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Term Definition: # | A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

 

Cable Dealers' slang for the sterling/US dollar exchange rate.
Cable Transfer Telegraphic transfer of funds from one centre to another. Now synonomous with inter bank electronic fund transfer.
Calendar spread An option position comprised of purchase and sale of two option contracts of the same type with different expiration dates at the same exercise price.
Call (1) An option that gives the holder the right to buy the underlying instrument at a specified price during a fixed period.  (2) A period of trading. (3) The right of an bond issuer to pre pay debt and demand the surrender of its bonds.
Call Dates Dates when a call option may be exerciseable.
Call Money Money lent that is repayable on demand.
Call money Overnight (GBP) or Federal funds (USD) currency lent by banks on a very short term basis which can be called the same day, at one days notice or at two days notice.
Call option A call option confers the right but not the obligation to buy stock, shares or futures at a specified price
 
Call Rate The overnight interbank interest rate.
Callable bond A bond that provides the borrower with an option to redeem the issue before the original maturity date. Usually, certain terms are set before the issue, such as the date after which the bond is callable and the price at which the issuer may retire the bond. The holder of the bond is usually paid a premium for early termination of the investment.
Cambiste French term for foreign exchange dealer.
Candlestick Chart A chart that indicates the trading range for the day as well as the opening and closing price. If the open price is higher than the close price, the rectangle between the open and close price is shaded. If the close price is higher than the open price, that area of the chart is not shaded.
Cap An agreement with a counterparty that sets an upper limit to interest rates for the cap buyer for a stated time.
Capital Account Just a position of the long and short term capital imports and exports of a country.
Capital Adequacy Standards set by BIS for banks.
Capital market The market for medium and long term securities.
Capital Movements Short and long term claims and liabilities, which are entered into vis a vis foreign countries, e.g. repayment of foreign debt, direct investments, portfolio investments, purchase of private real estate.
Capital Risk The risk arising from a bank having to pay to the counter party with out knowing whether the other party will or is able to meet its side of the bargain. see Herstatt.
Carry The interest cost of financing securities or other financial instruments held.
Carry The interest cost of financing securities or other financial instruments held.
Cash Normally refers to an exchange transaction contracted for settlement on the day the deal is struck. This term is mainly used in the North American markets and those countries which rely for foreign exchange services on these markets because of time zone preference, i.e. Latin America. In Europe and Asia, cash transactions are often referred to as value same-day deals. 
Cash Normally refers to an exchange transaction contracted for settlement on the day the deal is struck. This term is mainly used in the North American markets and those countries which rely for foreign exchange services on these markets because of time zone preference i.e. Latin America. In Europe and Asia, cash transactions are often referred to as value same day deals.
Cash and Carry The buying of an asset today and the selling of a future contract on the asset. A reverse cash and carry is possible by selling an asset and buying a future. 
Cash Delivery Same day settlement.
Cash Delivery The market in the actual financial instrument on which a futures or options contract is based.
Cash Market The market for the purchase and sale of physical currencies.
Cash Option An option written on an underlying cash instrument rather than a futures contract.
Cash Settled The closing out of currency contracts with the exchange of cash based upon the difference in the value of when the position was opened and the value of when it is closed, rather than the delivery of currency.
Cash Settlement A procedure for settling futures contract where the cash difference between the future and the market price is paid instead of physical delivery.
CBOE Chicago Board Options Exchange
CBOT or CBT Chicago Board of Trade
CD Certificate of Deposit.
CEDEL A computerised system for safe custody, delivery and settlement for Eurobonds and related securities. Also the name of an instrument coding system.
Central Bank A government or quasi-governmental organization that manages a countryís monetary policy. The US central bank is the Federal Reserve, and the German central bank is the Bundesbank.
Central Bank A bank which is responsible for controlling a countries monetary policy. It is normally the issuing bank and controls bank licencing, and any foreign exchange control regime.
Central Rate Exchange rates against the ECU adopted for each currency within the EMS. Currencies have limited movement from the central rate according to the relevant band. 
