Futures and Forex Glossary Dictionary A1

 
Absolute Rate

Also called an absolute swap yield. It is expressed in percentage terms. It combines the reference rate such as LIBOR with the fixed portion of an interest - rate swap. Related Terms: Absolute Swap Yield, LIBOR

Adjustable Peg

Fixing of a country’s exchange rate in tandem with a stronger currency such as the US dollar. Example: Value of the Chinese Yuan fixed by the Chinese Central Bank in relation to the US dollar. Related Terms: Crawling Pe

Aggregate Risk

Forex contracts originating from a single customer in the portfolio of a bank’s overall forex exposure

Aggregation

Sum of all futures positions owned by a single trader or group of traders in the futures market to ensure compliance of accurate reporting on the permissible levels of speculative activity on any single commodity. Related Terms: Actual, Finance Charges

Agio

The levy of a fee when one currency is exchanged to another. “Spread” is the more popular term for agio. Related Terms: Spre

Allan Greenspan

Was the Chairman of the Federal Reserve and the Federal Open Market Committee (FOMC) from 1987 for a period of 18 years, spanning 5 consecutive terms. First appointed by President Ronald Reagan, his technical and cautious public comments were known to intrinsically influence financial markets worldwide. Related Terms: Fed Speak, Ben Bernanke

API Trading

A trading platform that denies the forex broker access to your trading strategy. Orders executed by the trader remain in the trader's computer and are transferred to the dealer for execution only when the specified market price is reached. API trading provides enhanced security to the trader.

API’

Acronym for Application Programming Interface. Automated forex trading requires certain applications of which Application Programming Interface is one such enabler.

Arbitrage

The purchase of an asset at a lower price in one market and disposing off a similar asset at a higher price in another market. Arbitrage is possible only because of inefficiencies in the market relating to pricing setups. Related Terms: Arbitrage-Free Valuation

Arbitration

The adjudication of a dispute relating to futures market by an impartial and renowned panel of people without any further recourse to appeal.

Artificial Neural Network (ANN)

A computational model that mimics the functioning of biological neural networks based on the subject of computational neuroscience. It is used to find intricate relationships and pattern between input and output data, especially in the field of artificial intelligence, statistics and cognitive psychology.

Artificial Neural Network needs high processing time and the architecture of neural network is different from the architecture of microprocessors. The advantage is ANN can perform tasks which linear programs cannot; ANN does not need reprogramming, as they learn on their own and can be implemented in any application. Related Terms: Algorithm, Neural Networks

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