Grain Glossary

FREIGHT FORWARDS Safeguard Supply Chains From Currency Volatility Protect profits from currency fluctuations and offer shippers enhanced cargo protection with Grain Book a Demo Watch the Video CROSS CURRENCY HEDGING Explore Our Solutions Explore the powerful capabilities of our solution designed to simplify and enhance your cross-currency transactions. Empower Shippers with Cargo Value Protection Offer shippers the option to protect their cargo value against currency loss Learn More Protect Your Business from Currency Risk Shelter your business from currency related volatility and safeguard your bottom line. Learn More CARGO VALUE PROTECTION Elevate Your Freight Service with Cargo Value Protection Grain's solution allows freight forwarders to offer shippers a value-added-service that protects of their cargo value during transit from cross-currency volatility. Cost Certainty for Shippers Secure cost certainty for international trade, enabling accurate forecasting and seamless budget planning. Competitive Advantage Differentiate your freight forwarding services by empowering shippers with peace of mind and financial stability. Win New Profit Streams Grain shares with you the premiums paid by shippers for the cargo protection services we provide. Cargo Value Protection HOW IT WORKS Currency Stability in Freight Forwarding Provide shippers with unprecedented peace of mind by safeguarding their cargo's value from currency fluctuations throughout the entire shipping process. From PO to delivery. Booking the Shipment The shipper books their shipment through your freight forwarder platform. Choose Cargo Value Protection During the checkout process, shippers are offered the option to protect their cargo value & freight costs from currency changes. Compensate for Currency Loss In the event of currency headwinds, Grain compensates the shipper upon arrival. Shippers can be paid directly or via your platform. END-TO-END SOLUTION Full-Scale Hedging for Freight Forwarders Empower your supply chain with our seamless Currency Hedging solution. Streamline cross-border payments, eliminate currency risks, and safeguard your profits with our intuitive API or file-sharing integration. Financial Certainty Shield your business from currency fluctuations and navigate the global market with unwavering financial certainty. Pricing Transparency Offer upfront and transparent pricing quotes that factor in currency risk, eliminating hidden costs and ensuring financial clarity. Customer Satisfaction Provide consistent pricing that aligns with actual costs, fostering trust and loyalty within our customer base. End to End Why Choose Grain? Unveiling the Key Benefits for Your Business Reduce FX Pains Grain assumes 100% of your currency risk, guaranteeing your FX rates without the hassle of managing FX volatility on your own. Save Costs Lower your cost of hedging and cross-border payments by a typical factor of 80% relative to existing solutions. Boost Sales Integrate a menu of FX modules that brings measurable financial value to your customers. Simplify Financials Enable your customers to pay you over their local rails without any FX risk and without requiring expensive markups. See Grain in Action Add FX certainty - without the complexity. Get Started Why is currency protection crucial for my business? Currency volatility can lead to unpredictable financial outcomes, affecting your bottom line. Grain's currency protection ensures stability in your international transactions, allowing for more consistent financial planning and reduced risk exposure. How does Grain protect my business from currency volatility? Grain protects your business from currency volatility through our innovative embedded currency hedging solution. Our data-driven cross-currency approach is designed to shield your transactions from currency fluctuations, ensuring stability on future accounts receivables or payables. Using a straightforward data stream via API or file sharing, Grain assumes all currency risks away from you. What kind of data does Grain require to provide currency protection? Grain focuses on transactional data related to your cross-currency activities. This includes details of international transactions, payment histories, and related financial data. We are committed to maintaining the highest standards of data security and privacy. How does Grain's Machine Learning model enhance FX protection? Our Machine Learning model analyzes past transaction patterns to create FX protection strategies specifically for your business or your end users. This includes creating pricing based on customer behavior, like cancellations and payment delays, thereby minimizing risk and maximizing efficiency. What security measures does Grain take to protect my data? At Grain, we prioritize your data's security and privacy. We use advanced encryption and security protocols to ensure that all data processed through our system is protected. Our commitment to data privacy is backed by continuous monitoring and adherence to the latest security standards. Which currencies does Grain support for transactions? Grain supports a wide range of currencies, facilitated by our multi-currency wallet feature. This allows you to create and manage accounts in various currencies, enhancing your ability to conduct and receive payments globally. Whether you're dealing in major world currencies or more localized ones, our platform is designed to cater to your diverse currency needs. How does Grain currency volatility protection work? Grain's currency volatility protection works through an AI-driven solution. Firstly, it integrates with your platform to report transactions. Then, it provides real-time local currency quotes to your users, ensuring exchange rate certainty. Grain assumes 100% of the FX risk, guaranteeing the rates promised. Finally, on the due date, Grain automates the currency exchange at the guaranteed rate, completing the transaction seamlessly. Do I need the entire payment amount to be processed via Grain? No. You can elect whether to convert the entire transaction amount via Grain, or to only settle the currency offsets How does the Grain Local Collection functionality work? Grain opens multiple cross-currency bank accounts, facilitating seamless local collections for global business operations. FAQ

AI-Driven Currency Hedging Solution Embrace Seamless, Risk-Free Multi-Currency Commerce with Our Automated Cross-Currency Solution Get Started Watch the Video Adaptive Integration, Diverse Platforms Grain is designed to solve the challenges of cross-border commerce in diverse sets of environments, including Software Applications, Marketplaces, and Payment Service Providers. Software Platforms Embed Grain’s API to allow your users to automatically hedge Receivables and Payables from inside your application. Payment Service Providers B2B marketplaces GRAIN'S FLOW This is How it Works Report Platform Transactions Effortlessly integrate via our API or our file uploader. Get Quotes for Your Users Show your customer prices in their local currencies. Let Grain Take 100 % of the Risk Grain takes on the risk of delivering the FX rate promised. Automate Settlement on Due Date Grain exchanges currencies at the guaranteed rate and delivers to you or your customer. Learn More OUR DASHBOARD FX Insights & Management Gain complete visibility and control over your cross-currency activities with our intuitive dashboard. Additional Features for Optimal FX Management Explore the powerful capabilities of our solution designed to simplify and enhance your cross-currency transactions. Seamlessly convert currencies with our efficient spot transactions. Spot Transactions Simplify payments with local currency collections. Local Currency Collection Manage multi-currency wallets to withdraw & handle currencies easily. Virtual FX Accounts See Grain in Action Add FX certainty - without the complexity. Get Started Why is currency protection crucial for my business? Currency volatility can lead to unpredictable financial outcomes, affecting your bottom line. Grain's currency protection ensures stability in your international transactions, allowing for more consistent financial planning and reduced risk exposure. How does Grain protect my business from currency volatility? Grain protects your business from currency volatility through our innovative embedded currency hedging solution. Our data-driven cross-currency approach is designed to shield your transactions from currency fluctuations, ensuring stability on future accounts receivables or payables. Using a straightforward data stream via API or file sharing, Grain assumes all currency risks away from you. What kind of data does Grain require to provide currency protection? Grain focuses on transactional data related to your cross-currency activities. This includes details of international transactions, payment histories, and related financial data. We are committed to maintaining the highest standards of data security and privacy. How does Grain's Machine Learning model enhance FX protection? Our Machine Learning model analyzes past transaction patterns to create FX protection strategies specifically for your business or your end users. This includes creating pricing based on customer behavior, like cancellations and payment delays, thereby minimizing risk and maximizing efficiency. What security measures does Grain take to protect my data? At Grain, we prioritize your data's security and privacy. We use advanced encryption and security protocols to ensure that all data processed through our system is protected. Our commitment to data privacy is backed by continuous monitoring and adherence to the latest security standards. Which currencies does Grain support for transactions? Grain supports a wide range of currencies, facilitated by our multi-currency wallet feature. This allows you to create and manage accounts in various currencies, enhancing your ability to conduct and receive payments globally. Whether you're dealing in major world currencies or more localized ones, our platform is designed to cater to your diverse currency needs. How does Grain currency volatility protection work? Grain's currency volatility protection works through an AI-driven solution. Firstly, it integrates with your platform to report transactions. Then, it provides real-time local currency quotes to your users, ensuring exchange rate certainty. Grain assumes 100% of the FX risk, guaranteeing the rates promised. Finally, on the due date, Grain automates the currency exchange at the guaranteed rate, completing the transaction seamlessly. Do I need the entire payment amount to be processed via Grain? No. You can elect whether to convert the entire transaction amount via Grain, or to only settle the currency offsets How does the Grain Local Collection functionality work? Grain opens multiple cross-currency bank accounts, facilitating seamless local collections for global business operations. FAQs

MARKETPLACES Unlock Possibilities and Opportunities
 for Marketplaces We help marketplaces in enabling smooth collaboration between buyers and sellers by safeguarding their transactions from FX risk. Book a Demo Watch the Video END-TO-END FX HEDGING Gain Financial Control with Our Integrated Solution With Grain, you can elevate your performance, reduce costs, and drive higher sales. Empower your buyers and sellers with the best-in-class cross-currency solution. Streamlined Integration Easily integrate Grain into your platform's payables and receivable process. Smooth Payment Execution Grain takes care of moving funds to their destination, hassle-free. Currency Rate Protection Grain ensures that exchange rates are locked in for future transactions. Complete Payment Control Allow your platform customers
to view, analyze, edit, delete,
or schedule payments. HOW IT WORKS Empowering Marketplaces
 for Risk free Transactions Control payables and receivables, protect against currency volatility, and ensure effortless payment execution with Grain's solutions. Payables & Receivable Control Users can view, edit, and schedule payments or receipts with locked-in exchange rates for future transactions. Currency Rate Protection Grain ensures that exchange rates are locked in, eliminating currency volatility risks. Payment Execution We handle the transfer of funds to their destination, making payments effortless and certain. Enhancing Efficiency, Stability & Reach Discover the Grain benefits designed specifically for Marketplaces. Financial Certainty Lock in exchange rates for payables and receivables, even for future transactions, protecting your users from currency volatility. Global Reach Seamlessly connect buyers and sellers from around the world, facilitating international collaborations with ease. Efficiency Streamline your payment process and eliminate manual entry, saving time and reducing errors. Competitive Advantage Gain a competitive edge by offering seamless currency risk protection attracting a wider user base. Why Choose Grain? Unveiling the Key Benefits for Your Business Reduce FX Pains Grain assumes 100% of your currency risk, guaranteeing your FX rates without the hassle of managing FX volatility on your own. Save Costs Lower your cost of hedging and cross-border payments by a typical factor of 80% relative to existing solutions. Boost Sales Integrate a menu of FX modules that brings measurable financial value to your customers. Simplify Financials Enable your customers to pay you over their local rails without any FX risk and without requiring expensive markups. See Grain in Action Add currency certainty - without the complexity. Get Started Why is currency protection crucial for my business? Currency volatility can lead to unpredictable financial outcomes, affecting your bottom line. Grain's currency protection ensures stability in your international transactions, allowing for more consistent financial planning and reduced risk exposure. How does Grain protect my business from currency volatility? Grain protects your business from currency volatility through our innovative embedded currency hedging solution. Our data-driven cross-currency approach is designed to shield your transactions from currency fluctuations, ensuring stability on future accounts receivables or payables. Using a straightforward data stream via API or file sharing, Grain assumes all currency risks away from you. What kind of data does Grain require to provide currency protection? Grain focuses on transactional data related to your cross-currency activities. This includes details of international transactions, payment histories, and related financial data. We are committed to maintaining the highest standards of data security and privacy. How does Grain's Machine Learning model enhance FX protection? Our Machine Learning model analyzes past transaction patterns to create FX protection strategies specifically for your business or your end users. This includes creating pricing based on customer behavior, like cancellations and payment delays, thereby minimizing risk and maximizing efficiency. What security measures does Grain take to protect my data? At Grain, we prioritize your data's security and privacy. We use advanced encryption and security protocols to ensure that all data processed through our system is protected. Our commitment to data privacy is backed by continuous monitoring and adherence to the latest security standards. Which currencies does Grain support for transactions? Grain supports a wide range of currencies, facilitated by our multi-currency wallet feature. This allows you to create and manage accounts in various currencies, enhancing your ability to conduct and receive payments globally. Whether you're dealing in major world currencies or more localized ones, our platform is designed to cater to your diverse currency needs. How does Grain currency volatility protection work? Grain's currency volatility protection works through an AI-driven solution. Firstly, it integrates with your platform to report transactions. Then, it provides real-time local currency quotes to your users, ensuring exchange rate certainty. Grain assumes 100% of the FX risk, guaranteeing the rates promised. Finally, on the due date, Grain automates the currency exchange at the guaranteed rate, completing the transaction seamlessly. Do I need the entire payment amount to be processed via Grain? No. You can elect whether to convert the entire transaction amount via Grain, or to only settle the currency offsets How does the Grain Local Collection functionality work? Grain opens multiple cross-currency bank accounts, facilitating seamless local collections for global business operations. FAQs

GRAIN'S ARTICLES Grain in the Press Stay in the know with the latest news from Grain. NEWSROOM Fintech Weekly Navigating the Future of Currency Risk Management with AI Köln, April 3, 2024 - The article discusses the revolutionizing impact of AI on FX hedging, emphasizing how traditional methods lack in addressing the dynamic challenges of currency risk management. It showcases AI's potential to offer tailored, automated strategies that simplify operations and provide strategic advantages in global trade. This approach not only mitigates risks but also enhances competitiveness by allowing for precise, real-time adjustments to market changes. treasuryXL An overview of cross-currency transactions and how to master them Amsterdam, March 20, 2024 - The article dives into the topic of cross-currency transactions. It explore the challenges and opportunities these transactions present for companies operating internationally, with a particular focus on managing foreign exchange risk. Hitech Wizards Best practices, benchmark data & wisdom for tech finance executives Tel Aviv, 18 February, 2024 - Aharon Navon, Co-founder & CBO of Grain Finance Offers some Best-Practices and Benchmarks for FX Management and Solutions. Prequel Ventures Startup of the month: Grain - Interview with Grain’s Supply Chains January 4 - In this month's interview we asked Ofir Bronhaim, VP of Digital Supply Chain at Grain, 8 questions about his company. Based out of Israel, Grain offers end-to-end cross-currency solutions. Grain addresses a critical issue for its customers by providing solutions that mitigate the challenges posed by currency volatility, particularly for freight forwarders and their shippers operating in international markets. TechCrunch Vesey Ventures closes on $78M debut fund to back fintech startups New York, April 20, 2023 - Vesey’s self-described mission is to back companies “transforming financial services” at the seed to Series B stages. It plans to invest $1.5 million to $3 million as initial checks, and larger amounts for follow-ons. Based in the United States and Israel, the fund has so far backed five startups, including Coast, Cyrus, Grain, Equi and Proper. HOTELBEDS Spotlight On Grain, the winner of Wayra x Hotelbeds’ Pitch Day Challenge Madrid, 29 November, 2023 - In this ‘Spotlight On’ blog series, we’ll be shining the light of attention on each of the start-ups that were shortlisted during this Pitch Day Challenge, to bring their work to the forefront of the travel industry’s focus. The second in this series, this ‘Spotlight On’ will focus on the development of Grain from its beginning to fully formed start-up, which captured our attention thanks to its embedded cross-currency solution that protects travel platforms and their customers from FX volatility. Travolution How bed banks are tackling FX challenges head-on in today's economy London, November 6, 2023 - While one size doesn’t fit all when it comes to FX and needs, Grain’s embedded cross-currency solutions can advise what would work best for each organisation. We interviewed Gerardo Del Río, CFO of Didatravel, to get his insights on how he as a CFO would approach it. treasuryXL Top 3 questions about managing cross-currency transactions answered Amsterdam, August 22, 2023 - Forex trading can be a complex and challenging topic for treasurers, but it’s important to understand that the decisions you make can have a significant impact on the company. In this article, experts from Grain, Kantox and Ebury answers the top 3 questions about forex trading that every treasurer MUST know about. treasuryXL treasuryXL and Grain Finance announce premium editorial partnership VENLO, The Netherlands, July 10, 2023 – treasuryXL, a leading community platform for professionals in the treasury industry, and Grain Finance, a unique end-to-end embedded cross-currency solution that enables software providers and marketplaces to eliminate FX volatility for their customers, have entered into a premium partnership. HOTELBEDS Hotelbeds announce first start-ups to be part of the TravelTech Lab Madrid, June 8, 2023 - Hotelbeds and Wayra, Telefónica's open innovation initiative, have announced the winners of the first TravelTech Lab by Hotelbeds challenge. The four start-ups chosen after presenting innovative solutions to connect B2B global travel ecosystem stakeholders are BotsLovers , Grain, Smartvel and Chekin.

WHY CHOOSE GRAIN Protect Your Business Against Currency Volatility Grain provides businesses with an embedded cross-currency solution, reducing FX risk, driving new revenues, and improving competitiveness. First Name Last name Company Work Email Request a Demo Today OUR BENEFITS Explore the Advantages of Grain Assure Hedge, Alt21, Kantox, Fluenccy and Reach & Bound provide specialized FX services. Our API-based solution integrates these features into a single embeddable solution, enabling clients to hedge global transactions and extend these services to their customers. AI-Driven Hedging Efficiency Our AI technology enhances hedging effectiveness, ensuring your financial strategies are more accurate. Complete Risk Offloading With our insurance-based approach, Grain takes on 100% of the risk, providing you with peace of mind. Lower Operational Costs We lower operational costs through netting positions, directly passing savings onto our customers. Comprehensive Tech Ecosystem Our full tech stack supports every stage of the hedging transaction lifecycle, from initiation to cash settlement. Hedge 100% of Transactions Grain offers unparalleled support for cancellations and refunds, without any additional costs to our customers. Seamless Integration We offer both real-time and offline integration options, whether you want API or file sharing. Localized Fund Collection We enable the collection of funds locally at the point of transaction with secured FX rates. Embeddable Currency Protection Our solution can be fully integrated into any platform, offering end-to-end currency protection. Revenue Sharing Model Grain shares revenue generated from hedging activities with platform-type customers.

