following day and automatically repaid on the day.

Taegliches geld
automatically rolls over.

Talking up
Statements made normally by the central bank or government minister designed to bolster market sentiment with respect to the currency.

Tail
(1) In US Treasury cash auctions, refers to the differences between the average " issue price" and the "stop out price". (2) In the repo market, a dealer establishes a tail when it deliberately makes the reverse repo for longer than the repo in the hope that the interest rates will fall, lowering the cost of the remaining part of the reverse repo.