Glossary
Share index
The index of a given equities market, the weighted average of current rate of selected shares, where the weighting of individual equities featuring in the index corresponds to the share of their market value in the market value of all equities featuring in the index.
The index of a given equities market, the weighted average of current rate of selected shares, where the weighting of individual equities featuring in the index corresponds to the share of their market value in the market value of all equities featuring in the index.
American auction
A securities auction in which orders accepted are satisfied at the yields originally required.
A securities auction in which orders accepted are satisfied at the yields originally required.
American option
A type of option in the case of which the buyer may use its right on any day of option?s life until its expiry.
A type of option in the case of which the buyer may use its right on any day of option?s life until its expiry.
Arbitrage
The purchase (sale) of a given asset on one market and its subsequent sale (purchase) on another market at a higher (lower) price with the aim of achieving a profit.
The purchase (sale) of a given asset on one market and its subsequent sale (purchase) on another market at a higher (lower) price with the aim of achieving a profit.
At-the-money option
The situation when the spot price of the given asset equals the realisation price.
The situation when the spot price of the given asset equals the realisation price.
Aussie
A synonym for Australian dollar.
A synonym for Australian dollar.
Bid
In the foreign exchange market the exchange rate at which the bank is willing to buy the primary currency, on the money market the interest rate at which the bank is willing to borrow money.
In the foreign exchange market the exchange rate at which the bank is willing to buy the primary currency, on the money market the interest rate at which the bank is willing to borrow money.
Barrier option
An option which begins (or ceases) to be payable after achieving a certain, pre-set, barrier (mostly a certain value of the underlying asset). In the case where the option falls due upon having reached the barrier, this is then a ?knock-in? option. Conversely, a ?knock-out? option becomes worthless when the value of the underlying asset reaches its barrier.
An option which begins (or ceases) to be payable after achieving a certain, pre-set, barrier (mostly a certain value of the underlying asset). In the case where the option falls due upon having reached the barrier, this is then a ?knock-in? option. Conversely, a ?knock-out? option becomes worthless when the value of the underlying asset reaches its barrier.
Bond
A debt security of the capital market bringing a fixed interest-rate yield.
A debt security of the capital market bringing a fixed interest-rate yield.
BRIBID (Bratislava Interbank Bid rate)
Reference interest rate which is calculated as the average value of BID quotations of reference banks, where the highest and lowest quotations are annulled. It is set every working day at 11:00 hours in Bratislava.
Reference interest rate which is calculated as the average value of BID quotations of reference banks, where the highest and lowest quotations are annulled. It is set every working day at 11:00 hours in Bratislava.
BRIBOR (Bratislava Interbank Offered rate)
Reference interest rate which is calculated as the average of OFFER quotations of reference banks, where the highest and lowest quotations are annulled. It is set every working day at 11:00 hours in Bratislava.
Reference interest rate which is calculated as the average of OFFER quotations of reference banks, where the highest and lowest quotations are annulled. It is set every working day at 11:00 hours in Bratislava.
Broker
An intermediator of foreign exchange and money operations between individual dealers. The broker makes deals on another entity?s account, where for each deal made he/she collects a broker commission.
An intermediator of foreign exchange and money operations between individual dealers. The broker makes deals on another entity?s account, where for each deal made he/she collects a broker commission.
BUBOR
BUBOR – (BUdapest InterBank Offered Rate) shall mean a reference interest rate on the interbank market for Hungarian forint, that is quoted every business day in Budapest on the basis of the forex offer side of the quotations submitted by the reference banks in line with given algorithm.
BUBOR – (BUdapest InterBank Offered Rate) shall mean a reference interest rate on the interbank market for Hungarian forint, that is quoted every business day in Budapest on the basis of the forex offer side of the quotations submitted by the reference banks in line with given algorithm.
Bull
Designation of an investor expecting a raise in the exchange rate (interest rate).
Designation of an investor expecting a raise in the exchange rate (interest rate).
Call opcia
An option contract by which the option?s buyer buys the right to buy a given asset.
An option contract by which the option?s buyer buys the right to buy a given asset.
Caplet
A part of the interest-rate option for one base period (the whole interest rate cap contract may be understood as a sum of caplets for individual periods).
A part of the interest-rate option for one base period (the whole interest rate cap contract may be understood as a sum of caplets for individual periods).
Collars
Interest-rate option comprising a combination of cap and floor contracts.
Interest-rate option comprising a combination of cap and floor contracts.
Compound option
Option for an option.
Option for an option.
Customer dealer
A specialised member of the bank?s staff responsible for closing spot, forward or foreign exchange deals with the bank?s clients.
A specialised member of the bank?s staff responsible for closing spot, forward or foreign exchange deals with the bank?s clients.
CZEONIA
CZEONIA (CZEch OverNight Index Average) shall mean a weighted average of interest rates on all unsecured O/N deposits placed by reference banks on the interbank market. The CZEONIA reference interest rate is calculated and released by the ČNB on the basis of data provided by the reference banks.
