M

Major currency pair

The major currency pairs, also called the majors, are the most highly liquid, commonly traded currency pairs, accounting for approximately 85% of all foreign exchange market trades. The four most important major currency pairs are: EUR/USD – euro / US dollar USD/JPY – euro / Japanese yen GBP/USD – pound sterling / US dollar USD/CHF […]

Managed floating exchange rate

A managed floating exchange rate is a regime that allows an issuing central bank to intervene regularly in FX markets in order to change the direction of the currency’s float and shore up its balance of payments in excessively volatile periods. This regime is also known as a “dirty float”. More info FX Spot Transactions […]

Margin

In accounting vocabulary, the concept of margin defines the difference between the cost of producing a good or service and the price at which it is sold. Effectively, in this case, the margin would be the profit made on that product/service. When the production costs and the sales profits are denominated in different currencies, as […]

Margin Call

A margin call, also known as “fed call” or “maintenance call” is an action performed by brokers to their clients, requiring them to deposit additional funds or securities, when the value of one or more of their accounts have devalued down to the maintenance margin. In finance, a margin call is related to margin trading. […]

Margin deposit

A margin deposit is a type of security common in the trading of financial instruments, including foreign exchange and futures and options contracts. More info FX Spot Transactions FX Forward Contracts Dynamic Hedging Why margin deposit? A margin deposit is used as a guarantee that the contract in question will be fulfilled. It is made […]

Margin requirement

Margin requirement is a financial concept related to the minimum amount in collateral that the issuer of a financial security requests from the buyer, to hedge against the risk of adverse price movements or the buyer defaulting. In the foreign exchange markets, businesses or individuals who wish to enter a currency forward contract in order […]

Margin risk

Margin risk is an accounting term that refers to the probability that economic developments might have a negative impact on the profit margins of a company’s expected cash flow. The concept of margin risk is very well known among international businesses whose sales and/or purchases are denominated in foreign currencies, as this sort of risk […]

Mark-to-market

Mark-to-market accounting, also referred to as “marked-to-market” accounting, is the procedure used to obtain the market value of assets and liabilities through daily revaluation rather than referring to the “book value”. This accounting method is used to assess the true value of assets and liabilities, as it shows their current market price and gives a […]

Market maker

In financial markets, the figure of a market maker defines any company with the power to set buy and sell prices of financial instruments or commodities. The U.S. Securities and Exchange Commission defines it as “a firm that stands ready to buy and sell a particular stock on a regular and continuous basis at a […]

Market Order

A market order is one of the most basic tools to automate the management of foreign currency exchange and involves executing a sale or a purchase in financial markets immediately after predefined conditions are met. In currency markets, these orders allow a party that wants to execute a currency trade to do so at a […]