Glossary

Personal income

– Personal income is an individual's total earnings for one year from all sources, including salary, wages, investments and business enterprises. Personal income is an indicator of personal spending.

Pip

– The smallest unit of movement measured on a currency price. One pip is equal to 0.0001 full unit of currency.

Political risk

– Political risk is the possibility of an open position to be adversely affected by governmental policy or action.

Portfolio

– A portfolio is the selection of investments, securities or open positions held by a trader or investor.

Position

– The amount of a currency owned or borrowed by a trader or dealer is the position. It is synonymous with an open trade.

Premium

– Premium may refer to the total cost paid for an option or the difference between the price paid for a currency and its value. A currency may have a premium based on the difference between its current price and the price on a futures contract.

Price movement

– Price movement is the change in value of a currency pair over a given period of time.

Price transparency

– Price transparency is a condition that occurs when every participant has equal access to a given quote.

Prime rate

– The best rate offered by a financial institution, usually reserved for customers with the highest credit ratings.

Profit/Loss

– The actual monetary gain or loss from a closed trade or a group of closed trading activities. Profit/Loss is often abbreviated as P/L.