CZEONIA (CZEch OverNight Index Average) shall mean a weighted average of interest rates on all unsecured O/N deposits placed by reference banks on the interbank market. The CZEONIA reference interest rate is calculated and released by the ČNB on the basis of data provided by the reference banks.
Option time value
The difference between the overall value of the option (premium) and its internal value, falling with the approaching day of expiry.
The difference between the overall value of the option (premium) and its internal value, falling with the approaching day of expiry.
Foreign exchange market dealer
A specialized member of the bank?s staff who buys and sells foreign exchange currencies on the bank?s account.
A specialized member of the bank?s staff who buys and sells foreign exchange currencies on the bank?s account.
Dealing
A specialized workplace at the bank via which the bank?s trading is made in financial markets.
A specialized workplace at the bank via which the bank?s trading is made in financial markets.
Delta of an option
Expresses the percentage change in an option?s price against the change in the price of a base asset in the spot market.
Expresses the percentage change in an option?s price against the change in the price of a base asset in the spot market.
Expiry date
In the case of a European option, the date when the currency option owner has the right to realize its currency option, i.e. realization day of the option right.
In the case of a European option, the date when the currency option owner has the right to realize its currency option, i.e. realization day of the option right.
Devaluation
An official devaluation of the domestic currency against a foreign currency unit.
An official devaluation of the domestic currency against a foreign currency unit.
Foreign-exchange market
A segment of the financial market on which foreign exchange is bought and sold.
A segment of the financial market on which foreign exchange is bought and sold.
Foreign exchange
Receivables in a foreign currency, i.e. non-cash foreign currency.
Receivables in a foreign currency, i.e. non-cash foreign currency.
Discount rate
The basic rate set by the issuing bank from which other rates are derived, one of the monetary policy instruments of the issuing bank.
The basic rate set by the issuing bank from which other rates are derived, one of the monetary policy instruments of the issuing bank.
Long position
If the assets in the given currency exceed liabilities. The investor has a long position in the case where the purchase of the primary currency for the secondary currency exceeds its sales.
If the assets in the given currency exceed liabilities. The investor has a long position in the case where the purchase of the primary currency for the secondary currency exceeds its sales.
Dow Jones Industrial Average
The most important American share index at the New York stock exchange, comprising equities of the 30 most important industrial companies.
The most important American share index at the New York stock exchange, comprising equities of the 30 most important industrial companies.
Duisenberg Wim
Governor of the European Central Bank (ECB).
Governor of the European Central Bank (ECB).
EONIA
Reference interest rate of EURO currency for overnight money.
Reference interest rate of EURO currency for overnight money.
EURIBOR
Reference interest rate of the euro area countries fixed every day at Brussels at 11:00 hours of the local time. It is calculated as an average value of daily quotations of the selected 57 banks of the euro area. It is quoted on the basis of 360 days and is rounded to three decimal places.
Reference interest rate of the euro area countries fixed every day at Brussels at 11:00 hours of the local time. It is calculated as an average value of daily quotations of the selected 57 banks of the euro area. It is quoted on the basis of 360 days and is rounded to three decimal places.
European option
A type of option in the case of which the buyer may use its right only on the expiration date of option contract.
A type of option in the case of which the buyer may use its right only on the expiration date of option contract.
Expiry date (maturity date)
Fixed date when the option?s owner may exercise its option right.
Fixed date when the option?s owner may exercise its option right.
Federal Reserve System (FED)
USA central bank, responsible for monetary policy.
USA central bank, responsible for monetary policy.
Financial market
A place where demand for and supply of spare financial resources meet. It is divided by the type of subject into foreign exchange, capital, money, insurance and gold and precious metals markets.
A place where demand for and supply of spare financial resources meet. It is divided by the type of subject into foreign exchange, capital, money, insurance and gold and precious metals markets.
Financial derivative
A financial product the price of which is developed from the price of an underlying asset in the spot market. The basic financial derivatives include forwards, futures, swaps and options.
A financial product the price of which is developed from the price of an underlying asset in the spot market. The basic financial derivatives include forwards, futures, swaps and options.
FOMC (Federal Open Market Committee)
Committee for the operations on the free FED market.
Committee for the operations on the free FED market.
Forward
A forward dated deal in which the buyer undertakes to buy a certain volume of a given asset in the future at a pre-set price. The seller at the same time undertakes to supply the given asset in the future for the same price.
A forward dated deal in which the buyer undertakes to buy a certain volume of a given asset in the future at a pre-set price. The seller at the same time undertakes to supply the given asset in the future for the same price.
Forward-forward
In a forward-forward contract the client undertakes to deposit at the bank a certain volume of financial resources in the agreed currency and in the agreed time interval in the future, at earliest three working days from the day of arranging the contract. The bank undertakes to accrue interest to these funds during the agreed time interval at the interest rate agreed in advance.
