Forex Glossary (L)

Here are some terms that used in FOREX trading with series of L.   Lay Off To carry out a transaction in the market to offset a previous transaction and return to a square position.

LDC Less developed countries, often used with respect to secondary debt market.

Leading Indicators Statistics 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. The importers speeden up the payment for the imports and exporters delay recieving payment for the exports.

Liability 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.

LIBOR (London Inter Bank Offer Rate) British Bankers' Association average of interbank offered rates for dollar deposits in the London market based on quotations at 16 major banks. Effective rate for contracts entered into two days from date appearing.

LIFFE London International Financial Futures Exchange.

Limit Order – Reserved Day Trading Deal An order to perform a Day Trading deal at a rate pre-defined by the customer, when and if such rate comes up in real market time. The Limit rate is superior to the existing rate at the time of reservation. The reservation order lasts for a period defined by the customer, and is associated by the necessary collaterals to facilitate the potential Day Trading deal, when and if activated, under the pre-defined terms.

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 and the foreign institutional investors also have the liberty to buy and sell shares on the stock exchange of that country.

Liquidation Any transaction that offsets or closes out a previously established position.

Liquidity The ability of a market to accept large transactions without having any major impact on the interest rates.

Long A market position where the Client has bought a currency they previously did not own. For example: long Dollars.