A measure of how much the price of a currency changes over time.
A hedge is the practice of buying a physical commodity to protect against a possible currency devaluation.
Market-Maker – A dealer or broker that provides a two-way quote (i.e. a bid and ask price) for which the dealer agrees to buy or sell. Offering both sides of a trade literally "makes" a market for those wishing to engage in currency trading. In recent years, new developments in web-related technologies have made it possible for independent brokers to develop internet-based trading platforms.
These brokers serve as market-makers and provide a two-way quote for each currency pair they support. OANDA is an example of a forex market-maker.
Refers to the number of buyers and sellers in the market willing to trade at any given time. Generally speaking, the greater the liquidity within a market, the greater the number of trades completed, which translates into higher volumes.
The spread is the difference between the buy (offer) and sell (bid) price that we quote. For example, if the underlying asset is trading at 100, our offer price (the price at which you can buy) might be 101 and our bid price (the price at which you can sell) might be 99. You pay the spread by opening and closing a position. The spread we offer is a dynamic spread, and so can vary at any time and may be different when you open and close a position.
On your transaction history, each time you open or close a trade, there is a line entry "Half Spread Cost" which shows you the financial impact for the part of the spread you pay on opening your trade and then the part of the spread you pay when closing your trade. Effectively it is the financial impact of the distance from the spread mid-point to the buy or sell price at which your trade is executed.
An attempt to profit on the fluctuation in prices for currencies and other investment securities.
A commitment to fix the value of a currency to a specific quantity of gold. Under this system, the holder of the country's currency can convert funds to an equal amount of gold. After World War II, economies in Europe were left in tatters. To help these economies recover – and to avoid mistakes made in the wake of the First World War – the Bretton Woods Accord was convened in July 1944. Several resolutions arose from Bretton Woods, but it was the "pegging" of foreign currencies to the U.S. dollar, rather than gold, that arguably had the greatest immediate impact on the global economy.
A contract to buy or sell a specified amount of a currency pair at a given exchange rate.