In a forward-forward contract the client undertakes to deposit at the bank a certain volume of financial resources in the agreed currency and in the agreed time interval in the future, at earliest three working days from the day of arranging the contract. The bank undertakes to accrue interest to these funds during the agreed time interval at the interest rate agreed in advance.
FRA, forward rate agreement
An FRA contract allows the client to fix the interest rate for certain volume of financial resources and for certain time period in the future. On the day of settling the FRA contract (the first day of the agreed time period) financial resources are not actually transferred between the bank and the client, only the difference between the agreed FRA contract interest rate and the current value of certain reference interest rate (BRIBOR, LIBOR) for the agreed time period is paid out and the agreed volume of the principal. A FRA contract enables the client to secure in this manner its future deposit or loan against the risk of interest rate fluctuation.
An FRA contract allows the client to fix the interest rate for certain volume of financial resources and for certain time period in the future. On the day of settling the FRA contract (the first day of the agreed time period) financial resources are not actually transferred between the bank and the client, only the difference between the agreed FRA contract interest rate and the current value of certain reference interest rate (BRIBOR, LIBOR) for the agreed time period is paid out and the agreed volume of the principal. A FRA contract enables the client to secure in this manner its future deposit or loan against the risk of interest rate fluctuation.
Forward points
The premium, or discount, which expresses the change in the exchange rate after taking into account the difference in interest rates of the traded currencies in the period of the forward?s duration.
The premium, or discount, which expresses the change in the exchange rate after taking into account the difference in interest rates of the traded currencies in the period of the forward?s duration.
Fundamental analysis
An analysis based on observation of economic indicators, events, examining their potential impact on the price (exchange rate) of a given asset.
An analysis based on observation of economic indicators, events, examining their potential impact on the price (exchange rate) of a given asset.
Futures
A standardised forward in which the buyer undertakes to buy certain asset in the future at a pre-set price. The seller at the same time undertakes to sell the given asset in the future for the same price. Futures, in contrast to forwards, are traded in option and forward stock exchanges, they can be sold on.
A standardised forward in which the buyer undertakes to buy certain asset in the future at a pre-set price. The seller at the same time undertakes to sell the given asset in the future for the same price. Futures, in contrast to forwards, are traded in option and forward stock exchanges, they can be sold on.
Gama of an option
Expresses by how much a delta option will change in changing the price of the base asset by 1 unit.
Expresses by how much a delta option will change in changing the price of the base asset by 1 unit.
Greenback
A synonym for American dollar.
A synonym for American dollar.
Greenspan Alan
Governor of the American Central Bank (FED).
Governor of the American Central Bank (FED).
Hedging
The process of securing against risk, getting rid of a long, or short, position by means of a foreign exchange or money operation.
The process of securing against risk, getting rid of a long, or short, position by means of a foreign exchange or money operation.
Primary currency
The currency which is quoted indirectly, i.e. how many units of the other currency is necessary for obtaining one unit of the primary currency.
The currency which is quoted indirectly, i.e. how many units of the other currency is necessary for obtaining one unit of the primary currency.
Dutch auction
A type of auction in the case of which all accepted orders are satisfied at the highest accepted yield.
A type of auction in the case of which all accepted orders are satisfied at the highest accepted yield.
Chicago Board of Trade (CBOT)
A term exchange stock in the USA at which commodities, currencies and term future contracts are traded.
A term exchange stock in the USA at which commodities, currencies and term future contracts are traded.
In-the-money option
A situation when, for example in a call option, the spot price is higher than the realization price. In the case of a put option, the situation when the spot price is lower than the realisation price. An in-the-money option will be exercised on the expiry date.
A situation when, for example in a call option, the spot price is higher than the realization price. In the case of a put option, the situation when the spot price is lower than the realisation price. An in-the-money option will be exercised on the expiry date.
Insider trading
Abusing information prior to its publication for one?s own benefit for the purpose of achieving a profit. A criminal act.
Abusing information prior to its publication for one?s own benefit for the purpose of achieving a profit. A criminal act.
Interest rate cap
An interest rate cap enables a client drawing a loan bound to a certain reference interest rate (BRIBOR, Libor) to secure itself against the situation when this reference interest rate exceeds certain value R agreed in advance (the realisation value of the contract, or ?cap rate?).
An interest rate cap enables a client drawing a loan bound to a certain reference interest rate (BRIBOR, Libor) to secure itself against the situation when this reference interest rate exceeds certain value R agreed in advance (the realisation value of the contract, or ?cap rate?).
Interest rate floor
An interest rate floor enables a client who is to deposit at the bank a deposit bound to a certain reference interest rate (BRIBOR, LIBOR) to secure itself against the situation when this reference interest rate falls below certain value R agreed in advance (the realisation value of the contract, or ?floor rate?).
