Thursday, December 4, 2008
== T of Forex Dictionary ==
T-Bill
see Treasury Bill.
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.
Tan Book
An economic report prepared by the Federal Reserve for FOMC meetings.
Tap
UK term for a supply of Government stock available for sale through the Government broker at a stated price.
Tau
Expresses the price change of a option for a percentage change in the implied volatility.
Technical Analysis
Is concerned with past price and volume trends- often with the help of chart analysis- in a market, in order to be able to make forecasts about future price developments of the commodity being traded.
Technical Correction
An adjustment to price not based on market sentiment but technical factors such as volume and charting.
Temporal Accounting
Method of determining accounting exposure which translates all balance sheet items at the current rate of exchange, not the one at the time the cost was incurred.
Tender
(1) a formal offer to supply or purchase goods or services. (2) In the UK the term for the weekly Treasury Bill issue.
Tenor
Maturity or number of days to maturity normally on bills of exchange.
Terme
French for period.
Terme sec
French for outright in forward foreign exchange transaction.
Termingeld
German term for money market operations of over one month.
Theory of elasticities
A model of exchange rate determination stating that the exchange rate is simply the price of foreign exchange that maintains the BOP in equilibrium. The degree to which the exchange rate responds to a change in the trade balance depends entirely on the elasticity of demand to a change in price.
Terms of Trade
The ratio between export and import price indices.
Theta
A measure of the sensitivity of the price of an option to a change in its time to expiry.
Thin market
A market in which trading volume is low and in which consequently bid and ask quotes are wide and the liquidity of the instrument traded is low.
Threshold of divergence
A safety feature for the EMS that creates an emergency exit for currencies that become the singular focus of various adverse forces. The threshold of divergence indicates when the specific country with the pressured currency should take additional steps other than simple central bank intervention in the foreign exchange markets.
Thursday/Friday Dollars
A US foreign exchange technicality. If a foreign bank buys dollars on Tuesday for Thursday delivery. If the bank leaves the funds overnight and transfers them on Friday by means of a clearing house cheque then clearance is not until Monday, the next working day. Higher interest rates for this period are thus available.
TIBOR
Tokyo Inter-bank Offered Rate.
Tick
A minimum change in price, up or down.
Ticket
See Deal Slip.
Tier One
A measure of a banks financial strength used by the BIS being the shareholders' equity available to cover actual or potential irredeemable and non-cumulative preference shares. It excludes hybrid forms of capital such as fixed term stock, goodwill, and revaluation reserves. BIS has a minimum requirement of 4% on risk weighted assets.
Tight Money
A condition where there is a shortage of credit as a result of monetary policy restricting the supply of credit normally through raising interest rates.
TIFFE
Tokio International Financial Futures Exchange.
Time decay
The decline in the time value of an option as the expiry approaches.
Time deposit
Interest bearing deposits at a savings institution that has a specific maturity.
Time value
That part of an option premium which reflects the length of time remaining in the option prior to expiration. The longer the time remaining until expiration, the higher the time value.
Today/Tomorrow
Simultaneous buying of a currency for delivery the following day and selling for the spot day, or vice versa. Also referred to as overnight.
Tombstone
Colloquial term for announcement in a publication that a loan or bond has been arranged.
Tomorrow next (Tom next)
Simultaneous buying of a currency for delivery the following day and selling for the spot day or vice versa.
Trade date
The date on which a trade occurs.
Trade deficit/Surplus
The difference between the value of imports and exports. Often only reported in visible trade terms.
Trade weighted
Exchange rate The changes in the exchange rate against a trade weighted basket including the currencies of the county's principal trading partners.
Traded options
Transferable options with the right to buy and sell a standardized amount of a currency at a fixed price within a specified period.
Tradeable amount
Smallest transaction size acceptable.
Trade Ticket
See deal ticket.
Transaction date
The date on which a trade occurs.
Tranche
A portion. Specifically used for borrowings from the IMF.
Transaction
The buying or selling of securities resulting from the execution of an order.
Transaction exposure
Potential profit and loss generated by current foreign exchange transactions.
Translation exposure
The risk of change of the consolidated corporate earnings as a result of past volatility in the base currency.
Translation loss / profit
The calculation of loss or profit resulting from the valuation of foreign assets and liabilities for balance sheet purposes, when consolidating into the base currency.
Treasury bills
Short-term obligations of a Government issued for periods of one year or less. Treasury bills do not carry a rate of interest and are issued at a discount on the par value. Treasury bills are repaid at par on the due date. In the UK they are normally for 91 days, and are offered at weekly tenders. In the US they are auctioned.
Treasury bonds
Government obligations with maturities of ten years or more.
Treasury notes
Government obligations with maturities more than one year but less than ten years.
Treasury stock
Previously issued stock that has been repurchased by, or donated to, or otherwise are acquired by the issuing firm. Treasury stocks pay no dividends and have no voting privileges.
Treaty of Rome
Founding treaty of the EU, most recently modified by the Maastricht Treaty. Troc, troquer French FX term for swap.
Turnover
The total money value of currency contracts traded is calculated by multiplying size by the number of contracts traded.
Two Tier market
A dual exchange rate system where normally only one rate is open to market pressure, e.g. South Africa. Two- Way quotation When a dealer quotes both buying and selling rates for foreign exchange transactions.
see Treasury Bill.
