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Term Definition: # |
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Settlement Actual physical exchange of one currency for another.
Settlement date The date by which an executed order must be settled by the transfer of instruments or currencies and funds between buyer and seller. 
Settlement Risk Risk associated with the non-settlement of the transaction by the counterparty. 
Short  To go "short" is to have sold an instrument without actually owning it, and to hold a short position with expectations that the price will decline so it can be bought back in the future at a profit.
Short Margin The clientís account condition when Equity becomes smaller than the amount required to keep the positions open.
Short position Selling a currency in which you have no position in anticipation of it falling in value. At that point you will be able to "cover" your short by buying back the currency at a lower price. (If physical delivery of the currency is involved, the short seller will need to borrow the currency in order to make the delivery to the buyer). In foreign exchange, when the base currency in the pair is sold, the position is said to be short in that currency. It is understood that when the base currency in the pair is "short," the second currency will be "long."
Sidelined A major currency that is lightly traded due to major market interest being in another currency pair. 
Soft Market There are more potential sellers than buyers, creating an environment where rapid price falls are likely.
Spot Contract A contract where settlement is in two business days.
Spot Rate The rate of exchange between two foreign currencies for "spot" value (normally settlement in two business days), generally quoted either in "US terms" (price of one unit of foreign currency expressed in US dollars and cents) or in "European terms" (price of one US dollar expressed in units and decimals of the foreign currency).
 
Swissy Slang for the Swiss franc.
Support levels When an exchange rate depreciates or appreciates to a level where (1) Technical analysis techniques suggest that the currency will rebound, or not go below; (2) the monetary authorities intervene to stop any further downward movement. 
Spread The difference between the ask (offer) and bid price in a market quote. The spread is the reason why a newly opened positionís mark to market, or valuation, will likely be negative. If a trader buys a particular currency he/she will pay the ask (offer) price, but the current mark to market will be based on what the marketplace is presently paying for this currency. That price would be found on the bid side of the market quote, competitively lower than where he/she just bought the currency.
Stop/Loss Order An order to buy or sell at a specified foreign exchange rate away from the current market for the purpose of liquidating an open position during market conditions in which the open position has declined in value. Execution of such an order can occur at rates below (or above) the specified foreign exchange rate.
Storage The charge or recompense associated with a rollover.
Support levels When an exchange rate depreciates or appreciates to a level where (1) Technical analysis techniques suggest that the currency will rebound, or not go below; (2) the monetary authorities intervene to stop any further downward movement. 
Swap price A price as a differential between two dates of the swap. 
Swap The simultaneous purchase and sale of the same amount of a given currency for two different dates, against the sale and purchase of another. A swap can be a swap against a forward. In essence, swapping is somewhat similar to borrowing one currency and lending another for the same period. However, any rate of return or cost of funds is expressed in the price differential between the two sides of the transaction. 
SABE: Semi Annual Bond Equivalent. A method of converting yields and other measures of value in order to place them on a comparable basis. This method assumes interest is reinvested semiannually. SABE is often applied to discount securities in order to compare 
Same day transaction: A transaction that matures on the day the transaction takes place.
Sandwich spread: Same as a butterfly spread.
Savings ratio: The percentage of disposable income that is saved or used for debt repayment.
Scalping: A strategy of buying at the bid and selling at the offer as soon as possible.
SDR: Special Drawing Right. A standard basket of five major currencies in fixed amounts as defined by the IMF.
Seasonally Adjusted: A method of dealing with statistics to adjust for regular annual fluctuations in figures normally caused by non economic factors, e.g. school leavers impact on unemployment, or rise in food prices in winter. The months data is divided by the percentage of
Secondary date: Date that bond is first capable of trading on secondary market.
Selling rate: Rate at which a bank is willing to sell foreign currency.
Seller/grantor: Also known as the option writer.
Serial expiration: Options on the same underlying futures being contract which expire in more than one month.
Series: All options of the same class which share a common strike price and expiration date.
Settlement date: The date by which an executed order must be settled by the transference of instruments or currencies and funds between buyer and seller.
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.
Short / Short Position: A shortage of assets in a particular currency. See short sale
Short Contracts: Contracts with up to six months to delivery.
Short Covering: Buying to unwind a shortage of a particular currency or asset.
Short forward date / rate: The term short forward refers to period up to two months, although it is more commonly used with respect to maturities of less than one month.
Short sale: The sale of a currency futures not owned by the seller at the time of the trade. Short sales are usually made in expectation of a decline in the price.
Short term interest rates: Normally the 90 day rate.
Shorts: see Short forward date / rate.
SIBOR: Singapore Inter-bank Offered Rate.