An interest rate floor enables a client who is to deposit at the bank a deposit bound to a certain reference interest rate (BRIBOR, LIBOR) to secure itself against the situation when this reference interest rate falls below certain value R agreed in advance (the realisation value of the contract, or ?floor rate?).
Interest rate swap (IRS)
An interest rate swap is an exchange of a fixed interest rate R for a variable reference interest rate P (BRIBOR, Libor) for certain time period and for certain amount of principal. In the case of this contract no exchange of the agreed principal is made, only the difference between the agreed rate R and the reference rate P is paid out. Both parties to the contract agree that during the certain time period and in certain time intervals they will pay one another the difference between the agreed fixed interest rate agreed in advance and the variable interest rate for the volume of principal agreed in advance.
An interest rate swap is an exchange of a fixed interest rate R for a variable reference interest rate P (BRIBOR, Libor) for certain time period and for certain amount of principal. In the case of this contract no exchange of the agreed principal is made, only the difference between the agreed rate R and the reference rate P is paid out. Both parties to the contract agree that during the certain time period and in certain time intervals they will pay one another the difference between the agreed fixed interest rate agreed in advance and the variable interest rate for the volume of principal agreed in advance.
ISDA (International Swaps and Derivatives Association)
An international association for swaps and derivatives, associating the largest international financial institutions.
An international association for swaps and derivatives, associating the largest international financial institutions.
Cable
A synonym for the GBP/USD exchange rate.
A synonym for the GBP/USD exchange rate.
Capital market
A segment of the financial market in which securities are trades having maturity longer than 1 year (shares, bonds).
A segment of the financial market in which securities are trades having maturity longer than 1 year (shares, bonds).
Knock-in option
An option that will begin to apply when the spot price of a given asset exceeds, over the course of the option?s life, a certain level agreed in advance.
An option that will begin to apply when the spot price of a given asset exceeds, over the course of the option?s life, a certain level agreed in advance.
Knock-out option
An option that will cease to apply when the spot price of a given asset exceeds, over the course of the option?s life, a certain level agreed in advance.
An option that will cease to apply when the spot price of a given asset exceeds, over the course of the option?s life, a certain level agreed in advance.
Collateral
A certain level of financial resources which bank requires as security that the client will fulfil its liability; immediately after concluding a deal this financial amount is pledged on the client?s account in favour of the bank and represents the maximum level of loss which the client is willing to accept in the case of adverse development.
A certain level of financial resources which bank requires as security that the client will fulfil its liability; immediately after concluding a deal this financial amount is pledged on the client?s account in favour of the bank and represents the maximum level of loss which the client is willing to accept in the case of adverse development.
Confirmation
A written confirmation on a deal concluded between contracting parties.
A written confirmation on a deal concluded between contracting parties.
Correspondent bank
The bank in which the nostro account is open and which has a loro account open at our bank for foreign system of payments.
The bank in which the nostro account is open and which has a loro account open at our bank for foreign system of payments.
Quotation
An exchange rate record, setting the price.
An exchange rate record, setting the price.
Short position
If liabilities in the given currency exceed assets, the investor has a short position in the case when it sold certain volume of the primary currency for the secondary currency, e.g. by selling USD 1 million against SKK, it has a short position in dollars.
If liabilities in the given currency exceed assets, the investor has a short position in the case when it sold certain volume of the primary currency for the secondary currency, e.g. by selling USD 1 million against SKK, it has a short position in dollars.
Short-term term deposit
The short-term term deposit is a client?s deposit for a period and at an interest rate agreed in advance. The minimum length of the period is 1 day and the maximum 12 months.
The short-term term deposit is a client?s deposit for a period and at an interest rate agreed in advance. The minimum length of the period is 1 day and the maximum 12 months.
Call option
See Call.
See Call.
LIBOR (London Interbank Offer Rate)
A reference interest rate for GBP, USD and other euro currencies, quoted every day in London at 11:00 hours local time.
A reference interest rate for GBP, USD and other euro currencies, quoted every day in London at 11:00 hours local time.
LIFFE (London International Financial Futures Exchange)
London International Financial Futures Exchange at which future contracts for currencies and share indices are traded.
London International Financial Futures Exchange at which future contracts for currencies and share indices are traded.
Lombard loan
A loan which is provided by the central bank to commercial banks, securities are taken as a security. The Lombard rate is as a rule higher than the discount rate.
A loan which is provided by the central bank to commercial banks, securities are taken as a security. The Lombard rate is as a rule higher than the discount rate.
Maturity
Maturity period, maturity date.
Maturity period, maturity date.
Bear
An investor expecting a fall in the exchange rate, rate, interest rate.
An investor expecting a fall in the exchange rate, rate, interest rate.
Currency option
A currency option is the right to: (a) buy or sell funds in a foreign currency for Slovak koruna; (b) exchange of funds in a foreign currency for funds in another foreign currency, and this at an exchange rate agreed in advance with a maturity date agreed in advance for the deal in the future (expiry date), however not earlier than 3 working days after closing the option contract.