Central Rate Exchange rates against the ECU adopted for each currency within the EMS. Currencies have limited movement from the central rate according to the relevant band.
Certificate of deposit A negotiable certificate in bearer form issued by a commercial bank as evidence of a deposit with that bank which states the maturity value, maturity rate and interest rate payable. CDs vary in size with maturities ranging from a few weeks to several years. CDs may normally be redeemed before maturity only by sale on the secondary market but may also be redeemed back to issuing bank through payment of a penalty.
CFTC The Commodity Futures Trading Commission, the US Federal regulatory agency for futures traded on commodity markets, including financial futures.
CHAPS Clearing House Automated Payment System.
Chartist An individual who uses charts and graphs and interprets historical data to find trends and predict future movements. Also referred to as Technical Trader. 
Chartist An individual who studies graphs and charts of historic data to find trends and predict trend reversals which include the observance of certain patterns and characteristics of the charts to derive resistance levels, head and shoulders patterns, and double bottom or double top patterns which are thought to indicate trend reversals.
CHIPS The New York clearing house clearing system. (Clearing House Interbank Payment System) .Most Euro transactions are cleared and settled through this system.
CIBOR Copenhagen Interbank Rate, the rate at which the banks lend the Danish Krone on an unsecured basis. The rate is calculated daily by the Danmarks Nationalbank (the Danish Central Bank), based on rules set out by the Danish Banker's Association.
Circuit breaker Price change limits and trading halts intended to reduce excessive price fluctuations.Clean float:
Clean The price of a bond not including the accrued interest element.
Clean float An exchange rate that is not materially affected by official intervention. 
Clean price An exchange rate that is not materially effected by official intervention.
Clear Day In the UK capital market refers to a price quoted excluding accrued interest.
Cleared Funds Funds unencumbered and freely available sent in to settle a trade.
Clearing The process of settling a trade.
Clearing The process of setting a number of items against one another and making fund transfers on the net balance only as part of the settlement process.
Clearing house An organisation established to facilitate the transfer of ownership of securities. An exchange-associated, usually independent organization through which all contracts are made, offset and delivered eg. ICCH.
Clearing member A member firm of a clearing house.
Client agreement The process of matching, registering and guaranteeing transactions.
Close The end of the business day e.g. London 4.30 p.m.
Closed book period A period of time, usually two or three weeks, before each coupon due date. The coupon is paid to the person holding the bond prior to the closed-book period. If this person sells the bond during this period, he must compensate the buyer for any accrued interest.
Closed Position Exposures in foreign currencies that no longer exist. The process of closing a position is the selling or buying of a certain amount of currency to offset an equal amount of open positions. This will "square" the open position. 
Closed position A transaction which leaves the trade with a zero net commitment to the market with respect to a particular currency.
Closing purchase transaction The purchase of an option identical to one already sold to liquidate a position.
CME Chicago Merchantile Exchange
Cock Dates see broken dates.
Coincident Indicator An economic indicator that generally moves in line with the general business cycle such as industrial production.
Collar A combination of a cap and a floor. A collar sets a band within which interest rates will apply (e.g. 10%-13.75%), for a given period.
Collateral AnAn asset pledged as security to ensure payment or performance of an obligation.
Comex Commodity Exchange of New York.
Commercial Paper Promissory notes usually with up to 270 day maturity, sold by companies or institutions for working capital. Widely used in the US.
Commission The fee levied by an institution to undertake a trade.
Commission The fee that a broker may charge clients for dealing on their behalf.
Compound Option An option on an option, the dates and price of such option being fixed.
Comptant French term for spot settlement in foreign exchange.
Comptroller of the Currency US Treasury Department official with the primary role in bank supervision.
Confirmation A notification sent by a dealer to the customer describing the terms of a trade.
Confirmation A memorandum to the other party describing all the relevant details of the transaction.
Consumer Price Index Monthly measure of the change in the prices of a defined basket of consumer goods including food, clothing, and transport. Countries vary in their approach to rents, and mortgages.
