Accumulator Forward

An Accumulator Forward, also known as a Share Forward Accumulator or simply Accumulator is a financial derivative that obliges the issuer to sell and the investor to buy a specific…

Additional Fintech Subsectors

Fintech is the term used to describe a vast array of financial service companies. Numerous sectors are covered by this term, which goes beyond the main fintech categories. These include…

Average Rate Options

An Average Rate Option (ARO) is a FX derivative in which buyer and seller commit to exchange FX options at a predefined strike price under a schedule covering the duration…

Base currency

In a currency pair quote, the base currency, also known as the primary currency, is the first currency shown. The second currency shown is referred to as the quote currency. Currencies…

Base Currency Interest Rates

The Base Currency Interest Rate in a currency pair is that set by the central bank that issued the quote or secondary currency. In FX markets, currencies are quoted in relation to other…

Basis points (bp)

One basis point is equal to 1/100 of one percentage point or 0.01. This means that a rise of 1% is expressed as an increase of 100 basis points. In finance,…

Bid/Ask price

In foreign exchange, as in all financial markets, the bid price is the price that a buyer is willing to pay to acquire a particular asset, while the ask price…

Bitcoin

Bitcoin is a consensus network that enabled a new payment system and a digital currency, which was created in 2009. It is the first decentralized peer-to-peer payment network powered by…

Break Forward

A Break Forward, also known as a Cancellable Forward, Capped Forward or Cancellable Option is a derivative product half way between a forward contract and an option. Break forwards give…

Business foreign exchange

Business foreign exchange is the trading of currencies for purposes of real trade and not for speculation. This activity represents approximately 2% of the global $5.3 trillion daily FX market. The…

Cash Concentration

Cash Concentration is a corporate treasury management strategy involving the transfer of all funds from different accounts to a single, centralised account to increase cash management efficiency and reduce fees. There…

Cash flow hedge

A cash flow hedge is an investment position sold by banks and brokers to offset the losses and profit damage that could result from variations in prices. Example: a euro-denominated importer…

Cash Management

Cash Management is the term used to define all of the activities related to collecting, centralising and disbursing cash within a company. The main aim is to maximise the availability…

Cash Pooling

Cash Pooling is a cash management strategy that allows companies with credit and debit positions at several financial institutions to combine them into a centralised account. Concentrating balances into a single…

Central bank

A central bank is an autonomous or semi-autonomous institution entrusted with managing a state or monetary union’s monetary supply, currency and interest rates. They usually supervise the local commercial banking…