Currency put option

A currency put option is a hedging contract that gives the holder the right, but not the obligation, to sell a specific currency at a specific price within a defined…

Currency Risk

Currency risk is the impact of currency fluctuations on the value of a firm’s cash flows or on its accounting position. The quantification of currency risk is known…

Currency spot rate

The currency spot rate, or just spot rate, is the current exchange rate for any currency pair, for immediate settlement “on the spot”. For most currencies, the spot rate is…

Currency spot trade

A currency spot trade, or simply spot trade, is the act of exchanging currency at the current rate for immediate “on-the-spot” settlement. The spot rate (or spot price) for most currencies…

Currency swap

A currency swap, also known as a Foreign Exchange swap, or FX swap, is the agreement between two parties to exchange two currencies on a specific date or specific multiple…

Currency swing

A large fluctuation in the price of a currency against other currencies on the global foreign exchange market. It is is mainly used to refer to a large fluctuation in…

Currency volatility

Currency volatility, also known as foreign exchange or FX volatility, is the unpredictable movement of exchange rates in the global foreign exchange market. More info

Current rate method (of translation)

The financial concept of current rate method, also known as currency translation method, refers to the standards defined in a company to translate the items of its financial statements nominated…

Cylinder option

Cylinder options are a derivative product allowing investors to protect themselves against the devaluation of a specific currency and to partially benefit from a potential appreciation of that currency. Due to…

Daily foreign exchange rates

Daily foreign exchange rates are once-a-day exchange rate quotes, which are used to trade currencies until the following day, when a new daily foreign exchange rate is quoted. Daily rates are…

Decentralised Treasury

Decentralised (as opposed to centralised) Treasury is a financial management structure, used by some multinationals in which decisions about the company’s financial operations are taken by different teams in different…

Deflation

Deflation is an economic phenomenon involving a generalised decline in the prices of goods and services in a country or region. It is the opposite of inflation and is therefore…

Delivery date

In finance, the delivery date, also known as the settlement date, refers to the specific date on which an investment contract must be completed. Companies using financial instruments like forward or…

Dirty float

Dirty float or managed float are two terms that refer to a foreign currency regime by which a central bank intervenes in the foreign exchange markets to manipulate the balance…

Dollar offset method

The dollar offset method is one of the accounting procedures recognised by the international accounting standards to determine the effectiveness of a hedge relationship. Companies using derivative financial instruments to hedge…