Monday, November 2, 2009

Forex Terms (P)

Parity - (1) Foreign exchange dealer's slang for your price is the correct market price. (2) Official rates in terms of SDR or other pegging currency.

Parities - The value of one currency in terms of another.
Pegged - A system where a currency moves in line with another currency, some pegs are strict while others have bands of movement.

Pip - One unit of price change in the bid/ask price of a currency. For most currencies, it denotes the fourth decimal place in an exchange rate and represents 1/100 of one percent (.01%).

Pivot Levels - A pivot point level of a trading day is the point at which the market direction changes for the day. Many technical analysts attempt to predetermine a trading day’s pivot point as a high-probability time to trade. Foresight-A.I.’s™ forecast may show possible pivot points in a given trading day.

Position - The netted total commitments in a given currency. A position can be either flat or square (no exposure), long, (more currency bought than sold), or short ( more currency sold than bought).

Political Risk - Exposure to changes in governmental policy which will have an adverse effect on an investor’s position.

Pricing Indicator - A technical analysis tool that helps determine the prices at which a selected market may move or reverse. Pricing indicators do no indicate timing.

Price Transparency - Describes quotes to which every market participant has equal access.

Profit Taking - The unwinding of a position to realize profits.

Point & Figure charts - The Point & Figure Chart disregards Time and focuses entirely on price activity.

Premium - In the currency markets, describes the amount by which the forward or futures price exceed the spot price.


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