Glossary

The currency listed second in a Forex currency pair.

Liability associated with cross-border transactions as a result of legal,political or other conditions.

The rate of interest on a fixed income security or the detachable portion of a bearer’s stock certificate, redeemable for dividends.

The interest rate, expressed as a percentage of the principal, stated on a fixed income security.

A trading strategy where by an investor sells call options against shares of stocks already owned.

A bearish trading strategy invollving the writing of put options while shorting an e quivalent amount of the underlying stock.

A term associated with oil futures trading named after the chemical process of cracking (heating oil distilled to produce different grades of fuel). Crack spread is a hedge trade constructed by entering long in oil futures while at the same time, shorting heating oil and gasoline futures.

Plunging market prices driven by a crisis that adversely impacts investor confidence in the markets. 

The credit terms between broker and client relating to a margin account.

Hedging one financial instrument’s risk by taking a position in a derivatives contract.