Glossary

Foreign Exchange UK .com explains in simple english terms used in foreign exchange, foreign currency exchanges.

BACS - Bankers Automated Clearing Services - The process for Sterling clearing for domestic banks. Usually takes 3 business days.

CHAPS - Clearing House Automated Payment System - A faster means of making payments. Usually occurs on the same day.

Exposure: - The amount of money at risk due to Foreign Exchange movements.

Forward Rate: - The rate at which two currencies can be exchanged on a preset future date, e.g. sterling dollar exchange rate today for transfer in 3 months time.

Forward Points: - The difference between the spot rate and the forward rate.

Forward Contract: - A contract to exchange a specific amount of one currency for another on a future date at a predetermined rate.  A deposit is normally required for forward contracts.

GTC - Good Till Cancelled: - A GTC foreign exchange order will be left in the market until executed or cancelled by you.

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