Contagion The tendency of an economic crisis to spread from one market to another. In 1997, political instability in Indonesia caused high volatility in their domestic currency, the Rupiah. From there, the contagion spread to other Asian emerging currencies, and then to Latin America, and is now referred to as the "Asian Contagion."
Contango A condition in a futures market where the more distant delivery months trade at a premium to the term delivery months.
Contract An Over-the-Counter (OTC) agreement between Delta Stock and the customer to buy or sell currency.
Contract An agreement to buy or sell a specified amount of a particular currency or option for a specified month in the future. See Futures contract.
Contract expiration date The date on which a currency must be delivered to fulfill the terns of the contract. For options, the last day on which the option holder can exercise his right to buy or sell the underlying instrument or currency.
Contract month The month in which a futures contract matures or becomes deliverable if not liquidated or traded out before the date specified.
Contract of differences A futures contract which is settled by a cash payment reflecting the monetary difference between the initial transaction price and the price of the underlying asset on expiry.
Convergence The process by which the futures price moves towards and ultimately equals the price of the underlying instrument at expiration.
Conversion The process by which an asset or liability denominated in one currency is exchanged for an asset or liability denominated in another currency.
Conversion Account A general ledger account representing the uncovered position in a particular currency. Such accounts are referred to as position accounts. 
Conversion Account A general ledger account representing the uncovered position in a particular currency. Such accounts are referred to as Position Accounts.
Conversion arbitrage A transaction where the asset is purchased and buys a put option and sells a call option on the asset purchased, each option having the same excise price and expiry. 
Conversion premium The amount by which the price of a convertible bond exceeds the market price of the underlying stock.
Convertible Currency Currency which can be freely exchanged for other currencies or gold without special authorization from the appropriate central bank. Copey - slang for the Danish krone.
Counter Currency The second listed currency in a currency pair.
Counter party The customer or bank with whom a foreign deal is made. The term is also used in interest and currency swaps markets to refer to a participant in a swap exchange. Country Risk - risk associated with a cross-border transaction, including but not limited to legal and political conditions. Covered Arbitrage - arbitrage between financial instruments denominated in different currencies, using forward cover to eliminate exchange risk. Covered Margin - the interest rate margin between two instruments denominated in different currencies after taking account of the cost of forward cover. Crawling peg - a method of exchange rate adjustment; the rate is fixed/ pegged, but adjusted at certain intervals in line with certain economic or market indicators. 
Cover Forwards or futures taken to limit or eliminate exposure to currency fluctuations.
Covered Call Calls are sold on the underlying currency with strikes which are higher than the market price. The strike price limits the profit that can be realised from the position.
Cross Currency Pairs A foreign exchange transaction in which one foreign currency is traded against a second foreign currency.
Cross rate An exchange rate between two non-US currencies.
Cross Rate An exchange rate between two currencies, usually constructed from the individual exchange rates of the two currencies. 
Currency Option Option contract, which gives the right to buy or sell a currency with another currency at a specified exchange rate during a specified period. 
Currency Pair The two currencies that make up a foreign exchange rate. IE: USD/CHF.
Currency Risk  The risk of incurring losses resulting from an adverse change in exchange rates.
Currency Swap Contract which commits two counter-parties to exchange streams of interest payments in different currencies for an agreed period of time and to exchange principal amounts in different currencies at a pre-agreed exchange rate at maturity.
Currency Swaption OTC Option to enter into a currency swap contract.
Currency Trading The act of exchanging the legal tender of one country for another.
Currency Warrant OTC Option; long-dated (more than one year) currency option. 
Customer The party that executes an agreement with Delta Stock.
Conversion The process by which an asset or liability denominated in one currency is exchanged for an asset or liability denominated in another currency.
Conversion arbitrage A transaction where the asset is purchased and buys a put option and sells a call option on the asset purchased, each option having the same exercise price and expiry.
Convertible bond A bond that offers the holder the option to convert into another issue, possibly with different terms, at a specified coupon date(s). In some circumstances the bond may convert into another instrument such as shares.
