Forex Glossary J-L

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J Curve

A term describing the expected effect of a devaluation on a country's trade balance. It is anticipated that import bills rise before export orders and receipts increase.

Announcements and statements by politicians or monetary authorities to influence decisions by business, consumer, or trade union sectors, often associated with forecasts and policy implications.

Jurisdiction Risk
(1) The risk inherent in placing funds in the Centre where they will be under the jurisdiction of a foreign legal authority.
(2) The risk in making a loan subject to the laws of another country.


A measure of the sensitivity of the price of an option to a change in its implied volatility.

Key currency
Small countries, which are highly dependent on exports, orientates their currencies to their major trading partners, the constituents of a currency basket.

Slang for the New Zealand dollar.

Knock In
A process where a barrier option (European) becomes active as the underlying spot price is in the money. Knock out has a corresponding meaning although the option may permanently cease to exist.

Dealers analysis of the forward book or deposit book showing every existing deal by maturity date, and the net position at each future date arising.

Lagging Indicator
A measure of economic activity which tends to change after change has occurred in the overall economy e.g. CPI.

Lapsed Rights
Rights for which call payments have not been made by the acceptance date.

Last Trading Day
The day on which trading ceases for an expiring contract.

Lay Off
To carry out a transaction in the market to offset a previous transaction and return to a square position.

Leading Indicators
Statistic that are considered to precede changes in economic growth rates and total business activity, e.g. factory orders.

Leads and Lags

The effect on foreign trade payments of an anticipated move in the exchange rate, normally a devaluation. Then payment of imports is faster and export receipts are slowed down.

Left-hand Side
Taking the left hand side of a two way quote i.e. selling the quoted currency. See Right-hand Side.

In options terminology, this expresses the disproportionately large change in the premium in terms of the relative price movement of the underlying instrument.

In terms of foreign exchange , the obligation to deliver to a counterparty an amount of currency either in respect of a balance sheet holding at a specified future date or in respect of an un-matured forward or spot transaction.

The London Interbank Offered Rate, the rate charged by one bank to another for lending money.

Life of Contract
The period between the beginning of trading in a particular future and the expiration of trading.

London International Financial Futures Exchange

Limit Down
The maximum price decline from the previous trading day's settlement price permitted in one trading session.

Limit Move

A price that has advanced or declined the permissible limit permitted during one trading session.

Limit Order

An order to buy or sell a specified amount of a security at a specified price or better.

Limit Up

The maximum price advance from the previous trading day's settlement price permitted in one trading session.

(1) The maximum price fluctuation permitted by an exchange from the previous session's settlement price for a given contract.
(2) In international banking, the limit a bank is willing to lend in a country.
(3) The amount that one bank is prepared to trade with another.
(4) The amount that a dealer is permitted to trade in a given currency.

Limited Convertibility

When residents of a country are prohibited from buying other currencies even though non-residents may be completely free to buy or sell the national currency.


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