Foreign Exchange Terminology

  • What is pip?

    For the foreign exchange, the smallest pip is 1/10000, which means as the fourth decimal place. In case of EUR/USD, if the spread is 3, then the exchange rate can be like 1.2500/1.2503. In the currency pairs, the Japanese yen is the only exception. The exchange rate for USD/JPY only has two decimal place. For example, for the spread with 3, the exchange rate can be like 114.05/114.08. PIP means the smallest unit of the price. For EUR/USD, if the spread is 1 pip, the rice may be 1.2500/1`.2501.

  • What is the spread?
  • What is cross trade?
  • What is Foreign Exchange?
  • What is the margin rate?
  • What is leverage?
  • What is overnight?
  • What is swap rate?
  • What is the difference between "Day Trading" and "overnight trade"?
  • What is the unit of CFD?
  • What is net?
  • What is available margin?
  • What is a stop-loss price?

Risk Disclosure: Trading in forex and Over the Counter (OTC) products offered by Formax International Market Limited, a company registered in Auckland, New Zealand is speculative in nature and not appropriate for all investors. FORMAX is registered on Financial Service Providers Register with registration number FSP207987 and is a member of FSCL, a dispute resolution scheme in accordance with New Zealand law.

Investors should only use risk capital when trading forex because there is always the risk of substantial loss.
It is important investors carefully consider their objective, financial situation and level of experience. It is recommended that investors seek independent advice before trading. Account access, trade executions and system response may be adversely affected by market conditions, quote delays, system performance and other factors.

Discreet investment is suggested for the risk of the stock market.