EURO.uz -The Forex quick guide for beginners and private traders

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The Forex quick guide for beginners and private traders


Easing Modest decline in price.

Economic Exposure

Reflects the impact of foreign exchange changes on the

future competitive position of a company in the sense of

the impact it can have on the future cash flows of the

company.

Economic Indicator A statistic which indicates current economic growth rates

and trends such as retail sales and employment.

ECU - European Currency

Unit

A basket of the member currencies. As a composite unit,

the ECU consists of all the European Community currencies,

which are individually weighted. It was created by the

European Monetary System with the eventual goal of

replacing the individual European member currencies.

Effective Exchange Rate An attempt to summarize the effects on a country's trade

balance of its currency's changes against other currencies.

EFT Electronic Funds Transfer.

Either Way Market In the Euro Interbank deposit market where both bid and

offer rates for a particular period are the same.

EMS European Monetary System.

EMU European Monetary Union.

End/End

Indicates that both the spot and forward maturity, or two

forward maturities in a swap transaction, fall due on the

last business day of appropriate calendar months.

EOE European Options Exchange.

Epsilon

The change in the price of an option associated with a 1%

change in implied volatility (technically the first derivative

of the option price with respect to volatility). Also referred

to as eta, vega, omega and kappa.

ERM Exchange Rate Mechanism.

page 85 of 110

Value Definition

Euro Clear A computerized settlement and depository system for safe

custody, delivery of, and payment for Eurobonds.

Eurobonds

A long-term loan issued in a currency other than that of the

country or market in which it is issued. Interest is paid

without the deduction of tax.

Eurocurrency A currency domiciled outside its country of origin normally

held by non-residents.

Eurodollars US dollars deposited in a bank (US or non US) located

outside the USA.

Eurofranc

Swiss Franc (formerly also Belgian Francs) traded on the

Eurocurrency market. Normally Swiss Francs are the more

common currency.

Euromark Deutschmarks traded on the Eurocurrency market.

European Option An option that can be exercised only on its expiration date

rather than before that date.

European Union The group formerly known as the European Community.

Exchange Control

A system of controlling inflows and outflows of foreign

exchange. Exchange Control devices include licensing

multiple currencies, quotas, auctions, limits, levies and

surcharges.

Exchange Rate Risk The potential loss that could be incurred from an adverse

movement in exchange rates.

Exercise Limit A limit on the number of options contracts a holder may

exercise within a specific period.

Exercise Notice

The formal notification that the holder of a call (or put)

option wishes to buy (or sell) the underlying security at the

exercise price.

Exercise Price See Strike price.

Exercise Value

For a call option, this is the amount by which the strike

price is below the underlying investment; for a put option,

it is the amount by which the strike price is above the

underlying investment.

Exotic A less broadly traded currency.

Expiration Date

(1) Options - the last date after which the option can no

longer be exercised. (2) Bonds - the date on which a bond

matures.

Expiration Month The month in which an option expires.

Expiry Date The last day on which the holder of an option can exercise

his right to buy or sell the underlying security.

Expiry Date The last date on which an option can be bought or sold.

Exposure

The total amount of money loaned to a borrower or

country. Banks set rules to prevent overexposure to any

single borrower. In trading operations, it is the potential for

running a profit or loss from fluctuations in market prices.

 

 

 

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