Risk Warning: Trading financial products on margin carries a high degree of risk and is not suitable for all investors. Losses can exceed the initial investment. Please ensure you fully understand the risks and take appropriate care to manage your risk.

The industry’s
most important terms explained.

Discover a wealth of financial terms and definitions that every trader should know.

Forex Glossary

L

Lot

A unit to measure the amount of the deal. The value of the deal always corresponds to an integer number of lots.

Long position

A position that appreciates in value if market prices increase. When the base currency in the pair is bought, the position is said to be long.

Liquidity

The ability of a market to accept large transaction with minimal to no impact on price stability.

Liquidation

The closing of an existing position through the execution of an offsetting transaction.

Limit order

An order with restrictions on the maximum price to be paid or the minimum price to be received. As an example, if the current price of USD/JPY is 117.00/05, then a limit order to buy USD would be at a price below 117.00.

LIBOR

The London Inter-Bank Offered Rate. Banks use LIBOR when borrowing from another bank.

Leverage

Also called margin. The ratio of the amount used in a transaction to the required security deposit.

Leading Indicators

Statistics that are considered to predict future economic activity.