VIX Index – What is the VIX Index?

What is the VIX Index?

Definition of VIX Index: This is known as Volatility Index. This is explained as the ticker sign for Chicago Board Option Exchange Volatility Index. This is a famous measure and weighted mixture of the implied volatility for different choices on S&P 500. There are no valuables guarding this particular measure, even if trading in index is not permitted. As it is established by measuring indirect volatility, a measure of the market expectation for the volatility is measured. It is regarded as the popular forecasting equipment for the behavior of the market. High value communicates to a volatile market, therefore reflecting high prices for different options. VIX Index is commonly referred as index as it shows a single measure of the expectation of the market of volatility in the next trial period of 30 days.

Variation Margin – What is a Variation Margin?

What is a Variation Margin?

Definition of Variation Margin: It has two meaning in the Forex trading. It is commonly referred as a whole amount that the broker may request to you, provided that you use the leverage or margin for returning the account to the initial margin needs. The expression can also be utilized for describing the unrealized profit or loss for Future or Option contract. On the other hand, as far as leverage context is concerned, the broker will need you to place a maintenance and initial amount. Maintenance is referred as the smallest margin or the leverage ration that sets a level accounting balance which must satisfy the leverage or margin that is currently used. It is the defensive measure to lessen the risk of forex trader and broker. If the balance of the account falls under this level, the broker will attain a margin call demanding huge funds on the deposit. Generally, it is lesser than the initial deposit need. The positions that are especially determined dangerous, the exchange, regulators and the broker can set the requirement of the maintenance than the normal requirement.

Value Date – What is a Value Date?

What is a Value Date?

Definition of Value Date: It is the date when the counterparties to the financial deal agree to solve their obligations by exchanging the ownership rights and payments. The classic value date for the spot trade is two days. A Forex trade is the purchase or selling of the currency at the spot charge for immediate delivery as opposed to the date in future. Contracts are generally settled electronically. Spot Trade in the foreign currencies is transacted with the 2 days value date, a convention because of the differences in time zone and the demand for the banks to converse about the cross border to carry out the transaction. Infrequently, a one day value can be attained when the whole trade is within the similar time as with the USD trades for Canadian Dollar of Mexican Peso. If the post is left overnight, a broker will reset the date of value for two days by reopening and closing the post at the same cost, therefore preventing the real delivery of money to occur.

MCSI – What is University of Michigan’s Consumer Sentiment Index?

What is University of Michigan’s Consumer Sentiment Index?

Definition of University of Consumer Sentiment Index:
This is a famous survey for calculating the opinions of consumer regarding the optimism, pessimism regarding their own future and economy. The university had surveyed nearly 500 households in U.S every month. Because of its fame, this report is published as the preliminary version in the middle month and as a concluding version when the month comes to an end. Questions rotate around the attitudes of people regarding the economy of U.S and their confidence or lack of future prospects. The sentiment of the consumer is regarded as the popular indicator for the strength of customer spending, which is a necessary statistic as our economy is driven by the consumer. Consumer expenditure is at such a level that equalizes to nearly 70% of GDP.

USD Index – What is the USD Index?

What is the USD Index?

Definition of USD Index: This is explained as an index determining the value of US Dollar to a group of overseas currencies. As the currencies are available in pairs which are prejudiced by the own fundamentals of the economy of every country, it is hard to calculate a whole basis whether the currency is weakening or strengthening in the trading market. The Formulated group of money consists of the weight of six currencies. Keeping a track of USDX started in 1973 that followed them to take apart from the Woods system.

Uptick Rule – What is the Uptick Rule?

What is the Uptick Rule?

Definition of Uptick Rule: This rule says that a small seller may only start a short selling position after uptick in market for security. It refers to the encouraging movement in the cost of a security, currency or commodity and is regarded as term that specifically notes the times when the new cost quote crosses the preceding quotation in market. This is referred as the contradictory of the downtick. Another term associated with uptick rule is “zero plus tick” taking place when the final trade is same as the earlier one but if the earlier trade was regarded as uptick. These expressions are commonly used when it is employed by this rule. It was used in 1938 to limit the ability of the short sellers to create further down momentum when the cost of the stock starts falling. When the markets moved to the decimalization in 2000, the SEC eliminated this rule in 2007. Because of the abuses followed, Congress made a request that a rule should be reinstated. After evaluating several proposals and after a trial period, SEC made an announcement about the new laws in February. This rule is known as plus tick rule and short sale rule.

Unemployment Rate – What is the Unemployment Rate?

What is the Unemployment Rate?

Definition of Unemployment Rate: This is a macroeconomic sign that calculates the entire workforce which is employed and seeks employment. It is stated as the percentage of the whole labor force. The pointer is important barometer of health of the economy of the nation. In United States, Bureau of the Labor Statistics says every month the number of unemployed and employed for the earlier month, along with several classifications of different components of composed data. These numbers attain wide coverage in media. BLS utilizes a wide survey procedure to find the reported items. The population found under the survey consists of 60,000 houses in sample, which alters to nearly 110,000 people, a huge sample compared to the public surveys which generally cover few people than two thousand people. An individual is regarded as unemployed if the person is not engaged in any kind of occupation.

Unrealized Gain or Loss – What is an Unrealized Gain/Loss in trading?

What is an Unrealized Gain/Loss?

Definition of Unrealized Gain/ Unrealized Loss: It is defined as a hypothetical profit or loss on the Open position which is valued at the rates of current market, as founded by the trader or by the broker for assessing the outstanding danger. This figure is calculated by taking the existing market value for the post and subtracting its book value. Unrealized losses or gains play the role of losses and profits for the purpose of tax reporting whenever the position is closed or liquidated. For instance, if the Forex trader moves a long way on the Euros and is appreciated by the market, he is considered as a paper profit in his post. Paper profits are not generally taxable, recordable and until it is realized, they are even not permanent also. The foreign market is volatile, and unrealized profits can disappear instantly. For such reason, future investments in the overseas exchange are not advised because of the unpredictability of the general fundamentals that influences the market.

Turnover – What is Turnover in trading ?

What is Turnover?

Definition of Turnover: This is an expression utilized in various parts of world to signify revenue or volume. In the trading world, it is explained as the total cash value of the executed transactions in the given time. This term can also be applied to the management of the portfolio, in which it calculates how long the money or an investor holds the stores after it has been purchased. The longer the investor holds the stock and few trading takes place, there will be low turnover.

Trade Balance – What is Trade Balance?

What is Trade Balance?

Definition of Trade Balance: This is also known as balance of trade and is defined as the dissimilarity between the value of imports and exports of the economic output of a certain country for a specific time period. This is one of the several economic fundamentals affecting the value of the currency of a country. A favorable or positive trade balance is called trade surplus when the exports crosses imports. On the other hand, an unfavorable or negative balance is regarded as a deficit of trade or a trade gap. The trade balance is also an important part of the existing account of the nation which consists of money from an international investment posts and the international help and another cross border exchanges. Factors that affect the trade balance consists of movements of exchange rate, relative costs of production between the trading partners, the accessibility of raw materials, different taxes, the accessibility of sufficient overseas exchange or the reserves to make payment for the imports.