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Financial Glossary

SAME DAY TRANSACTION

A transaction that matures on the day the transaction takes place

SCALPING

A strategy of buying at the bid and selling at the offer as soon as possible

SDR

Special Drawing Right; an artificial currency unit based upon several national currencies. SDR serves as the official monetary unit of the IMF, and acts as a supplemental reserve for national banking systems

SECONDARY MARKET

The market in which securities are traded after they are initially offered in the primary market

SELLING RATE

Rate that a bank is willing to sell foreign currency

SERIES

All options of the same class which share a common strike price and expiration date

SETTLEMENT DATE

The date by which an executed transaction must be settled; in currencies it is 2 days while stocks is 3 days

SETTLEMENT PRICE

The official closing price for a future set by the clearing house at the end of each trading day

SETTLEMENT RISK

Risk associated with the non-settlement of the transaction by the counter party

SHARES

Certificates or book entries representing ownership in a corporation or similar entity

SHORT POSITION

An investor who has sold a currency or an instrument without having covered it

SHORT COVERING

Buying to unwind a short position

SHORT-TERM INTEREST RATES

Normally the 90 day rate

SLIPPAGE

The difference between estimated transactions costs and actual transactions costs. The difference usually represents revisions to price difference or spread and commission costs

SOFFEX

Swiss Options and Financial Futures Exchange, a fully automated and integrated trading and clearing system

SPOT

Refers to a transaction for immediate delivery; spot currency transactions have a value date of 2 business days

SPOT NEXT

The overnight swap from the spot date to the next business day

SPOT MONTH

The contract month closest to delivery

SPOT PRICE

The price that a currency is currently trading in the spot market

SPOT WEEK

A standard period of one week swap measured from the current value date of the currency spot rate

SPREAD

The difference between the bid and ask price of a currency; the difference between the price of two related futures contracts

SQUARE

The buy and sell positions are in balance; no open positions

SQUAWK BOX )

A speaker connected to a phone often used in broker trading desks

SQUEEZEدشواري

A period of tight monetary policy, when interest rates are high and borrowing is difficult

STANDARD

A term referring to certain normal amounts and maturities for dealing

STANDARD AND POORS

A US firm engaged in assessing the financial health of borrowers. The firm also has generated certain stock indices i.e. S & P 500

STERILIZATION

Central Bank activity in the domestic money market to reduce the impact on money supply of its intervention activities in the FX market

STERLING

British pound, otherwise known as Cable

STOP LOSS ORDER

A market order to buy or sell a certain quantity of a certain currency or security if a specified price (the stop price) is touched

STRADDLE

The simultaneous purchase/sale of both call and put options for the same currency, exercise/strike price and expiry date

STAGFLATION

Recession or low growth in conjunction with high inflation rates

STRAP

A combination of two calls and one put

STRIKE PRICE

The price at which an options holder can buy or sell the underlying instrument; the exercise price

STRIP

A combination of two puts and one call

SUPPORT LEVELS

When an exchange rate depreciates or appreciates to a level where technical analysis techniques suggest that the currency will rebound or not go below

SWAP PRICE

A price as a differential between two dates of the swap

SWAP

An exchange of streams of payments over time according to specified terms

SWAPTION

An option to enter into a swap contract

SWIFT

Society for World-wide Interbank Telecommunications is a Belgian based company that provides the global electronic network for settlement of most foreign exchange transactions

SWISSY

Market slang for Swiss Franc

SYNTHETICS

The artificial creation of an asset using combinations of other assets; In options, a long call option and a short put option amounts to a synthetic long, or a long put option and a short call option amounts to a synthetic short

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