A currency option is the right to: (a) buy or sell funds in a foreign currency for Slovak koruna; (b) exchange of funds in a foreign currency for funds in another foreign currency, and this at an exchange rate agreed in advance with a maturity date agreed in advance for the deal in the future (expiry date), however not earlier than 3 working days after closing the option contract.
Currency swap
A currency swap is a combination of a spot and forward currency conversion or two forward currency conversions with the same volume in the primary currency. It is an agreement of two parties in which one party buys (sells) the agreed amount in the primary currency with the D1 maturity date at the agreed spot or forward exchange rate and this foreign exchange is sold back (bought back) with a maturity date later than D1 at the forward exchange rate agreed in advance.
A currency swap is a combination of a spot and forward currency conversion or two forward currency conversions with the same volume in the primary currency. It is an agreement of two parties in which one party buys (sells) the agreed amount in the primary currency with the D1 maturity date at the agreed spot or forward exchange rate and this foreign exchange is sold back (bought back) with a maturity date later than D1 at the forward exchange rate agreed in advance.
MPC (Monetary Policy Committee)
The Monetary Policy Committee of the Bank of England, determining the level of interest rates.
The Monetary Policy Committee of the Bank of England, determining the level of interest rates.
NIKKEI
Japanese share index of the 225 largest Japanese companies traded on the Tokyo exchange.
Japanese share index of the 225 largest Japanese companies traded on the Tokyo exchange.
Non-resident
A foreign exchange foreign national.
A foreign exchange foreign national.
NYSE (New York Stock Exchange)
The largest securities stock exchange in the USA.
The largest securities stock exchange in the USA.
Offer (sale)
In the foreign exchange market the exchange rate at which the bank is willing to sell the primary currency, on the money market the interest rate at which the bank is willing to lend money.
In the foreign exchange market the exchange rate at which the bank is willing to sell the primary currency, on the money market the interest rate at which the bank is willing to lend money.
Free market operations
One of the main instruments of the central bank for applying monetary policy, via direct purchases and sales.
One of the main instruments of the central bank for applying monetary policy, via direct purchases and sales.
Order
A binding order for the realization of a deal at the required exchange rate, or interest rate.
A binding order for the realization of a deal at the required exchange rate, or interest rate.
Open position
The investor has a open position in the case when it has a long, or short position, i.e. that it is exposed to the risk of exchange, or interest rate fluctuation.
The investor has a open position in the case when it has a long, or short position, i.e. that it is exposed to the risk of exchange, or interest rate fluctuation.
Out-of-the-money option
The situation when, for example in a call option, the spot price is lower than the realization price. In the case of a put option, the situation when the spot price is higher than the realisation price. An out-of-the-money option will not be applied at the expiration date.
The situation when, for example in a call option, the spot price is lower than the realization price. In the case of a put option, the situation when the spot price is higher than the realisation price. An out-of-the-money option will not be applied at the expiration date.
Overnight (O/N)
An overnight loan or deposit. Settlement of the deal takes place on the following working day.
An overnight loan or deposit. Settlement of the deal takes place on the following working day.
Over the counter (OTC)
Over-the-counter (not organised) manner of trading, mainly via commercial banks, brokers, investment companies, funds, etc.
Over-the-counter (not organised) manner of trading, mainly via commercial banks, brokers, investment companies, funds, etc.
Money market
A segment of the financial market in which short-term financial assets, having a maturity not exceeding 1 year, are traded. Money market instruments include various forms of short-term loans and deposits, T-bills, bills of exchange, cheques, etc. The money market price is interest.
A segment of the financial market in which short-term financial assets, having a maturity not exceeding 1 year, are traded. Money market instruments include various forms of short-term loans and deposits, T-bills, bills of exchange, cheques, etc. The money market price is interest.
Payment instructions
Data on the client?s accounts and banks? codes, for the transfer of individual currencies.
Data on the client?s accounts and banks? codes, for the transfer of individual currencies.
Treasury bill
A short-term debt security, the maturity of which is up to 1 year. Its nominal value is SKK 1 million. State treasury bills ? issued by the Ministry of Finance SR ? are intended for short-term coverage of the state budget deficit. NBS treasury bills are issued by the National Bank of Slovakia.
A short-term debt security, the maturity of which is up to 1 year. Its nominal value is SKK 1 million. State treasury bills ? issued by the Ministry of Finance SR ? are intended for short-term coverage of the state budget deficit. NBS treasury bills are issued by the National Bank of Slovakia.
Compulsory minimum reserves
Compulsory deposits of commercial banks, at present their level in Slovakia is 8% of term and non-term primary deposits and they bear a 1.5% p.a. interest.
Compulsory deposits of commercial banks, at present their level in Slovakia is 8% of term and non-term primary deposits and they bear a 1.5% p.a. interest.
