Glossary

Acronyms:

AML : Anti-money laundering, counter-terrorist funding and sanctions.

CDD: Customer Due Diligence as required by Applicable domestic and international Laws relating to AML

DXY: The U.S. Dollar Index (DXY) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners' currencies. The basket is currently weighted as: 57.6% Euro (EUR) 13.6% Japanese Yen (JPY) 11.9% Pound sterling (GBP) 9.1% Canadian dollar (CAD) 4.2% Swedish krona (SEK) 3.6% Swiss franc (CHF)

FAANG: In finance, "FAANG" is an acronym that refers to the stocks of five prominent American technology companies: Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX); and Alphabet (GOOG) (formerly known as Google).

FCA: The UK Financial Conduct Authority previously the FSA (The Financial Services Authority).

IMF: International Monetary Fund

SDR: Special Drawing Rights (SDRs) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). Created in 1969 to supplement a shortfall of preferred foreign exchange reserve assets, namely gold and U.S. dollars. The basket is currently weighted as: 41.73% United States dollar (USD) 30.93% Euro (EUR) 10.92% Chinese Yuan (Renminbi CNY) 8.33% Japanese Yen (JPY) 8.09% Pound sterling (GBP).

Definitions

Cyclical Stock: A cyclical stock refers to stocks whose price is affected by macroeconomic, systematic changes int the overall economy. Cyclical stocks are known for following the cycles of an economy through expansion, peak, recession, and recovery. Most cyclical stocks belong to companies that sell discretionary items consumers can afford to buy more of during a booming economy. These stocks are also from companies that consumers choose to spend less with and cut back during a recession.

Defensive Stock: A defensive stock that provides consistent dividends and stable earnings regardless of the state of the overall stock market. There is a constant demand for their products, so defensive stocks tend to be more stable during the carious phases of the business cycle. Defenisve stocks should not be confused with defense stocks, which re the stocks of companies that manufacture things like weapons, ammunition, and fighter jets.

Four Asian Tigers: The Four Asian Tigers are the high growth economies of Hong Kong, Singapore, South Korea, and Taiwan. Fuelled by exports and rapid industrialisation, the Four Asian Tigers have consistently maintained high levels of economic growth since the 1960s, and have collectively joined the ranks of the world's wealthiest nations. Hong Kong and Singapore are among the most prominent worldwide financial centres, while South Korea and Taiwan are essential hubs for the global manufacturing of automobile and electronic components, as well as information technology.

Forward (Transaction): A deliverable foreign exchange contract, constituting a financial instrument as defined under MiFID II, under which we agree that on a specific date or specific range of dates in the future, to exchange money at an agreed exchange rate and at an agreed time.

FX Transactions: Spot Transactions, Forward Transactions outside the scope of MiFID II and Forward Transactions within the scope of MiFID II.

Head and Shoulders: Not the shampoo, the technical analysis. The pattern is named after the shape the grap creates with a spike, a larger high and then a lower high. It's a reversal pattern based on the fact that the third move higher failed to beat the second.

Interest Sensitive Stock: An Interest Sensitive Stock is a stock that is especially influenced by changes in interest rates. Interest rate sensitive stocks including financial institutions, highly leveraged business and companies that pay high dividends. An interest rate sensitive stock isn't intrinsically worse or better than a stock that is insulated against rate changes. Interest rate sensitivity simply means that the interest rteand interest rate projections become a key part of analysing the stock as an investment.

Long / Short Equity: A fund that focuses on stocks and goes long in companies that are expected to increase in value while simultaneously going short in companies that are expected to decrease in value.

MiFID II: Directive 2014/65/EU of the European Parliament and of the Council o 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU and any delegated legislation or regulations issued under that Directive;

Naked Short: As per the definition of a 'Short Position' below, a naked short is defined by the fact that the trader lacks the ownership of the asset in the first place and is thus deemed 'naked'. This practice is illegal in the U.S. for equities but for Futures or FX shorts can be created without restriction.

Non-Deliverable Forward: a cash-settled foreign exchange contract, constituting a financial instrument as defined under MiFID II, where the profit or loss at the settlement date is calculated by taking the difference between the agreed upon exchange rate and the spot rate provided by the agreed Fixing Source on the Fixing Date, for an agreed upon notional amount of funds.