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.
Tan Book
An economic report prepared by the Federal Reserve for FOMC meetings.
Tap
UK term for a supply of Government stock available for sale through the Government broker at a stated price.
Tau
Expresses the price change of a option for a percentage change in the implied volatility.
Technical Analysis
Is concerned with past price and volume trends- often with the help of chart analysis- in a market, in order to be able to make forecasts about future price developments of the commodity being traded.
Technical Correction
An adjustment to price not based on market sentiment but technical factors such as volume and charting.
Temporal Accounting
Method of determining accounting exposure which translates all balance sheet items at the current rate of exchange, not the one at the time the cost was incurred.
Tender
(1) a formal offer to supply or purchase goods or services. (2) In the UK the term for the weekly Treasury Bill issue.
Tenor
Maturity or number of days to maturity normally on bills of exchange.
Terme
French for period.
Terme sec
French for outright in forward foreign exchange transaction.
Termingeld
German term for money market operations of over one month.
Theory of elasticities
A model of exchange rate determination stating that the exchange rate is simply the price of foreign exchange that maintains the BOP in equilibrium. The degree to which the exchange rate responds to a change in the trade balance depends entirely on the elasticity of demand to a change in price.
Terms of Trade
The ratio between export and import price indices.
Theta
A measure of the sensitivity of the price of an option to a change in its time to expiry.
Thin market
A market in which trading volume is low and in which consequently bid and ask quotes are wide and the liquidity of the instrument traded is low.
Threshold of divergence
A safety feature for the EMS that creates an emergency exit for currencies that become the singular focus of various adverse forces. The threshold of divergence indicates when the specific country with the pressured currency should take additional steps other than simple central bank intervention in the foreign exchange markets.
Thursday/Friday Dollars
A US foreign exchange technicality. If a foreign bank buys dollars on Tuesday for Thursday delivery. If the bank leaves the funds overnight and transfers them on Friday by means of a clearing house cheque then clearance is not until Monday, the next working day. Higher interest rates for this period are thus available.
TIBOR
Tokyo Inter-bank Offered Rate.
Tick
A minimum change in price, up or down.
Ticket
See Deal Slip.
Tier One
A measure of a banks financial strength used by the BIS being the shareholders' equity available to cover actual or potential irredeemable and non-cumulative preference shares. It excludes hybrid forms of capital such as fixed term stock, goodwill, and revaluation reserves. BIS has a minimum requirement of 4% on risk weighted assets.
Tight Money
A condition where there is a shortage of credit as a result of monetary policy restricting the supply of credit normally through raising interest rates.
TIFFE
Tokio International Financial Futures Exchange.
Time decay
The decline in the time value of an option as the expiry approaches.
Time deposit
Interest bearing deposits at a savings institution that has a specific maturity.
Time value
That part of an option premium which reflects the length of time remaining in the option prior to expiration. The longer the time remaining until expiration, the higher the time value.
Today/Tomorrow
Simultaneous buying of a currency for delivery the following day and selling for the spot day, or vice versa. Also referred to as overnight.
Tombstone
Colloquial term for announcement in a publication that a loan or bond has been arranged.
Tomorrow next (Tom next)
Simultaneous buying of a currency for delivery the following day and selling for the spot day or vice versa.
Trade date
The date on which a trade occurs.
Trade deficit/Surplus
The difference between the value of imports and exports. Often only reported in visible trade terms.
Trade weighted
Exchange rate The changes in the exchange rate against a trade weighted basket including the currencies of the county's principal trading partners.
Traded options
Transferable options with the right to buy and sell a standardized amount of a currency at a fixed price within a specified period.
Tradeable amount
Smallest transaction size acceptable.
Trade Ticket
See deal ticket.
Transaction date
The date on which a trade occurs.
Tranche
A portion. Specifically used for borrowings from the IMF.
Transaction
The buying or selling of securities resulting from the execution of an order.
Transaction exposure
Potential profit and loss generated by current foreign exchange transactions.
Translation exposure
The risk of change of the consolidated corporate earnings as a result of past volatility in the base currency.
Translation loss / profit
The calculation of loss or profit resulting from the valuation of foreign assets and liabilities for balance sheet purposes, when consolidating into the base currency.
Treasury bills
Short-term obligations of a Government issued for periods of one year or less. Treasury bills do not carry a rate of interest and are issued at a discount on the par value. Treasury bills are repaid at par on the due date. In the UK they are normally for 91 days, and are offered at weekly tenders. In the US they are auctioned.
Treasury bonds
Government obligations with maturities of ten years or more.
Treasury notes
Government obligations with maturities more than one year but less than ten years.
Treasury stock
Previously issued stock that has been repurchased by, or donated to, or otherwise are acquired by the issuing firm. Treasury stocks pay no dividends and have no voting privileges.
Treaty of Rome
Founding treaty of the EU, most recently modified by the Maastricht Treaty. Troc, troquer French FX term for swap.
Turnover
The total money value of currency contracts traded is calculated by multiplying size by the number of contracts traded.
Two Tier market
A dual exchange rate system where normally only one rate is open to market pressure, e.g. South Africa. Two- Way quotation When a dealer quotes both buying and selling rates for foreign exchange transactions.
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