Foreign Exchange Market

The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global forex and related markets currently is over US$ 3 trillion.

Exchange Rate

In finance, the exchange rate (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies specifies how much one currency is worth in terms of the other. For example an exchange rate of 123 Japanese yen (JPY, ¥) to the United States dollar (USD, $) means that JPY 123 is worth the same as USD 1. The foreign exchange market is one of the largest markets in the world. By some estimates, about 2 trillion USD worth of currency changes hands every day.

Stock Broker

A stock broker is a qualified and regulated professional who buys and sells (trades) shares (in other words, stocks) and other securities through market makers on behalf of investors.

Paper Trading

Paper trading (sometimes also called "virtual stock trading") is a simulated trading process in which would-be investors can 'practice' investing without committing real money.

Floor Trader

A floor trader is a member of a stock or commodities exchange who trades on the floor of that exchange for his or her own account. The floor trader must abide by trading rules similar to those of the exchange specialists who trade on behalf of others. The term should not be confused with Floor broker. Floor Traders are occasionally referred to as Registered Competitive Traders, Individual Liqudidity Providers or locals.

Stock Trader

A stock trader or a stock investor is an individual or firm who buys and sells stocks or bonds (and possibly other financial assets) in the financial markets.

Trader (finance)

In finance, a trader is someone who buys and sells financial instruments such as stocks, bonds and derivatives.

Traders are either professionals working in a financial institution or a corporation, or casual individual investors or speculators. They buy and sell financial instruments traded in the stock markets, derivatives markets and commodity markets, comprising the stock exchanges, derivatives exchanges and the commodities exchanges.

Barter

Barter is a type of trade that doesn't use any medium of exchange, in which goods or services are exchanged for other goods and/or services. It can be bilateral or multilateral as trade.

Barter and money are different means of balancing an economic exchange. Barter is recognized as trade in societies without monetary systems. Although it can be argued that barter exists in most societies parallel to monetary systems. Barter crosses over to the spheres of trade with money when economies are suffering from a very unstable currency (as when hyperinflation hits). Barter is also used as a concept in regard of intercultural exchange between craftsmen or artists of different countries, especially when the exchange is passing the gap between "the rich world" and "the poor world".

Market

In economics, a market is a social structure developed to facilitate the exchange of rights, services or product ownership. Markets enable peoples' services, firms and products to be evaluated and priced. There are two roles in markets, buyers and sellers. The one side of the market, who is aware of at least two actors on the other side whose offers can be evaluated in relation to each other. A market allows buyers and sellers to discover information and carry out a voluntary exchange of goods or services. This is commonly done through trade. These trades may be handled a variety of ways, but in small market environments, buyers and sellers typically deal in currency, and goods. In everyday usage, the word "market" may also refer to the location where goods are traded, or in other words, the marketplace.

Trade

A mechanism that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and services. Modern traders instead generally negotiate through a medium of exchange, such as money. As a result, buying can be separated from selling, or earning. The invention of money (and later credit, paper money and non-physical money) greatly simplified and promoted trade. Trade between two traders is called bilateral trade, while trade between more than two traders is called multilateral trade.

Trade exists for many reasons. Due to specialisation and division of labor, most people concentrate on a small aspect of production, trading for other products. Trade exists between regions because different regions have a comparative advantage in the production of some tradable commodity, or because different regions' size allows for the benefits of mass production. As such, trade at market prices between locations benefits both locations.

Trading can also refer to the action performed by traders and other market agents in the financial markets.

Commodities Exchange

A commodities exchange is an exchange where various commodities and derivatives products are traded. Most commodity markets across the world trade in agricultural products and other raw materials (like wheat, barley, sugar, maize, cotton, cocoa, coffee, milk products, pork bellies, oil, metals, etc.) and contracts based on them. These contracts can include spot prices, forwards, futures and options on futures. Other sophisticated products may include interest rates, environmental instruments, swaps, or ocean freight contracts. Steel contracts started to be traded for the first time on the London Metal Exchange in 2007.

Commodity Market

Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts.

Commodity Money

Commodity money is money whose value comes from a commodity out of which it is made. Examples of commodities that have been used as mediums of exchange include gold, silver, copper, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, and candy.

Representative Money

Representative money refers to money that consists of token coins, other physical tokens such as certificates, and even non-physical "digital certificates" (authenticated digital transactions) that can be reliably exchanged for a fixed quantity of a commodity such as gold, silver or potentially water, oil or food. Representative money thus stands in direct and fixed relation to the commodity which backs it. This is to be distinguished from commodity money which is actually composed of a real physical commodity. It is also distinguished from fiat money, in which the value of the money varies with regard to commodities, according to government dictate in regions where government authority holds sway, or else according to market forces where it does not.

Fiat Currency

In economics, fiat currency or fiat money is money backed by an authority, usually a government, for use in exchange of goods and services or to pay a debt, e.g tax. Unlike representative money, fiat money is not convertible to specie.

Fiat money is a form of money backed by the good credit of the issuing authority, which could be a government, bank, or other organization. The value of the money is based primarily on the faith that the money will remain relatively stable in value, continue to be accepted as a means of exchange, and will be accepted by creditors. Of particular relevance is its acceptability as payment of debts to the government, such as taxes. The term “fiat” money is also often used to distinguish it from representative money, which is pegged or fixed to a quantity or mass of precious metal. While representative money is often associated with a legal requirement that the bank of issue pay in fixed weights of a given precious metal or (in theory) fixed amount of any other precious good, fiat money generally has no inherent value. Instead, it derives its value as a medium for exchange when traded for goods or services or to pay debts.

