Forex Glossary - C

Candlestick Chart

A forex chart that indicates the trading range for the day as well as the opening and closing price. If the open price is higher than the close price, the rectangle between the open and close price is shaded. If the close price is higher than the open price, that area of the chart is not shaded.


Cash Market

The market in the actual financial instrument on which a futures or options contract is based.


Central Bank

A government or quasi-governmental organization that manages a country's monetary policy. For example, the US central bank is the Federal Reserve, and the German central bank is the Bundesbank.


Chartist

An individual who uses charts and graphs and interprets historical data to find trends and predict future movements. Also referred to as Technical Trader.


Cleared Funds

Funds that are freely available, sent in to settle a trade.


Closed Position

Exposures in foreign currencies that no longer exist. The process to close a position is to sell or buy a certain amount of currency to offset an equal amount of the open position. This will 'square' the postion.


Clearing

The process of settling a forex trade.


Contagion

The tendency of an economic crisis to spread from one market to another. In 1997, political instability in Indonesia caused high volatility in their domestic currency, the Rupiah. From there, the contagion spread to other Asian emerging currencies, and then to Latin America, and is now referred to as the "Asian Contagion".


Collateral

Something given to secure a loan or as a guarantee of performance.


Commission

A transaction fee charged by a forex broker.


Confirmation

A document exchanged by counterparts to a transaction that states the terms of said transaction.


Contract

The standard unit of trading.


Counter Currency

The second listed Currency in a Currency Pair.


Counterparty 

One of the participants in a financial transaction.


Country Risk

Risk associated with a cross-border transaction, including but not limited to legal and political conditions.


Cross Currency Pairs or Cross Rate

A foreign exchange transaction in which one foreign currency is traded against a second foreign currency. For example; EUR/GBP


Currency Symbols AUD

Australian Dollar, CAD - Canadian Dollar, EUR - Euro, JPY - Japanese Yen, GBP - British Pound, CHF - Swiss Franc


Currency

Any form of money issued by a government or central bank and used as legal tender and a basis for forex trade.


Currency Pair

The two currencies that make up a foreign exchange rate. For Example, EUR/USD


Currency Risk
The probability of an adverse change in exchange rates position. This will 'square' the postion.