Forex Glossary

Leading Indicators

Statistics that are considered to predict future economic activity.

Leverage

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

LIBOR

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

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/YEN is 117.00/05, then a limit order to buy USD would be at a price below 102. (ie 116.50)

Liquidation

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

Liquidity

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

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.

Lot

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