Option premium
The price paid for purchase of a currency option, i.e. price for the right to buy a given asset.
The price paid for purchase of a currency option, i.e. price for the right to buy a given asset.
Direct quotation
Expression of the exchange rate as a number of units of domestic currency for a unit of foreign currency.
Expression of the exchange rate as a number of units of domestic currency for a unit of foreign currency.
PRIBOR
PRIBOR (Prague InterBank Offered Rate) shall mean a reference interest rate on the deposits interbank market that is calculated (fixed) in line with the ČNB algorithm by a calculation agent for the Czech Forex Club on the basis of the forex offer side of the quotations submitted by the member reference banks.
PRIBOR (Prague InterBank Offered Rate) shall mean a reference interest rate on the deposits interbank market that is calculated (fixed) in line with the ČNB algorithm by a calculation agent for the Czech Forex Club on the basis of the forex offer side of the quotations submitted by the member reference banks.
Primary market
Primary sale of a given asset directly from the issuer.
Primary sale of a given asset directly from the issuer.
Prime rate
Interest rate at which the bank provides credit to its best clients.
Interest rate at which the bank provides credit to its best clients.
Profit-take
Realisation of the profit, closing the open positions with the aim of crediting the profit achieved.
Realisation of the profit, closing the open positions with the aim of crediting the profit achieved.
Spot deal
Spot deal ? settlement takes place two working days later.
Spot deal ? settlement takes place two working days later.
Put option
An option contract through which a right to sell the given asset at the agreed realization price is bought or sold.
An option contract through which a right to sell the given asset at the agreed realization price is bought or sold.
Realisation price
See strike.
See strike.
Refinancing repo tender
A repo trade of the central bank by which the central bank puts money into the sector so that it repurchases state securities owned by commercial banks at interest.
A repo trade of the central bank by which the central bank puts money into the sector so that it repurchases state securities owned by commercial banks at interest.
Repo trade
A repo trade of the central bank the purpose of which is to supply liquidity in the money sector.
A repo trade of the central bank the purpose of which is to supply liquidity in the money sector.
Repo rate
Interest rate in repo trades.
Interest rate in repo trades.
Resist
A psychological value in technical analysis; the value of resistance, about which on the basis of the past development it is expected that the exchange rate will, in its growth, rebound from it downwards, that it will not exceed its upward value.
A psychological value in technical analysis; the value of resistance, about which on the basis of the past development it is expected that the exchange rate will, in its growth, rebound from it downwards, that it will not exceed its upward value.
Reuters
Information agency bringing financial news, current values of exchange rates, interest rates, etc., also a system via which interbank deals are made.
Information agency bringing financial news, current values of exchange rates, interest rates, etc., also a system via which interbank deals are made.
Revaluation
The official revaluation of a currency against a foreign currency.
The official revaluation of a currency against a foreign currency.
Resident
A foreign exchange resident.
A foreign exchange resident.
Rho of an option
It expresses sensitivity of the option?s price to a change in the interest rate.
It expresses sensitivity of the option?s price to a change in the interest rate.
SEC (Security and Exchange Commision)
A commission for supervision over the share market in the USA.
A commission for supervision over the share market in the USA.
Secondary market
The second and further sale of the given asset (share, bonds, T-bill).
The second and further sale of the given asset (share, bonds, T-bill).
SKONIA
SKONIA (SlovaK OverNight Index Average) – shall mean a weighted average of interest rates on all O/N deposits placed by reference banks on the interbank market (banks to which the status of a reference bank has been assigned). The SKONIA reference interest rate is calculated and released by the NBS on the basis of data submitted by the reference banks.
SKONIA (SlovaK OverNight Index Average) – shall mean a weighted average of interest rates on all O/N deposits placed by reference banks on the interbank market (banks to which the status of a reference bank has been assigned). The SKONIA reference interest rate is calculated and released by the NBS on the basis of data submitted by the reference banks.
Spot next (S/N)
Deposit (loan) beginning in two working days (D+2) and ending on the following working day (D+3).
Deposit (loan) beginning in two working days (D+2) and ending on the following working day (D+3).
Spot exchange rate
Current exchange rate of the primary and secondary currency in the interbank market.
Current exchange rate of the primary and secondary currency in the interbank market.
Spot currency conversion
Spot currency conversion is an immediate purchase of sale of foreign exchange to the client for Slovak koruna, or swap of foreign exchange in one currency for foreign exchange in the other. The actual transfer of funds takes place two working days following the closing of a deal, where Saturdays, Sundays and bank holidays in the country of one of the currencies are not deemed working days. If agreed so between the bank and the client, it is possible to conclude a currency conversion with a transfer of funds already on the day of agreeing the conversion, or on the following working day.
