A type of option product that allows an investor to set not only the conditions that need to be met in order to receive a desired payout, but also the size of the payout he or she wishes to receive if the conditions are met. The broker that provides this product will determine the likelihood that the conditions will be met and, in turn, will charge what it feels is an appropriate commission. This type of arrangement is often referred to as a "binary option" because only two types of payouts are possible for the investor: 1. The conditions set out by both parties occur, and the investor collects the agreed-upon payout amount.2. The event does not occur and the investor loses the full premium paid to the broker. |||This type of option product is often found in the forex market. For example, if a trader believes that the EUR/USD will not break below 1.20 in 14 days, he or she would pay a certain premium to a broker and then collect the agreed upon payout in 14 days if this scenario turns out to be accurate. However, if the EUR/USD does break below 1.20, the investor will lose the full amount of the premium.
Former legal tender (paper currency) issued by the U.S. government beginning in 1878. A certificate represented a stated amount of silver bullion purchased or held by an investor. These certificates were created to allow an investor to purchase silver without having to take physical possession of the investment. Certificates were deemed payable to the bearer upon demand. |||Although the U.S. stopped minting silver coins in 1806, both gold and silver coins were usable as legal tender until 1861. Today silver certificates can be redeemed for their face value in cash in the U.S. but not in actual silver.
In currencies, this is the abbreviation for the St. Helana Pound. |||The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion.
The currency abbreviation for the Saint Helena pound (SHP), the currency for Saint Helena and Ascension Island. The Saint Helena pound is made up of 100 pence and is often presented with the symbol £. Saint Helena and Ascension Island are British overseas territories. |||The Saint Helena pound was first issued in the territories in 1976, replacing the British pound (GBP) and the South African pound that came before it. Saint Helena pound banknotes are only accepted in Saint Helena and Ascension Island, and are not exchangeable in any banks in the U.K. They can only be obtained from the Bank of Saint Helena or on the RMS Saint Helena on the way to the island.
In currencies, this is the abbreviation for the Sri Lankan rupee. |||The currency market, also known as the foreign-exchange market, is the world's largest financial market, with a daily average volume of more than US$1 trillion.
An indicator that shows the difference between the bid and ask price of a security, currency or asset. The spread indicator is typically used in a chart to graphically represent the spread at a glance, and is a popular tool among forex traders. The indicator, displayed as a curve, shows the direction of the spread as it relates to the bid and ask price. Usually, highly liquid currency pairs have lower spreads. |||Spreads are calculated metrics that often requires that a trader manually determine the difference between bid and ask prices. For traders trying to capture small fluctuations in the spread, determining the spread requires handling quotes with a large number following the decimal. As a result, the spread indicator fluctuates over a very narrow range.
The purchase or sale of a foreign currency or commodity for immediate delivery. Spot trades are settled "on the spot", as opposed to at a set date in the future. Futures transactions that expire in the current month are also considered spot trades.Also known as "cash trades". |||Spot trades are the opposite of futures contracts, which usually expire well before any physical delivery. Foreign-exchange contracts are the most common kinds of spot trades. If these kinds of contracts are not settled immediately, traders would expect to be compensated for the time value of their money for the duration of the delivery. Since these contracts are settled electronically, the forex market is essentially instantaneous.
A term used in foreign-currency trading. "Spot next" denotes the delivery of purchased currency on a day after the spot date. Spot-next contracts come in many lengths, such as spot one week, which implies delivery of the currency one week following the trade date. |||The price for spot-next deliveries is adjusted for the extra time period. For example, a currency that is bought on Tuesday will settle on Friday; therefore, the price of the trade is determined on Friday.