Back office

The office location, or department, where the processing of financial transactions takes place.


The financial result of all completed transactions of a trading account.

Bank Rate

The rate at which a central bank is prepared to lend money to its domestic banking system.

Base currency

In terms of foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. The base currency is the currency against which exchange rates are generally quoted in a given country. Examples: USD/JPY, the US Dollar is the base currency; EUR/USD, the EURO is the base currency.

Base interest rate(benchmark interest rate)

A minimal interest rate set and published by commercial banks for accumulating interest on different credit types.

Basis Point

The security profit change of 0.01%. E.g. the decrease of an interest rate from 5% to 4.5%, means the loss of 50 basis points.


A market participant counting on the market price decrease; a market operator, a trader or an investor who speculates for the fall.

Bear market

An extended period of general price decline in an individual security, an asset, or a market.


The price at which an investor can place an order to buy a currency pair; the quoted price where an investor can sell a currency pair. This is also known as the "bid price" and "bid rate".

Big figure

The first two or three digits of a foreign exchange price or rate. Examples: USD/JPY rate of 108.05/10 the big figure is 108. EUR/USD price of .8325/28 the big figure is .83

Bretton Woods

The site of the conference which in 1944 led to the establishment of the post war foreign exchange system that remained intact until the early 1970s. The conference resulted in the formation of the IMF. The system fixed currencies in a fixed exchange rate system with 1% fluctuations of the currency to gold or the dollar.

Bretton Woods Agreement

The treaty signed by the first members of the UN in 1944, which has set fixed exchange rates for major currencies giving central banks the right to intervene in foreign exchange markets as well as the price of gold at the level of 35 USD per ounce. The agreement has been in force until 1971.


An agent, who executes orders to buy and sell currencies and related instruments either for a commission or on a spread. Brokers are agents working on commission and not principals or agents acting on their own account. In the foreign exchange market brokers tend to act as intermediaries between banks bringing buyers and sellers together for a commission paid by the initiator or by both parties. There are four or five major global brokers operating through subsidiaries affiliates and partners in many countries.

Budget deficit

A situation when the expenditures planned by government exceed the revenue.


A market participant counting on the market price increase; a market operator, a trader or an investor who speculates for the rise.

Bull market

A market which is on a consistent upward trend.


Central Bank of Germany.


An opening of a long and a closure of a short positions.

Buy Limit order

An order to execute a transaction at a specified price (the limit) or lower.

Buy on margin

The process of buying a currency pair where a client pays cash for part of the overall value of the position. The word margin refers to the portion the investor puts up rather than the portion that is borrowed.