International Commodities Clearing House Limited, a
clearing house based in London operating worldwide for
many futures markets.
IFEMA International Foreign Exchange Master Agreement.
International Monetary Fund, established in 1946 to provide
international liquidity on a short and medium term, and to
encourage liberalization of exchange rates. The IMF helps
its members to tide over the balance of payments problems
by supplying the necessary loans.
International Monetary Market, part of the Chicago
Mercantile Exchange that lists a number of currency and
Implied Rates The interest rate determined by calculating the difference
between spot and forward rates.
A measurement of the market's expected price range of the
underlying currency futures based on the traded option
Implied Volatility Skews The implied volatility variances for different strikes of an
In the Money
A call option is in the money when the strike price is less
than the current price of the underlying instrument. A put is
when the strike price is greater.
Currency which cannot be exchanged for other currencies
either because it is forbidden by the foreign exchange
regulations or the currency experiences extreme volatility
that it is not perceived to be a safe haven for parking the
Indicative Quote A market-maker's price which is not firm.
Indirect quote See reciprocal currency.
A coincident indicator measuring physical output of
manufacturing, mining and utilities.
Continued rise in the general price level in conjunction with
a related drop in purchasing power. Sometimes referred to
as an excessive movement in such price levels.
Info Quote Rate given for information purposes only.
The deposit required by the Broker before a client can
trade/transact a particular deal in order to have some
cushion in the event of default by the party.
The Forex rates large international banks quote to other
large international banks. Normally the public and other
businesses do not have access to these rates.
Interest Rate Floor An agreement which provides the buyer of the floor with a
minimum interest rate for future lending requirements.
Interest Rate Options An agreement permitting a party to obtain a particular
interest rate, issued both OTC and by exchanges.
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Interest Rate Risk The potential for losses arising from changes in interest
Interest Rate Swaps
An agreement to exchange interest rate exposures from
floating to fixed or vice versa. There is no swap of the
principal. The principal amount is notional as at the end of
the tenure only cash flows related with the interest
payments (whether payment or receipt) are exchanged.
Action by a central bank to affect the value of its currency
by entering the market. In India the intervention by Reserve
Bank of India is confined to the events of extreme volatility.
A call option is in-the-money if the price of the underlying
instrument is higher than the exercise/strike price. A put
option is in-the-money if the price of the underlying
instrument is below the exercise/strike price.
Intra Day Limit Limit set by bank management on the size of each dealer's
Intra Day Position.
Intra Day Position Open positions run by a dealer within the day. Usually
squared by the close.
The amount by which an option is "in-the-money". The
intrinsic value is the difference between the exercise/strike
price and the price of the underlying security.
IOM Index and Options Market part of the Chicago Mercantile
Industrial Production Index. A coincident indicator
measuring physical output of manufacturing, mining and
Organization that foreign currency exchange banks have
formed to regulate inter-bank markets and exchanges.
A term describing the expected effect of devaluation on a
country's trade balance. It is expected that import bills will
rise before export orders and receipts increase.
Small countries, which are highly dependent on exports,
orient their currencies to their major trading partners, the
constituents of a currency basket.
Kiwi Slang for the New Zealand dollar.
Knock In A process where a barrier option (European) becomes active
as the underlying spot price is in-the-money.
Knock Out Has a corresponding meaning to "Knock In" (see above),
although the option may permanently cease to exist.
Last Trading Day The day on which trading ceases for an expiring contract.
Lay Off To carry out a transaction in the market to offset a previous
transaction and return to a square position.
LDC Less developed countries, often used with respect to a
secondary debt market.
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Statistics that are considered to precede changes in
economic growth rates and total business activity, e.g.
Leads and Lags
The effect on foreign trade payments of an anticipated
move in the exchange rate, normally devaluation. The
importers speed up the payment for the imports, and
exporters delay receiving payment for the exports.
In options terminology, this expresses the disproportionately
large change in the premium in terms of the relative price
movement of the underlying instrument.
In terms of foreign exchange: the obligation to deliver to
counterparty an amount of currency, either in regards to a
balance sheet holding at a specified future date, or in
regards to an un-matured forward or spot transaction.
LIBID The London Interbank Bid Rate. The rate charged by one
bank to another for a deposit.
LIBOR The London Interbank Offered Rate, the rate charged by
one bank to another for lending money.
LIBOR (London Interbank
British Bankers' Association average of interbank offered
rates for dollar deposits in the London market based on
quotations at 16 major banks. Effective rate for contracts
entered into two days from date appearing.
LIFFE London International Financial Futures Exchange.
(1)The maximum price fluctuation permitted by an
exchange from the previous session's settlement price for a
given contract. (2) In international banking the limit a bank
is willing to lend in a country. (3) The amount that one bank
is prepared to trade with another. (4) The amount that a
dealer is permitted to trade in a given currency.
Limit Down The maximum price decline from the previous trading day's
settlement price permitted in one trading session.
Limit Order An order to buy or sell a specified amount of a security at a
specified price or better.
Limit Order - Reserved
Day Trading Deal
An order to perform a Day-Trading deal at a rate predefined
by the customer, when and if such rate comes up in
real market time. The Limit rate is superior to the existing
rate at the time of reservation. The reservation order lasts
for a period defined by the customer, and is associated by
the necessary collaterals to facilitate the potential
Day Trading deal when, and if, activated under the predefined
Limit Up The maximum price advance from the previous trading day's
settlement price permitted in one trading session.
When residents of a country are prohibited from buying
other currencies even though non-residents may be
completely free to buy or sell the national currency, and
foreign institutional investors have the liberty to buy and
sell shares on the stock exchange of that country.
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An arrangement by which a bank agrees to lend to the line
holder during some specified period any amount up to the
full amount of the line.
Liquidation Any transaction that offsets or closes out a previously
Liquidity The ability of a market to accept large transactions without
having any major impact on interest rates.
One of the key commercial interest rates, normally
referring to Germany although such rates exist in France,
Belgium, and Switzerland. An interest rate for a loan
against the security of pledged paper.
Long A market position where the Client has bought a currency
not previously owned. For example: long Dollars.
The purchase of futures contracts for price protection
purposes, as a defensive position against an increase in cash
prices or falling interest rates.