Grain Financial Technology Ltd. Terms Of Serv ice Last Revised on September 16th , 2024 1. Services and Accounts 2. No Advice 3. Your Rights & Obligations 4. Ownership and Content 5. Third Party Services and Materials 6. Disclaimers, Limitations of Liability and Indemnification 7. Arbitration 8. Additional Provisions 1. Services and Accounts 2. No Advice These Grain Terms of Service (“ Agreement ”) are between you (“ Customer ”, “ you ” or “ your ”) and Grain Finance BV., or any of its affiliates or subsidiaries as indicated in the applicable Confirmation Note (“Grain”, “Company”, “us”, “we” or “our”). This Agreement governs your access and use of Grain Services, as well as any Transactions made or submitted by you, whether executed or not, unless explicitly stated otherwise by Grain, and constitutes the legal relationship between you and Grain. This Agreement includes each order form, Confirmation Note, and any other referenced terms, agreements, and policies. This Agreement does not have to be signed in order to be binding. You indicate your agreement to this Agreement by logging into your account or otherwise using Grain Services. Additional terms and conditions relating to specific services or products may be provided by Grain from time to time and will apply only if you use such specific services or products. Each time you use any of our Grain Services, it will be based on a Transaction (as further explained below), which forms a separate contract between you and Grain and is subject to the terms and conditions of the applicable Transaction, as indicated in the confirmation note issued by Grain (“Confirmation Note”) and this Agreement (including the applicable service or product specific documentation). In the event of any conflict between the terms of a Transaction Confirmation Note and this Agreement, the Confirmation Note of the applicable Transaction shall prevail to the extent of the specific conflict. By accessing or using Grain Services on behalf of an organization or other entity on behalf of whom you are acting; (a) you declare that you are over the age of 18 years old; (b) you declare that you have the right to bind such organization or entity to the terms of this Agreement, and that you and such organization or entity agree to be bound by the terms of this Agreement; (d) all references to “Customer”, “you” or “your” in this Agreement refer to such organization or entity. IF YOU OR SUCH ORGANIZATION OR ENTITY DO NOT AGREE TO BE BOUND BY THIS AGREEMENT, OR YOU DO NOT HAVE THE AUTHORITY TO BIND THE APPLICABLE ORGANIZATION OR ENTITY, YOU MAY NOT ACCESS OR USE GRAIN SERVICES NOR CARRY OUT ANY TRANSACTION. YOU ACKNOWLEDGE AND AGREE THAT GRAIN IS NOT PROVIDING ANY ADVICE, CONSULTATION, ENDORSEMENT, PROFESSIONAL OR FINANCIAL ADVICE, SERVICES, OR RECOMMENDATION IN RELATION TO GRAIN SERVICES, TRANSACTION(S), FINANCIAL DECISIONS, OR THE USE OR NON-USE THEREOF. CUSTOMER’S USE OF GRAIN SERVICES OR SUBMISSION OF TRANSACTION(S) IS ENTIRELY AT CUSTOMER’S OWN RISK. GRAIN DISCLAIMS ANY AND ALL RESPONSIBILITY OR LIABILITY FOR ANY DECISION THE CUSTOMER OR ANYONE ON ITS BEHALF MAKES IN RELATION TO OR IN RELIANCE UPON THE GRAIN SERVICES (INCLUDING ANY SUBMISSION OR ACCEPTANCE OF ANY PARTICULAR TRANSACTION). YOU SHOULD SEEK PROFESSIONAL ADVICE ON THE RISKS INVOLVED IN THE USE OF THE GRAIN SERVICES, INCLUDING SUBMISSION OR CARRY OUT OF ANY PARTICULAR TRANSACTION. 1. Grain Services and Account a. Subject to the terms of this Agreement, Grain may agree to provide you with the following services, as may be offered by Grain from time to time (together, “Grain Services”): (i) the opportunity to carry out cross-currency transactions and lock in the currency exchange rate of future payments in a particular currency rate (as may be available from time to time) at a specified price and on a definite future date (“Transaction(s)”) through its proprietary platform (“Platform”); (ii) Customer’s-side dashboard and online applications as may be offered from time to time, for information, and technology-based insights and risks assessments through the Platform; (iii) local currency collection; and (iv) sale or purchase of currency, at the rate set at the time the Transaction is issued, and conversion of funds from one currency into another at a specified date as agreed with you and set out in the Confirmation Note. Each Transaction shall form a separate, individual binding contract between Customer and Grain. Transactions are not transferable, negotiable, or assignable by Customer to or with any third party. Grain may refuse to accept any request to carry out any Transaction, without giving any reason, and Grain will have no liability to Customer or any other party as a result of doing so. b. You hereby agree and acknowledge that your access to and use of certain Grain Services or features of the Platform may be subject to the Company (including Third Parties and its service providers) completing a user assessment, diligence, identification, and verification process, including having the right, in Company’s sole discretion, to approve, reject, or cancel any Account (as defined below), request submitted through or in relation to the Grain Services/Platform (including any Transaction) at any time, if the Company or its service providers believes such use, Account, request, or Transaction is not in compliance with, or poses a risk, under Company’s policies or not in compliance with applicable laws, rules, or guidelines (including without limitation BSA/AML, fraud, Know Your Customer (KYC), Know Your Business (KYB)). In the event of non-approval or cancellation of any Account, request, or Transaction, the Company shall make reasonable commercial efforts to inform you, subject to applicable law and regulations. The Company will review and approve/reject prospective accounts, user requests, and transactions, and will have the sole discretion of determining the relevant criteria for using the applicable Grain Services and determining whether such criteria were met. The Company will have no liability for the non-completion of or a delay in completing any Transaction in relation to (i) circumstances that prohibit or restrict the execution or performance of a Transaction, including, without limitation, abnormal or unforeseeable circumstances beyond the Company’s reasonable control; (ii) applicable laws, regulations or Rules; (iii) occurrence of errors in quoted rates as a result of the automation of the Grain Services that resulted in erroneous rates being presented when a Transaction is placed; (iv) your violation of this Agreement. Costs and losses arising from the cancellation of a Transaction will be charged to, and payable by Customer. c. Account . To use certain Grain Services, you need to create an account by registering to our Platform (“Account”). You will only be eligible to carry out Transaction and use specific Grain Services once we have completed the applicable checks and assessments (as indicated above) and confirmed your request. You agree to provide us with accurate, complete, and updated information and details in respect of your Account and any action performed therein (including, without limitation, any Transaction submitted or carried out through your Account). You can access, edit, and update your Account details via the following means: navigate to “settings”, and choose to delete your data and/or disconnect any connected accounting software, or email us at: support@grainfinance.co. You are solely responsible for any activity on your Account and for maintaining the confidentiality and security of your Account log-in details and other confidential information therein. We are not liable for any acts or omissions by you or any third party in connection with your Account. You must immediately notify us at support@grainfinance.co if you know or have any reason to suspect that your Account or log-in details have been stolen, misappropriated, or otherwise compromised, or in case of any actual or suspected unauthorized use of your Account. You agree not to create any Account if we have previously eliminated your account, or banned you from any use of Grain Services, unless we provide written consent otherwise. d . Availability of Your Account. We will use commercially reasonable efforts to maintain the availability of the Grain Services; however, we do not guarantee that the Grain Services will be available at all times. You agree to use Grain Services at your own risk and discretion, and you accept and acknowledge that the services and platform are prone to unforeseen issues, which may cause Grain Services or parts thereof to be unavailable or loss of data. You agree that Grain will not be liable or accountable for any reason for any loss as a result of the unavailability or disconnection of Grain Services or parts thereof. In such an event, you agree that your only recourse is to cease using the Grain Services. Grain is entitled, at its sole discretion, to suspend access to the Platform, Account, and/or Grain Services, or otherwise restrict functionality thereof, if (i) you (or anyone on your behalf) is in breach of this Agreement; or (ii) you (or anyone on your behalf), is using the Grain Services in a manner that may cause us or our partners legal liability or disrupt the Grain Services; We may continue any such suspension or restriction as we deem necessary at our discretion. e. In the event that you are unable to fully settle Transaction(s) payment, Grain may deduct any losses or costs from any funds held in your Account, and any overdue shortfall will be charged interest pursuant to applicable law. Subject to applicable law, you hereby acknowledge and agree that the Company can, in its sole discretion at any time and without notice, set off any sum standing to the credit of you in your Account against any payments, costs, charges, or other liabilities which you owe to the Company with respect to the Grain Services. If you are unable to fully settle the Transaction(s) payment, any and all losses, costs, damages, liabilities, and other amounts shall be borne by you. 2. No advice a. You acknowledge and agree that we are not providing any advice, consultation, endorsement, professional or financial services, or recommendation in relation to the Grain Services, Transaction(s), or any part thereof, or your use of the Grain Services, including, without limitation, whether or not to proceed with any specific transaction or the potential implications of any particular transaction. Your use of the Grain Services is your own choice and responsibility, based solely on your own assessment. The Company disclaims all responsibility or liability for any decision you make in relation to the Grain Services (including any Transaction). The Company will not be liable to you, or to any third party, for any loss of opportunity or other loss in relation to exchange rate changes or movements around the transaction time. Users should seek professional advice on the risks involved in the use of the Grain Services, including undertaking Transactions. b. We may provide content, information, data, market information, and materials (“Content”) as part of our Grain Services, and/or on our Platform, social media pages, blogs, or otherwise in connection with the Grain Services and the use thereof. Such Content does not constitute, nor should be deemed as, investment, financial, or professional advice. We encourage you to seek professional advice from a duly qualified and authorized financial services professional or advisor before you use Grain Services and carry out any Transaction. 3. Your Rights & Obligations a. Approved Customers who were accepted to have an Account are permitted to use Grain Services for their internal business purposes, provided that such Customers and any users on their behalf shall comply with this Agreement. b. Your Obligations. You must timely perform all obligations that may be required to establish your use of Grain Services, including but not limited to (i) providing information relating to your organization, technology platforms, systems configurations, business processes, and any other information that is reasonably requested by us; (ii) providing contact information for each bank that you want to use the Grain Services in connection with; (iii) make your personnel available to us as may be reasonably necessary for us to perform under this Agreement; and (iv) complete in a timely manner all your responsibilities in connection with the Grain Services. Your delay or failure to perform your responsibilities shall result in an extension of our dependent obligations due to such delay or failure. You hereby represent, warrant, and covenant to the Company that (1) at all times, you will comply with all applicable laws, agency regulations, and instructions applicable to you, and any order or judgment of any court; (2) you will not use, nor allow anyone to use the Grain Services or any part thereof for any illegal or fraudulent purposes (including, without limitation, money laundering, tax evasion, terrorist financing, or any other illegal activities); and (3) all information you supplied to the Company in relation to the Grain Services shall be retained complete, accurate, up to date, and truthful. Your access and use of Grain Services may be interrupted from time to time for any of several reasons, including, without limitation, the malfunction of equipment, periodic updating, maintenance or repair of service or other actions that Company, in its sole discretion, may elect to take. c. The Platform and Grain Services may be used only in connection with lawful future payment needs and not for any speculative or investment purpose. You agree to provide the Company with such information as may reasonably request to assess your use of the Platform, Transaction, and/or Grain Services in relation to a lawful future payment need. We may refuse any transaction, suspend any incomplete Transaction, or terminate any Account if we or any Third Party suspects that a user is using or intends to use the Platform, Transaction, or Grain Services for investment or speculative purposes, or in violation of this Agreement. d. Rules. To enable the Company to provide you with certain of Grain Services, applicable operating rules, regulations, manuals, policies, and procedures, promulgated by any regulatory authority or third-party service providers (“Rules”), may need to be met before and during your use of such Grain Services. You agree, upon the Company’s request, to provide us with the required information and reasonably cooperate with us in order to meet such Rules and applicable requirements. e. Unauthorized or Incorrect Transaction Details . Customer shall notify the Company in writing (by email to tradeops@grainfinance.co ) as soon as is reasonably practicable after becoming aware of any circumstances which may reasonably result in unauthorized, fraudulent, inaccurate, or incorrect booking or transaction submitted to Grain Services, or if the Customer is otherwise made aware of any such unauthorized, fraudulent, inaccurate, or incorrect use of Grain Services (“Error Details”). The Company shall make commercially reasonable efforts to resolve such matters as the Company deems appropriate, and in accordance with applicable laws, and the Customer shall cooperate with the Company and fulfill Company’s reasonable instructions related to such event. All communication with the Company with respect to any Error Details (including, without limitation, any notice thereof) shall be made between the Company and the Customer in writing. Notwithstanding the foregoing, the Customer (and not the Company) shall be liable for any acts or omissions, transactions, or trades made through its Account or otherwise in relation to such Error Details (including, without limitation, any delay in providing notice and delivery of a notice with insufficient or partial information). The Company has no liability to you or any third party for any unauthorized or incorrectly executed transactions unless statutory law stipulates otherwise. Insofar legally permitted, the Company hereby expressly disclaims and shall not be liable to you or any third party for (i) the execution or failure to execute a payment, or for the defective execution of a payment, if the information provided by you or on your behalf (including through your Account) is incorrect; (ii) errors, mistakes, or non-performance arising from failure to process the payment correctly. In either case, the Company will make reasonable efforts to recover the funds involved in the payment. Customer will be responsible for the costs incurred by the Company for any such recovery. f. Restrictions on Use. You may not do any of the following in connection with your use of Grain Services, unless applicable laws or regulations prohibit these restrictions, or you have our written permission to do so: i. download, modify, copy, distribute, transmit, display, perform, reproduce, duplicate, publish, license, create derivative works from, or offer for sale any information contained on, or obtained from or through, the Grain Services, except for temporary files that are automatically cached by your web browser for display purposes, or as otherwise expressly permitted in this Agreement. ii. duplicate, decompile, reverse engineer, disassemble or decode the Grain Services (including any underlying idea or algorithm), or attempt to do any of the same. iii. use, reproduce or remove any copyright, trademark, service mark, trade name, slogan, logo, image, or other proprietary notation displayed on or through Grain Services. iv. use cheats, automation software (bots), hacks, modifications (mods) or any other unauthorized third-party software designed to modify Grain Services. v. exploit Grain Services for any commercial purpose, including without limitation communicating or facilitating any commercial advertisement or solicitation. vi. access or use Grain Services in any manner that could disable, overburden, damage, disrupt or impair the Grain Services or interfere with any other party’s access to or use of the Grain Services or use any device, software or routine that causes the same. vii. attempt to gain unauthorized access to, interfere with, damage or disrupt the Grain Services, accounts registered to other users, or the computer systems or networks connected to the Grain Services. viii. circumvent, remove, alter, deactivate, degrade or thwart any technological measure or content protections of the Grain Services. ix. use any robot, spider, crawler, scraper, or other automatic device, process, software or queries that interrupt, “mines,” scrapes, extracts, or otherwise access Grain Services to monitor, extract, copy or collect information or data from or through Grain Services, or engage in any manual process to do the same. x. present or enable or allow any viruses, trojan horses, worms, logic bombs or other materials that are malicious or technologically harmful into our systems. xi. violate any applicable law or regulation in connection with your access to or use of Grain Services. xii. access or use Grain Services in any way not expressly permitted by this Agreement. 4. Ownership a. Grain Services, Platform, and content therein, including their “look and feel” (e.g., text, graphics, images, logos), proprietary content, information, and other materials, are protected under copyright, trademark, and other intellectual property laws. You agree that the Company and/or its licensors own all rights, titles, and interests in and to Grain Services (including any and all intellectual property rights therein), and you agree not to take any action(s) inconsistent with such ownership interests. We and our licensors reserve all rights in connection with Grain Services and its content, including, without limitation, the exclusive right to create derivative works. You may not, without our prior written consent and the consent of any other relevant rights owners, broadcast, republish, upload to a third party, transmit, post, distribute, display in public, or change in any way the Grain Services for any purpose. The Company’s name, Company’s logo, and all related names, logos, product, branding, and service names, designs, and slogans are trademarks of the Company or its affiliates or licensors. Other names, logos, product and service names, designs and slogans that appear on Grain Services are the property of their respective owners, who may or may not be affiliated with, connected to, or sponsored by us. b. Feedback. We welcome feedback, comments, and suggestions for improvements to Grain Services (“Feedback”). You acknowledge and expressly agree that any contribution of Feedback does not and will not give or grant you any right, title, or interest in Grain Services or in any such Feedback. All Feedback becomes the sole and exclusive property of the Company, and the Company may use and disclose Feedback in any manner and for any purpose whatsoever without further notice or compensation to you and without retention by you of any proprietary or other right or claim. You hereby assign to the Company any and all right, title and interest that you may have in and to any and all Feedback. 5. Third Party Services and Materials a. You acknowledge that the Platform, Content, and Grain Services include, may rely on, or otherwise facilitate or act as merely a conduit to functionalities, infrastructures, services, and/or operations which are made available by third parties (“Third Party(ies)”), including, for example, currency exchange brokers, and financial banking institutions. Third Parties’ functionalities, infrastructures, services, and/or operations are not operated or controlled by the Company. Notwithstanding anything else in this Agreement or otherwise, the Company makes no warranties or representations express or implied, as to the quality, capabilities, operations, performance, or suitability of Third Parties or their functionalities, infrastructures, services, and/or operations and disclaims all liability resulting from or related to the foregoing, including any effect on Grain Services or any part thereof. b. Certain Grain Services may display, include or make available content, data, information, applications or materials from third parties (“Third Party Materials”) or provide links to certain third party websites or platforms. By using Grain Services, you acknowledge and agree that the Company is not responsible for examining or evaluating the content, accuracy, completeness, availability, timeliness, validity, copyright compliance, legality, decency, quality or any other aspect of such Third Party Materials or websites. We do not warrant or endorse and do not assume and will not have any liability or responsibility to you or any other person for any third-party services, Third Party Materials or third-party websites, or for any other materials, products, or services of third parties. 6. Disclaimers, Limitations of Liability and Indemnification a. Disclaimers. Grain Services may have limited features and functionalities and may contain errors, defects, bugs, or inaccuracies that could cause failures, corruption or loss of data and information from any connected device. Additionally, the beta version of Grain Services may have different standards of security, privacy, availability or reliability that can affect your use of the Grain Services. Your access to and use of Grain Services are at your own risk. You understand and agree that Grain Services are provided to you on an “AS IS” and “AS AVAILABLE” basis. Without limiting the foregoing, to the maximum extent permitted under applicable law, the Company, its parents, subsidiaries, affiliates, related companies, officers, directors, employees, agents, representatives, partners, and licensors (“Company Entity(ies)”) DISCLAIM ALL WARRANTIES AND CONDITIONS, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. The Company Entities make no warranty or representation and disclaim all responsibility and liability for (a) the completeness, accuracy, availability, timeliness, security or reliability of Grain Services; (b) any harm to your computer system, loss of data, or other harm that results from your access to or use of Grain Services; (c) the operation or compatibility with any other application or any particular system or device; and (d) whether Grain Services will meet your requirements or be available on an uninterrupted, secure or error-free basis. No advice or information, whether oral or written, obtained from the Company Entities or through Grain Services, will create any warranty or representation not expressly made herein. b. Liability. (i) TO THE MAXIMUM EXTENT PERMITTED BY LAW IN NO EVENT WILL GRAIN NOR ANY COMPANY ENTITIES BE LIABLE FOR INDIRECT, SPECIAL, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES (INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, LOSS OF PROFITS, LOSS OF DATA, LOSS OF GOODWILL OR ANY OTHER DAMAGES OR LOSSES), HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY, WHETHER UNDER THIS AGREEMENT OR OTHERWISE ARISING IN ANY WAY IN CONNECTION WITH THE USE OF GRAIN SERVICES, AND WHETHER IN CONTRACT, STRICT LIABILITY OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) EVEN IF GRAIN OR THE COMPANY ENTITIES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE OR LOSS. (ii) SUBJECT TO SECTION 6(I), GRAIN AND COMPANY ENTITIES MAXIMUM AGGREGATE LIABILITY ARISING UNDER OR IN CONNECTION WITH ANY TRANSACTION SHALL BE LIMITED TO THE AMOUNT PAID BY CUSTOMER TO GRAIN IN RESPECT OF SUCH TRANSACTION, IN THE CURRENCY, AND AT THE RATE, ACCEPTED BY THE CUSTOMER WHEN BOOKING THE APPLICABLE TRANSACTION, TO THE EXTENT SUCH CLAIM WAS NOT RAISED LATER THAN SIX (6) MONTHS FOLLOWING THE DATE OF THE TRANSACTION SETTLEMENT. (iii) SUBJECT TO SECTION 6(I) AND 6(II), GRAIN AND COMPANY ENTITIES MAXIMUM AGGREGATE LIABILITY FOR DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT SHALL NOT EXCEED THE PAYMENTS THAT WERE ACTUALLY PAID BY THE CUSTOMER TO GRAIN UNDER THIS AGREEMENT DURING THE THREE (3) MONTHS PERIOD PRIOR TO THE DATE THE CLAIM ARISES. IT IS HEREBY EXPLICITLY AGREED THAT ANY LIABILITY ARISING UNDER OR IN CONNECTION WITH ANY TRANSACTION WILL BE SOLELY DEALT WITH UNDER SECTION 6(II). c. Indemnification. By entering into this Agreement and accessing and using Grain Services, you agree that you shall defend, indemnify, and hold the Company Entities harmless from and against any and all claims, costs, damages, losses, liabilities, and expenses (including attorneys’ fees and costs) incurred by the Company Entities arising out of or in connection with (a) violation or breach of this Agreement or any applicable laws or regulations; (b) misuse of Grain Services; or (c) fraudulent acts, negligence or willful misconduct, or (d) any loss, liability, or damage arising from the data and information provided by the Customer or on its behalf in connection with any Transaction. If you are obligated to indemnify any Company Entity hereunder, then you agree that Company (or, at its discretion, the applicable Company Entity) will have the right, in its sole discretion, to control any action or proceeding and to determine whether to settle, and if so, on what terms, and you agree to fully cooperate with Company in the defense or settlement of such claim. 7. ARBITRATION a. Informal Process First. You agree that in the event of any dispute between you and the Company Entities, you will first contact the Company and make a good faith sustained effort to resolve the dispute before resorting to more formal means of resolution, including without limitation, any court action. b. Arbitration Agreement. After the informal dispute resolution process, any remaining dispute, controversy, or claim (collectively, “Claim”) relating in any way to your use of the Company’s services and/or products, including Grain Services, will be resolved by arbitration, including threshold questions of arbitrability of the Claim. You and the Company agree that any Claim will be settled by final and binding arbitration, using the English language, administered by JAMS under its Comprehensive Arbitration Rules and Procedures and the JAMS Consumer Minimum Standards (together, the “JAMS Rules”) then in effect (those rules are deemed to be incorporated by reference into this section, and as of the date of this Agreement). Arbitration will be handled by a sole arbitrator in accordance with the JAMS Rules. The seat of the arbitration will be in New York, New York. Judgement on the arbitration award may be entered in any court that has jurisdiction. 