Spot currency conversion is an immediate purchase of sale of foreign exchange to the client for Slovak koruna, or swap of foreign exchange in one currency for foreign exchange in the other. The actual transfer of funds takes place two working days following the closing of a deal, where Saturdays, Sundays and bank holidays in the country of one of the currencies are not deemed working days. If agreed so between the bank and the client, it is possible to conclude a currency conversion with a transfer of funds already on the day of agreeing the conversion, or on the following working day.
Spot currency conversion without physical delivery
Spot currency conversion without physical delivery is a spot purchase or sale of foreign exchange in the primary currency from the side of the client and the sell-back or repurchase of this foreign exchange at the same value date, in the case of which no actual transfer of these foreign exchange funds is made, only the difference between the agreed exchange rates is settled. The settlement of the exchange rate difference takes place two working days following the closing of a deal, where Saturdays, Sundays and bank holidays in the country of one of the currencies are not deemed working days.
Spot currency conversion without physical delivery is a spot purchase or sale of foreign exchange in the primary currency from the side of the client and the sell-back or repurchase of this foreign exchange at the same value date, in the case of which no actual transfer of these foreign exchange funds is made, only the difference between the agreed exchange rates is settled. The settlement of the exchange rate difference takes place two working days following the closing of a deal, where Saturdays, Sundays and bank holidays in the country of one of the currencies are not deemed working days.
Spot value date
The date D + 2 working days, where Saturdays, Sundays and bank holidays in the country of one of the currencies are not deemed working days.
The date D + 2 working days, where Saturdays, Sundays and bank holidays in the country of one of the currencies are not deemed working days.
Spread
In the foreign exchange market the gap between the bid exchange rate and offer exchange rate. Its size is individual in the case of each exchange rate. The narrower the spread the more liquid is its market. In the money market the gap between the buy and sell rate.
In the foreign exchange market the gap between the bid exchange rate and offer exchange rate. Its size is individual in the case of each exchange rate. The narrower the spread the more liquid is its market. In the money market the gap between the buy and sell rate.
Sterilisation repo tender
A repo tender declared by the central bank aimed at withdrawing surplus liquidity from circulation.
A repo tender declared by the central bank aimed at withdrawing surplus liquidity from circulation.
Stop-Loss (S/L)
An order serving for limiting the level of loss, which is input by the investor to the dealer when the exchange rate develops in its disfavour. For example, if the investor buys USD 1 million for SKK at a 41.500 SKK/USD exchange rate, then in the case of strengthening of the Slovak koruna the investor will give to the dealer an S/L order at the level of 41.350 SKK/USD, so that it limits its loss at SKK 150,000.
An order serving for limiting the level of loss, which is input by the investor to the dealer when the exchange rate develops in its disfavour. For example, if the investor buys USD 1 million for SKK at a 41.500 SKK/USD exchange rate, then in the case of strengthening of the Slovak koruna the investor will give to the dealer an S/L order at the level of 41.350 SKK/USD, so that it limits its loss at SKK 150,000.
Straddle
An option strategy; the concurrent purchase or sale of the same number of call or put options for the same underlying asset, the same expiry date and the same realisation price.
An option strategy; the concurrent purchase or sale of the same number of call or put options for the same underlying asset, the same expiry date and the same realisation price.
Strangle
An option strategy; the concurrent purchase or sale of the same number of call or put options for the same underlying asset, the same expiry date but different realisation prices.
An option strategy; the concurrent purchase or sale of the same number of call or put options for the same underlying asset, the same expiry date but different realisation prices.
Strike (exercise price, realisation price)
The price of the option; the price to be paid by the option?s buyer for the right to sell, or buy the given asset.
The price of the option; the price to be paid by the option?s buyer for the right to sell, or buy the given asset.
Support
A psychological value in technical analysis, about which on the basis of past development it is expected that the exchange rate will, in a fall, rebound from it upwards, that it will not exceed its value downwards.
A psychological value in technical analysis, about which on the basis of past development it is expected that the exchange rate will, in a fall, rebound from it upwards, that it will not exceed its value downwards.
S.W.I.F.T.
An electronic system for transferring funds between participating banks.
An electronic system for transferring funds between participating banks.
Government bond
A security issued by a government for a period of above 1 year, serves for covering a deficit in the state?s management, traded on the stock exchange.
A security issued by a government for a period of above 1 year, serves for covering a deficit in the state?s management, traded on the stock exchange.
Technical analysis
Forecasting of further development in the price, exchange rate on the basis of the past development of the given instrument, by means of development graphs.
Forecasting of further development in the price, exchange rate on the basis of the past development of the given instrument, by means of development graphs.
Forward currency conversion
A forward currency conversion is a currency conversion where the transfer of resources is made later than two working days following the arrangement of the forward contract. In the case that the exchange rate is agreed for a precise date of transferring funds in the future, we talk about a forward currency conversion with a fixed maturity date. In the case that the exchange rate is agreed for a certain time interval in the future, in the framework of which funds may be transferred, we talk about a forward currency conversion with a variable maturity date.
