Forex Glossary (I)

Here are some terms that used in FOREX trading with series of I. ICCH International Commodities Clearing House Limited, a clearing house based in London operating world wide for many futures markets.

IFEMA International Foreign Exchange Master Agreement.

IMF International Monetary Fund, established in 1946 to provide international liquidity on a short and medium term and encourage liberalization of exchange rates. The IMF helps its members to tide over the balance of payments problems with supplying the necessary loans.

IMM International Monetary Market part of the Chicago Mercantile Exchange that lists a number of currency and financial futures.

Implied Rates The interest rate determined by calculating the difference between spot and forward rates.

Inconvertible Currency Currency which cannot be exchanged for other currencies either because it is forbidden by the foreign exchange regulations or the currency witnesses extreme volatility that it is not perceived to be a safe haven for parking the funds.

Indicative Quote A market-maker's price which is not firm.

Indirect quote Where the foreign currency is a variable amount and the domestic currency is fixed at one unit.

Inflation Continued rise in the general price level in conjunction with a related drop in purchasing power. Sometimes referred to as an excessive movement in such price levels.

Info Quote Rate given for information purposes only.

Initial Margin The deposit required by the Broker before a client can trade/transact a deal to have some cushion in the event of default by the party.

Interbank Rates The forex rates large international banks quote to other large international banks. Normally the public and other businesses do not have access to these rates.

Interest Rate Risk The potential for losses arising from changes in interest rates

Interest Rate Swaps An agreement to exchange interest rate exposures from floating to fixed or vice versa. There is no swap of the principal. The principal amount is notional as at the end of the tenure only cash flows related with the interest payments (whether payment or reciept) are exchanged.

Intervention Action by a central bank to effect the value of its currency by entering the market.

In-the-Money A call option is in-the-money if the price of the underlying instrument is higher than the exercise/strike price. A put option is in-the-money if the price of the underlying instrument is below the exercise/strike price.

Intra Day Limit Limit set by bank management on the size of each dealer's Intra Day Position.

Intra Day Position Open positions run by a dealer within the day. Usually squared by the close.

IOM Index and Options Market part of the Chicago Mercantile Exchange.

IPI Industrial Production Index. A coincident indicator measuring physical output of manufacturing, mining and utilities.

ISDA (International Securities Dealers Association Organization which foreign currency exchange banks have formed to regulate inter-bank markets and exchanges.