8. Additional Provisions a. Services Changes; Updating this Agreement. The Company reserves the right to make changes and modifications to the Platform and/or Grain Services at any time and from time to time. We may modify this Agreement from time to time in which case we will update the “Last Revised” date at the top of this Agreement. If we make changes that are material, we will use reasonable efforts to attempt to notify you, such as by e-mail and/or by placing a prominent notice on the Platform. However, it is your sole responsibility to review this Agreement from time to time to view any such changes. The updated terms and conditions will be effective as of the time of posting, or such later date as may be specified in the updated terms and conditions. Your continued access or use of Grain Services after the modifications have become effective will be deemed your acceptance of the modified terms and conditions. b. Termination. Grain may close your Account and terminate your access to Grain Services at any time without prior notice (including by terminating any existing Transaction) if: (i) Grain suspects that you are non-comply with the terms of this Agreement; (ii) a liquidator has been appointed in respect of any of your assets, or you otherwise become insolvent; (iii) if required under applicable law, Rules, or regulations, or if Grain suspects that your use of Grain Services may impose risk or liability to Grain. You may request to close your Account and terminate this Agreement at any time by providing Grain written notice (by email or by using the applicable contact form in the Platform). Grain will close your Account within a reasonable period after your notice. Notwithstanding, you will remain responsible for any transactions made on your Account until the access to your Account is deactivated. Upon termination of the Agreement, other than as expressly permitted in this Agreement, Customer and anyone on its behalf will immediately cease using the Platform and Grain Services. Transactions that were placed and confirmed by Grain before your Account is terminated or suspended will not be affected and shall be carried out per the terms of the Confirmation Note and this Agreement. Any amount that is due to Grain under this Agreement, together with accrued interest and any other amount associated with the Transactions carried out or issued under this Agreement, will be paid by the Customer to Grain in full immediately upon termination. Grain will promptly notify the Customer in writing of the amount owed to Grain and such amount shall become properly due and payable. Further, Customer shall be responsible for recovering Grain for any costs and expenses incurred by Grain in connection with the settlement and processes taken in connection with the enforcement of such payment obligations, including reasonable legal expenses. All sections which by their nature should survive the termination of this Agreement shall continue in full force and effect subsequent to and notwithstanding any termination of this Agreement by the Company or you. Termination will not limit any of the Company’s other rights or remedies at law or in equity. g. Event of Transaction Liquidation. Each of the following constitutes a non-compliance or event of breach ("Event"): (i) Customer’s failure to make any payment when due under this Agreement and/or per Confirmation Note, or to perform any other provision or material requirement of any Transaction; (ii) insolvency; (iii) false or misleading information made available by or on behalf of Customer, including without limitation unreported or delay in reporting about any Error Details; (iv) the Customer transfers all or substantially all its assets to another entity; (v) Grain estimations in its sole discretion that Customer's ability to perform its obligations under this Agreement or with respect to a Transaction are harmed or affected. At any time following such an Event Grain may provide the Customer with notice and designate a date for the termination and liquidation of any or all the Customer’s Transactions ("Event Closing Date"). Upon the Event Closing Date, all Transactions will terminate, and an amount equal to the sum of the aggregate values upon termination of all Transactions, determined by Grain in a commercially reasonable manner, will be payable (whether by payment, set-off, or otherwise) to Grain. c. Injunctive Relief. You agree that a breach of this Agreement will cause irreparable injury to the Company for which monetary damages would not be an adequate remedy and the Company shall be entitled to equitable relief in addition to any remedies it may have hereunder or at law without a bond, other security or proof of damages. d. U.S. Government Restricted Rights. The Grain Services and related documentation are “Commercial Items”, as that term is defined at 48 C.F.R. §2.101, consisting of “Commercial Computer Software” and “Commercial Computer Software Documentation”, as such terms are used in 48 C.F.R. §12.212 or 48 C.F.R. §227.7202, as applicable. Consistent with 48 C.F.R. §12.212 or 48 C.F.R. §227.7202-1 through 227.7202-4, as applicable, the Commercial Computer Software and Commercial Computer Software Documentation are being licensed to U.S. Government end users (a) only as Commercial Items, and (b) with only those rights as are granted to all other end users pursuant to the terms and conditions herein. e. Export Laws. You agree that you will not export or re-export, directly or indirectly, the Grain Services and/or other information or materials provided by the Company hereunder, to any country for which the United States or any other relevant jurisdiction requires any export license or other governmental approval at the time of export without first obtaining such license or approval. In particular, but without limitation, the Grain Services may not be exported or re-exported (a) into any U.S. embargoed countries or any country that has been designated by the U.S. Government as a “terrorist supporting” country, or (b) to anyone listed on any U.S. Government list of prohibited or restricted parties, including the U.S. Treasury Department’s list of Specially Designated Nationals or the U.S. Department of Commerce Denied Persons List or Entity List. By using Grain Services, you represent and warrant that you are not located in any such country or on any such list. You are responsible for and hereby agree to comply at your sole expense with all applicable United States export laws and regulations. f. You are responsible for providing the mobile device, wireless service plan, software, Internet connections and/or other equipment or services that you need to download, install and use the Platform. We do not guarantee that the Platform can be accessed and used on any particular device or with any particular service plan. We do not guarantee that the Platform will be available in, or that transactions can be placed from, any particular geographic location. g. Privacy Policy. Our Privacy Policy describes how we handle the information you provide to us when you use Grain Services. For an explanation of our privacy practices, please visit our Privacy Policy located at https://www.grainfinance.co/privacy-policy . h. Miscellaneous. If any provision of this Agreement shall be unlawful, void or for any reason unenforceable, then that provision shall be deemed severable from this Agreement and shall not affect the validity and enforceability of any remaining provisions. This Agreement and the licenses granted hereunder may be assigned by the Company but may not be assigned by you without the prior express written consent of the Company. No waiver by either party of any breach or default hereunder shall be deemed to be a waiver of any preceding or subsequent breach or default. The section headings used herein are for reference only and shall not be read to have any legal effect. The Grain Services are operated by us in the United States. Those who choose to access Grain Services from locations outside the United States do so at their own initiative and are responsible for compliance with applicable local laws. This Agreement are governed by the laws of the State of New York, without regard to conflict of laws rules, and the proper venue for any disputes arising out of or relating to any of the same will be the arbitration venue set forth in this Agreement, or if arbitration does not apply, then the state and federal courts located in New York, New York. You and the Company agree that the United Nations Convention on Contracts for the International Sale of Goods will not apply to the interpretation or construction of this Agreement. You agree to receive email notifications from us and acknowledge that these emails are required to notify you of updates in relation to the Grain Services. i. How to Contact Us. You may contact us regarding the Grain Services or this Agreement at: 8 Shaul HaMelech Blvd, Israel, or by email at support@grainfinance.co. j. Payment services for Grain Finance Ltd. are provided by TransferMate Limited. 3. Your Rights & Obligations 5. Third Party Services and Materials 4. Ownership and Content 7. Arbitration 6. Disclaimers, Limitations of Liability and Indemnification 8. Additional Provisions

KNOWLEDGE BASE Grain Glossary Get an overview of financial terms and their definitions. ALL A B C D E F G H I J K L M N O P Q R S T U V W X Z A At The Money (ATM) In finance, an option is at the money if the current market price of its underlying asset equals its strike price. Because the underlying asset cannot be bought or sold at a price other than the current market price, at-the-money options have no intrinsic value. Accounts payable A company's accounts payable is the amount of money it owes to its creditors for goods or services it has received, but has not yet paid for. In the context of accounting, accounts payable is classified as a liability, as it represents a company's obligation to pay off its debts. It is recorded in a company's balance sheet under the category of current liabilities, along with other debts and financial obligations that are due within the next year. Appreciation in currency A currency appreciation in the currency market refers to an increase in the value of one currency relative to another. Simultaneously, the currency appreciation benefits importers as they have to pay less in domestic currency for imported goods. Alt 21 Alt 21 is a digital financial platform designed to let individuals and businesses hedge currency risks. The company's platform offers customizable forex hedging software including options and forwards with real-time rates for pricing in multiple currencies, enabling banks, credit unions, and corporate treasury departments to automate their forex hedging processes and deliver tailor-made financial services. Actual/360 A day count convention is used for calculating interest accrued on Treasury bills and other money market instruments . Uses actual number of days in a month and 360 days in a year for calculating interest payments. B Balance sheet hedging A balance sheet hedging technique involves using financial instruments to offset potential losses or gains on the balance sheet of a company. Companies typically use it to protect themselves against adverse movements in foreign exchange rates, interest rates, or commodity prices, which can affect the value of their assets and liabilities. Base currency The base currency is the primary currency that is used to quote prices for financial instruments, such as currency pairs in the foreign exchange market. It is also the currency in which financial statements, such as balance sheets and income statements, are typically reported. Bid Bids are offers made by buyers to purchase securities at a specified price. In an auction-style market, such as a stock exchange, bids are made by buyers who want to purchase securities, and offers (also called "asks") are made by sellers who want to sell them. "Bid-ask spread" refers to the difference between prices at which buyers and sellers are willing to buy at a particular moment. Bid prices are typically lower than ask prices, and spreads are the difference between them. Bill of Landing A Bill of Lading (B/L) is a document used in shipping to acknowledge the receipt of goods and to serve as proof of title. The B/L is issued by the carrier (such as a shipping company or a trucking firm) and lists the type, quantity, and destination of the goods being transported. It also serves as a contract between the carrier and the shipper, setting out the terms and conditions of the shipment. Basis Points (bps) Basis points are used to measure a percentage change in a financial instrument's value or rate. One basis point is equal to 1/100th of 1% or 0.01%, which is used to express very small changes in value. A basis point represents a very small percent change in an easy-to-understand manner and is often used to describe changes in interest rates, yields, and other financial metrics. Bond A bond is a debt security issued by a government, municipality, or corporation for the purpose of raising capital. An investor who purchases a bond is essentially lending money to the issuer in return for interest payments and the return of principal at maturity. Companies and governments often use bonds to finance long-term projects and to smooth out their cash flow. Bonds come in many types, including corporate, municipal, and government bonds. Binary Option Binary options are financial instruments that allow speculating on the movement of various assets, such as stocks, commodities, currencies, and indices. It is called a binary option because the outcome is either a fixed payout or a loss. Broken Date Broken dates refer to contracts and financial instruments that have a non-standard or irregular tenor, or length of time until maturity. It is possible to use broken dates in a variety of financial instruments, such as bonds, loans, and derivatives. Butterfly Option The butterfly option is a type of option strategy that involves combining two vertical spreads, which each have four different options with three different strike prices. This strategy takes advantage of a neutral market environment, where the underlying asset's price is expected to remain stable. It involves purchasing two call options at a lower strike price, two put options at a higher strike price, and selling one call option and one put option at the same middle strike price. Budget Rate In the context of foreign exchange (FX), a budget rate is a financial projection that estimates the expected exchange rate for a particular currency pair at a future point in time. It is used to help plan and manage resources for international transactions, and to ensure that the costs of the transactions are within the allocated budget. Blocked Currency Block currencies are effectively non-convertible or inconvertible. Generally, currencies are blocked because of government restrictions, such as foreign exchange regulations, physical barriers, political sanctions, or extremely high volatility. Barrier Option A barrier option is a type of derivative where the payoff depends on whether or not the underlying asset has reached or exceeded a predetermined price. A barrier option can be a knock-out, or a knock-in. Bretton Woods System According to the Bretton Woods system, the dollar was pegged to gold, which in turn was pegged to the price of gold. Despite its collapse in the 1970s, Bretton Woods had a lasting impact on currency exchange and trade through the development of the International Monetary Fund and the World Bank. Bound Bound was launched in 2020 with the vision of making currency conversion and hedging cheap, fair, and most of all, easy. Today, our platforms help hundreds of businesses protect themselves from currency risk across the world. Broker Currency Trading A Forex Broker is an intermediary between retail traders and the foreign exchange market in the international trading arena . Forex brokers allow people to buy and sell currencies for the participation of individuals and institutions in the global financial system. C Cash Flow Hedge A cash flow hedge is a type of hedge that is used to protect against potential losses or gains on a company's future cash flows. It involves using financial instruments, such as derivatives, to offset the impact of changes in foreign exchange rates, interest rates, or commodity prices on the value of the company's cash flows. Consumer Price Index (CPI) Consumer Price Index (CPI) measures the average price level of a basket of goods and services consumed by households. The Consumer Price Index (CPI) is a critical indicator of pricing pressures in an economy and provides a gauge of inflation. Forex traders monitor the CPI, as it can lead to changes in monetary policy by the central bank that will either strengthen or weaken the currency against others in the markets. Counter Currency In a currency pair, the counter currency is the second or reference currency. In ISO currency code pairs, the counter currency follows the base currency. The base currency of a pair is usually a major currency, especially when trading exotic currencies. Carry Trade Carry trades involve borrowing at a low interest rate and reinvesting in a currency or financial product at a higher rate of return. Carry trades are appropriate only for investors with deep pockets due to the risks involved. Collateral In the context of foreign exchange (FX), collateral refers to assets that are pledged as security for a financial obligation, such as a loan or a derivative contract. Collateral is often used in FX transactions to reduce the risk of default by one of the parties. Collateral can be used in other types of FX transactions as well, such as currency forwards, options, and non-deliverable forwards. In these cases, the collateral may be used to cover the potential risk of loss due to changes in exchange rates or other market conditions. Commodity Commodities are raw materials or primary agricultural products that can be bought and sold, such as copper, oil, wheat, gold, etc. Because commodities are standardized products with little differentiation between their qualities, they can be interchanged with other commodities of the same type. They are often produced and traded in large quantities and can be used as inputs for further production or as sources of energy. Calendar Spread A calendar spread, also called a time spread or a horizontal spread, involves simultaneously buying and selling options on the same underlying asset but with different expiration dates. Calendar spreads aim to profit from differences in option time decay. Call Option Call options are financial contracts that give the holder the right, but not the obligation, to buy a specific asset at a predetermined price (the strike price) before or on a certain date (the expiration date). The underlying asset is the asset that the call option gives the holder the right to purchase. Call Spread The call spread is an option strategy where one call option is purchased and another call option is simultaneously sold on the same underlying asset. Call options have different strike prices, and the option that is purchased has a lower strike price than the option that is sold. Call spreads are designed to profit from an upward move in the price of the underlying asset while limiting losses. CAPS Caps are financial contracts used to hedge against currency fluctuations, similar to options. By using it, a currency's upside potential is limited while the holder benefits from its potential depreciation. The holder of a cap has the right to buy or sell a currency, but is not obligated to do so, at a specific strike price, on a specific date or period of time. A cap rate is the strike price that determines a currency's maximum rate. Credit Default Swap (CDS) Credit default swaps (CDS) are financial derivatives that are used to transfer credit risk from one party to another. A CDS provides protection against the risk of debt default by the issuer. Cross rate In the context of foreign exchange (FX), a cross rate is the exchange rate between two currencies, both of which are not the official currency of the country in which the exchange rate quote is given. It is calculated by using the exchange rates of the two currencies relative to a third currency, which is typically a more widely traded currency such as the US dollar. Cross border payment A cross border payment is a financial transaction that involves the transfer of money between countries, typically in different currencies. Cross border payments can be made for a variety of purposes, such as to pay for goods or services, to transfer money to or from foreign bank accounts, or to make international wire transfers. There are a number of factors to consider when making a cross border payment, such as exchange rates, fees, and regulatory requirements. Cross Border Trade As defined by the OCDE, cross-border trade is the exchange of goods and services between residents and non-residents. It is measured in USD as a percentage of GDP for net trade (exports minus imports) and also in annual growth for imports and exports. Convertible Bond Convertible bonds are bonds that can be converted into shares of the issuer's stock or another security at the holder's discretion. Convertible bonds are a hybrid security that combine the features of both bonds and stocks. They offer the stability and regular income of a bond, as well as the opportunity to participate in the company's potential growth. Corporate Bond Corporate bonds are debt securities issued by corporations to raise capital. There are a variety of maturities available for corporate bonds, ranging from a few months to more than 30 years. The bondholder receives periodic interest, known as a coupon, and the principal is returned at maturity. Currency Forward (FX forward) A currency forward is a financial contract that involves the exchange of two currencies at a predetermined exchange rate on a future date. It is a type of derivative instrument that is used to hedge against the risk of fluctuations in exchange rates. Currency Hedging Currency hedging is the practice of using financial instruments or strategies to reduce the risk of losses due to fluctuations in foreign exchange rates. It is a common risk management strategy for companies and investors with international operations or exposures, as it can help to protect against the impact of currency fluctuations on the value of their assets, liabilities, and cash flows. Currency Volatility Currency volatility refers to the fluctuations in the value of a currency relative to other currencies. It is a measure of the risk associated with holding or trading assets in a particular currency, and is an important consideration for companies and investors with international operations or exposures. Currency Exposure Currency exposure refers to the potential impact of changes in foreign exchange rates on the value of a company's assets, liabilities, and cash flows. It is a measure of the extent to which a company is exposed to risk from movements in foreign exchange rates. A company with significant foreign currency exposure may be at risk of losses due to changes in exchange rates, which can impact the value of its assets and liabilities, as well as the cash flows from its international operations. Currency Depreciation Currency depreciation occurs when the value of a currency falls against other currencies. The depreciation of currencies can be caused by economic fundamentals, interest rate differentials, political instability, or investor risk aversion. Currency Convertibility In terms of foreign transactions, currency convertibility refers to the ability to exchange one currency for another at a given conversion rate. A range of degrees of convertibility can be identified, ranging from total convertibility to total inconvertibility. Convertible Currency A currency is said to be freely convertible when it has an immediate value on the different international markets, and few restrictions on the manner and amount that can be traded for another currency . Free convertibility is a major feature of a hard currency. Cross Currency Triangulation In cross currency triangulation, monetary amounts are first converted from one national currency unit (source currency) into an intermediate currency (anchor currency). Calculation then converts the intermediate currency amount into the designated national currency unit (target currency). Cash Collection In cash collection, companies recover money from other businesses (or individuals) to whom they have previously provided invoices. Cash collection primarily aims to get invoices paid by the due date. Currency controls Currency controls (or exchange controls) limit the purchase and/or sale of currencies by governments. By limiting inflows and outflows of currency, these controls help countries stabilize their economies. Exchange controls are not available to every nation, at least not legitimately; the 14th article of the IMF's Articles of Agreement only permits their use in transitional economies. Currency Score A currency score typically refers to a metric or rating system used to assess the relative strength or performance of a currency. This score can be based on several factors, including economic indicators, interest rates, inflation rates, trade balances, geopolitical stability, and market sentiment. It is commonly used by investors, traders, and economists to make decisions regarding foreign exchange (FX) markets or to analyze a country's economic health. D Day Count Convention The day count convention is a standardized method for calculating the number of days between two dates in a given year. For financial instruments such as bonds, loans, and derivatives, day count conventions determine the number of days of interest accrual. Delta In finance, delta is a measure of how sensitive an option's price is to changes in the underlying asset's price. It is a Greek letter used in options pricing formulas to represent the amount by which the price of an option is expected to change in response to a $1 change in the price of the underlying asset. Delta is typically expressed as a decimal number between 0 and 1 for call options, and between 0 and -1 for put options. Developed Markets The developed markets are those with advanced economies and well-developed financial systems. Generally, these countries have high per capita incomes and well-developed financial markets. Japan, the United States, Canada, and Western European countries are examples of developed markets. Discrete Hedging Discrete hedging is a risk management strategy that involves taking specific, individual positions in financial instruments to offset losses from other positions. Unlike continuous or ongoing hedging strategies, such as dynamic hedging, discrete hedging involves specific trades in response to specific risks or events. For example, a company might use discrete hedging to protect against a potential loss from an upcoming foreign currency payment by buying a forward contract or currency option. Dow Jones Dow Jones Industrial Average (DJIA) is a U.S. stock market index that consists of 30 large publicly traded companies. Stock market performance is largely influenced by the index, which is generally viewed as a leading indicator. Dollar DXY Index A U.S. Dollar Index (USDX, DXY, DX, or, informally, the "Dixie") measures the value of the dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trading partners' currencies. Direct Quotation Direct quotation is where the cost of one unit of foreign currency is given in units of local currency, whereas indirect quotation is where the cost of one unit of local currency is given in units of foreign currency. E Electronic Invoicing Electronic invoicing (e-invoicing) refers to the creation, exchange, and processing of invoices electronically instead of on paper. E-invoicing involves sending invoices electronically between a supplier and a buyer, usually via the internet. There are several benefits to this method of invoicing over traditional paper invoicing, including increased efficiency, reduced errors and fraud, improved cash flow, and lower costs for printing and mailing. In addition, e-invoicing can be integrated with financial systems, making the accounts payable process easier to automate and improving cash flow visibility. Embedded Finance Embedded finance refers to the integration of financial services into non-financial products or services. This can take many forms, such as adding payment or lending functionality to a mobile app or website, or bundling insurance or investment products into a larger offering. Embedded finance aims to make financial services more accessible for consumers by bringing them directly into the products and services they use. Emerging Markets Emerging markets refer to countries that are in the process of developing their economies and are considered to be of high growth potential. These countries are often classified as being less developed than more industrialized nations and are characterized by a lower level of per capita income, less developed financial markets, and less mature political systems. Exotic Currency An exotic currency is a term used to describe a currency that is not widely traded or used in international transactions. These currencies are typically from smaller or less developed countries, and may be less liquid or more volatile than major currencies. Examples of exotic currencies are the Brazilian Real (BRL), South African Rand (ZAR), Mexican Peso (MXN). Turkish Lira (TRY), Indian Rupee (INR) and Russian Ruble. Exchange Rate An exchange rate is the price at which one currency can be exchanged for another currency. It is the value of one currency in terms of another currency, and is determined by the supply and demand for the two currencies in the foreign exchange market. Economic value added (EVA) Economic value added (EVA) is a measure of a company's economic profit, or the value it creates beyond what shareholders require. A company's EVA is calculated by subtracting its after-tax operating profit from its cost of capital. ECB rate ECB rates are foreign exchange reference rates published by the European Central Bank. Every working day, the bank publishes the exchange rate for European currencies against the euro (EUR). F Federal Funds Rate The federal funds rate is the interest rate at which banks lend and borrow overnight balances from each other, known as federal funds, in the U.S. The federal funds rate is an important benchmark for short-term interest rates in the U.S. financial market, and is used as a reference rate for various financial products, such as adjustable-rate mortgages, credit card loans, and small business loans. Fintech The term fintech refers to the use of technology to provide financial services. It can include everything from robo-advisors to mobile banking apps. Fintech is constantly evolving and has the potential to disrupt traditional financial systems by providing more efficient and accessible financial services. Floor In finance, a floor refers to a minimum that cannot be dropped below. An interest rate floor means that a loan is not subject to any other contingent interest rates. Regardless of market conditions, a price floor prevents an item's price from falling below a certain limit. Forward Points Forward points in finance refers to the amount added to or subtracted from the current spot rate of a currency to determine the forward exchange rate for a future delivery date. The forward exchange rate determines the rate at which a currency can be exchanged for another at a future date, based on an agreement made on the spot date. In addition to accounting for the time value of money, forward points are used to correct for differences in interest rates between the currencies being exchanged. The size of the forward point will depend on the difference between the interest rates of the two currencies and the time until the forward contract is set to expire. Foreign Exchange (FX) Foreign exchange (FX) refers to the buying and selling of currencies on the foreign exchange market. The foreign exchange market is a global decentralized market for the trading of currencies, and is the largest financial market in the world. Foreign Exchange (FX) Option A foreign exchange (FX) option is a financial contract that gives the holder the right, but not the obligation, to buy or sell a specified currency at a predetermined exchange rate on or before a certain date. It is a type of derivative instrument that is used to hedge against the risk of fluctuations in exchange rates. Foreign Exchange (FX) Hedging FX hedging is a risk management strategy used by companies to protect themselves from potential losses resulting from changes in currency exchange rates. FX hedging involves buying and selling financial instruments, such as forwards, options, and futures, to offset potential currency exposures in order to minimize the impact of exchange rate fluctuations on a company's financial statements. The goal of FX hedging is to reduce or eliminate the risk of loss due to currency movements, allowing companies to better manage their financial risk and focus on their core business operations. Foreign Exchange (FX) Swap An FX swap is a foreign exchange derivative that allows two parties to exchange an agreed amount of one currency for another currency at a specified rate, on a specified date, and then reverse the trade at a later date. The two legs of the trade are carried out simultaneously for a fixed amount of time, and then reversed later. FX swaps are usually used to hedge currency risk or obtain financing in a different currency. FX swaps are commonly used by banks and other financial institutions, but are also used by companies and individuals to manage their foreign exchange exposures. Foreign Exchange (FX) Risk - exchange rate risk Foreign exchange (FX) risk is the risk that a company or investor will incur losses due to fluctuations in exchange rates. It is a type of market risk that can impact the value of assets, liabilities, and cash flows denominated in different currencies. Forward Forwards are financial derivatives that allow two parties to exchange assets at a specified price at a specific future date. Contracts are customized to the needs of the parties involved, and terms include the type of asset, the quantity of the asset, and the delivery date. Forwards are often used to hedge against currency risk, commodity price risk, or interest rate risk. In a forward contract, one party agrees to buy the asset at the agreed-upon price on a specific date from the other party. The other party agrees to sell the asset at that price on that date. The forward contract is not traded on an exchange, and the terms of the contract are not standardized. The terms are negotiated between the two parties, and the contract is usually customized to meet their specific needs. Although forward contracts are similar to futures contracts, they differ in some important ways. A futures contract is standardized and traded on an exchange, whereas a forward contract is customized and traded over the