Forex glossary of terms
Forex glossary - T
Target price - An expected selling or buying price. For long and short hedges with futures - Futures Price + Expected Basis. For puts - Futures Price - Premium + Expected Basis. For calls - Futures Price + Premium + Expected Basis.
T-Bill - Treasury Bill.
Technical analysis - The study of historical price patterns to help forecast futures prices.
Technical Correction - An adjustment to price not based on market sentiment but technical factors such as volume and charting.
Term - the life of a bond, usually expressed in days, months or years Terms of Trade - The ratio between export and import price indices.
Technical Analysis - A technique used to try and predict future movements of a security, commodity or currency, based solely on past price movements and volume levels. It examines charts and historical performance.
Theta - The measure of the change in an option's premium given a change in the option's time until expiration. Equal to the change in the option's premium divided by the change in time to expiration.
Thin Market - A market in which trading volume is low and in which consequently bid and ask quotes are wide and the liquidity of the instrument traded is low.
TIBOR - Tokyo Inter-bank Offered Rate.
Tick - A minimum price movement. (see also - PIP) Ticker - Depicts current or recent history of a currency, usually in the form of a graph or chart.
TIFFE - Tokio International Financial Futures Exchange.
Time value - The amount by which an option's premium exceeds the intrinsic value of the option. Usually relative to the time left to expiration.
Tomorrow Next (Tom/Next) - When a trade buys and sells a currency today for delivery tomorrow.
Trade Date - The date on which a trade occurs.
Trade Price Response - This term advises that price reaction to a certain level is critical. If this level breaks then the recommendation would be to run with the market direction (i.e. Buy a break above resistance level; sell a break below a support level). However, if a price stalls at this level and is rejected then the recommendation is to go with this also (i.e. Sell at a resistance level that is tested and holds, buy at a support level).
Trader - A member of the exchange who buys and sells futures and options on the floor of the exchange. See Day trader, Floor broker, Position trader and Scalper.
Tranche - A portion of, specifically used for borrowings from the IMF.
Transaction - The buying or selling of securities resulting from the execution of an order.
Transaction Costs - The costs that are incurred by a trader when buying or selling currencies, commodities, or currencies. These cost include broker commissions or spreads.
Transaction Date - The date on which a trade occurs.
Transaction Exposure - Potential profit and loss generated by current foreign exchange transactions.
Trend - The general direction of the market.
Trend Lines - A straight line drawn across a chart that indicates the overall trend for the currency pair. In an upward trend, the line is drawn below, and acts as a support line; the opposite holds true for a downward trend. Once the currency breaks the trend line, the trend is considered to be invalid.
Triple Top - A pattern in which a currency has reached a price three times previously, yet has been unable to sustain movements beyond those three peaks. A triple top signifies a strong resistance level.
Turnover - The number or volume of shares traded over a specific time period. The larger the turnover, the more commissions a broker will be making.
Two Way Price - A price that includes both the bid and offer price. The NASD requires that market makers have both bid and ask prices for any security, currency or commodity in which they make a market. This is called a two-sided market.
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