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Glossary of Forex (Foreign Exchange) Terminology  O – Q

 

O

 

Offer – The rate at which a dealer is willing to sell a currency.

 

Offsetting transaction – A trade with which serves to cancel or offset some or all of the market risk of an open position.

 

One Cancels the Other Order (OCO) – A designation for two orders whereby one part of the two orders is executed the other is automatically cancelled.

 

Open order – An order that will be executed when a market moves to its designated price. Normally associated with Good ‘til Cancelled Orders.

 

Open position – A deal not yet reversed or settled with a physical payment.

 

Over the Counter (OTC) – Used to describe any transaction that is not conducted over an exchange.

 

Overnight – A trade that remains open until the next business day.

 

P

 

Pips – Digits added to or subtracted from the fourth decimal place, i.e. 0.0001. Also c a lled Points.

 

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

 

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

 

Position – The netted total holdings of a given currency.

 

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

 

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

 

Q

 

Quote – An indicative market price, normally used for information purposes only.

 

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