counter. Additionally, futures contracts have margin requirements and are marked to market daily, whereas forwards do not. Foreign Exchange (FX) Forward Contract FX forwards are contracts between clients and their bank, or non-bank provider, to exchange currencies at a set rate on a future date. Contract pricing is determined by the exchange spot price, interest rate differentials between the two currencies, and the length of the contract, which is determined by the buyer and seller. Future Futures contracts are financial derivatives that obligate the buyer or seller to purchase or sell an asset at a predetermined price at a future date. The terms of futures contracts, including the quantity and quality of the assets, the delivery date, and the price, are all determined in advance. Futures contracts are standardized and traded on exchanges. Futures contracts are used to hedge against price risk, or to speculate on the price movements of an asset. The buyer and seller of a futures contract are required to put up a margin, which is a small percentage of the value of the contract. The margin is used to cover any potential losses on the contract. Functional Currency A functional currency is the currency of the primary economic environment in which an entity operates. It is the currency in which an entity primarily generates and expends cash, and the currency in which it primarily holds assets and liabilities. For a business, the functional currency is typically the currency of the country in which the business is headquartered. The functional currency is used to determine the appropriate exchange rate to use when translating the financial statements of an entity into a different currency. The functional currency is also known as accounting currency. FX Translation Currency translation is the process of converting one currency in terms of another, often in the context of the financial results of a parent company's foreign subsidiaries into its functional currency. FX Swap In a foreign currency swap, two foreign parties agree to swap interest payments on a loan made in one currency for interest payments on a loan made in another currency. Foreign currency swaps can also involve exchanging principal. When the agreement ends, this will be exchanged back. In most cases, however, notional principal is just used to calculate interest and is not actually exchanged. Floating Exchange Rate In a floating exchange rate system, the currency price of a nation is set according to supply and demand relative to other currencies. A fixed exchange rate, on the other hand, is determined entirely or predominantly by the government. FX Forward Transaction The FX Forward Deal is a foreign exchange transaction based on a foreign exchange rate agreed by the buyer and seller under a foreign exchange contract, delivered on a specified date after the second working day of the transaction, in most cases. FX Netting Netting FX (or Forex Netting ) involves offsetting receivables and payables in one currency with receivables and payables in the same currency. As currency rates move, FX gains (losses) on one position should be offset by FX losses (gains) on the other. Foreign Transaction Fee A foreign transaction fee is a charge assessed by a financial institution to a consumer who uses an electronic payment card to make a purchase in a foreign currency. Foreign transaction fees usually apply to card purchases made in foreign countries while traveling, but they can also apply to purchases made online from your home country where the vendor is foreign and processes the transaction in its local currency. FX Gain / FX Loss An FX gain or loss is reflected in the income statement as a change in value of a foreign exchange-denominated transaction. A sales transaction creates a foreign exchange gain (loss) when the foreign currency appreciates (depreciates) against the company's home currency. Fedwire Fedwire is a real-time gross settlement funds transfer system operated by the United States Federal Reserve Banks that allows financial institutions to transfer funds electronically between the system's more than 9,289 participants (as of March 19, 2009). Upon receiving the proper wiring instructions from the receiving bank, the sending bank can initiate transfers. Foreign Exchange Broker A forex broker, or currency trading broker is a financial services company that provides traders access to a platform for buying and selling currencies. Transactions in the foreign exchange market are always between a pair of two different currencies. Foreign Exchange Commissions Financial institutions or service providers charge foreign exchange commissions for facilitating currency exchange transactions. Commissions are usually calculated as a percentage of the transaction amount or as a fixed fee. Brokers may charge 50% of a pip spread or a fixed commission per standard lot, for example. The amount is deducted from the total cash received during the transaction. FX Software FX software manages and optimizes foreign exchange transactions, helping businesses handle currency conversion, mitigate FX risk, and automate trading. It provides real-time exchange rates, risk management tools like forward contracts, and compliance reporting. These platforms integrate with ERP systems to streamline global operations and protect against FX volatility. Financial Conduct Authority ( FCA ) The Financial Conduct Authority (FCA) is a financial regulatory body in the United Kingdom. It operates independently of the UK Government and is financed by charging fees to members of the financial services industry. The FCA regulates financial firms providing services to consumers and maintains the integrity of the financial markets in the United Kingdom. G Gamma A gamma is a measure of how sensitive the delta of an option is to changes in the price of the underlying asset, used in options pricing formulas to represent the amount by which the delta of an option is expected to change in response to a $1 change in the price of the underlying asset. Gamma is typically expressed as a decimal number, and it reflects the impact that changes in the price of the underlying asset can have on the delta of an option. Government Bond A government bond is a debt security issued by the government to raise capital. Due to the fact that government bonds are backed by the full faith and credit of the issuing government, they are considered a safe investment. Greeks in Finance Variables used to assess risk in the options market are commonly referred to as "the Greeks." A Greek symbol represents each risk. Greek variables result from imperfect assumptions or relationships between the option and another underlying variable. Greek values, such as delta, theta, and others, are used by traders to assess options risk. G10 Currencies The G10 currenc ies are a group of selected major currencies that are used in international marketplaces. The name of the group originated from a meeting of finance ministers from the G10 nations on the 10th of September of 1975. The G10 currencies are: United States Dollar (USD), Euro (EUR), Pound Sterling (GBP), Japanese Yen (JPY), Australian Dollar (AUD), New Zealand Dollar (NZD), Canadian Dollar (CAD), Swiss Franc (CHF), Norwegian Krone (NOK), Swedish Krona (SEK). H Hedger Hedgers are investors or financial institutions that engage in financial transactions to reduce the risk of potential losses on assets. Hedging involves taking offsetting positions in financial instruments to mitigate the impact of price movements on the underlying asset. There are many different ways that investors and financial institutions can hedge their risks, depending on their specific needs and the nature of the underlying asset. Some common hedging strategies include the use of financial derivatives such as options and futures, as well as the use of diversification and portfolio optimization techniques. Historical Volatility Historical volatility refers to the fluctuations in the price of a security over a specific period of time. Calculated by taking the standard deviation of the natural logarithm of the asset's price over a specified number of trading days. The higher the historical volatility, the greater the price fluctuations of the asset. Historical volatility can be used to help predict future volatility and risk, but it is important to note that past performance is not necessarily indicative of future results. I International Monetary Fund (IMF) The International Monetary Fund (IMF) is an international organization that promotes global monetary cooperation, financial stability, and international trade. The IMF was founded in 1944 at the Bretton Woods Conference and is headquartered in Washington, D.C. It is funded and owned by its member countries, which contribute financial resources to the organization and are represented by a board of directors. Implied Volatility The implied volatility of a financial instrument, such as a stock or an option, indicates its expected volatility over its lifetime. Due to its derived nature, it is implied as it cannot be observed directly. Options contracts are commonly priced using implied volatility because it determines the likelihood that the underlying asset will reach a certain price by a certain date. An asset with a high implied volatility is likely to experience price swings in the future, while one with a low implied volatility is less likely to experience price movements. Implied volatility is typically expressed as an annualized percentage. Interest Rate Curve An interest rate curve represents the relationship between interest rates and debt maturity. The curve plots the interest rates of securities with different maturities on the y-axis and the maturities of the securities on the x-axis. Several factors, such as monetary policy, inflation expectations, and market conditions, can influence the shape of the interest rate curve over time. Interest Rate Swap (IRS) Interest rate swaps are financial derivatives that allow two parties to exchange or swap cash flows based on a notional principal amount. During the inception of the swap, the parties agree on a set of fixed or floating interest rates. The swap involves one party paying a fixed rate of interest on the notional amount, while the other party pays a floating rate. Floating rates are typically based on an index, such as London Interbank Offered Rate (LIBOR), which is the average rate at which banks can borrow funds. By using interest rate swaps, parties can hedge against changes in interest rates, manage the risk of fluctuating interest rates, or speculate on future changes in interest rates. In The Money (ITM) In finance, an option is considered to be in the money if the current market price of the underlying asset is higher than the strike price for a call option, or lower than the strike price for a put option. For example, if a stock is trading at $60 per share, and a call option with a strike price of $50 is available, the option is in the money. Similarly, if a put option with a strike price of $70 is available, it is also in the money. In-the-money options have intrinsic value, which is the difference between the current market price of the underlying asset and the strike price of the option. International Transaction International transactions are cross-border trade agreements or credit operations involving a foreign currency. A typical international transaction involves the exchange of goods or services, and the settlement date is the last step. ISO 4217 A standard published by the International Organization for Standardization (ISO) provides information about the relationships between individual currencies and their minor units by defining alpha and numeric codes. Initial Margin (IM) The initial margin (IM) is the amount of cash or collateral that an investor must pay to open a margin account in order to purchase a security. Investors can borrow money to buy securities with this type of collateral. IMM Dates IMM Dates refer to the expiration dates for futures and options traded on the International Monetary Market (IMM), the largest foreign exchange futures and options market in the United States. These contracts consistently expire on the third Wednesday of March, June, September, and December. The selection of these dates is intentional and standardized for market consistency. J Japanese Yen Carry Trade Carry trades involve borrowing money in one currency at a low interest rate and investing it in another currency at a high interest rate. The currency you borrow in a Japanese Yen carry trade is the Yen - the currency of Japan. K Knock-in Option A knock-in option is a type of option that becomes active or "knocks in" to the market only when the price of the underlying asset reaches a predetermined trigger price. Until the trigger price is reached, the option remains dormant and has no value. Knock out Option A knock-out option is a type of option that becomes inactive or "knocks out" of the market when the price of the underlying asset reaches a predetermined trigger price. When the trigger price is reached, the option is automatically exercised, and the trader either receives a payout or incurs a loss, depending on the terms of the option. Kantox Kantox is a multinational fintech company that offers Currency Management Automation software for corporate clients. Their software automates the pre-trade, trade, and post-trade stages of the corporate foreign exchange workflow. Key Risk Indicator (KRI) A key risk indicator (KRI) measures the likelihood that the combined probability of an event and its consequences will exceed an organization's risk appetite and negatively impact the success of the organization. L Landed Cost A landed cost is the total cost of bringing a product from the origin to its destination, including transportation, insurance, duties, tariffs, and other fees. Importing businesses must consider the landed cost, as it affects the final price of the product and ultimately their competitiveness. By calculating the landed cost, companies can determine the true cost of their imports, make informed purchasing decisions, and price their products accurately. Letter of Credit A Letter of Credit (LOC) is a document issued by a bank on behalf of a buyer, guaranteeing payment to a seller under the terms and conditions agreed upon by the buyer and seller. The seller can use the LOC as a guarantee of payment as long as they meet the conditions outlined in it. If the buyer fails to pay the seller, the issuing bank will pay the seller. It is commonly used in international trade transactions to mitigate the risk of non-payment by the buyer. Liquidity Liquidity refers to the ease with which an asset can be bought or sold in the market without affecting its price. Highly liquid assets, such as cash, can be easily bought or sold with minimal impact on the price, while less liquid assets, such as real estate or collectibles, may take longer to sell and may be subject to larger price fluctuations. There are several measures of liquidity, including the bid-ask spread (the difference between the highest price that a buyer is willing to pay for an asset and the lowest price that a seller is willing to accept), the volume of trading activity, and the speed at which an asset can be bought or sold. Local currency payment Local currency payments are financial transactions that are conducted in the local currency of a client or supplier, rather than the company's own functional currency. These payments can be made for sales transactions, exports, or purchases transactions, imports. Operating in the local currency allows companies to avoid costly markups and expand sales by avoiding passing on exchange rate markups to clients. Effective currency hedging is necessary for companies to protect against exchange rate risk when making local currency payments. London Interbank Offered Rate (LIBOR) The London Interbank Offered Rate (LIBOR) is a benchmark interest rate that is used as a reference rate for short-term interest rates around the world. It is calculated and published daily by the ICE Benchmark Administration (IBA), a financial services company, based on the interest rates at which a panel of banks in London are willing to lend to each other. There are different LIBOR rates for different currencies and maturities, ranging from overnight to one year. The most commonly quoted LIBOR rate is the three-month U.S. dollar rate. LIBOR is used as a reference rate for a wide variety of financial products, including adjustable rate mortgages, student loans, and floating rate bonds. It is also used as a benchmark for the pricing of derivatives such as interest rate swaps. Long In finance, the term "long" refers to the buying of a security or other financial instrument with the intention of holding it for an extended period of time. The term "going long" or "taking a long position" refers to investing in a security with the expectation that it will appreciate in value over the long term. By holding the security, the investor hopes to sell it at a higher price in the future and make a profit. Live exchange rate The live exchange rate is a currency exchange rate that is updated in real time. The current exchange rate on the market or between banks. Customers of money transfer companies receive exchange rates that change in real time, but also include a small margin. M Market Maker A market maker is a firm or individual that buys or sells securities at any time with the goal of providing liquidity to the market and facilitating trade. Market makers typically hold an inventory of securities that they buy and sell, and they provide quotes to buyers and sellers using their capital and liquidity. Market makers play a crucial role in facilitating price discovery and trade execution by providing a source of demand and supply for securities. Market makers may operate on exchanges or in the over-the-counter (OTC) market. Market Taker A market taker buys or sells securities by accepting the price quoted by market makers or other traders. By contrast to market makers, who can buy and sell securities at any time and provide quotes to the market, market takers are passive participants who rely on quotes provided by others in order to execute trades. Market takers do not provide liquidity to the market in the same way that market makers do, but they can benefit from the liquidity provided by market makers and other traders by being able to quickly and easily buy and sell securities at quoted prices. Market takers may also be referred to as "buyers" and "sellers," depending on whether they are buying or selling securities. Major Currency A major currency is a term used to describe a currency that is widely traded and used in international transactions. Major currencies are typically from economically and politically stable countries, and are considered to be relatively liquid and stable compared to other currencies. Mark to Market Mark to market (MTM) is a method of measuring the fair value of accounts that can fluctuate over time, such as assets and liabilities. Mark to market aims to provide a realistic appraisal of an institution's or company's current financial situation based on current market conditions. Monetary Assets A monetary asset is one that is readily convertible into money, such as cash on hand, bank deposits, investment accounts, accounts receivable (AR), and notes receivable. Midmarket Exchange Rate The midmarket exchange rate (sometimes called the interbank or middle rate) is the midpoint between any two currencies' buy and sell prices. As the demand for and supply of a currency is constantly changing, the mid-market rate is also constantly changing. Managed floating exchange rate A managed floating exchange rate, or "dirty float," blends elements of fixed and floating rates. Central banks, like China's, intervene to keep the currency within a set range against others, such as the USD, with daily fluctuations capped at 2%. This system helps prevent extreme currency misvaluations. For credibility, it relies on a central bank with ample reserves and a market-aligned exchange rate corridor. Merchant of Record (MoR) A merchant of record (MoR) is a legal entity that sells goods or services to end consumers on behalf of a merchant, and assumes all legal liabilities for the transaction . MoRs are often used in online commerce and are designed to help sellers scale their businesses globally. N Negative Carry A negative carry occurs when the cost of holding a financial asset exceeds the income generated by it. It occurs typically when an asset pays a lower return than what it costs to finance its purchase. Nominal Effective Exchange Rate An unadjusted weighted average rate at which one country's currency exchanges for a basket of multiple foreign currencies is called the nominal effective exchange rate (NEER). Nominal exchange rates indicate the amount of domestic currency needed to purchase foreign currency. Non-Deliverable Forward Non-deliverable forwards (NDF) are cash-settled, and usually short-term, forward contracts. The notional amount is never exchanged, hence the name "non-deliverable." Two parties agree to take opposite sides of a transaction for a set amount of money—at a contracted rate, in the case of a currency NDF. Notional Value The notional value of an underlying asset is often used by derivatives traders to refer to the contract's value. This can be the total value of a position, the amount that a position controls, or an agreed-upon amount. A financial asset's face value is used to determine its payment. In the options, futures, forward, and currency markets, this term describes derivative contracts. Natural Hedge A risk management strategy that reduces exposure by aligning assets with inherent negative correlations or by matching operating expenses and revenues in the same currency to minimize exchange rate risk. O OECD The Organisation for Economic Co-operation and Development (OECD) is an international organization that promotes economic and social well-being around the world. It was founded in 1961 and is headquartered in Paris, France. The OECD is made up of 36 member countries, which are primarily developed countries, but also include a few emerging economies. Offer An offer is a proposal from a seller to sell a product or service at a specified price. In securities trading, an offer is often expressed as an "ask," which is the price at which a seller is willing to sell a particular security. In an auction-style market, such as a stock exchange, offers are made by sellers and paired with bids made by buyers. The lowest ask and the highest bid at a given time make up the "bid-ask spread," which is the difference between the prices at which buyers are willing to buy and sellers are willing to sell. The ask price is typically higher than the bid price, and the difference between the two is called the "spread." Option Options are financial instruments that give the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a certain date. A call option gives the holder the right to buy the underlying asset; a put option gives the holder the right to sell the underlying asset. Options are often used to hedge against potential price movements in other assets, or to speculate on price movements. Off the Run In finance, "off the run" refers to securities that have not been issued most recently. In the case of government bonds issued every year, for example, the most recently issued bond would be considered "on the run," but all previous bonds would be considered "off the run." Due to their limited trading, off-the-run securities are usually considered less liquid than on-the-run securities. On the Run "On-the-run" is a term used in the bond market to refer to the most recently issued bonds in a particular series or issuer. On-the-run bonds are typically the most liquid and widely traded bonds in a given market, and they are usually considered to be the benchmark or reference bonds for that market. Out Off The Money (OTM) In finance, an option is considered to be out of the money if the current market price of the underlying asset is lower than the strike price for a call option, or higher than the strike price for a put option. Out-of-the-money options have no intrinsic value, because the holder of the option is not entitled to buy or sell the underlying asset at a price that is different from the current market price. Over The Counter Market (OTC) The OTC (over-the-counter) market is a decentralized market where financial instruments are traded directly between two parties without a central exchange. Alternatively, it is known as the "off-exchange" market. The OTC market is typically facilitated by market makers, who act as intermediaries between buyers and sellers and help match buyers and sellers. Over Hedged Risk management strategy over-hedging involves taking an offsetting position that exceeds the size of the original position being hedged. It may result in a net position opposite to the initial position. Overhedging can be inadvertent or intentional. Option Currency Trading Currency options are derivatives based on underlying currency pairs. Trading currency options involves a wide variety of strategies available for use in FX markets, where foreign currencies are traded. P Pips Pips are units of measurement used to express the change in value between two currencies. Pips represent the smallest increments of difference in exchange rates and they represent the change in value between two currencies. For most currency pairs, a pip is equal to the fourth decimal place of the exchange rate, but it can vary depending on the pair being traded and the size of the trade. A one-pip change in the EUR/USD exchange rate, for example, would be 1.1234 to 1.1235. A pip is a unit of measurement used in forex trading to calculate profit and loss. It is a crucial concept for traders to grasp. Positive Carry A positive carry occurs when the income generated by holding a financial asset exceeds its cost. This typically occurs when the asset pays a higher rate of return or yield than the cost of financing the purchase of the asset. Put Option Put options are financial contracts that give the holder the right, but not the obligation, to sell a specific asset at a predetermined price (the strike price) before a specific date (the expiration date). The asset that the put option gives the holder the right to sell is known as the underlying asset. Put options are often used as a way to hedge against potential price declines in the underlying asset, or to speculate on price declines. Put Spread A put spread is an option strategy that involves purchasing one put option while simultaneously selling another put option on the same underlying asset. The put options have different strike prices, and the option that is purchased has a higher strike price than the option that is sold. The goal of a put spread is to profit from a downward move in the price of the underlying asset, while also limiting potential losses. Primary Dealer A primary dealer is a financial institution that is authorized to buy and sell securities directly with a central bank, such as the Federal Reserve in the United States. Primary dealers are an important part of the financial system because they help to facilitate the implementation of monetary policy by the central bank. Primary dealers are typically large, well-capitalized banks or securities firms that are able to make markets in a wide range of securities, including U.S. government securities, agency securities, and mortgage-backed securities. They also act as market makers in these securities, providing liquidity to the market and helping to ensure that prices remain stable. Pegged Exchange Rate The pegged exchange rate system incorporates aspects of floating and fixed exchange rate systems. Smaller economies that are particularly susceptible to currency fluctuations will “peg” their currency (pegged currency) to a single major currency or a basket of currencies. These currencies are chosen based on which country the smaller economy experiences a lot of trade activity with or on which currency the nation’s debt is denominated in. Q Quote Currency In foreign exchange (Forex), the quote currency, also known as the counter currency, is the second currency in both direct and indirect currency pairs. A quote currency determines the value of a base currency. When currency exchange rates are quoted, the quote currency is listed after the base currency. R Reserve Currency The term reserve currency refers to a large amount of currency held by central banks and major financial institutions for international transactions. Since reserves do not need to be exchanged for trade, reserve currencies reduce exchange rate risk. Real-time gross settlement (RTGS) Real-time gross settlement (RTGS) systems are specialist funds transfer systems that allow money or securities to be transferred from one bank to another in real time and on a gross basis to avoid settlement risk. When a payment transaction is settled "in real time," there is no waiting period. Transactions are settled as soon as they are processed. The term "gross settlement" means the transaction is settled one-to-one, without bundling or netting with any other transaction. "Settlement" refers to payments that are final and irrevocable once processed. Repurchase Agreement (REPO) Repo transactions involve one party selling securities to another with the agreement to buy them back later at a higher price. Often, repos are used to raise short-term capital or finance the purchase of securities. There are two types of repos: term repos, which have a fixed maturity date, and open repos, which have no fixed maturity date and can be terminated at any time. A repos is most commonly used by banks, hedge funds, and other financial institutions as a way to raise short-term capital, and they are considered a low-risk investment because they are usually secured with high-quality securities. Reverse Repurchase Agreement (Rev REPO) A reverse repo is a financial transaction where one party purchases securities from another party and then sells them back at a lower price at a later date. Like regular repos, reverse repos can be either term repos or open repos, depending on whether they have a fixed maturity date. Reverse repos are typically used by banks, hedge funds, and other financial institutions as a way to invest short-term excess cash or to finance the purchase of securities. Rho Rho is a measure of the sensitivity of an option's price to changes in the risk-free interest rate. It is a Greek letter used in options pricing formulas to represent the amount by which the price of an option is expected to change in response to a 1% change in the risk-free interest rate. Rho is typically expressed as a percentage, and it reflects the impact that changes in the risk-free interest rate can have on the value of an option. Risk Reversal Risk reversals are financial transactions in which two parties exchange risk. It is generally used to hedge against or speculate on changes in the value of an underlying asset. One common type of risk reversal is an options strategy that involves the simultaneous purchase of a put option and the sale of a call option on the same underlying asset. This strategy is also known as a short straddle or a short combination. The put option gives the holder the right to sell the underlying asset at a predetermined price (the strike price), while the call option gives the holder the right to buy the underlying asset at the same strike price. Run on the Bank A run on the bank is a situation where a large number of depositors attempt to withdraw their money from a bank at the same time due to concerns about the bank's solvency or financial stability. This can be triggered by rumors or actual news of the bank's financial difficulties or instability. A run on the bank can have serious