A forward currency conversion is a currency conversion where the transfer of resources is made later than two working days following the arrangement of the forward contract. In the case that the exchange rate is agreed for a precise date of transferring funds in the future, we talk about a forward currency conversion with a fixed maturity date. In the case that the exchange rate is agreed for a certain time interval in the future, in the framework of which funds may be transferred, we talk about a forward currency conversion with a variable maturity date.
Non-delivery forward
This is a forward currency conversion where no physical transfer of funds is made at the maturity date, only the difference between the agreed forward exchange rate and the spot exchange rate is settled.
This is a forward currency conversion where no physical transfer of funds is made at the maturity date, only the difference between the agreed forward exchange rate and the spot exchange rate is settled.
Forward exchange rate
The value (in foreign exchange market) expressing the number of units of secondary currency per one unit of the primary currency as at a certain date in the future after taking into consideration the difference in interest rates.
The value (in foreign exchange market) expressing the number of units of secondary currency per one unit of the primary currency as at a certain date in the future after taking into consideration the difference in interest rates.
Forward deal
A contract agreed today for the purchase (sale) of a certain asset in the future at a price agreed in advance.
A contract agreed today for the purchase (sale) of a certain asset in the future at a price agreed in advance.
Theta of an option
It expresses sensitivity of the option?s price to a change in the contract?s life.
It expresses sensitivity of the option?s price to a change in the contract?s life.
Tick
In the case of futures contract, the minimum possible price fluctuation.
In the case of futures contract, the minimum possible price fluctuation.
Tick database
A database of the exchange rate development taking into account every single change in the price quotation.
A database of the exchange rate development taking into account every single change in the price quotation.
Tomorrow next (T/N)
A one-day loan, or deposit, the so-called tomorrow next. Funds are transferred on the following working day following the arrangement of the deal, where the debtor repays the funds on the second working day after arranging the deal.
A one-day loan, or deposit, the so-called tomorrow next. Funds are transferred on the following working day following the arrangement of the deal, where the debtor repays the funds on the second working day after arranging the deal.
Interest-rate option
See Interest rate caps.
See Interest rate caps.
Interest rate differential
Difference in interest of two currencies.
Difference in interest of two currencies.
Interest rate swap
See Interest rate swap.
See Interest rate swap.
Value date
Date of the physical transfer of the given asset.
Date of the physical transfer of the given asset.
Foreign currency cash
Cash tender of foreign states (banknotes, coins, treasury notes).
Cash tender of foreign states (banknotes, coins, treasury notes).
Secondary currency
In quoting the exchange rate, its volume expresses the value of one unit of the primary currency.
In quoting the exchange rate, its volume expresses the value of one unit of the primary currency.
Vega of an option
It monitors how a change in base asset?s volatility affects the value of the option. When the volatility grows, the price of the option grows, too. Conversely, a fall in volatility causes a fall in the price of the option.
It monitors how a change in base asset?s volatility affects the value of the option. When the volatility grows, the price of the option grows, too. Conversely, a fall in volatility causes a fall in the price of the option.
Volatility
A ratio between the median value and standard deviation in exchange rate of the base instrument. It is expressed in percent.
A ratio between the median value and standard deviation in exchange rate of the base instrument. It is expressed in percent.
Exchange rate
A value expressing a number of units of secondary currency per unit of the primary currency.
A value expressing a number of units of secondary currency per unit of the primary currency.
Yield curve
Graphical presentation between the yield and maturity of assets with the same yield.
Graphical presentation between the yield and maturity of assets with the same yield.
WIBOR
WIBOR – (Warshaw InterBank Offered Rate) shall mean a reference interest rate on the interbank market for Polish zloty that is quoted every business day in Warsaw on the basis of the forex offer side of the quotations submitted by the reference banks in line with given algorithm.
WIBOR – (Warshaw InterBank Offered Rate) shall mean a reference interest rate on the interbank market for Polish zloty that is quoted every business day in Warsaw on the basis of the forex offer side of the quotations submitted by the reference banks in line with given algorithm.
Closing a position
Making of a counter-operation towards the opening position, i.e. settlement of an open long or short position.
Making of a counter-operation towards the opening position, i.e. settlement of an open long or short position.
Currency appreciation
An appreciation of a currency, e.g. Slovak koruna appreciates when it gets from an exchange rate of 39 SKK/USD to the level of 38 SKK/USD.
An appreciation of a currency, e.g. Slovak koruna appreciates when it gets from an exchange rate of 39 SKK/USD to the level of 38 SKK/USD.
Currency depreciation
Depreciation of a currency, e.g. Slovak koruna depreciates when it gets from an exchange rate of 39 SKK/USD to the level of 40 SKK/USD.
Depreciation of a currency, e.g. Slovak koruna depreciates when it gets from an exchange rate of 39 SKK/USD to the level of 40 SKK/USD.
Withholding tax
Tax deducted directly at the sale of a given asset.
Tax deducted directly at the sale of a given asset.
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