Initial Margin
The initial deposit required by a broker from a trader to open a position.
Glossary and FAQs
Explore key trading terms and find answers to common questions about GTCFX's products, services, and trading conditions.
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I · Trading glossary
13 termsInter-bank rates
The bid and offer rates at which international banks place deposits with each other. The basis of the Interbank market.
ISDA
The body that sets terms and conditions for derivative trades is The International Swaps and Derivatives Association.
IMM
International Monetary Market part of the Chicago Mercantile Exchange that lists a number of currency and financial futures Implied volatilityA measurement of the market's expected price range of the underlying currency futures based on the traded option premiums.
Implied Rates
The interest rate determined by calculating the difference between spot and forward rates.
Indicative quote
A market-maker's price which is not firm.
Inflation
Continued rise in the general price level in conjunction with a related drop in purchasing power. Sometimes referred to as an excessive movement in such price levels.
Interest Arbitrage
Switching into another currency by buying spot and selling forward, and investing proceeds in order to obtain a higher interest yield. Interest arbitrage can be inward, i.e. from foreign currency into the local one or outward, i.e. from the local currency to the foreign one. Sometimes better results can be obtained by not selling the forward interest amount. In that case some treat it as no longer being a complete arbitrage, as if the exchange rate moved against the arbitrageur, the profit on the transaction may create a loss.
Interest rate Swaps
An agreement to swap interest rate exposures from floating to fixed or vice versa. There is no swap of the principal. It is the interest cash flows be they payments or receipts that are exchanged.
Intervention
Action by a central bank to effect the value of its currency by entering the market. Concerted intervention refers to action by a number of central banks to control exchange rates.
Inflation
The rate at which the general level of prices for goods and services is rising, eroding purchasing power.
Interbank Market
A decentralized market where banks and financial institutions trade currencies directly with each other.
IMF
International Monetary Fund, established in 1946 to provide international liquidity on a short and medium term and encourage liberalization of exchange rates. The IMF supports countries with balance of payments problems with the provision of loans.
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