consequences, as it can lead to the bank's inability to fulfill the withdrawal requests of its depositors, resulting in a liquidity crisis that can spread to other banks and the wider financial system. In some cases, governments or central banks may step in to provide support and prevent a wider financial crisis. Repatriation of Profits The repatriation of profits means that a firm can send earnings or assets from abroad back to its home country in hard currency such as USD, EUR, and others. Rolling Option A rolling option is an options contract that grants a buyer the right to purchase something at a future date, as well as the choice to extend the expiration date of that right, for a fee. Realized Currency Gain A realized currency gain is the result of an increase in the exchange rate between the date the invoice is issued and the date it is settled in a foreign currency. Consequently, the amount converted to the base currency at settlement is greater than the amount at the time the invoice was raised, resulting in a profit. Realised Currency Loss Realised currency loss occurs when the exchange rate moves unfavorably between the date an invoice in a foreign currency is issued and the date it is settled. This results in the amount converted to the base currency at settlement being less than the amount at the time the invoice was raised, leading to a financial loss. S Sharpe Ratio The Sharpe ratio is a measure of risk-adjusted return, which compares the expected returns of an investment to the risk it carries. It is calculated by dividing the expected excess return (the return of the investment minus the risk-free rate) by the standard deviation of returns. A higher Sharpe ratio indicates a better risk-to-return tradeoff. Short In finance, the term "short" refers to the selling of a security or other financial instrument that the seller does not own. This is also known as "short selling" or "going short." Short selling is typically done in anticipation of a decline in the price of the security or instrument. The seller borrows the security from someone else, sells it on the market, and then buys it back at a later time (hopefully at a lower price) in order to return it to the lender. If the price of the security does indeed decline, the seller can profit by buying it back at a lower price than they sold it for. If the price goes up instead, the seller incurs a loss. S&P 500 Standard & Poor's 500 (S&P 500) is a stock market index containing 500 large publicly traded companies in the United States. It is widely considered a leading indicator of U.S. stock market performance. The companies in the S&P 500 are chosen by Standard & Poor's (S&P), a financial services company, based on their market size, liquidity, and industry group representation. The index is weighted by market capitalization, which means that the larger companies have a greater influence on the index's performance. The S&P 500 is typically used as a benchmark for the performance of actively managed large-cap mutual funds and exchange-traded funds (ETFs). The Secured Overnight Financing Rate (SOFR) The Secured Overnight Financing Rate (SOFR) is a benchmark interest rate for the U.S. dollar overnight lending market. It is calculated and published by the Federal Reserve Bank of New York (FRBNY) based on the interest rates at which banks lend overnight funds to each other using U.S. Treasury securities as collateral. Speculator Speculators buy and sell financial instruments to profit from changes in the price of the underlying asset. In order to achieve higher returns, speculators often take on greater risks than traditional investors. Speculators can trade a wide variety of financial instruments, including stocks, bonds, currencies, commodities, and derivatives. Supply Chain Supply chains refer to the flow of goods, services, and information from the raw material suppliers to the customer's final product. It involves all activities involved in the sourcing, procurement, production, and delivery of a product or service, as well as the coordination and collaboration of all parties involved, including suppliers, manufacturers, distributors, and customers. A successful supply chain delivers the right product, at the right time, in the right quantity, and at the lowest price. Swaption A swaption is a financial derivative that gives the holder the right, but not the obligation, to enter into an interest rate swap at a later date. An interest rate swap is a financial instrument that allows two parties to exchange a stream of fixed-rate payments for a stream of floating-rate payments, or vice versa. Spot Rate Spot rates are the current market prices at which financial instruments, such as currencies, commodities, and securities, can be bought or sold for immediate delivery. Spot rates are affected by market forces, such as supply and demand, and are commonly used as benchmarks for forward, futures, and options contracts. The spot rate can be quoted in either direct or indirect terms, depending on the conventions of the market in which the instrument is traded. Spot Exchange Rate Spot exchange rates represent the current value of one currency against another at a given point in time. The price at which a trader will pay to buy another currency on the open market. Spot exchange rates are regulated by the global foreign exchange market, where organizations, countries, and traders settle financial transactions. Straddle The straddle strategy involves simultaneously purchasing a put option and a call option for the underlying security with the same strike price and expiration date. When the price of the security rises or falls from the strike price by more than the total premium paid, a trader will profit from a long straddle. As long as the underlying security's price moves sharply, the profit potential is virtually unlimited. SWIFT Message The SWIFT international payment network generates SWIFT messages when funds are transferred internationally. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is renowned as the fastest, most secure way to transmit financial messages internationally. Settlement Date A settlement date is the day when a trade in the securities industry is finalized, and the transfer of cash or assets is completed. It's usually a few days after the trade was made. Stagflation When slow growth, high unemployment, and rising prices occur simultaneously in an economy, it is called stagflation. In the developed world, stagflation has repeatedly occurred since the 1970s, once thought impossible by economists. Slow-growth policy solutions tend to worsen inflation, and vice versa. It is therefore difficult to fight stagflation. T Take Rate A take rate is the fee that a marketplace charges for a transaction that is carried out by a third-party seller or service provider. The take rate is a determining factor in a marketplace's revenue as reported on its income statement: Take rate * GMV (gross merchandise volume) = revenue. Tenor Tenor refers to the time between the maturity date and the maturity date of a financial instrument, such as a bond or loan. The tenor of a financial instrument can be expressed in various ways, such as years, months, or even days. Theta In finance, theta is a measure of an option's sensitivity to time-based changes in price. The Greek letter used in options pricing formulas to represent the amount by which the price of an option is expected to decline over a given period of time, due to the passage of time and the decay of the option's extrinsic value.Theta is typically expressed as a negative number, and it reflects the impact that the passage of time can have on the value of an option. Tick Ticks are units of measurement that represent the minimum price change for a security. Ticks are commonly used for expressing changes in a financial instrument's price, such as a stock, bond, commodity, or derivative, and they represent the smallest increment in a security's price. The value of a tick can vary depending on the security being traded and the market in which it is traded, but it is typically very small. For example, in the stock market, a tick may be equal to one cent for some stocks and $0.01 for others. Ticks are often used by traders and investors to track the performance of a security and to make decisions about buying and selling. Treasury bill (T-bill) T-bills are short-term debt securities issued by the U.S. government. T-bills are sold in denominations ranging from $100 to $1,000,000, and their maturities range from a few days to 52 weeks. Since T-bills are backed by the full faith and credit of the United States government, they are considered to be very safe investments. Investors often use them to park money or diversify their portfolios for a short period of time. T-bills do not pay interest, but they are sold at a discount to their face value, and the difference between the purchase price and the face value represents the return to the investor. T-bills are issued through competitive and noncompetitive bidding processes. Transaction Exposure Transaction exposure is the potential loss a company may incur due to changes in foreign exchange rates on existing financial obligations or expected future cash flows. Companies can use a variety of financial instruments and strategies to manage transaction exposure. Transaction exposure is also known as economic exposure. Trader A trader is a person who buys and sells financial instruments such as stocks, bonds, currencies, commodities, or derivatives in an attempt to make a profit. Traders can work on their own or as part of a larger financial institution, such as a bank or brokerage firm. Translation Exposure / Transaction Risk The translation exposure (also known as the translation risk) is the possibility that an organization's assets, liabilities, or income will change in value as a result of changes in exchange rates. Translation risk occurs when a company has equities, assets, liabilities, or income denominated in a foreign currency. Target redemption forwards (TARFs) Target redemption forwards (TARFs) are complex financial instruments that allow holders to exchange currencies at a better rate than the standard forward rate. Corporate organizations often use TARFs in foreign exchange (FX) markets. With multiple partial settlement dates, they combine a barrier (knock-out) call option and a barrier (knock-out) put option. If the enhanced rate reaches a target level, the product automatically expires if the holder hasn't paid an upfront premium. Tied Gold Tied gold in finance refers to a system where a country's currency is directly linked to gold reserves. Under this system, the value of the currency is backed by a fixed quantity of gold, and the government promises to exchange the currency for a specific amount of gold upon request. It is a form of gold standard. U U.S. Dollar Index U.S. Dollar Index measures the dollar's value relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners' currencies. Universal Currency Converter Universal currency converters provide the convenience of converting currency values using current exchange rates through software applications or websites. It is easy to find free currency converters on the Internet, which are capable of converting the value of one currency to another, such as dollars to euros and euros to pounds. V Value at Risk (VaR) Value at Risk (VaR) measures the risk of loss on an investment or portfolio over a specified period. Based on the performance of the investment or portfolio over a given period, it estimates the likelihood of a loss of a certain magnitude over a given period. VaR is typically expressed as a dollar amount or as a percentage of the total value of the investment or portfolio. Vega In finance, vega measures how sensitive an option price is to changes in the volatility of the underlying asset. It is a Greek letter used in options pricing formulas to represent the amount by which the price of an option is expected to change in response to a 1% change in the volatility of the underlying asset. Vega is typically expressed as a percentage, and it reflects the impact that changes in volatility can have on the value of an option. Volatility In finance, volatility refers to the amount of risk or uncertainty associated with the price of a security. It is a measure of how much the price of a security, such as a stock or bond, fluctuates over time. A security with high volatility experiences significant price changes over a short period of time, while a security with low volatility experiences less significant price changes. Volatility can be measured using a variety of statistical techniques, such as standard deviation or the variance of returns. Volatility Surface In finance, a volatility surface is a graphical representation of the implied volatilities of a group of options on a particular underlying asset, as a function of the options' expiration dates and strike prices. The volatility surface is used to help visualize the relationships between the implied volatilities of options with different expiration dates and strike prices, and can be used to model the expected volatility of the underlying asset over time. W WM/Reuters benchmark rate A WM/Reuters benchmark rate is an exchange rate that is published daily at 4 PM London time. The exchange rates are calculated by averaging the exchange rates for currency trades that take place 30 seconds before and after 4 PM on the London market. Standard rates are used to calculate portfolio valuations and measure performance. X Xenocurrency A xenocurrency is a currency deposited or exchanged outside its country of origin. The term "eurocurrency" or "foreign currency" is more commonly used today. Due to globalization of supply chains and financial markets, these types of currency transactions have become increasingly common. Xero currency rates At midnight, the official rate of the day (or mid-market rate) is determined. The exchange rates in Xero are rounded to six significant figures, including decimal places. Variances can occur if the actual exchange rate has more than this. Z Zero Coupon Bond A zero-coupon bond is a type of bond that does not pay periodic interest to the bondholder. Instead, the bond is issued at a discount to its face value, and the bondholder receives the face value of the bond at maturity. The difference between the purchase price and the face value represents the return to the bondholder, which is the equivalent of the interest that would have been paid out in periodic coupons. Zero-Cost Hedge (0 hedge) The concept of zero-cost hedging refers to risk management strategies in which a financial position is protected without an upfront payment using options or other financial instruments.

< Back Content Writer (closed) Grain is searching for an advocate of brand communication across a diverse mix of marketing channels. Full Time Tel Aviv Apply Now Who are we? Grain is a fast-growing fintech startup based in Tel Aviv, offering embedded cross-currency solutions for software platforms and marketplaces. Founded by entrepreneurs formerly of Barclays, Deutsche Bank and top fintech startups who are passionate about leveraging technology to make financial solutions more accessible. Grain is backed by venture capitals and leading financial institutions. Who are we looking for? As part of our Marketing team, we are seeking passionate, experienced, independent English content writer/copywriter. We are searching for an advocate of brand communication across a diverse mix of marketing channels. The purpose of this position is to create all written materials for business use. Responsible for communicating the company's messaging to potential and existing customers in various industries, researching industry-related topics, coming up with ideas for new content types, and writing content that helps drive conversions. Responsibilities Create marketing messages that connect with our target audience Conduct in-depth market research and compose content that is relevant and engaging to target audience Create educational and action-driving marketing collaterals – blog posts, whitepapers, landing pages, ads, social content and publications Collaborate with biz dev and partnerships teams to conceptualize and write compelling sales-driven collaterals – presentations, brochures, white papers, testimonials and more Develop, implement, and manage organic social media activities Implement SEO practices to increase blog posts’ visibility Maintain a content marketing calendar that schedules all aspects of the creation and delivery of content throughout the year Update and maintain our websites as needed, including writing the copy for new landing pages Write, manage, and edit product-related copy across multiple channels Work closely with the entire organization as part of the Marketing Team Qualifications Native English Speaker (must) Exceptional storytelling, writing and editing skills, including the ability to approach in a range of voices and styles for diverse audiences A consistent record of crafting solid short copy and long form content across several mediums Copywriting samples; a portfolio of published articles is a plus Bachelor’s Degree, preferably in marketing, Communications, Journalism, or relevant field 3+ year’s proven work experience as a Content Writer, Copywriter, preferably in tech/SaaS Understanding and interest in financial topics Experience using social media for business An ability to describe product features in a creative and informative way Research skills to produce high-quality content An ability to fact-check long-form content pieces Data-driven thinking & resourceful Collaborative/self-starter approach, able to find opportunities and take initiative Advantage Experience in Fintech Knowledge of SEO/SEM and Google Analytics Experience in working with Wix as an editor Posting Statement All qualified applicants will receive consideration for employment without regard to race, color, religion, religious creed, sex, national origin, ancestry, age, physical or mental disability, medical condition, genetic information, military and veteran status, marital status, pregnancy, gender, gender expression, gender identity, sexual orientation, or any other characteristic protected by local law, regulation, or ordinance. Apply Now

Understanding the Japanese Yen: Role in Global Commerce, Volatility, and Historical Overview Find out how the Yen influences global trade, how it fluctuates, and what its history is by taking a brief look back at the currency. August Al posts Recent blog posts Understanding the Japanese Yen: Role in Global Commerce, Volatility, and Historical Overview Find out how the Yen influences global trade, how it fluctuates, and what its history is by taking a brief look back at the currency. Aug Navigating FX Volatility in the EU: A Balancing Act Between Euro and Non-Euro Countries Eurozone countries leverage several strategies to mitigate the impact of FX volatility. Mar Navigating Currency Fluctuations: Insights from a Bed Bank’s Transaction Analysis In this use case we present a comprehensive analysis of cross-border transactions conducted by a global bed bank. Aug Grain triumphs in Hotelbeds' Innovation Challenge – disrupting the travel industry Grain's unique position as the only fintech company among the winners attests to our commitment to disrupting the hotel tech ecosystem. Jun How Cross-Currency Volatility Exposes Supply Chains - and What to Do About It Extreme FX volatility wreaked havoc on the global markets in 2022 and continues well into 2023. Mar Navigating 2024’s Most Volatile Currency Pairs: A Business Survival Guide In the global marketplace, understanding currency volatility is crucial for businesses that deal with international transactions.... Jun The Competitive Power of Local Collection Without Cross-Currency Volatility Loss The US dollar witnessed its longest winning streak in nearly nine years, gaining 5% since mid-July. Nov Mexico and Brazil: Seizing Opportunities for Bedbanks amid Strengthening Currencies We bring you important currency news that has the potential to significantly impact bed banks operating in the Mexican and Brazilian markets Jul An overview of how risk-free multi-currency returns transform the e-commerce industry Despite the endless possibilities that e-commerce provides to every industry, there are undoubtedly global challenges. Increased... May Why Cross-Currency Management Matters: The Top 3 Risks for Businesses that Ignore It In this interview, Grain Co-founder Aharon Navon outlines three major risks that businesses may encounter if they do not employ FX solutions Feb Understanding the U.S. Dollar - History, Role in Global Commerce, and Volatility The U.S. dollar has a rich history that has played a pivotal role in shaping the global economy. May The CFO of Didatravel, Gerardo Del Rio, explains how Bedbanks handle FX volatility While one size doesn’t fit all when it comes to FX and needs, Grain’s embedded cross-currency solutions can advise what would work best for Nov Bed Banks on the Global Markets: What the Weakening Japanese Yen Means In this blog post, we delve into the recent currency trends, specifically the weakening of the Japanese Yen against major currencies. Jul Embedded FX Solutions: the silver bullets for supply chains' cross-currency risk 2022 brought an influx of FX volatility at rates not seen in decades, and 2023 continues this trend. Apr Travel Marketplaces, tell your clients to kiss goodbye to cross currency volatility The travel industry has always faced challenges of low profit margins of 5-7% and long transaction cycles averaging 50 days. Oct Understanding the Japanese Yen: Role in Global Commerce, Volatility, and Historical Overview Navigating 2024’s Most Volatile Currency Pairs: A Business Survival Guide Understanding the U.S. Dollar - History, Role in Global Commerce, and Volatility

< BACK KNOWLEDGE BASE Grain Glossary Get an overview of financial terms and their definitions. 47 items found for "" M < BACK KNOWLEDGE BASE Grain Glossary Get an overview of financial terms and their definitions. ALL A A B B C C D D E E F F G G H H I I J J K K L L M M N N O O P P Q Q R R S S T T U U V V W W X X Z Z M Market Maker A market maker is a firm or individual that buys or sells securities at any time with the goal of providing liquidity to the market and facilitating trade. Market makers typically hold an inventory of securities that they buy and sell, and they provide quotes to buyers and sellers using their capital and liquidity. Market makers play a crucial role in facilitating price discovery and trade execution by providing a source of demand and supply for securities. Market makers may operate on exchanges or in the over-the-counter (OTC) market. Market Taker A market taker buys or sells securities by accepting the price quoted by market makers or other traders. By contrast to market makers, who can buy and sell securities at any time and provide quotes to the market, market takers are passive participants who rely on quotes provided by others in order to execute trades. Market takers do not provide liquidity to the market in the same way that market makers do, but they can benefit from the liquidity provided by market makers and other traders by being able to quickly and easily buy and sell securities at quoted prices. Market takers may also be referred to as "buyers" and "sellers," depending on whether they are buying or selling securities. Major currency A major currency is a term used to describe a currency that is widely traded and used in international transactions. Major currencies are typically from economically and politically stable countries, and are considered to be relatively liquid and stable compared to other currencies. Mark to Market Mark to market (MTM) is a method of measuring the fair value of accounts that can fluctuate over time, such as assets and liabilities. Mark to market aims to provide a realistic appraisal of an institution's or company's current financial situation based on current market conditions. Monetary Assets A monetary asset is one that is readily convertible into money, such as cash on hand, bank deposits, investment accounts, accounts receivable (AR), and notes receivable. Midmarket Exchange Rate The midmarket exchange rate (sometimes called the interbank or middle rate) is the midpoint between any two currencies' buy and sell prices. As the demand for and supply of a currency is constantly changing, the mid-market rate is also constantly changing. Managed floating exchange rate A managed floating exchange rate, or "dirty float," blends elements of fixed and floating rates. Central banks, like China's, intervene to keep the currency within a set range against others, such as the USD, with daily fluctuations capped at 2%. This system helps prevent extreme currency misvaluations. For credibility, it relies on a central bank with ample reserves and a market-aligned exchange rate corridor. Merchant of Record (MoR) A merchant of record (MoR) is a legal entity that sells goods or services to end consumers on behalf of a merchant, and assumes all legal liabilities for the transaction . MoRs are often used in online commerce and are designed to help sellers scale their businesses globally. < PREVIOUS NEXT > Financial Terms to Know | Grain Glossary KNOWLEDGE BASE Grain Glossary Get an overview of financial terms and their definitions. ALL A B C D E F G H I J K L M N O P Q R S T U V W X Z A At The Money (ATM) In finance, an option is at the money if the current market price of its underlying asset equals its strike price. Because the underlying asset cannot be bought or sold at a price other than the current market price, at-the-money options have no intrinsic value. Accounts payable A company's accounts payable is the amount of money it owes to its creditors for goods or services it has received, but has not yet paid for. In the context of accounting, accounts payable is classified as a liability, as it represents a company's obligation to pay off its debts. It is recorded in a company's balance sheet under the category of current liabilities, along with other debts and financial obligations that are due within the next year. Appreciation in currency A currency appreciation in the currency market refers to an increase in the value of one currency relative to another. Simultaneously, the currency appreciation benefits importers as they have to pay less in domestic currency for imported goods. Alt 21 Alt 21 is a digital financial platform designed to let individuals and businesses hedge currency risks. The company's platform offers customizable forex hedging software including options and forwards with real-time rates for pricing in multiple currencies, enabling banks, credit unions, and corporate treasury departments to automate their forex hedging processes and deliver tailor-made financial services. Actual/360 A day count convention is used for calculating interest accrued on Treasury bills and other money market instruments . Uses actual number of days in a month and 360 days in a year for calculating interest payments. B Balance sheet hedging A balance sheet hedging technique involves using financial instruments to offset potential losses or gains on the balance sheet of a company. Companies typically use it to protect themselves against adverse movements in foreign exchange rates, interest rates, or commodity prices, which can affect the value of their assets and liabilities. Base currency The base currency is the primary currency that is used to quote prices for financial instruments, such as currency pairs in the foreign exchange market. It is also the currency in which financial statements, such as balance sheets and income statements, are typically reported. Bid Bids are offers made by buyers to purchase securities at a specified price. In an auction-style market, such as a stock exchange, bids are made by buyers who want to purchase securities, and offers (also called "asks") are made by sellers who want to sell them. "Bid-ask spread" refers to the difference between prices at which buyers and sellers are willing to buy at a particular moment. Bid prices are typically lower than ask prices, and spreads are the difference between them. Bill of Landing A Bill of Lading (B/L) is a document used in shipping to acknowledge the receipt of goods and to serve as proof of title. The B/L is issued by the carrier (such as a shipping company or a trucking firm) and lists the type, quantity, and destination of the goods being transported. It also serves as a contract between the carrier and the shipper, setting out the terms and conditions of the shipment. Basis Points (bps) Basis points are used to measure a percentage change in a financial instrument's value or rate. One basis point is equal to 1/100th of 1% or 0.01%, which is used to express very small changes in value. A basis point represents a very small percent change in an easy-to-understand manner and is often used to describe changes in interest rates, yields, and other financial metrics. Bond A bond is a debt security issued by a government, municipality, or corporation for the purpose of raising capital. An investor who purchases a bond is essentially lending money to the issuer in return for interest payments and the return of principal at maturity. Companies and governments often use bonds to finance long-term projects and to smooth out their cash flow. Bonds come in many types, including corporate, municipal, and government bonds. Binary Option Binary options are financial instruments that allow speculating on the movement of various assets, such as stocks, commodities, currencies, and indices. It is called a binary option because the outcome is either a fixed payout or a loss. Broken Date Broken dates refer to contracts and financial instruments that have a non-standard or irregular tenor, or length of time until maturity. It is possible to use broken dates in a variety of financial instruments, such as bonds, loans, and derivatives. Butterfly Option The butterfly option is a type of option strategy that involves combining two vertical spreads, which each have four different options with three different strike prices. This strategy takes advantage of a neutral market environment, where the underlying asset's price is expected to remain stable. It involves purchasing two call options at a lower strike price, two put options at a higher strike price, and selling one call option and one put option at the same middle strike price. Budget Rate In the context of foreign exchange (FX), a budget rate is a financial projection that estimates the expected exchange rate for a particular currency pair at a future point in time. It is used to help plan and manage resources for international transactions, and to ensure that the costs of the transactions are within the allocated budget. Blocked Currency Block currencies are effectively non-convertible or inconvertible. Generally, currencies are blocked because of government restrictions, such as foreign exchange regulations, physical barriers, political sanctions, or extremely high volatility. Barrier Option A barrier option is a type of derivative where the payoff depends on whether or not the underlying asset has reached or exceeded a predetermined price. A barrier option can be a knock-out, or a knock-in. Bretton Woods System According to the Bretton Woods system, the dollar was pegged to gold, which in turn was pegged to the price of gold. Despite its collapse in the 1970s, Bretton Woods had a lasting impact on currency exchange and trade through the development of the International Monetary Fund and the World Bank. C Cash Flow Hedge A cash flow hedge is a type of hedge that is used to protect against potential losses or gains on a company's future cash flows. It involves using financial instruments, such as derivatives, to offset the