Pips: The fourth decimal place ie: 0.0001. The term is used by sales-side to quote a price. While bps, bips or 'basis points' are the most commonly used denominations. Pips are used for more accuracy. While Interest Rate products very rarely move by more than the second decimal (eg. The Bank of England just dropped IR from 0.25 to 0.1 the currency markets may move from 1.2851 to 1.2892. Interbank (extremely high volume) brokers like ICAP will quote to the fifth decimal.

Price/Book Ratio: Companies use the price-to-book ratio (P/B ratio) to compare a firm's market capitalisation to its book value. It's calculated by dividing the company's stock price per share by its book value per share (BVPS). An asset's book value is equal to its carrying value on the balance sheet, and companies calculate it netting the asset against its accumulated depreciation.

Price/Earnings Ratio: The price-to-earnings ration (P/E) is one of the most widely used metrics for investors and analysts to determine stock valuation. In addition to showing whether a company's stock price is overvalued or undervalued, the P/E can reveal how a stock's valuation compares to its industry group or a benchmark like the S&P index. The latest P/E ratio for the FTSE was 12.78 Apr-20.

Price/Cashflow Ratio: The price-to-cash-flow (P/CF)multiple falls into the same category as (P/E) (P/S) (P/B), as it evaluates the price of a company's stock relative to how much cash flow a firm is generating.

Short (Position): With stock-markets in order to short a stock, a trader must borrow the position from someone else in order to 'sell' those shares creating a bet that it is going lower, with the intention to buy back at a lower price, return the stock to the owner and lock-in the profit. Also known as a 'covered short' instead of the other 'naked' short.

Special Drawing Rights: Special Drawing Rights (SDR) refer to an international type of monetary reserve currency created by the International Monetary Fund (IMF) in 1969 that operates as a supplement to the existing money reserve of member countries. (USD 42 % EUR 30.93% CNY 10.92% JPY 8.33% GBP 8.09%)

Spot (Transaction): The purchase or sale of a foreign currency to be settled within a maximum of two business days. Spot normally stipulates two exactly (Same-day is Spot-2 and Next-day is Spot-1)

Trailing Stop-Loss: A vanilla FX product that replicates a derivative using a manual currency dealer. The down-side is protected using a fixed Stop-Loss product and the upside is gained via bringing the Stop-Loss upwards in line with subsequent moves.

Currency Codes & Synonyms

AED : The United Arab Emirates dirham. The Emirati dirham.

AUD $ : The Australian Dollar, Aussie

BHD ; Bahraini Dinar

CAD $ : Canadian Dollar. Loonie

CHF : Swiss Franc. Also currency in Liechtenstein. Swissy

CNH ¥ : Offshore Chinese Yuan. The two way, fully deliverable, fully convertible version of the Renminbi. Traded through Hong-Kong.

CNY ¥ : Onshore Chinese Yuan.

CZK : Czech Republic Koruna

DKK : Danish krone

EUR € : European Union Euro

GBP £ : Pounds, Sterling, Quid,

HKD $ : Hong Kong Dollar

ILS : Israeli (New) Shekel

JPY ¥ : Japanese Yen

KWD : Kuwaiti dinar

MAD : Moroccan dirham

MXN : Mexican Peso

NOK : Norwegian Krone

NZD $ : New Zealand Dollar, Kiwi

OMR : Omani rial

PLN : Polish Zloty

QAR : Qatari Riyal

RON : Romanian leu

SAR : Saudi Riyal

SEK : Swedish Krone

SGD $ : Singapore Dollar

THB : Thai Bhat

TRY : Turkish Lira

USD $ : Dollar, Greenback, bucks, benjamins,

ZAR ; South-African Rand

Terminology / Slang

Cable: is the most common parlance for the currency pair GBPUSD. The term derives from the sub-Atlantic 'cable' that connected the two financial hubs from 1855.

Loonie: is the synonym for CAD Canadian Dollar the national currency of Canada which gets its name for the 'common loon' a bird which sits on it's one dollar coin.

Yard: Common parlance and synonym amongst traders for 'One Billion'. The frequency is more common within currency markets as the sheer volume means trades of that size are uncommon outside of them. JBS

Latin

Dictum Meum Pactum: My word is my bond. The motto of The London Stock Exchange since 1923.