Vostro Account
A local currency account maintained with a bank by another bank. The term is normally applied to the counter-party’s account from which funds may be paid into or withdrawn, as a result of a transaction.
A local currency account maintained with a bank by another bank. The term is normally applied to the counter-party’s account from which funds may be paid into or withdrawn, as a result of a transaction.
A measure of the amount by which an asset price is expected to fluctuate over a given period. Normally measured by the annual standard deviation of daily price changes (historic). Can be implied from futures pricing, implied volatility.
Shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. The VIX is a widely-used measure of market risk and is often referred to as the “investor fear gauge.”
The speed with which money circulates or turnover in the economy. It is calculated as the annual national income: average money stock in the period.
Funds required to be deposited by a client when a price movement has caused funds to fall below the stipulated percentage of the value of the contract.
Normally settlement is for two working days from the date the contract is entered into. Value Today Transaction is executed for same day settlement; sometimes also referred to as “cash transaction”.
For exchange contracts it is the day on which the two contracting parties exchange the currencies which are being bought or sold. For a spot transaction it is two business banking days forward in the country of the bank providing quotations which determine the spot value date.
An exchange rate is normally considered to be undervalued when it is below its purchasing power parity.