impact of changes in foreign exchange rates, interest rates, or commodity prices on the value of the company's cash flows. Consumer Price Index (CPI) Consumer Price Index (CPI) measures the average price level of a basket of goods and services consumed by households. The Consumer Price Index (CPI) is a critical indicator of pricing pressures in an economy and provides a gauge of inflation. Forex traders monitor the CPI, as it can lead to changes in monetary policy by the central bank that will either strengthen or weaken the currency against others in the markets. Counter Currency In a currency pair, the counter currency is the second or reference currency. In ISO currency code pairs, the counter currency follows the base currency. The base currency of a pair is usually a major currency, especially when trading exotic currencies. Carry Trade Carry trades involve borrowing at a low interest rate and reinvesting in a currency or financial product at a higher rate of return. Carry trades are appropriate only for investors with deep pockets due to the risks involved. Collateral In the context of foreign exchange (FX), collateral refers to assets that are pledged as security for a financial obligation, such as a loan or a derivative contract. Collateral is often used in FX transactions to reduce the risk of default by one of the parties. Collateral can be used in other types of FX transactions as well, such as currency forwards, options, and non-deliverable forwards. In these cases, the collateral may be used to cover the potential risk of loss due to changes in exchange rates or other market conditions. Commodity Commodities are raw materials or primary agricultural products that can be bought and sold, such as copper, oil, wheat, gold, etc. Because commodities are standardized products with little differentiation between their qualities, they can be interchanged with other commodities of the same type. They are often produced and traded in large quantities and can be used as inputs for further production or as sources of energy. Calendar Spread A calendar spread, also called a time spread or a horizontal spread, involves simultaneously buying and selling options on the same underlying asset but with different expiration dates. Calendar spreads aim to profit from differences in option time decay. Call Option Call options are financial contracts that give the holder the right, but not the obligation, to buy a specific asset at a predetermined price (the strike price) before or on a certain date (the expiration date). The underlying asset is the asset that the call option gives the holder the right to purchase. Call Spread The call spread is an option strategy where one call option is purchased and another call option is simultaneously sold on the same underlying asset. Call options have different strike prices, and the option that is purchased has a lower strike price than the option that is sold. Call spreads are designed to profit from an upward move in the price of the underlying asset while limiting losses. CAPS Caps are financial contracts used to hedge against currency fluctuations, similar to options. By using it, a currency's upside potential is limited while the holder benefits from its potential depreciation. The holder of a cap has the right to buy or sell a currency, but is not obligated to do so, at a specific strike price, on a specific date or period of time. A cap rate is the strike price that determines a currency's maximum rate. Credit Default Swap (CDS) Credit default swaps (CDS) are financial derivatives that are used to transfer credit risk from one party to another. A CDS provides protection against the risk of debt default by the issuer. Cross rate In the context of foreign exchange (FX), a cross rate is the exchange rate between two currencies, both of which are not the official currency of the country in which the exchange rate quote is given. It is calculated by using the exchange rates of the two currencies relative to a third currency, which is typically a more widely traded currency such as the US dollar. Cross border payment A cross border payment is a financial transaction that involves the transfer of money between countries, typically in different currencies. Cross border payments can be made for a variety of purposes, such as to pay for goods or services, to transfer money to or from foreign bank accounts, or to make international wire transfers. There are a number of factors to consider when making a cross border payment, such as exchange rates, fees, and regulatory requirements. Cross Border Trade As defined by the OCDE, cross-border trade is the exchange of goods and services between residents and non-residents. It is measured in USD as a percentage of GDP for net trade (exports minus imports) and also in annual growth for imports and exports. Convertible Bond Convertible bonds are bonds that can be converted into shares of the issuer's stock or another security at the holder's discretion. Convertible bonds are a hybrid security that combine the features of both bonds and stocks. They offer the stability and regular income of a bond, as well as the opportunity to participate in the company's potential growth. Corporate Bond Corporate bonds are debt securities issued by corporations to raise capital. There are a variety of maturities available for corporate bonds, ranging from a few months to more than 30 years. The bondholder receives periodic interest, known as a coupon, and the principal is returned at maturity. Currency Forward (FX forward) A currency forward is a financial contract that involves the exchange of two currencies at a predetermined exchange rate on a future date. It is a type of derivative instrument that is used to hedge against the risk of fluctuations in exchange rates. Currency Hedging Currency hedging is the practice of using financial instruments or strategies to reduce the risk of losses due to fluctuations in foreign exchange rates. It is a common risk management strategy for companies and investors with international operations or exposures, as it can help to protect against the impact of currency fluctuations on the value of their assets, liabilities, and cash flows. Currency Volatility Currency volatility refers to the fluctuations in the value of a currency relative to other currencies. It is a measure of the risk associated with holding or trading assets in a particular currency, and is an important consideration for companies and investors with international operations or exposures. Currency Exposure Currency exposure refers to the potential impact of changes in foreign exchange rates on the value of a company's assets, liabilities, and cash flows. It is a measure of the extent to which a company is exposed to risk from movements in foreign exchange rates. A company with significant foreign currency exposure may be at risk of losses due to changes in exchange rates, which can impact the value of its assets and liabilities, as well as the cash flows from its international operations. Currency Depreciation Currency depreciation occurs when the value of a currency falls against other currencies. The depreciation of currencies can be caused by economic fundamentals, interest rate differentials, political instability, or investor risk aversion. Currency Convertibility In terms of foreign transactions, currency convertibility refers to the ability to exchange one currency for another at a given conversion rate. A range of degrees of convertibility can be identified, ranging from total convertibility to total inconvertibility. Convertible Currency A currency is said to be freely convertible when it has an immediate value on the different international markets, and few restrictions on the manner and amount that can be traded for another currency . Free convertibility is a major feature of a hard currency. Cross Currency Triangulation In cross currency triangulation, monetary amounts are first converted from one national currency unit (source currency) into an intermediate currency (anchor currency). Calculation then converts the intermediate currency amount into the designated national currency unit (target currency). Cash Collection In cash collection, companies recover money from other businesses (or individuals) to whom they have previously provided invoices. Cash collection primarily aims to get invoices paid by the due date. Currency controls Currency controls (or exchange controls) limit the purchase and/or sale of currencies by governments. By limiting inflows and outflows of currency, these controls help countries stabilize their economies. Exchange controls are not available to every nation, at least not legitimately; the 14th article of the IMF's Articles of Agreement only permits their use in transitional economies. D Day Count Convention The day count convention is a standardized method for calculating the number of days between two dates in a given year. For financial instruments such as bonds, loans, and derivatives, day count conventions determine the number of days of interest accrual. Delta In finance, delta is a measure of how sensitive an option's price is to changes in the underlying asset's price. It is a Greek letter used in options pricing formulas to represent the amount by which the price of an option is expected to change in response to a $1 change in the price of the underlying asset. Delta is typically expressed as a decimal number between 0 and 1 for call options, and between 0 and -1 for put options. Developed Markets The developed markets are those with advanced economies and well-developed financial systems. Generally, these countries have high per capita incomes and well-developed financial markets. Japan, the United States, Canada, and Western European countries are examples of developed markets. Discrete Hedging Discrete hedging is a risk management strategy that involves taking specific, individual positions in financial instruments to offset losses from other positions. Unlike continuous or ongoing hedging strategies, such as dynamic hedging, discrete hedging involves specific trades in response to specific risks or events. For example, a company might use discrete hedging to protect against a potential loss from an upcoming foreign currency payment by buying a forward contract or currency option. Dow Jones Dow Jones Industrial Average (DJIA) is a U.S. stock market index that consists of 30 large publicly traded companies. Stock market performance is largely influenced by the index, which is generally viewed as a leading indicator. Dollar DXY Index A U.S. Dollar Index (USDX, DXY, DX, or, informally, the "Dixie") measures the value of the dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trading partners' currencies. Direct Quotation Direct quotation is where the cost of one unit of foreign currency is given in units of local currency, whereas indirect quotation is where the cost of one unit of local currency is given in units of foreign currency. E Electronic Invoicing Electronic invoicing (e-invoicing) refers to the creation, exchange, and processing of invoices electronically instead of on paper. E-invoicing involves sending invoices electronically between a supplier and a buyer, usually via the internet. There are several benefits to this method of invoicing over traditional paper invoicing, including increased efficiency, reduced errors and fraud, improved cash flow, and lower costs for printing and mailing. In addition, e-invoicing can be integrated with financial systems, making the accounts payable process easier to automate and improving cash flow visibility. Embedded Finance Embedded finance refers to the integration of financial services into non-financial products or services. This can take many forms, such as adding payment or lending functionality to a mobile app or website, or bundling insurance or investment products into a larger offering. Embedded finance aims to make financial services more accessible for consumers by bringing them directly into the products and services they use. Emerging Markets Emerging markets refer to countries that are in the process of developing their economies and are considered to be of high growth potential. These countries are often classified as being less developed than more industrialized nations and are characterized by a lower level of per capita income, less developed financial markets, and less mature political systems. Exotic Currency An exotic currency is a term used to describe a currency that is not widely traded or used in international transactions. These currencies are typically from smaller or less developed countries, and may be less liquid or more volatile than major currencies. Examples of exotic currencies are the Brazilian Real (BRL), South African Rand (ZAR), Mexican Peso (MXN). Turkish Lira (TRY), Indian Rupee (INR) and Russian Ruble. Exchange Rate An exchange rate is the price at which one currency can be exchanged for another currency. It is the value of one currency in terms of another currency, and is determined by the supply and demand for the two currencies in the foreign exchange market. Economic value added (EVA) Economic value added (EVA) is a measure of a company's economic profit, or the value it creates beyond what shareholders require. A company's EVA is calculated by subtracting its after-tax operating profit from its cost of capital. F Federal Funds Rate The federal funds rate is the interest rate at which banks lend and borrow overnight balances from each other, known as federal funds, in the U.S. The federal funds rate is an important benchmark for short-term interest rates in the U.S. financial market, and is used as a reference rate for various financial products, such as adjustable-rate mortgages, credit card loans, and small business loans. Fintech The term fintech refers to the use of technology to provide financial services. It can include everything from robo-advisors to mobile banking apps. Fintech is constantly evolving and has the potential to disrupt traditional financial systems by providing more efficient and accessible financial services. Floor In finance, a floor refers to a minimum that cannot be dropped below. An interest rate floor means that a loan is not subject to any other contingent interest rates. Regardless of market conditions, a price floor prevents an item's price from falling below a certain limit. Forward Points Forward points in finance refers to the amount added to or subtracted from the current spot rate of a currency to determine the forward exchange rate for a future delivery date. The forward exchange rate determines the rate at which a currency can be exchanged for another at a future date, based on an agreement made on the spot date. In addition to accounting for the time value of money, forward points are used to correct for differences in interest rates between the currencies being exchanged. The size of the forward point will depend on the difference between the interest rates of the two currencies and the time until the forward contract is set to expire. Foreign Exchange (FX) Foreign exchange (FX) refers to the buying and selling of currencies on the foreign exchange market. The foreign exchange market is a global decentralized market for the trading of currencies, and is the largest financial market in the world. Foreign Exchange (FX) Option A foreign exchange (FX) option is a financial contract that gives the holder the right, but not the obligation, to buy or sell a specified currency at a predetermined exchange rate on or before a certain date. It is a type of derivative instrument that is used to hedge against the risk of fluctuations in exchange rates. Foreign Exchange (FX) Hedging FX hedging is a risk management strategy used by companies to protect themselves from potential losses resulting from changes in currency exchange rates. FX hedging involves buying and selling financial instruments, such as forwards, options, and futures, to offset potential currency exposures in order to minimize the impact of exchange rate fluctuations on a company's financial statements. The goal of FX hedging is to reduce or eliminate the risk of loss due to currency movements, allowing companies to better manage their financial risk and focus on their core business operations. Foreign Exchange (FX) Swap An FX swap is a foreign exchange derivative that allows two parties to exchange an agreed amount of one currency for another currency at a specified rate, on a specified date, and then reverse the trade at a later date. The two legs of the trade are carried out simultaneously for a fixed amount of time, and then reversed later. FX swaps are usually used to hedge currency risk or obtain financing in a different currency. FX swaps are commonly used by banks and other financial institutions, but are also used by companies and individuals to manage their foreign exchange exposures. Foreign Exchange (FX) Risk - exchange rate risk Foreign exchange (FX) risk is the risk that a company or investor will incur losses due to fluctuations in exchange rates. It is a type of market risk that can impact the value of assets, liabilities, and cash flows denominated in different currencies. Forward Forwards are financial derivatives that allow two parties to exchange assets at a specified price at a specific future date. Contracts are customized to the needs of the parties involved, and terms include the type of asset, the quantity of the asset, and the delivery date. Forwards are often used to hedge against currency risk, commodity price risk, or interest rate risk. In a forward contract, one party agrees to buy the asset at the agreed-upon price on a specific date from the other party. The other party agrees to sell the asset at that price on that date. The forward contract is not traded on an exchange, and the terms of the contract are not standardized. The terms are negotiated between the two parties, and the contract is usually customized to meet their specific needs. Although forward contracts are similar to futures contracts, they differ in some important ways. A futures contract is standardized and traded on an exchange, whereas a forward contract is customized and traded over the counter. Additionally, futures contracts have margin requirements and are marked to market daily, whereas forwards do not. Foreign Exchange (FX) Forward Contract FX forwards are contracts between clients and their bank, or non-bank provider, to exchange currencies at a set rate on a future date. Contract pricing is determined by the exchange spot price, interest rate differentials between the two currencies, and the length of the contract, which is determined by the buyer and seller. Future Futures contracts are financial derivatives that obligate the buyer or seller to purchase or sell an asset at a predetermined price at a future date. The terms of futures contracts, including the quantity and quality of the assets, the delivery date, and the price, are all determined in advance. Futures contracts are standardized and traded on exchanges. Futures contracts are used to hedge against price risk, or to speculate on the price movements of an asset. The buyer and seller of a futures contract are required to put up a margin, which is a small percentage of the value of the contract. The margin is used to cover any potential losses on the contract. Functional Currency A functional currency is the currency of the primary economic environment in which an entity operates. It is the currency in which an entity primarily generates and expends cash, and the currency in which it primarily holds assets and liabilities. For a business, the functional currency is typically the currency of the country in which the business is headquartered. The functional currency is used to determine the appropriate exchange rate to use when translating the financial statements of an entity into a different currency. The functional currency is also known as accounting currency. FX Translation Currency translation is the process of converting one currency in terms of another, often in the context of the financial results of a parent company's foreign subsidiaries into its functional currency. FX Swap In a foreign currency swap, two foreign parties agree to swap interest payments on a loan made in one currency for interest payments on a loan made in another currency. Foreign currency swaps can also involve exchanging principal. When the agreement ends, this will be exchanged back. In most cases, however, notional principal is just used to calculate interest and is not actually exchanged. Floating Exchange Rate In a floating exchange rate system, the currency price of a nation is set according to supply and demand relative to other currencies. A fixed exchange rate, on the other hand, is determined entirely or predominantly by the government. FX Forward Transaction The FX Forward Deal is a foreign exchange transaction based on a foreign exchange rate agreed by the buyer and seller under a foreign exchange contract, delivered on a specified date after the second working day of the transaction, in most cases. FX Netting Netting FX (or Forex Netting ) involves offsetting receivables and payables in one currency with receivables and payables in the same currency. As currency rates move, FX gains (losses) on one position should be offset by FX losses (gains) on the other. Foreign Transaction Fee A foreign transaction fee is a charge assessed by a financial institution to a consumer who uses an electronic payment card to make a purchase in a foreign currency. Foreign transaction fees usually apply to card purchases made in foreign countries while traveling, but they can also apply to purchases made online from your home country where the vendor is foreign and processes the transaction in its local currency. FX Gain / FX Loss An FX gain or loss is reflected in the income statement as a change in value of a foreign exchange-denominated transaction. A sales transaction creates a foreign exchange gain (loss) when the foreign currency appreciates (depreciates) against the company's home currency. Fedwire Fedwire is a real-time gross settlement funds transfer system operated by the United States Federal Reserve Banks that allows financial institutions to transfer funds electronically between the system's more than 9,289 participants (as of March 19, 2009). Upon receiving the proper wiring instructions from the receiving bank, the sending bank can initiate transfers. Foreign Exchange Broker A forex broker, or currency trading broker is a financial services company that provides traders access to a platform for buying and selling currencies. Transactions in the foreign exchange market are always between a pair of two different currencies. Foreign Exchange Commissions Financial institutions or service providers charge foreign exchange commissions for facilitating currency exchange transactions. Commissions are usually calculated as a percentage of the transaction amount or as a fixed fee. Brokers may charge 50% of a pip spread or a fixed commission per standard lot, for example. The amount is deducted from the total cash received during the transaction. G Gamma A gamma is a measure of how sensitive the delta of an option is to changes in the price of the underlying asset, used in options pricing formulas to represent the amount by which the delta of an option is expected to change in response to a $1 change in the price of the underlying asset. Gamma is typically expressed as a decimal number, and it reflects the impact that changes in the price of the underlying asset can have on the delta of an option. Government Bond A government bond is a debt security issued by the government to raise capital. Due to the fact that government bonds are backed by the full faith and credit of the issuing government, they are considered a safe investment. Greeks in Finance Variables used to assess risk in the options market are commonly referred to as "the Greeks." A Greek symbol represents each risk. Greek variables result from imperfect assumptions or relationships between the option and another underlying variable. Greek values, such as delta, theta, and others, are used by traders to assess options risk. G10 Currencies The G10 currenc ies are a group of selected major currencies that are used in international marketplaces. The name of the group originated from a meeting of finance ministers from the G10 nations on the 10th of September of 1975. The G10 currencies are: United States Dollar (USD), Euro (EUR), Pound Sterling (GBP), Japanese Yen (JPY), Australian Dollar (AUD), New Zealand Dollar (NZD), Canadian Dollar (CAD), Swiss Franc (CHF), Norwegian Krone (NOK), Swedish Krona (SEK). H Hedger Hedgers are investors or financial institutions that engage in financial transactions to reduce the risk of potential losses on assets. Hedging involves taking offsetting positions in financial instruments to mitigate the impact of price movements on the underlying asset. There are many different ways that investors and financial institutions can hedge their risks, depending on their specific needs and the nature of the underlying asset. Some common hedging strategies include the use of financial derivatives such as options and futures, as well as the use of diversification and portfolio optimization techniques. Historical Volatility Historical volatility refers to the fluctuations in the price of a security over a specific period of time. Calculated by taking the standard deviation of the natural logarithm of the asset's price over a specified number of trading days. The higher the historical volatility, the greater the price fluctuations of the asset. Historical volatility can be used to help predict future volatility and risk, but it is important to note that past performance is not necessarily indicative of future results. I International Monetary Fund (IMF) The International Monetary Fund (IMF) is an international organization that promotes global monetary cooperation, financial stability, and international trade. The IMF was founded in 1944 at the Bretton Woods Conference and is headquartered in Washington, D.C. It is funded and owned by its member countries, which contribute financial resources to the organization and are represented by a board of directors. Implied Volatility The implied volatility of a financial instrument, such as a stock or an option, indicates its expected volatility over its lifetime. Due to its derived nature, it is implied as it cannot be observed directly. Options contracts are commonly priced using implied volatility because it determines the likelihood that the underlying asset will reach a certain price by a certain date. An asset with a high implied volatility is likely to experience price swings in the future, while one with a low implied volatility is less likely to experience price movements. Implied volatility is typically expressed as an annualized percentage. Interest Rate Curve An interest rate curve represents the relationship between interest rates and debt maturity. The curve plots the interest rates of securities with different maturities on the y-axis and the maturities of the securities on the x-axis. Several factors, such as monetary policy, inflation expectations, and market conditions, can influence the shape of the interest rate curve over time. Interest Rate Swap (IRS) Interest rate swaps are financial derivatives that allow two parties to exchange or swap cash flows based on a notional principal amount. During the inception of the swap, the parties agree on a set of fixed or floating interest rates. The swap involves one party paying a fixed rate of interest on the notional amount, while the other party pays a floating rate. Floating rates are typically based on an index, such as London Interbank Offered Rate (LIBOR), which is the average rate at which banks can borrow funds. By using interest rate swaps, parties can hedge against changes in interest rates, manage the risk of fluctuating interest rates, or speculate on future changes in interest rates. In The Money (ITM) In finance, an option is considered to be in the money if the current market price of the underlying asset is higher than the strike price for a call option, or lower than the strike price for a put option. For example, if a stock is trading at $60 per share, and a call option with a strike price of $50 is available, the option is in the money. Similarly, if a put option with a strike price of $70 is available, it is also in the money. In-the-money options have intrinsic value, which is the difference between the current market price of the underlying asset and the strike price of the option. International Transaction International transactions are cross-border trade agreements or credit operations involving a foreign currency. A typical international transaction involves the exchange of goods or services, and the settlement date is the last step. ISO 4217 A standard published by the International Organization for Standardization (ISO) provides information about the relationships between individual currencies and their minor units by defining alpha and numeric codes. Initial Margin (IM) The initial margin (IM) is the amount of cash or collateral that an investor must pay to open a margin account in order to purchase a security. Investors can borrow money to buy securities with this type of collateral. J Japanese Yen Carry Trade Carry trades involve borrowing money in one currency at a low interest rate and investing it in another currency at a high interest rate. The currency you borrow in a Japanese Yen carry trade is the Yen - the currency of Japan. K Knock-in Option A knock-in option is a type of option that becomes active or "knocks in" to the market only when the price of the underlying asset reaches a predetermined trigger price. Until the trigger price is reached, the option remains dormant and has no value. Knock out Option A knock-out option is a type of option that becomes inactive or "knocks out" of the market when the price of the underlying asset reaches a predetermined trigger price. When the trigger price is reached, the option is automatically exercised, and the trader either receives a payout or incurs a loss, depending on the terms of the option. Kantox Kantox is a multinational fintech company that offers Currency Management Automation software for corporate clients. Their software automates the pre-trade, trade, and post-trade stages of the corporate foreign exchange workflow. L Landed Cost A landed cost is the total cost of bringing a product from the origin to its destination, including transportation, insurance, duties, tariffs, and other fees. Importing businesses must consider the landed cost, as it affects the final price of the product and ultimately their competitiveness. By calculating the landed cost, companies can determine the true cost of their imports, make informed purchasing decisions, and price their products accurately. Letter of Credit A Letter of Credit (LOC) is a document issued by a bank on behalf of a buyer, guaranteeing payment to a seller under the terms and conditions agreed upon by the buyer and seller. The seller can use the LOC as a guarantee of payment as long as they meet the conditions outlined in it. If the buyer fails to pay the seller, the issuing bank will pay the seller. It is commonly used in international trade transactions to mitigate the risk of non-payment by the buyer. Liquidity Liquidity refers to the ease with which an asset can be bought or sold in the market without affecting its price. Highly liquid assets, such as cash, can be easily bought or sold with minimal impact on the price, while less liquid assets, such as real estate or collectibles, may take longer to sell and may be subject to larger price fluctuations. There are several measures of liquidity, including the bid-ask spread (the difference between the highest