Glossary

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Look up the meaning of hundreds of trading terms in our comprehensive glossary.

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  • IBOR
    IBOR stands for Interbank Offered Rate – a type of interest rate benchmark that represents an average of the rates that banks will offer each other for loans of various maturities.

    The most well-known and widely used IBOR is LIBOR. However, you might also encounter EURIBOR, TIBOR and other rates.

    IBORs have been used in financial markets for a long time and feature in a huge variety of different products and transactions. Over-the-counter (OTC) derivatives in particular have long been associated with IBORs.
  • Illiquid
    Little volume being traded in the market; a lack of liquidity often creates choppy market conditions.
  • Index components
  • Inflation
    Inflation is the decline of a specific currency's purchasing power over time. It’s calculated by measuring the cost of a basket of widely consumed goods and services in an economy.

    Inflation reduces each unit of currency's purchasing power and increases living costs; consumers must spend more to fill a shopping basket or get a haircut. As prices rise, money buys less so inflation can reduce living standards over time.
  • Initial margin requirement
    The initial deposit of collateral required to enter into a position.
  • Interbank rates
    The foreign exchange rates which large international banks quote to each other.
  • Interest rate
    An interest rate is the percentage of money charged above the lender's principal – the amount of money loaned – for using its capital. Global central banks set base interest rates to manage their domestic economies. Base rates are the benchmark all banks use to decide their borrowing and investment rates.
  • Intervention
    Action by a central bank to affect the value of its currency by entering the market. Concerted intervention refers to action by a number of central banks to control exchange rates.
  • INX
    Symbol for S&P 500 index.
  • ISM non-manufacturing

    The ISM Non-Manufacturing Index (now called the Services PMI) is an index used to assess the performance of services companies in the United States. The reading, published monthly, is based on surveys of more than 400 purchasing and supply managers in non-manufacturing (services) firms.

    Monitoring the ISM Services PMI helps traders and investors in US markets get a detailed snapshot and insight into the country’s economic conditions.

    The index is compiled and published by the ISM (Institute for Supply Management) as part of the ISM Report On Business.

    Understanding the ISM Non-Manufacturing Index

    The ISM services report measures the economic activity of more than 15 industries, measuring prices, inventory levels and employment. A reading which comes in above 50 indicates economic growth, while below 50 indicates contraction.

    The reading can prove helpful when choosing which sectors to trade. The US dollar may also react to bullish or bearish ISM readings.

    The various PMI/ISM readings are considered leading rather than lagging indicators, because purchasing manager activity predicts future business activity and trends.

    The ISM Services PMI gets published in the first week of each month. Trends in the ISM can continue for months, which can be valuable for economists and analysts looking to make long-term financial forecasts.

    The index has five major components: business activity, new orders, inventories, employment trends and prices.