A currency peg is a governmental policy of fixing the exchange rate of its currency to that of another currency, or occasionally to the gold price. It can sometimes also be referred to as a fixed exchange rate or pegging.
A currency future is a contract that details the price at which currency could be bought or sold and sets a specific date for the exchange.
Currency depreciation is the decline of a currency’s value relative to another currency. It specifically refers to currencies in a floating exchange rate – a system in which a currency’s value is set by the forex market, based on supply and demand.
Currency appreciation is when one currency in a forex pair increases in value relative to the other currency in the pair. Forex traders often talk about one currency ‘strengthening’ in relation to another, meaning that it would cost more to buy, or that it can buy more of another currency when sold.
Crystallization is the term used when a trader or business closes a position and then reopens an identical position immediately.
CPI stands for the consumer price index, an average of several consumer goods and services that are used to give an indication of inflation.
A covered call is when a trader sells (or writes) call options in an asset that they currently have a long position on. They are also known as buy-writes.
The cost of maintaining an investment position is often referred to as the cost of carry or carrying charge. It can come in many forms, including interest on margins or the loans used to make the trade, or the cost of storage and insurance associated with holding a commodity.
