Trading terms and definitions

BACS
Bankers Automated Clearing Services is a scheme for the electronic processing of financial transactions.

Direct Credits are a simple, secure and reliable service which enables both personal; and business customers of all sizes to make payments by electronic transfer directly into a bank or building society account. BACS payments are free of charge for private clients; however bank charging tariffs will apply to business clients.

In general BACS payments take three working days to arrive, however on occasion BACS payments may be delayed by up to one day to allow your bank to carry out some additional checks to protect your account from potential fraudulent activity.

Bear Market
A Market with a downward trend indicating Lower Prices

Bull Market
Means a market where the price is moving higher

CHAPS
Clearing House Automated Payment System is an electronic bank to bank, same day value payment within the UK in either Sterling or Euro.

The main benefit of CHAPS is that it is a fast, secure and efficient guaranteed same day value payment. This can be used by business or private clients when buying or selling a high value items, such as foreign currency, property purchase or a car.

Banks fees in relation to this service will vary.

EMS
European Monetary System

EMU
European Monetary union

Exchange Rate
Means how much of a foreign currency you will get for 1 unit of your own currency

Forex or FX
These terms are used as an abbreviation of foreign Exchange

Forward Rate
This is the rate which is fixed on the day for a specific date in the future

IBAN (International Bank Account Number)
International Bank Account Numbers (IBANs) were introduced in 2001 to provide a standard format for account numbers across Europe, to improve the quality of information exchanged between parties involved in European cross-border payments to help minimise errors and delays.
Learn more

Inter-bank Rate
This is the term for the rates traded exclusively between international banks around the world and is not available to the public domain

Margin
The deposit required to trade a forward transaction

Maturity
The date of settlement and exchange of funds

Settlement
Actual exchange of funds on the day of maturity

Spot Rate
When a deal is transacted on the day for settlement in 2 working days

Status Enquiry/Banking Reference
This is a request for a bank's opinion as to a particular customer's ability to meet a specific financial commitment. It will be based on the financial standing of the customer in question. A status enquiry cannot be given without the prior consent of the customer.

A bank’s reply to a status enquiry should help the originator of the enquiry to build up a picture of a particular individual or business, but it should never be considered, or relied on, in isolation.

SWIFTBIC
This code identifies the bank with whom the beneficiary holds their account for use when sending funds cross-border.

Value Date
The date of settlement for either a spot or forward contract