BASIS:Basis is the difference between cash and futures prices, or the difference between(but similar) financial Instruments.
CALL:The optional right of an issuer to redeem bonds before their stated maturity, at a given price on a given data.
COVER:It is to protect the value of the future proceeds of an international trade transaction, usually by buying or selling the proceeds in the forward market.
FISCAL POLICY:It means the policy relating to taxation, expenditure, government’s debts and its profits management.
FOREIGN BOND:A bond issue for a foreign borrower, offered in the domestic capital market of a particular country and denominated in the currency of that country.
FUTURES AND OPTIONS:Futures and Options are financial derivatives (derived as they are from certain basic elements, namely, exchange rates, interest rates, equities and commodities) whose value reflects the changing price of the underlying assets, say, currencies, shares etc.
GOLD RUSH:Strong demand for gold in the free markets by private buyers for purposes of speculation or hoarding or by Central Banks for Strengthening their reserves.
HOT MONEY:Hot money or flight capital, is vast sum of international money, transferred by the owner into another country for investment for speculative purposes.
LAG:Lag is to defer payment of a debt. If a currency is under pressure, foreigners making payments in that currency will defer payment as long as possible.
LEAD:Lead is to prepay a debit. If a currency is expected to appreciate in value, foreigners making payments in that currency will accelerate payment of obligations in that currency.
LIMITS:Maximum amounts for which names of banks are taken by other banks in the foreign exchange market (a) for forward exchange transactions, (b) for Euro-currency transactions, and (c) for payments arising from foreign exchange transactions on the same day.
LIQUID FUNDS:Balances on currency account sight deposits short time deposits, long time deposits with escape clauses, money at call or at short notice, bills which have a good market.
OUTRIGHT:Forward exchanges bought and sold unconnected with a simultaneous sale or purchases of spot exchanges.
POSITION:The net commitment in a currency. It is Square if sales equal purchases. Long if purchases exceed sales, and Short if sales exceed purchases.
ULTIMO: Continental practice of timing transactions to matures on the last business day of the calendar month.