Glossary of Terms
Ours is a business full of technical terms. If you come across a term you don't recognize check here to see if it is explained.
A
Available Funds
These are the funds in this currency which are held in your account with us and which are available for you to sell in
exchange for another currency or for you to disburse to a beneficiary of your choice. Further details can be seen
by following the This Week's Transactions and Account History link from your
Account Balances page.
B
Balance Date
The date the client is expected to effect settlement of their sold currency to the specified Elldridge Lynch account.
Beneficiary
The receiver of funds a client has purchased. The beneficiary details include account name, bank account details and notification email address.
C
Contract Date
The date and time (NZT) that the contract was transacted.
D
Deposit Date
The date that the deposit is due to be paid for a deposit on a forward contract.
E
Exchange rate
(Foreign-exchange rate, Forex rate, FX rate)
Rate between two currencies specifies how much one currency is worth in terms of
the other.
F
Foreign exchange option
(FX option, Currency option)
A derivative financial instrument where the owner has the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date. No obligation arises where an option is purchased however an obligation may arise if the option is sold.
Forward Contract
A contract entered into today to buy or sell an agreed currency at an agreed future date and at an agreed price.
Forward Limit Rate
A rate that is better than the current market rate allowing you to capture positive market movements. If the order is executed the contract is for delivery on a future date as specified by the client. A deposit is required upon execution of the order.
Forward Rate
The forward exchange rate refers to an exchange rate that is quoted today but for delivery and payment on a specific future date. In order to obtain the forward rate from the actual exchange rate the forward points are either added or subtracted from the spot exchange rate. The forward points represent differential between the interest rates for the currencies.
Forward Stop Rate
A rate that is worse than the current market rate allowing you to protect against adverse market movements. If the order is executed the contract is for delivery on a future date as specified by the client. A deposit is required upon execution of the order.
Forward Transaction
See Forward Contract
M
Margin Call
A request for additional deposits to meet margin requirements because of adverse market movements.
Market Order
See trade order
Market Rate
The current exchange rate as quoted by Elldridge Lynch.
Mid-rate
This is the middle rate between buy/sell quotes in foreign exchange. For example, if the NZD/USD quote was 0.6010/0.6020, the mid-rate would be 0.6015.
S
Spot Contract
It is an agreement to buy or sell one currency in exchange for another at an agreed rate. Settlement for spot usually takes place two business days after the original contract date. However clients in certain cases can contract for same day or next business day.
Spot Limit Rate
A rate that is better than the current market rate allowing you to capture positive market movements. If the order is executed the contract is for immediate delivery.
Spot OCO (One Cancels the Other)
This is both a limit and stop rate. Whichever is reached first automatically cancels the other. If the order is executed the contract is for immediate delivery.
Spot Rate
The spot exchange rate refers to the current exchange rate between two currencies for value in two business days time.
Spot Stop Rate
A rate that is worse than the current market rate allowing you to protect against adverse market movements. If the order is executed the contract is for immediate delivery.
Spot Transaction
See Spot Contract
T
T.T. (Telegraphic Transfer)
An electronic funds transfer to bank accounts worldwide.
Total Balance
In addition to any cleared funds, this balance includes
- uncleared funds [ie. funds we have received but which are still clearing through the banking system]; and
- amounts due on or before today which are owed by you but which have not yet been received by us such as the amount you have sold under a spot or forward contract on whcih the balance date is today or earlier, or the amount of any unpaid forward deposit or margin call; and
- amounts you have bought from us in this currency under foreign exchange contracts where you have fully settled the currency you have sold to us.
The Total Balance does not include the value of contracts for which the balance date has not yet been reached.
Further details can be seen
by following the
This Week's Transactions and Account History link from your
Account Balances page.
Trade Order
Trade orders allow customers to specify a rate they wish to transact at that is either better than the current market rate to capture positive movements or worse than the current market rate to protect against adverse movements.
V
Value Date
The date that the contract will be completed and the beneficiary account credited providing the client has fulfilled there payment obligation under the contract.