price that a buyer is willing to pay for an asset and the lowest price that a seller is willing to accept), the volume of trading activity, and the speed at which an asset can be bought or sold. Local currency payment Local currency payments are financial transactions that are conducted in the local currency of a client or supplier, rather than the company's own functional currency. These payments can be made for sales transactions, exports, or purchases transactions, imports. Operating in the local currency allows companies to avoid costly markups and expand sales by avoiding passing on exchange rate markups to clients. Effective currency hedging is necessary for companies to protect against exchange rate risk when making local currency payments. London Interbank Offered Rate (LIBOR) The London Interbank Offered Rate (LIBOR) is a benchmark interest rate that is used as a reference rate for short-term interest rates around the world. It is calculated and published daily by the ICE Benchmark Administration (IBA), a financial services company, based on the interest rates at which a panel of banks in London are willing to lend to each other. There are different LIBOR rates for different currencies and maturities, ranging from overnight to one year. The most commonly quoted LIBOR rate is the three-month U.S. dollar rate. LIBOR is used as a reference rate for a wide variety of financial products, including adjustable rate mortgages, student loans, and floating rate bonds. It is also used as a benchmark for the pricing of derivatives such as interest rate swaps. Long In finance, the term "long" refers to the buying of a security or other financial instrument with the intention of holding it for an extended period of time. The term "going long" or "taking a long position" refers to investing in a security with the expectation that it will appreciate in value over the long term. By holding the security, the investor hopes to sell it at a higher price in the future and make a profit. Live exchange rate The live exchange rate is a currency exchange rate that is updated in real time. The current exchange rate on the market or between banks. Customers of money transfer companies receive exchange rates that change in real time, but also include a small margin. M Market Maker A market maker is a firm or individual that buys or sells securities at any time with the goal of providing liquidity to the market and facilitating trade. Market makers typically hold an inventory of securities that they buy and sell, and they provide quotes to buyers and sellers using their capital and liquidity. Market makers play a crucial role in facilitating price discovery and trade execution by providing a source of demand and supply for securities. Market makers may operate on exchanges or in the over-the-counter (OTC) market. Market Taker A market taker buys or sells securities by accepting the price quoted by market makers or other traders. By contrast to market makers, who can buy and sell securities at any time and provide quotes to the market, market takers are passive participants who rely on quotes provided by others in order to execute trades. Market takers do not provide liquidity to the market in the same way that market makers do, but they can benefit from the liquidity provided by market makers and other traders by being able to quickly and easily buy and sell securities at quoted prices. Market takers may also be referred to as "buyers" and "sellers," depending on whether they are buying or selling securities. Major Currency A major currency is a term used to describe a currency that is widely traded and used in international transactions. Major currencies are typically from economically and politically stable countries, and are considered to be relatively liquid and stable compared to other currencies. Mark to Market Mark to market (MTM) is a method of measuring the fair value of accounts that can fluctuate over time, such as assets and liabilities. Mark to market aims to provide a realistic appraisal of an institution's or company's current financial situation based on current market conditions. Monetary Assets A monetary asset is one that is readily convertible into money, such as cash on hand, bank deposits, investment accounts, accounts receivable (AR), and notes receivable. Midmarket Exchange Rate The midmarket exchange rate (sometimes called the interbank or middle rate) is the midpoint between any two currencies' buy and sell prices. As the demand for and supply of a currency is constantly changing, the mid-market rate is also constantly changing. Managed floating exchange rate A managed floating exchange rate, or "dirty float," blends elements of fixed and floating rates. Central banks, like China's, intervene to keep the currency within a set range against others, such as the USD, with daily fluctuations capped at 2%. This system helps prevent extreme currency misvaluations. For credibility, it relies on a central bank with ample reserves and a market-aligned exchange rate corridor. Merchant of Record (MoR) A merchant of record (MoR) is a legal entity that sells goods or services to end consumers on behalf of a merchant, and assumes all legal liabilities for the transaction . MoRs are often used in online commerce and are designed to help sellers scale their businesses globally. N Negative Carry A negative carry occurs when the cost of holding a financial asset exceeds the income generated by it. It occurs typically when an asset pays a lower return than what it costs to finance its purchase. Nominal Effective Exchange Rate An unadjusted weighted average rate at which one country's currency exchanges for a basket of multiple foreign currencies is called the nominal effective exchange rate (NEER). Nominal exchange rates indicate the amount of domestic currency needed to purchase foreign currency. Non-Deliverable Forward Non-deliverable forwards (NDF) are cash-settled, and usually short-term, forward contracts. The notional amount is never exchanged, hence the name "non-deliverable." Two parties agree to take opposite sides of a transaction for a set amount of money—at a contracted rate, in the case of a currency NDF. Notional Value The notional value of an underlying asset is often used by derivatives traders to refer to the contract's value. This can be the total value of a position, the amount that a position controls, or an agreed-upon amount. A financial asset's face value is used to determine its payment. In the options, futures, forward, and currency markets, this term describes derivative contracts. O OECD The Organisation for Economic Co-operation and Development (OECD) is an international organization that promotes economic and social well-being around the world. It was founded in 1961 and is headquartered in Paris, France. The OECD is made up of 36 member countries, which are primarily developed countries, but also include a few emerging economies. Offer An offer is a proposal from a seller to sell a product or service at a specified price. In securities trading, an offer is often expressed as an "ask," which is the price at which a seller is willing to sell a particular security. In an auction-style market, such as a stock exchange, offers are made by sellers and paired with bids made by buyers. The lowest ask and the highest bid at a given time make up the "bid-ask spread," which is the difference between the prices at which buyers are willing to buy and sellers are willing to sell. The ask price is typically higher than the bid price, and the difference between the two is called the "spread." Option Options are financial instruments that give the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a certain date. A call option gives the holder the right to buy the underlying asset; a put option gives the holder the right to sell the underlying asset. Options are often used to hedge against potential price movements in other assets, or to speculate on price movements. Off the Run In finance, "off the run" refers to securities that have not been issued most recently. In the case of government bonds issued every year, for example, the most recently issued bond would be considered "on the run," but all previous bonds would be considered "off the run." Due to their limited trading, off-the-run securities are usually considered less liquid than on-the-run securities. On the Run "On-the-run" is a term used in the bond market to refer to the most recently issued bonds in a particular series or issuer. On-the-run bonds are typically the most liquid and widely traded bonds in a given market, and they are usually considered to be the benchmark or reference bonds for that market. Out Off The Money (OTM) In finance, an option is considered to be out of the money if the current market price of the underlying asset is lower than the strike price for a call option, or higher than the strike price for a put option. Out-of-the-money options have no intrinsic value, because the holder of the option is not entitled to buy or sell the underlying asset at a price that is different from the current market price. Over The Counter Market (OTC) The OTC (over-the-counter) market is a decentralized market where financial instruments are traded directly between two parties without a central exchange. Alternatively, it is known as the "off-exchange" market. The OTC market is typically facilitated by market makers, who act as intermediaries between buyers and sellers and help match buyers and sellers. Over Hedged Risk management strategy over-hedging involves taking an offsetting position that exceeds the size of the original position being hedged. It may result in a net position opposite to the initial position. Overhedging can be inadvertent or intentional. Option Currency Trading Currency options are derivatives based on underlying currency pairs. Trading currency options involves a wide variety of strategies available for use in FX markets, where foreign currencies are traded. P Pips Pips are units of measurement used to express the change in value between two currencies. Pips represent the smallest increments of difference in exchange rates and they represent the change in value between two currencies. For most currency pairs, a pip is equal to the fourth decimal place of the exchange rate, but it can vary depending on the pair being traded and the size of the trade. A one-pip change in the EUR/USD exchange rate, for example, would be 1.1234 to 1.1235. A pip is a unit of measurement used in forex trading to calculate profit and loss. It is a crucial concept for traders to grasp. Positive Carry A positive carry occurs when the income generated by holding a financial asset exceeds its cost. This typically occurs when the asset pays a higher rate of return or yield than the cost of financing the purchase of the asset. Put Option Put options are financial contracts that give the holder the right, but not the obligation, to sell a specific asset at a predetermined price (the strike price) before a specific date (the expiration date). The asset that the put option gives the holder the right to sell is known as the underlying asset. Put options are often used as a way to hedge against potential price declines in the underlying asset, or to speculate on price declines. Put Spread A put spread is an option strategy that involves purchasing one put option while simultaneously selling another put option on the same underlying asset. The put options have different strike prices, and the option that is purchased has a higher strike price than the option that is sold. The goal of a put spread is to profit from a downward move in the price of the underlying asset, while also limiting potential losses. Primary Dealer A primary dealer is a financial institution that is authorized to buy and sell securities directly with a central bank, such as the Federal Reserve in the United States. Primary dealers are an important part of the financial system because they help to facilitate the implementation of monetary policy by the central bank. Primary dealers are typically large, well-capitalized banks or securities firms that are able to make markets in a wide range of securities, including U.S. government securities, agency securities, and mortgage-backed securities. They also act as market makers in these securities, providing liquidity to the market and helping to ensure that prices remain stable. Pegged Exchange Rate The pegged exchange rate system incorporates aspects of floating and fixed exchange rate systems. Smaller economies that are particularly susceptible to currency fluctuations will “peg” their currency (pegged currency) to a single major currency or a basket of currencies. These currencies are chosen based on which country the smaller economy experiences a lot of trade activity with or on which currency the nation’s debt is denominated in. Q Quote Currency In foreign exchange (Forex), the quote currency, also known as the counter currency, is the second currency in both direct and indirect currency pairs. A quote currency determines the value of a base currency. When currency exchange rates are quoted, the quote currency is listed after the base currency. R Reserve Currency The term reserve currency refers to a large amount of currency held by central banks and major financial institutions for international transactions. Since reserves do not need to be exchanged for trade, reserve currencies reduce exchange rate risk. Real-time gross settlement (RTGS) Real-time gross settlement (RTGS) systems are specialist funds transfer systems that allow money or securities to be transferred from one bank to another in real time and on a gross basis to avoid settlement risk. When a payment transaction is settled "in real time," there is no waiting period. Transactions are settled as soon as they are processed. The term "gross settlement" means the transaction is settled one-to-one, without bundling or netting with any other transaction. "Settlement" refers to payments that are final and irrevocable once processed. Repurchase Agreement (REPO) Repo transactions involve one party selling securities to another with the agreement to buy them back later at a higher price. Often, repos are used to raise short-term capital or finance the purchase of securities. There are two types of repos: term repos, which have a fixed maturity date, and open repos, which have no fixed maturity date and can be terminated at any time. A repos is most commonly used by banks, hedge funds, and other financial institutions as a way to raise short-term capital, and they are considered a low-risk investment because they are usually secured with high-quality securities. Reverse Repurchase Agreement (Rev REPO) A reverse repo is a financial transaction where one party purchases securities from another party and then sells them back at a lower price at a later date. Like regular repos, reverse repos can be either term repos or open repos, depending on whether they have a fixed maturity date. Reverse repos are typically used by banks, hedge funds, and other financial institutions as a way to invest short-term excess cash or to finance the purchase of securities. Rho Rho is a measure of the sensitivity of an option's price to changes in the risk-free interest rate. It is a Greek letter used in options pricing formulas to represent the amount by which the price of an option is expected to change in response to a 1% change in the risk-free interest rate. Rho is typically expressed as a percentage, and it reflects the impact that changes in the risk-free interest rate can have on the value of an option. Risk Reversal Risk reversals are financial transactions in which two parties exchange risk. It is generally used to hedge against or speculate on changes in the value of an underlying asset. One common type of risk reversal is an options strategy that involves the simultaneous purchase of a put option and the sale of a call option on the same underlying asset. This strategy is also known as a short straddle or a short combination. The put option gives the holder the right to sell the underlying asset at a predetermined price (the strike price), while the call option gives the holder the right to buy the underlying asset at the same strike price. Run on the Bank A run on the bank is a situation where a large number of depositors attempt to withdraw their money from a bank at the same time due to concerns about the bank's solvency or financial stability. This can be triggered by rumors or actual news of the bank's financial difficulties or instability. A run on the bank can have serious consequences, as it can lead to the bank's inability to fulfill the withdrawal requests of its depositors, resulting in a liquidity crisis that can spread to other banks and the wider financial system. In some cases, governments or central banks may step in to provide support and prevent a wider financial crisis. Profit Repatriation The repatriation of profits means that a firm can send earnings or assets from abroad back to its home country in hard currency such as USD, EUR, and others. Rolling Option A rolling option is an options contract that grants a buyer the right to purchase something at a future date, as well as the choice to extend the expiration date of that right, for a fee. S Sharpe Ratio The Sharpe ratio is a measure of risk-adjusted return, which compares the expected returns of an investment to the risk it carries. It is calculated by dividing the expected excess return (the return of the investment minus the risk-free rate) by the standard deviation of returns. A higher Sharpe ratio indicates a better risk-to-return tradeoff. Short In finance, the term "short" refers to the selling of a security or other financial instrument that the seller does not own. This is also known as "short selling" or "going short." Short selling is typically done in anticipation of a decline in the price of the security or instrument. The seller borrows the security from someone else, sells it on the market, and then buys it back at a later time (hopefully at a lower price) in order to return it to the lender. If the price of the security does indeed decline, the seller can profit by buying it back at a lower price than they sold it for. If the price goes up instead, the seller incurs a loss. S&P 500 Standard & Poor's 500 (S&P 500) is a stock market index containing 500 large publicly traded companies in the United States. It is widely considered a leading indicator of U.S. stock market performance. The companies in the S&P 500 are chosen by Standard & Poor's (S&P), a financial services company, based on their market size, liquidity, and industry group representation. The index is weighted by market capitalization, which means that the larger companies have a greater influence on the index's performance. The S&P 500 is typically used as a benchmark for the performance of actively managed large-cap mutual funds and exchange-traded funds (ETFs). The Secured Overnight Financing Rate (SOFR) The Secured Overnight Financing Rate (SOFR) is a benchmark interest rate for the U.S. dollar overnight lending market. It is calculated and published by the Federal Reserve Bank of New York (FRBNY) based on the interest rates at which banks lend overnight funds to each other using U.S. Treasury securities as collateral. Speculator Speculators buy and sell financial instruments to profit from changes in the price of the underlying asset. In order to achieve higher returns, speculators often take on greater risks than traditional investors. Speculators can trade a wide variety of financial instruments, including stocks, bonds, currencies, commodities, and derivatives. Supply Chain Supply chains refer to the flow of goods, services, and information from the raw material suppliers to the customer's final product. It involves all activities involved in the sourcing, procurement, production, and delivery of a product or service, as well as the coordination and collaboration of all parties involved, including suppliers, manufacturers, distributors, and customers. A successful supply chain delivers the right product, at the right time, in the right quantity, and at the lowest price. Swaption A swaption is a financial derivative that gives the holder the right, but not the obligation, to enter into an interest rate swap at a later date. An interest rate swap is a financial instrument that allows two parties to exchange a stream of fixed-rate payments for a stream of floating-rate payments, or vice versa. Spot Rate Spot rates are the current market prices at which financial instruments, such as currencies, commodities, and securities, can be bought or sold for immediate delivery. Spot rates are affected by market forces, such as supply and demand, and are commonly used as benchmarks for forward, futures, and options contracts. The spot rate can be quoted in either direct or indirect terms, depending on the conventions of the market in which the instrument is traded. Straddle The straddle strategy involves simultaneously purchasing a put option and a call option for the underlying security with the same strike price and expiration date. When the price of the security rises or falls from the strike price by more than the total premium paid, a trader will profit from a long straddle. As long as the underlying security's price moves sharply, the profit potential is virtually unlimited. SWIFT Message The SWIFT international payment network generates SWIFT messages when funds are transferred internationally. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is renowned as the fastest, most secure way to transmit financial messages internationally. Settlement Date A settlement date is the day when a trade in the securities industry is finalized, and the transfer of cash or assets is completed. It's usually a few days after the trade was made. T Take Rate A take rate is the fee that a marketplace charges for a transaction that is carried out by a third-party seller or service provider. The take rate is a determining factor in a marketplace's revenue as reported on its income statement: Take rate * GMV (gross merchandise volume) = revenue. Tenor Tenor refers to the time between the maturity date and the maturity date of a financial instrument, such as a bond or loan. The tenor of a financial instrument can be expressed in various ways, such as years, months, or even days. Theta In finance, theta is a measure of an option's sensitivity to time-based changes in price. The Greek letter used in options pricing formulas to represent the amount by which the price of an option is expected to decline over a given period of time, due to the passage of time and the decay of the option's extrinsic value.Theta is typically expressed as a negative number, and it reflects the impact that the passage of time can have on the value of an option. Tick Ticks are units of measurement that represent the minimum price change for a security. Ticks are commonly used for expressing changes in a financial instrument's price, such as a stock, bond, commodity, or derivative, and they represent the smallest increment in a security's price. The value of a tick can vary depending on the security being traded and the market in which it is traded, but it is typically very small. For example, in the stock market, a tick may be equal to one cent for some stocks and $0.01 for others. Ticks are often used by traders and investors to track the performance of a security and to make decisions about buying and selling. Treasury bill (T-bill) T-bills are short-term debt securities issued by the U.S. government. T-bills are sold in denominations ranging from $100 to $1,000,000, and their maturities range from a few days to 52 weeks. Since T-bills are backed by the full faith and credit of the United States government, they are considered to be very safe investments. Investors often use them to park money or diversify their portfolios for a short period of time. T-bills do not pay interest, but they are sold at a discount to their face value, and the difference between the purchase price and the face value represents the return to the investor. T-bills are issued through competitive and noncompetitive bidding processes. Transaction Exposure Transaction exposure is the potential loss a company may incur due to changes in foreign exchange rates on existing financial obligations or expected future cash flows. Companies can use a variety of financial instruments and strategies to manage transaction exposure. Transaction exposure is also known as economic exposure. Trader A trader is a person who buys and sells financial instruments such as stocks, bonds, currencies, commodities, or derivatives in an attempt to make a profit. Traders can work on their own or as part of a larger financial institution, such as a bank or brokerage firm. Translation Exposure / Transaction Risk The translation exposure (also known as the translation risk) is the possibility that an organization's assets, liabilities, or income will change in value as a result of changes in exchange rates. Translation risk occurs when a company has equities, assets, liabilities, or income denominated in a foreign currency. Target redemption forwards (TARFs) Target redemption forwards (TARFs) are complex financial instruments that allow holders to exchange currencies at a better rate than the standard forward rate. Corporate organizations often use TARFs in foreign exchange (FX) markets. With multiple partial settlement dates, they combine a barrier (knock-out) call option and a barrier (knock-out) put option. If the enhanced rate reaches a target level, the product automatically expires if the holder hasn't paid an upfront premium. U U.S. Dollar Index U.S. Dollar Index measures the dollar's value relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners' currencies. Universal Currency Converter Universal currency converters provide the convenience of converting currency values using current exchange rates through software applications or websites. It is easy to find free currency converters on the Internet, which are capable of converting the value of one currency to another, such as dollars to euros and euros to pounds. V Value at Risk (VaR) Value at Risk (VaR) measures the risk of loss on an investment or portfolio over a specified period. Based on the performance of the investment or portfolio over a given period, it estimates the likelihood of a loss of a certain magnitude over a given period. VaR is typically expressed as a dollar amount or as a percentage of the total value of the investment or portfolio. Vega In finance, vega measures how sensitive an option price is to changes in the volatility of the underlying asset. It is a Greek letter used in options pricing formulas to represent the amount by which the price of an option is expected to change in response to a 1% change in the volatility of the underlying asset. Vega is typically expressed as a percentage, and it reflects the impact that changes in volatility can have on the value of an option. Volatility In finance, volatility refers to the amount of risk or uncertainty associated with the price of a security. It is a measure of how much the price of a security, such as a stock or bond, fluctuates over time. A security with high volatility experiences significant price changes over a short period of time, while a security with low volatility experiences less significant price changes. Volatility can be measured using a variety of statistical techniques, such as standard deviation or the variance of returns. Volatility Surface In finance, a volatility surface is a graphical representation of the implied volatilities of a group of options on a particular underlying asset, as a function of the options' expiration dates and strike prices. The volatility surface is used to help visualize the relationships between the implied volatilities of options with different expiration dates and strike prices, and can be used to model the expected volatility of the underlying asset over time. W WM/Reuters benchmark rate A WM/Reuters benchmark rate is an exchange rate that is published daily at 4 PM London time. The exchange rates are calculated by averaging the exchange rates for currency trades that take place 30 seconds before and after 4 PM on the London market. Standard rates are used to calculate portfolio valuations and measure performance. X Xenocurrency A xenocurrency is a currency deposited or exchanged outside its country of origin. The term "eurocurrency" or "foreign currency" is more commonly used today. Due to globalization of supply chains and financial markets, these types of currency transactions have become increasingly common. Z Zero Coupon Bond A zero-coupon bond is a type of bond that does not pay periodic interest to the bondholder. Instead, the bond is issued at a discount to its face value, and the bondholder receives the face value of the bond at maturity. The difference between the purchase price and the face value represents the return to the bondholder, which is the equivalent of the interest that would have been paid out in periodic coupons. Zero-Cost Hedge (0 hedge) The concept of zero-cost hedging refers to risk management strategies in which a financial position is protected without an upfront payment using options or other financial instruments. S < BACK KNOWLEDGE BASE Grain Glossary Get an overview of financial terms and their definitions. ALL A A B B C C D D E E F F G G H H I I J J K K L L M M N N O O P P Q Q R R S S T T U U V V W W X X Z Z S Sharpe Ratio The Sharpe ratio is a measure of risk-adjusted return, which compares the expected returns of an investment to the risk it carries. It is calculated by dividing the expected excess return (the return of the investment minus the risk-free rate) by the standard deviation of returns. A higher Sharpe ratio indicates a better risk-to-return tradeoff. Short In finance, the term "short" refers to the selling of a security or other financial instrument that the seller does not own. This is also known as "short selling" or "going short." Short selling is typically done in anticipation of a decline in the price of the security or instrument. The seller borrows the security from someone else, sells it on the market, and then buys it back at a later time (hopefully at a lower price) in order to return it to the lender. If the price of the security does indeed decline, the seller can profit by buying it back at a lower price than they sold it for. If the price goes up instead, the seller incurs a loss. S&P 500 Standard & Poor's 500 (S&P 500) is a stock market index containing 500 large publicly traded companies in the United States. It is widely considered a leading indicator of U.S. stock market performance. The companies in the S&P 500 are chosen by Standard & Poor's (S&P), a financial services company, based on their market size, liquidity, and industry group representation. The index is weighted by market capitalization, which means that the larger companies have a greater influence on the index's performance. The S&P 500 is typically used as a benchmark for the performance of actively managed large-cap mutual funds and exchange-traded funds (ETFs). The Secured Overnight Financing Rate (SOFR) The Secured Overnight Financing Rate (SOFR) is a benchmark interest rate for the U.S. dollar overnight lending market. It is calculated and published by the Federal Reserve Bank of New York (FRBNY) based on the interest rates at which banks lend overnight funds to each other using U.S. Treasury securities as collateral. Speculator Speculators buy and sell financial instruments to profit from changes in the price of the underlying asset. In order to achieve higher returns, speculators often take on greater risks than traditional investors. Speculators can trade a wide variety of financial instruments, including stocks, bonds, currencies, commodities, and derivatives. Supply Chain Supply chains refer to the flow of goods, services, and information from the raw material suppliers to the customer's final product. It involves all activities involved in the sourcing, procurement, production, and delivery of a product or service, as well as the coordination and collaboration of all parties involved, including suppliers, manufacturers, distributors, and customers. A successful supply chain delivers the right product, at the right time, in the right quantity, and at the lowest price. Swaption A swaption is a financial derivative that gives the holder the right, but not the obligation, to enter into an interest rate swap at a later date. An interest rate swap is a financial instrument that allows two parties to exchange a stream of fixed-rate payments for a stream of floating-rate payments, or vice versa. Spot Rate Spot rates are the current market prices at which financial instruments, such as currencies, commodities, and securities, can be bought or sold for immediate delivery. Spot rates are affected by market forces, such as supply and demand, and are commonly used as benchmarks for forward, futures, and options contracts. The spot rate can be quoted in either direct or indirect terms, depending on the conventions of the market in which the instrument is traded. Straddle The straddle strategy involves simultaneously purchasing a put option and a call option for the underlying security with the same strike price and expiration date. When the price of the security rises or falls from the strike price by more than the total premium paid, a trader will profit from a long straddle. As long as the underlying security's price moves sharply, the profit potential is virtually unlimited. SWIFT Message The SWIFT international payment network generates SWIFT messages when funds are transferred internationally. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is renowned as the fastest, most secure way to transmit financial messages internationally. Settlement Date A settlement date is the day when a trade in the securities industry is finalized, and the transfer of cash or assets is completed. It's usually a few days after the trade was made. < PREVIOUS NEXT > F < BACK KNOWLEDGE BASE Grain Glossary Get an overview of financial terms and their definitions. ALL A A B B C C D D E E F F G G H H I I J J K K L L M M N N O O P P Q Q R R S S T T U U V V W W X X Z Z F Federal Funds Rate The federal funds rate is the interest rate at which banks lend and borrow overnight balances from each other, known as federal funds, in the U.S. The federal funds rate is an important benchmark for short-term interest rates in the U.S. financial market, and is used as a reference rate for various financial products, such as adjustable-rate mortgages, credit card loans, and small business loans. Fintech The term fintech refers to the use of technology to provide financial services. It can include everything from robo-advisors to mobile banking apps. Fintech is constantly evolving and has the potential to disrupt traditional financial systems by providing more efficient and accessible financial services. Floor In finance, a floor refers to a minimum that cannot be dropped below. An interest rate floor means that a loan is not subject to any other contingent interest rates. Regardless of market conditions, a price floor prevents an item's price from falling below a certain limit. Forward Points Forward points in finance refers to the amount added to or subtracted from the current spot rate of a currency to determine the forward exchange rate for a future delivery date. The forward exchange rate determines the rate at which a currency can be exchanged for another at a future date, based on an agreement made on the spot date. In addition to accounting for the time value of money, forward points are used to correct for differences in interest rates between the currencies being exchanged. The size of the forward point will depend on the difference between the interest rates of the two currencies and the time until the forward contract is set to expire. Foreign exchange (FX) Foreign exchange (FX) refers to the buying and selling of currencies on the foreign exchange market. The foreign exchange market is a global decentralized market for the trading of currencies, and is the largest financial market in the world. Foreign exchange (FX) option A foreign exchange (FX) option is a financial contract that gives the holder the right, but not the obligation, to buy or sell a specified currency at a predetermined exchange rate on or before a certain date. It is a type of derivative instrument that is used to hedge against the risk of fluctuations in exchange rates. Foreign Exchange (FX) Hedging FX hedging is a risk management strategy used by companies to protect themselves from potential losses resulting from changes in currency exchange rates. FX hedging involves buying and selling financial instruments, such as forwards, options, and futures, to offset potential currency exposures in order to minimize the impact of exchange rate fluctuations on a company's financial statements. The goal of FX hedging is to reduce or eliminate the risk of loss due to currency movements, allowing companies to better manage their financial risk and focus on their core business operations. Foreign Exchange (FX) Swap An FX swap is a foreign exchange derivative that allows two parties to exchange an agreed amount of one currency for another currency at a specified rate, on a specified date, and then reverse the trade at a later date. The two legs of the trade are carried out simultaneously for a fixed amount of time, and then reversed later. FX swaps are usually used to hedge currency risk or obtain financing in a different currency. FX swaps are commonly used by banks and other financial institutions, but are also used by companies and individuals to manage their foreign exchange exposures. Foreign exchange (FX) risk - exchange rate risk Foreign exchange (FX) risk is the risk that a company or investor will incur losses due to fluctuations in exchange rates. It is a type of market risk that can impact the value of assets, liabilities, and cash flows denominated in different currencies. Forward Forwards are financial derivatives that allow two parties to exchange assets at a specified price at a specific future date. Contracts are customized to the needs of the parties involved, and terms include the type of asset, the quantity of the asset, and the delivery date. Forwards are often used to hedge against currency risk, commodity price risk, or interest rate risk. In a forward contract, one party agrees to buy the asset at the agreed-upon price on a specific date from the other party. The other party agrees to sell the asset at that price on that date. The forward contract is not traded on an exchange, and the terms of the contract are not standardized. The terms are negotiated between the two parties, and the contract is usually customized to meet their specific needs. Although forward contracts are similar to futures contracts, they differ in some important ways. A futures contract is standardized and traded on an exchange, whereas a forward contract is customized and traded over the counter. Additionally, futures contracts have margin requirements and are marked to market daily, whereas forwards do not. Foreign Exchange (FX) forward contract FX forwards are contracts between clients and their bank, or non-bank provider, to exchange currencies at a set rate on a future date. Contract pricing is determined by the exchange spot price, interest rate differentials between the two currencies, and the length of the contract, which is determined by the buyer and seller. Future Futures contracts are financial derivatives that obligate the buyer or seller to purchase or sell an asset at a predetermined price at a future date. The terms of futures contracts, including the quantity and quality of the assets, the delivery date, and the price, are all determined in advance. Futures contracts are standardized and traded on exchanges. Futures contracts are used to hedge against price risk, or to speculate on the price movements of an asset. The buyer and seller of a futures contract are required to put up a margin, which is a small percentage of the value of the contract. The margin is used to cover any potential losses on the contract. Functional currency A functional currency is the currency of the primary economic environment in which an entity operates. It is the currency in which an entity primarily generates and expends cash, and the currency in which it primarily holds assets and liabilities. For a business, the functional currency is typically the currency of the country in which the business is headquartered. The functional currency is used to determine the appropriate exchange rate to use when translating the financial statements of an entity into a different currency. The functional currency is also known as accounting currency. FX Translation Currency translation is the process of converting one currency in terms of another, often in the context of the financial results of a parent company's foreign subsidiaries into its functional currency. FX Swap In a foreign currency swap, two foreign parties agree to swap interest payments on a loan made in one currency for interest payments on a loan made in another currency. Foreign currency swaps can also involve exchanging principal. When the agreement ends, this will be exchanged back. In most cases, however, notional principal is just used to calculate interest and is not actually exchanged. Floating Exchange Rate In a floating exchange rate system, the currency price of a nation is set according to supply and demand relative to other currencies. A fixed exchange rate, on the other hand, is determined entirely or predominantly by the government. FX Forward Transaction The FX Forward Deal is a foreign exchange transaction based on a foreign exchange rate agreed by the buyer and seller under a foreign exchange contract, delivered on a specified date after the second working day of the transaction, in most cases. FX Netting Netting FX (or Forex Netting ) involves offsetting receivables and payables in one currency with receivables and payables in the same currency. As currency rates move, FX gains (losses) on one position should be offset by FX losses (gains) on the other. Foreign Transaction Fee A foreign transaction fee is a charge assessed by a financial institution to a consumer who uses an electronic payment card to make a purchase in a foreign currency. Foreign transaction fees usually apply to card purchases made in foreign countries while traveling, but they can also apply to purchases made online from your home country where the vendor is foreign and processes the transaction in its local currency. FX Gain / FX Loss An FX gain or loss is reflected in the income statement as a change in value of a foreign exchange-denominated transaction. A sales transaction creates a foreign exchange gain (loss) when the foreign currency appreciates (depreciates) against the company's home currency. Fedwire Fedwire is a real-time gross settlement funds transfer system operated by the United States Federal Reserve Banks that allows financial institutions to transfer funds electronically between the system's more than 9,289 participants (as of March 19, 2009). Upon receiving the proper wiring instructions from the receiving bank, the sending bank can initiate transfers. Foreign Exchange Broker A forex broker, or currency trading broker is a financial services company that provides traders access to a platform for buying and selling currencies. Transactions in the foreign exchange market are always between a pair of two different currencies. Foreign Exchange Commissions Financial institutions or service providers charge foreign exchange commissions for facilitating currency exchange transactions. Commissions are usually calculated as a percentage of the transaction amount or as a fixed fee. Brokers may charge 50% of a pip spread or a fixed commission per standard lot, for example. The amount is deducted from the total cash received during the transaction. < PREVIOUS NEXT > E < BACK KNOWLEDGE BASE Grain Glossary Get an overview of financial terms and their definitions. ALL A A B B C C D D E E F F G G H H I I J J K K L L M M N N O O P P Q Q R R S S T T U U V V W W X X Z Z E Electronic invoicing Electronic invoicing (e-invoicing) refers to the creation, exchange, and processing of invoices electronically instead of on paper. E-invoicing involves sending invoices electronically between a supplier and a buyer, usually via the internet. There are several benefits to this method of invoicing over traditional paper invoicing, including increased efficiency, reduced errors and fraud, improved cash flow, and lower costs for printing and mailing. In addition, e-invoicing can be integrated with financial systems, making the accounts payable process easier to automate and improving cash flow visibility. Embedded finance Embedded finance refers to the integration of financial services into non-financial products or services. This can take many forms, such as adding payment or lending functionality to a mobile app or website, or bundling insurance or investment products into a larger offering. Embedded finance aims to make financial services more accessible for consumers by bringing them directly into the products and services they use. Emerging markets Emerging markets refer to countries that are in the process of developing their economies and are considered to be of high growth potential. These countries are often classified as being less developed than more industrialized nations and are characterized by a lower level of per capita income, less developed financial markets, and less mature political systems. Exotic currency An exotic currency is a term used to describe a currency that is not widely traded or used in international transactions. These currencies are typically from smaller or less developed countries, and may be less liquid or more volatile than major currencies. Examples of exotic currencies are the Brazilian Real (BRL), South African Rand (ZAR), Mexican Peso (MXN). Turkish Lira (TRY), Indian Rupee (INR) and Russian Ruble. Exchange rate An exchange rate is the price at which one currency can be exchanged for another currency. It is the value of one currency in terms of another currency, and is determined by the supply and demand for the two currencies in the foreign exchange market. Economic value added (EVA) Economic value added (EVA) is a measure of a company's economic profit, or the value it creates beyond what shareholders require. A company's EVA is calculated by subtracting its after-tax operating profit from its cost of capital. < PREVIOUS NEXT > T < BACK KNOWLEDGE BASE Grain Glossary Get an overview of financial terms and their definitions. ALL A A B B C C D D E E F F G G H H I I J J K K L L M M N N O O P P Q Q R R S S T T U U V V W W X X Z Z T Take Rate A take rate is the fee that a marketplace charges for a transaction that is carried out by a third-party seller or service provider. The take rate is a determining factor in a marketplace's revenue as reported on its income statement: Take rate * GMV (gross merchandise volume) = revenue. Tenor Tenor refers to the time between the maturity date and the maturity date of a financial instrument, such as a bond or loan. The tenor of a financial instrument can be expressed in various ways, such as years, months, or even days. Theta In finance, theta is a measure of an option's sensitivity to time-based changes in price. The Greek letter used in options pricing formulas to represent the amount by which the price of an option is expected to decline over a given period of time, due to the passage of time and the decay of the option's extrinsic value.Theta is typically expressed as a negative number, and it reflects the impact that the passage of time can have on the value of an option. Tick Ticks are units of measurement that represent the minimum price change for a security. Ticks are commonly used for expressing changes in a financial instrument's price, such as a stock, bond, commodity, or derivative, and they represent the smallest increment in a security's price. The value of a tick can vary depending on the security being traded and the market in which it is traded, but it is typically very small. For example, in the stock market, a tick may be equal to one cent for some stocks and $0.01 for others. Ticks are often used by traders and investors to track the performance of a security and to make decisions about buying and selling. Treasury bill (T-bill) T-bills are short-term debt securities issued by the U.S. government. T-bills are sold in denominations ranging from $100 to $1,000,000, and their maturities range from a few days to 52 weeks. Since T-bills are backed by the full faith and credit of the United States government, they are considered to be very safe investments. Investors often use them to park money or diversify their portfolios for a short period of time. T-bills do not pay interest, but they are sold at a discount to their face value, and the difference between the purchase price and the face value represents the return to the investor. T-bills are issued through competitive and noncompetitive bidding processes. Transaction Exposure Transaction exposure is the potential loss a company may incur due to changes in foreign exchange rates on existing financial obligations or expected future cash flows. Companies can use a variety of financial instruments and strategies to manage transaction exposure. Transaction exposure is also known as economic exposure. Trader A trader is a person who buys and sells financial instruments such as stocks, bonds, currencies, commodities, or derivatives in an attempt to make a profit. Traders can work on their own or as part of a larger financial institution, such as a bank or brokerage firm. Translation Exposure / Transaction Risk The translation exposure (also known as the translation risk) is the possibility that an organization's assets, liabilities, or income will change in value as a result of changes in exchange rates. Translation risk occurs when a company has equities, assets, liabilities, or income denominated in a foreign currency. Target redemption forwards (TARFs) Target redemption forwards (TARFs) are complex financial instruments that allow holders to exchange currencies at a better rate than the standard forward rate. Corporate organizations often use TARFs in foreign exchange (FX) markets. With multiple partial settlement dates, they combine a barrier (knock-out) call option and a barrier (knock-out) put option. If the enhanced rate reaches a target level, the product automatically expires if the holder hasn't paid an upfront premium. < PREVIOUS NEXT > W < BACK KNOWLEDGE BASE Grain Glossary Get an overview of financial terms and their definitions. ALL A A B B C C D D E E F F G G H H I I J J K K L L M M N N O O P P Q Q R R S S T T U U V V W W X X Z Z WM/Reuters benchmark rate A WM/Reuters benchmark rate is an exchange rate that is published daily at 4 PM London time. The exchange rates are calculated by averaging the exchange rates for currency trades that take place 30 seconds before and after 4 PM on the London market. Standard rates are used to calculate portfolio valuations and measure performance. < PREVIOUS NEXT > I < BACK KNOWLEDGE BASE Grain Glossary Get an overview of financial terms and their definitions. ALL A A B B C C D D E E F F G G H H I I J J K K L L M M N N O O P P Q Q R R S S T T U U V V W W X X Z Z I International Monetary Fund (IMF) The International Monetary Fund (IMF) is an international organization that promotes global monetary cooperation, financial stability, and international trade. The IMF was founded in 1944 at the Bretton Woods Conference and is headquartered in Washington, D.C. It is funded and owned by its member countries, which contribute financial resources to the organization and are represented by a board of directors. Implied Volatility The implied volatility of a financial instrument, such as a stock or an option, indicates its expected volatility over its lifetime. Due to its derived nature, it is implied as it cannot be observed directly. Options contracts are commonly priced using implied volatility because it determines the likelihood that the underlying asset will reach a certain price by a certain date. An asset with a high implied volatility is likely to experience price swings in the future, while one with a low implied volatility is less likely to experience price movements. Implied volatility is typically expressed as an annualized percentage. Interest Rate Curve An interest rate curve represents the relationship between interest rates and debt maturity. The curve plots the interest rates of securities with different maturities on the y-axis and the maturities of the securities on the x-axis. Several factors, such as monetary policy, inflation expectations, and market conditions, can influence the shape of the interest rate curve over time. Interest Rate Swap (IRS) Interest rate swaps are financial derivatives that allow two parties to exchange or swap cash flows based on a notional principal amount. During the inception of the swap, the parties agree on a set of fixed or floating interest rates. The swap involves one party paying a fixed rate of interest on the notional amount, while the other party pays a floating rate. Floating rates are typically based on an index, such as London Interbank Offered Rate (LIBOR), which is the average rate at which banks can borrow funds. By using interest rate swaps, parties can hedge against changes in interest rates, manage the risk of fluctuating interest rates, or speculate on future changes in interest rates. In The Money (ITM) In finance, an option is considered to be in the money if the current market price of the underlying asset is higher than the strike price for a call option, or lower than the strike price for a put option. For example, if a stock is trading at $60 per share, and a call option with a strike price of $50 is available, the option is in the money. Similarly, if a put option with a strike price of $70 is available, it is also in the money. In-the-money options have intrinsic value, which is the difference between the current market price of the underlying asset and the strike price of the option. International Transaction International transactions are cross-border trade agreements or credit operations involving a foreign currency. A typical international transaction involves the exchange of goods or services, and the settlement date is the last step. ISO 4217 A standard published by the International Organization for Standardization (ISO) provides information about the relationships between individual currencies and their minor units by defining alpha and numeric codes. Initial Margin (IM) The initial margin (IM) is the amount of cash or collateral that an investor must pay to open a margin account in order to purchase a security. Investors can borrow money to buy securities with this type of collateral. < PREVIOUS NEXT > FX Execution Trader < Back FX Execution Trader Be part of Grain's Risk team, playing a crucial role in supporting and optimizing the company's financial strategies, executing and managing FX trades to ensure optimal market execution, and serving as the primary contact for trading and risk-related communications with liquidity providers and selected partners. Full Time Tel Aviv Apply Now Who We Are Grain is a pioneering fintech startup based in the heart of Tel Aviv. We offer embedded cross-currency solutions tailored for software platforms and marketplaces. Grain was founded by seasoned entrepreneurs, formerly of financial institutions such as Barclays, Deutsche Bank, and other renowned fintech startups. Grain is backed by leading venture capital firms and prominent financial institutions. At Grain, we offer an opportunity to shape the fintech landscape and be a part of a community that's committed to excellence. Objectives of this role Efficiently execute and manage FX trades to ensure optimal market execution. Maintain and improve trading tools and processes to increase operational efficiency. Ensure accurate trade allocations and resolution of any discrepancies. Being a point of contact regarding trading related aspects with liquidity providers and selected partners Responsibilities Execute FX trades in accordance with client strategies and market conditions. Optimize Trading Tools to improve efficiency, implement enhancements to optimize control, ensure accurate trade capture, position management & inventory continuity day over day Ensure Trade Accuracy: Work closely with the operations team, bank’s dealing desks and brokers to ensure accurate trade allocations and resolve discrepancies. Maintain real-time monitoring positions, ensuring alignment with client objectives and risk parameters. Work closely with internal teams, including risk management, Data and operation teams. Source Liquidity: Engage with brokers and bank dealing desks to secure necessary liquidity. Ad Hoc Duties: Perform miscellaneous tasks as assigned, including generating ad hoc reports Required skills and qualifications Bachelor's degree in Finance, Economics, Mathematics, or a related field or equivalent industry experience 2+ years of FX trading desk experience, demonstrate ability in executing and managing trades, with a focus on FX derivatives Strong analytical skills and proficiency in statistical analysis tools and software with emphasis on advanced Excel skills Attention to detail to ensure quality, completeness and accuracy of work Excellent communication and interpersonal skills Preferred skills and qualifications Master's degree in finance, economics, mathematics, or a related field Knowledge of Google suite products, has ability to quickly work with new tools Proficiency with MS suite products Knowledge of Python/VBA Fluent in written and spoken English Apply Now Payment Operations Manager < Back Payment Operations Manager Manage and direct the activities of the domestic and international payment operations, ensuring continuous, uninterrupted support from critical third parties. Full Time Tel Aviv Apply Now Qualifications: 3+ years of operations experience, with 2+ years of direct payment operations experience 2+ years managing high-performing teams An operationally focused mindset, with an ability to lead teams through complex relationship management activities by setting a clear vision and running tight processes Experience maintaining operational working relationships with internal and external partners Experience working with recovery services such as recollections, disputes & recalls Bonus points: Knowledge of fintech, AP/AR, and/or B2B strategy Experience working on a global team A day in the life and how you’ll make an impact: Manage and direct the activities of the domestic and international payment operations ensuring continuous, uninterrupted support from critical third parties Assist team in the daily operations of all recovery services with a focus on gross/net loss and real-time operational metrics Lead on suspicious activities that include, fraud reporting, loss, disputes, and recovery efforts including ACH, Wire, and push Transaction Recalls Collaborate consistently with internal stakeholders, including Risk and compliance, Customer Experience, Legal, Product, R&D and others to proactively drive performance and manage risk Execute strategies, resolve issues, and provide support on all operational matters regarding payments to drive operational efficiency, continuous improvement, and enhance the customer experience Maintain in-depth knowledge of end-to-end transactional flows for payment channels Identify and communicate technical and/or business issues and solutions, including troubleshooting and coordinating with cross-functional teams in identifying and resolving issues that impact operations and the customer Anticipate emerging risks and mitigate existing risks relative to payment channel operations, prioritize and resolve issues About the team: Grain’s product is transaction based, so who better than the Payment Operations team to perform critical manual escalations of money movement to ensure we collect and deliver those transactions; and to be constantly changing with our platform uplift. Payment Operations solves problems. We are a team of financial services experts that understand how the banking system works and helps unblock bottlenecks in payment flows. This team focuses on continuous improvement of manual processes to move money in production, project work, automations, recovery of funds within the banking system, tooling and data insights to optimize our impact. About Grain: Grain is an end-to-end embedded cross-currency solution that empowers software platforms and marketplaces to effectively eliminate FX risk for their end customers. Through a user-friendly and automated tool, Grain's partners and their customers can easily secure currency rates into the future and conduct seamless cross-border fund transfers. Apply Now Middle Office Analyst < Back Middle Office Analyst Be part of Grain's Risk team, playing a crucial role in supporting and optimizing the company's financial strategies, providing daily trade support, and serving as the primary contact for trading and risk-related communications with selected partners. Full Time Tel Aviv Apply Now Objectives of this role Playing a crucial role in supporting and optimizing the company’s financial strategies Perform daily trade support of all trade aspects Being a point of contact regarding trading and risk related aspects with selected partners Responsibilities Perform daily trade support and implement enhancements to optimize control, ensure accurate trade capture, position management & inventory continuity day over day Maintain real-time monitoring positions, ensuring alignment with client objectives and risk parameters Execute FX hedge transactions in accordance with client strategies and market conditions Generate comprehensive reports for internal use and clients, summarize trading activities and performance metrics Work closely with internal teams, including trading, risk management and Data teams Develop and maintain strong relationships with clients, serving as a point of contact for trading and risk related inquiries Required skills and qualifications Bachelor's degree in Finance, Economics, Mathematics, or a related field or relevant industry experience 2+ years of proven experience as a Middle Office Analyst specializing in FX or a similar role in the financial sector Strong analytical skills and proficiency in statistical analysis tools and software with emphasis on advanced Excel skills Familiarity with financial technology and trading platforms. Trading skills- demonstrate ability in executing and managing trades, with a focus on FX derivatives Attention to detail to ensure quality, completeness and accuracy of work Excellent communication and interpersonal skills Preferred skills and qualifications Master's degree in finance, economics, mathematics, or a related field Knowledge of Google suite products, has ability to quickly work with new tools Proficiency with MS suite products Knowledge of Python/VBA Fluent in English, with excellent verbal and written communication skills About Grain: Grain is an end-to-end embedded cross-currency solution that empowers software platforms and marketplaces to effectively eliminate FX risk for their end customers. Through a user-friendly and automated tool, Grain's partners and their customers can easily secure currency rates into the future and conduct seamless cross-border fund transfers. Apply Now Previous 1 2 3 4 5 Next