C

Cable – This slang word used by forex traders refers to the exchange rate between the U.S. dollar and the British pound sterling. Although the term developed because this quote was originally transmitted via a transatlantic cable, it is still commonly used today.

Canadian Ivey Purchasing Managers (CIPM) Index – The CIPM Index measures the business climate in Canada. It is issued by the Richard Ivey Business School.

Candlestick Chart – A candlestick chart is a measure of the trading prices for the day. It includes the opening price and closing price. If the bar from the opening to closing price is shaded, then the currency closed lower than its opening price. If the bar is not shaded, the currency closed higher than its opening price.

Carry Trade – A carry trade is a simultaneous purchase and sell in which currencies with a low interest rate are sold, while currencies with a high interest rate are purchased.

Cash Market – A cash market is the market for an actual or cash commodity as opposed to the market for a futures contract.

Central Bank – A central bank is the top tier of a two-tier banking system. A central bank is a part of the government or works closely with a government in order to ensure national price stability, manage foreign reserves and act as a banker to the government and commercial banks.

Chartist – Also known as a technical trader, a chartist is a trader that specialises in using graphs, charts and historical data in an attempt to predict future currency values.

Cleared Funds – Cleared funds are funds that are available to be used again after the settlement of a trade.

Clearing – When a trade is being settled, it is referred to as clearing.

Closed Position – A closed position is the equal offset to an open position required to square the position, thus ending it.

Collateral – Collateral is an asset used to secure a monetary loan or guarantee the performance of an investment. Collateral can be seized by a creditor or investor if the loan is not paid back or if the investment does not perform to standards.

Commission – A commission is a transaction fee charged by a broker. It can be a percentage or a flat rate.

Confirmation – A confirmation is a document exchanged between a buyer and a seller that details the terms of a transaction.

Construction Spending – The monthly estimate of the cost of new construction in the United States.

Contagion – When an economic crisis spreads from one market to others, it is referred to as contagion. For example, the economic and political crises in Indonesia in 1997 led to instability in most other Asian markets and Latin American markets.

Contract – Each transaction on the foreign exchange market is completed through a contract.

Counter Currency – The second currency of a currency pair is called the counter currency.

Counterparty – Either of the parties in a currency transaction may be referred to as the counterparty as long as the other is referred to as the party, but it is usually used to mean the party opposite the trader.

Country Risk – The risk inherent in any transaction conducted across political borders. Country risk may involve political and/or legal risks.

Cross Currency – This term may refer to a transaction involving the simultaneous buying and selling of multiple currencies, any pair of currencies that does not include the U.S. dollar or any transaction that involves more than a single currency.

Currency – Currency is the basic medium of trade within a given political boundary. The use of one particular currency within a country or territory is usually enforced by law.

Currency Code – All currencies are designated a three-letter ISO code for the purpose of standardizing the names of currencies on the foreign exchange.

Currency Market – The currency market is another name for the foreign exchange market.

Currency Pair – The rate of exchange in purchasing one currency with another currency is listed as a currency pair and expressed in terms of one currency for the other.

Currency Risk – The inherent possibility of an adverse change in the exchange rates of every currency.

Currency Symbol – The currency symbol is an abbreviation commonly used for a particular currency. The symbol can be from an alphabet or an unrelated character. Confusingly, some traders, brokers and dealers refer to a currency’s ISO code as the currency symbol.

Current Account – A current account is the sum of a country’s balance of trade, net income and net payments. Of these components, the balance of trade is considered the key factor.

Customizable Currency Converter – A tool, usually electronic, that can be customized to display the exchange rates of specifically designated currencies.