Convertible currency A currency that can be freely exchanged for another currency ( and or gold ) without special authorization from the central bank.
Copey Slag for the Danish krone.
Corporate Settlement In bond market in US used for five business days after the trade date.
Correspondent Bank The foreign banks representative who regularly performs services for a bank which has no branch in the relevant centre, e.g. to facilitate the transfer of funds. In the US this often occurs domestically due to inter state banking restrictions.
Cost of Living Index Broadly equivalent to Retail Price Index or Consumer price Index
Counterparty The other organisation or party with whom the exchange deal is being transacted.
Countervalue Where a person buys a currency against the dollar it is the dollar value of the transaction.
Country risk The risk attached to a borrower by virtue of its location in a particular country. This involves examination of economic, political and geographical factors. Various organisations generate country risk tables.
Coupon Dates Nominal payment date of interest coupon (a.n.a. coupon due dates). If it falls on a non business day it is normally due next business day.
Coupon value The annual rate of interest of a bond.
Coupon (1) On bearer stocks, the detachable part of the hide behind nominee status. certificate exchangeable for dividends. (2) Denotes the rate of interest on a fixed interest security.
Cours du Change Exchange rate.
Cours Libre Free exchange rate.
Cours Officiel Official exchange rate.
Court French for "short" as in une position courte.
Courtier French term for broker.
Cover (1) To take out a forward foreign exchange contract. (2) To close out a short position by buying currency or securities which have been sold.
Covered Arbitrage Arbitrage between financial instruments denominated in different currencies, using forward cover to eliminate exchange risk.
Covered call write A strategy of writting call options against a long position in the underlying asset. A covered put write being based on a short position in the assett.
Covered Margin The interest rate margin between two instruments denominated in different currencies after taking account of the cost of forward cover.
Crawling peg A method of exchange rate adjustment; the rate is fixed/ pegged, but adjusted at certain intervals in line with certain economic or market indicators.
Credit Lombard see Lombard rate.
Credit Risk The risk that a debtor will not repay; more specifically the risk that the counterparty does not have the currency promised to be delivered.
Cross deal A foreign exchange deal entered into involving two currencies, neither of which is the base currency.
Cross hedge A technique using financial futures to hedge different but related cash instruments based on the view that the price movements between the instruments move in concert.
Cross rates Rates between two currencies, neither of which is the US Dollar.
Cross-trade A cross-trade transaction is a transaction where either the buy broker and the sell broker are the same, or the buy broker and the sell broker belong to the same firm.
Crossed market The situation which exists when a broker's bid is higher than the lowest offer of another broker.
Currency Band see band.
Currency Basket Various weightings of other currencies grouped together in relation to a basket currency(e.g. ECU or SDR). Sometimes used by currencies to fix their rate often on a trade weighted basket.
Currency Cocktail Colloquial term for a unit of account or basket of currencies.
Current Account The net balance of a country's international payment arising from exports and imports together with unilateral transfers such as aid and migrant remittances. It excludes capital flows.
Current balance The value of all exports (goods plus services) less all imports of a country over a specific period of time, equal to the sum of trade and invisible balances plus net receipt of interest, profits and dividends from abroad.
Currency Swaps See swaps.
Current delivery month The most current calendar month in which a futures contract comes to maturity and becomes deliverable. Also known as the spot month.
Current Yield The annual coupon rate divided by clean price of the bond.
CUSIP code The CUSIP numbering system is the standard method for identifying securities throughout the US financial industry. The CUSIP number is permanently allocated to each issue .
Cutting Date The date on which the coupon is physically cut from the bond. The date determines, from a custodial perspective, who actually receives the next coupon payment. This is usually the market day preceding the coupon due date (or ex-dividend date). Ownership of the next coupon payment is determined by who holds the securities after close of business on the cutting date. Also referred to as record date.
Cycle The set of expiration dates applicable to different classes of option.


Term Definition: # | A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

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