Gold

Gold is a chemical element with the symbol Au (from the Latin aurum, meaning shining dawn) and atomic number 79. It is a highly sought-after precious metal which, for many centuries, has been used as money, a store of value and in jewelry. The metal occurs as nuggets or grains in rocks, underground "veins" and in alluvial deposits. It is one of the coinage metals. Gold is dense, soft, shiny and the most malleable and ductile of the known metals. Pure gold has a bright yellow color traditionally considered attractive.

Gold formed the basis for the gold standard used before the fiat currency monetary system was employed by the International Monetary Fund (IMF) and the Bank for International Settlements (BIS). It is specifically against IMF regulations to base any currency against gold for all IMF member states. The ISO currency code of gold bullion is XAU.

Coin Collecting

Coin collecting is the collecting or trading of coins or other forms of legally minted currency. Frequently collected coins include those that were in circulation for only a brief time, minted with errors or especially beautiful or historically interesting pieces. Coin collecting can be differentiated from numismatics in that the latter is the study of currency, though both are obviously closely related.

Bullion Coin

A bullion coin is a coin struck from precious metal and kept as a store of value or an investment, rather than used in day-to-day commerce. Examples include Krugerrands, British sovereigns, the American Eagle series and the Canadian Maple Leaf series.

Precious Metal

A precious metal is a rare metallic chemical element of high economic value. Chemically, the precious metals are less reactive than most elements, have high luster, are softer or more ductile, and have higher melting points than other metals. Historically, precious metals were important as currency, but are now regarded mainly as investment and industrial commodities. Gold, silver, platinum and palladium each have an ISO 4217 currency code.

Coinage Metals

Coins are made from one or more coinage metals.
Many coinage metals are from Group 11 of the Periodic table, however there are some exceptions. Precious metals are used in bullion coins and some collectable coins. Coins not intended for circulation or for intrinsic value, have also been made experimentally using an even larger variety of metals, in technical and artistic experiments.

Coin

A coin is usually a piece of hard crap, usually metal or a metallic material, usually in the shape of a disc, and most often issued by a government. Coins are used as a form of money in transactions of various kinds, from the everyday circulation coins to the storage of vast amounts of bullion coins. In the present day, coins and banknotes make up the cash forms of all modern money systems. Coins made for circulation (general monetized use) are usually used for lower-valued units, and banknotes for the higher values; also, in most money systems, the highest value coin is worth less than the lowest-value note. The face value of circulation coins is usually higher than the gross value of the metal used in making them, but this is no longer generally the case with historical circulation coins made of precious metals. For example, the historical Eagle (United States coin) contained .48375 troy ounce of gold and has a face value of only ten U.S. dollars, but the market value of the coin, due to its metal content, is now many times the face amount.

Negotiable Instrument

A negotiable instrument is a specialized type of contract for the payment of money that is unconditional and capable of transfer by negotiation. Common examples include cheques and banknotes (paper money).

Banknote

A banknote (often known as a bill or simply a note) is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. Along with coins, banknotes make up the cash or bearer forms of all modern money. With the exception of non-circulating high-value or precious metal commemorative issues, coins are generally used for lower valued monetary units, while banknotes are used for higher values.

Fractional-Reserve Banking

Fractional-reserve banking refers to a financial system "in which some fraction of the deposits can be used to finance profitable but illiquid investments."

Transactional Account

Transactional account is a deposit account held at a bank or other financial institution, for the purpose of securely and quickly providing frequent access to funds on demand, through a variety of different channels. Because money is available on demand these accounts are also referred to as demand accounts or demand deposit accounts.

Bank

A banker or bank is a financial institution that acts as a payment agent for customers, and borrows and lends money. In some countries such as Germany and Japan banks are the primary owners of industrial corporations while in other countries such as the United States banks are prohibited from owning non-financial companies.

Deposit Account

A deposit account is a current account at a banking institution that allows money to be deposited and withdrawn by the account holder, with the transactions and resulting balance being recorded on the bank's books. Some banks charge a fee for this service, while others may pay the customer interest on the funds deposited.

Money Market Deposit Account

Money market deposit account is a deposit account that is considered a savings account for some purposes, but upon which checks can typically be written, subject to certain restrictions. Typical restrictions are that a fairly high minimum balance must be maintained in order to avoid fees. With the advent of online banking, many banks are able to pay a high interest rate on a low balance, sometimes as low as $1. A debit card is often issued for making withdrawals.

Money Supply

Money supply, also known as monetary aggregates and money stock, is the quantity of currency and the value of checking accounts owned by the public. The interest rate is the price of borrowing money. The two are related inversely: as the money supply increases, interest rates will fall.

Money

Money is any token or other object that functions as a medium of exchange that is socially and legally accepted in payment for goods and services and in settlement of debts. Money also serves as a standard of value for measuring the relative worth of different goods and services and as a store of value. Some authors explicitly require money to be a standard of deferred payment.



Money includes both currency, particularly the many circulating currencies with legal tender status, and various forms of financial deposit accounts, such as demand deposits, savings accounts, and certificates of deposit. In modern economies, currency is the smallest component of the money supply.

Medium of Exchange

A medium of exchange is an intermediary used in trade to avoid the inconveniences of a pure barter system.

Currency

A currency is a unit of exchange, facilitating the transfer of goods and/or services. It is one form of money, where money is anything that serves as a medium of exchange, a store of value, and a standard of value. A currency is the dominant medium of exchange. To facilitate trade between currency zones, there are exchange rates, which are the prices at which currencies (and the goods and services of individual currency zones) can be exchanged against each other. Currencies can be classified as either floating currencies or fixed currencies based on their exchange rate regime. In common usage, currency sometimes refers to only paper money, as in coins and currency, but this is misleading. Coins and paper money are both forms of currency.