The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum. Watch: Inflation |||As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year. Most countries' central banks will try to sustain an inflation rate of 2-3%.
An order to purchase a security at or below a specified price. A buy limit order allows traders and investors to specify the price that they are willing to pay for a security, such as a stock. By using a buy limit order, the investor is guaranteed to pay that price or better, meaning that he or she will pay the specified price or less for the purchase of the security. While the price is guaranteed, the filling of the order is not. In other words, if the specified price is never met, the order will not be filled and the investor may miss out on the trading opportunity. A buy limit order ensures that negative slippage will not occur - the buyer will not get a worse price than he or she expects. Buy limit orders provide investors and traders with a means of precisely entering a position. For example, a buy limit order can be put in for $2.40 when a stock is trading at $2.45. If the price dips to $2.40, the order will automatically be executed.
A strategy that focuses on buying a given security once the price of the asset falls toward an important level of support. Traders who "buy a bounce" attempt to profit from a short-term correction or "bounce" off of the identified support. In order to use this strategy most effectively, a trader has to be sure that he or she is able to identify a valid level of support. Some traders may wish to enter a position before the signs of a bounce off of a support level, but generally this is a high-risk strategy and can result in devastating losses. Most traders will want to confirm a bounce off of a support level by using a combination of other technical indicators before entering a position.
A foreign exchange rate quoted as the foreign currency per unit of the domestic currency. In an indirect quote, the foreign currency is a variable amount and the domestic currency is fixed at one unit. |||For example, in the U.S., an indirect quote for the Canadian dollar would be C$1.17 = US$1. Conversely, in Canada an indirect quote for U.S. dollars would be US$0.85 = C$1.
Located in Buenos Aires, this exchange functions as the primary exchange in Argentina. Its key index is the MERVAL. Other indices include the Burcap, Bolsa General and MAR. The Buenos Aires Stock Exchange succeeded the Banco Mercantil as the primary exchange in 1854. It is a self-directed, not-for-profit civil entity. Representatives of all of the sectors of Argentina's economy sit on its board of directors
In forex trading, a currency quote that is provided by a market maker to a trading party but that is not firm. In other words, when a market maker provides an indicative quote to a trader, the market maker is not obligated to trade the given currency pair at the price or the quantity stated in the quote. Contrast this to a firm quote, in which a market maker guarantees a specified bid or ask price to a trader up to the maximum quantity specified in the quote. |||Market makers will typically provide indicative quotes if a trader requests a quote for a currency pair but does not specify the quantity to be traded, or if there is some doubt as to the market maker's ability to transact the currency pair at the bid or ask quoted. The bottom line is that traders can rely on indicative quotes as a reasonable estimate of the exchange rate at which they can enter their currency trade, but there is no guarantee that this will be the rate they get.
The interest rate relative to which margin loans are quoted. Also known as the call loan rate. This rate is published daily in The Wall Street Journal and Investor's Business Daily.
A situation where one currency cannot be exchanged for another currency because of foreign exchange regulations or physical barriers. Inconvertible currencies may be restricted from trade due to extremely high volatility or political sanctions. |||Labeling a currency as inconvertible allows regulators to protect investors from storing funds in an unsafe investment. For example, if a nation were to begin experiencing hyperinflation, where the value of a unit of currency rapidly depreciates, its currency could be deemed inconvertible. This would prevent investors from converting funds into the unstable currency.