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1. Ladder Option

An option that locks in gains as the underlying asset reaches predetermined price levels, In this way, these levels are like rungs of a ladder. The gains are locked in even if the asset More…

2. Lagging Indicator

Economic indicators that change after the overall economy has changed, used to confirm effects of Fed policy. An example is the Consumer Price Index (CPI).

3. Leading Indicators

Economic indicators used to predict future economic activity, such as the levels of the S&P 500 index.

4. Left-Hand Side

Refers to the bid quote, which is the price at which customers who are long a currency pair sell it.

5. Leverage

The ratio of margin to the maximum position size. With a deposit of $5000 and a leverage of 50, a trader could enter a position with a face value of $250,000. Leveraging allows you to More…

6. Liability

The obligation to deliver currency as part of a spot transaction. In speculative forex trading, currency is not delivered. All profits and losses are subtracted from margin deposits.

7. LIBOR

London Interbank Offered Rate – The rate that banks use when borrowing from one another. See also: London Interbank Offered Rate

8. LIFFE

London International Financial Futures Exchange

9. Limit Order

An order to transact at a specified price or better. See Buy Limit Order and Sell Limit Order.

10. Limit Price

The specified price as part of a limit order.

11. Line Chart

The simplest form of charting, a line chart plots a series of lines connecting the various price levels over a specified time period.

12. Liquid

Term used to describe a market where there are lots of buyers and sellers generating a great deal of volume.

13. Liquidation

This is what happens as a result of a margin call. All positions are closed to prevent further loss. At margin call, the value of the account is not sufficient to sustain the position size. More…

14. Liquidity

Term used to describe a market where there are lots of buyers and sellers generating a great deal of volume.

15. London Interbank Offered Rate

The London Interbank Offered Rate or LIBOR is a daily reference rate based on the interest rates at which banks borrow unsecured funds from other banks in the London wholesale money market More…

16. Long

When a currency pair is long, the first currency is bought while the second currency is sold short. To go long on a currency means that you buy it. A long position is expressed in terms of More…

17. Long Call

An option which gives its holder the right, but not the obligation, to buy the underlying asset.

18. Long Position

When a currency pair is long, the first currency is bought while the second currency is sold short. To go long on a currency means that you buy it. A long position is expressed in terms of More…

19. Long Put

An option which gives its holder the right, but not the obligation, to sell the underlying asset.

20. Lookback Option

An option that lets the holder look back at the prices of the underlying asset during the life of the option and select the ideal price to exercise at.

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