Sidelined: A major currency that is lightly traded due to major market interest being in another currency pair.
SIMEX: Singapore International Monetary Exchange
Simple Yield: A modified version of the current yield that accounts for a deviation in a bond's clean price from par. Any capital gain or loss is assumed to occur uniformly over the life of the bond
SITC: Standard International Trade Classification. A system for reporting trade statistics in a common manner.
Sinking fund Bond: A bond with gradual retirement of the original issue at specified dates (usually coupon dates). For certain serial issues, a drawing (or lottery) determines which bonds of the original issue are retired early.
Skip day settlement: T+2, settle day after next business day.
SOFFEX: Swiss Options and Financial Futures Exchange, a fully automated and integrated trading and clearing system.
Soft Market: More potential sellers than buyers, which creates an environment where rapid price falls are likely.
Sovereign immunity: Legal doctrine which means that the state cannot be sued or have its assets seized.
Sovereign risk: (1) Risk of default on a sovereign loan;(2) Risk of appropriation of assets held in a foreign country.
Split Date: See broken date
Spot: (1) The most common foreign exchange transaction (2) Spot or Spot date refers to the spot transaction value date that requires settlement within two business days, subject to value date calculation.
Spot next: The overnight swap from the spot date to the next business day.
Spot month: The contract month closest to delivery or
Spot price / rate: The price at which the 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: (l)The difference between the bid and ask price of a currency. (2) The difference between the price of two related futures contracts. (3) For options, transactions involving two or more option series on the same underlying currency
Square: Purchase and sales are in balance and thus the dealer has no open position.
Squawk Box: A speaker connected to a phone often used in broker trading desks.
Squeeze: Action by a central bank to reduce supply in order to increase the price of money.
Stable market: An active market which can absorb large sale or purchases of currency without major moves.
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
Stand by Credit: An arrangement with the IMF for draw downs on a "need " basis. The term is sometimes more generally used.
Sterilisation: Central Bank activity in the domestic money market to reduce the impact on money supply of its intervention activities in the FX market.
Sterling Index: A index based on the movement of sterling against the major currency.
Sterling: British pound, otherwise known as cable.
STIBOR: Stockholm Inter-bank Offered Rate.
Stocky: Market slang for Swedish Krona.
Stop loss order: Order given to ensure that, should a currency weaken by a certain percentage, a short position will be covered even though this involves taking a loss. Realise profit orders are less common.
Stop out Price: US term for the lowest accepted price for Treasury Bills at auction. Generally used as Stop price for bond auctions..
Straddle: The simultaneous purchase/sale of both call and put options for the same share, exercise/strike price and expiry date.
Stagflation: Recession or low growth in conjunction with high inflation rates.
Straight: A bond with unquestioned right to repayment of principal and interest at the specified dates with no additional further rights or bonuses.
Straight date: See fixed dates
Strangle: zz
Strap: A combination of two calls and one put
Street Method: The standard yield to maturity calculation used in the United States by market participants other than the U.S. Treasury. Yield is compounded semiannually regardless of the coupon frequency. If the value date does not fall on a coupon date, the present va
Strike price: Also called exercise price. The price at which an options holder can buy or sell the underlying instrument.
Strip: (1) A combination of two puts and one call. (2) (Separate Trading of Registered Interest and Principal of Securities). Process by which a bond is separated into its corpus and coupons, which are then sold separately as zero coupon securities.
Structural Unemployment: Unemployment levels inherent in an economic structure.
Supply side economics: The concept is that tax cuts will boost investment leading to an increase in the supply of goods in the economy. To be compared with demand led Keynesian economics.
Support levels: When an exchange rate depreciates or appreciates to a level where: (1) Technical analysis techniques suggest that the currency will rebound, or not go below; (2) the monetary authorities intervene to stop any further down ward movement. See resistance poi
Swap as a percentage: Swaps expressed as an annualised percentage.
Swap margin: See forward margin.
Swap price: A price as a differential between two dates of the swap
Swap rate: See forward margin.
Swap: The simultaneous purchase and sale of the same amount of a given currency for two different dates, against the sale and purchase of another. A swap can be a swap against a forward. In essence, swapping is somewhat similar to borrowing one currency and len
Swaption: An option to enter into a swap contract.
SWIFT: Society for Worldwide Interbank Telecommunications is Belgian based company that provides the global electronic network for settlement of most foreign exchange transactions.
Swissy: Market slang for Swiss Franc.
Switch: See Deposit Swap
Synthetics: Options or futures that create a position that able to be achieved directly but is generated by a combination of options and futures in the relevant market. In foreign exchange a SAFE combines two forward contracts into a single transaction where settleme

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