Spot/Next A currency deposit transaction or the simultaneous purchase and sale of currency,
or vice versa by means of swap for spot value day against the next working day.
Spot Price The current market price. Settlement of spot transactions usually occurs within two business days.
Spot (Rate) In FX Markets, Spot refers to the cash price without interest factored in.
Spot Trade When you trade foreign exchange you are always quoted a spot price 2 business days in advance. This is under normal conditions where there are no bank holidays in the traded currencies countries or is not over a weekend.
Spread The difference between the bid (buy) and offer (ask, sell) prices; in other words the spread is the commission that the brokerage house makes on each trade. This can vary widely between currencies and between brokerage firms. For example, USD/JPY may bid at 131.40 and ask at 131.45, this five-pip spread defines the trader’s cost, which can be recovered with a
favorable currency move in the market.
Sterling slang for British Pound.
Stop Loss Order Order type whereby an open position is automatically liquidated at a specific price. Often used to minimize exposure to losses if the market moves against an investor’s
position. As an example, if an investor is long USD at 156.27, they might wish to put in a stop loss order for 155.49, which would limit losses should the dollar depreciate, possibly below 155.49.
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