What is MLP? What is FSA? What is Fannie Mae? How to Use Leverage in Financial Market? What is IMF? How Do Financial Broker Commissions Work? What Does Financial Default Mean? What is a Margin Call? What is NFA? What is ASiC? What is Financial Market Regulation? What is CFTC? What is Ginnie Mae? How … Continue reading Regulation Terms
Economic Indicators Terms
What is PMI? What is Counted in GDP? What is CPI? What is Income Statement Used for? What is RPI? How does Unemployment Rate Work? What is PPI? What is CCI? What is ISM? What is GNP? What is IFO? What does Non Farm Payroll Employment Mean? What are Retail Sales? What is Current Account? … Continue reading Economic Indicators Terms
What is MiFID?
The Markets in Financial Instruments Directive (MiFID) is geared to integrate the European Union’s financial markets and enhance cross board investment transactions. The goal is to enhance transparency and determine the reserve requirements a financial institution must hold. Example: Markets in Financial Instruments Directive (MiFID) officially took effect on November 1st, 2007. More Regulation … Continue reading What is MiFID?
What is a Financial Market Maker?
A market maker is a dealer that is tasked with providing prices that help set the liquidity of a given security. Market makers are always willing to purchase on the bid price and sell on the offer prices. Maker makers generally make their revenue by capturing the difference between the bid price and the offer … Continue reading What is a Financial Market Maker?
What is FOMC?
The Federal Open Market Committee (FOMC) is the monetary policy board of the Federal Reserve Bank of the United States. This committee meets multiple times during the year in an effort to set central bank interest rate policy. The FOMC has permanent and rolling members made up of Federal Reserve Regional Presidents. Example: The Fed … Continue reading What is FOMC?
How Does Forex Rollover Work?
A forex rollover is a situation where a position is being settled at some date in the future. Most forex transaction are spot, which means delivered in two business days. To rollover a position to a future date, a dealer would need to unwind the original positions and simultaneously add a new position with a … Continue reading How Does Forex Rollover Work?
What is Ginnie Mae?
The Government National Mortgage Association (GNMA – Ginnie Mae) is a U.S. government corporation within the U.S. Department of Housing and Urban Development. The corporation does not issue, buy or sell mortgage securities and also does not purchase or sell loans. The agency guarantees the payment of interest and principal on loans for approved mortgage … Continue reading What is Ginnie Mae?
What is CFTC?
The Commodity Futures Trading Commission (CFTC) is an independent regulatory agency in the United States that governs the futures and options on futures market. The agency was created in 1974. The mission of the CFTC is to create a transparent and competitive futures market and avoid systematic risk to protect investors. Example: The CFTC would … Continue reading What is CFTC?
What is Financial Market Regulation?
Financial regulation provides guidelines, restrictions to financial institutions throughout a nation. This may be performed by either a government or non-government organization. Regulation might be in the form of regulatory transactions as accounting for revenue and expenses. Example: Financial regulation influences the organizational structure of banking sectors, by decreasing borrowing costs and increasing the variety … Continue reading What is Financial Market Regulation?
What is IMF?
International Monetary Fund (IMF) is a specialized organization of United Nations. IMF was formed in 1945 and has 188 member countries. It oversees international monetary policy and monitors economic, monetary and financial policies. IMF provides financial assistance to members in economic difficulties. Example: In March 2014, theInternational Monetary Fund approved a $14 billion bailout package … Continue reading What is IMF?
What is ASiC?
The Australian Securities and Investment Commission (ASIC) helps insure the economic integrity of the Australian financial markets by regulating its activity. ASIC is an independent commonwealth government organization. The organization mandate is the government and administer securities laws in Australia. Example: ASiC is set up under the Australian Securities and Investments Commission Act 2001. … Continue reading What is ASiC?
What is NFA?
National Futures Association (NFA) is a self-regulatory organization for the U.S. derivatives industry. It regulates futures, retail forex and swaps. All intermediaries in derivatives market are required to be registered with the NFA. The NFA monitors the derivatives market and protects interest of investors, participants and intermediaries. Example: In past National Futures Association has permanently … Continue reading What is NFA?
What is a Margin Call?
When market value of collateral goes down, the lender asks the investor to deposit additional funds or securities so the account meet the minimum maintenance margin – this is called margin call. In trading, margin refers to cash or securities required to be deposited by the investor to the brokerage firm. Example: If you borrow … Continue reading What is a Margin Call?
What Does Financial Default Mean?
Default occurs when a party fails to pay their obligation on a loan. The language that determines if a financial default occurs can be on either interest or principal, when it is due. When a default occurs the lending generally has some form of recourse such as collateral. Example: A trading default can occur when … Continue reading What Does Financial Default Mean?
How Do Financial Broker Commissions Work?
Commissions are payments received by brokers for the services they provide. Commissions are generally attached to transactions, and are an additional charge that can fluctuate from broker to broker. Some brokers will avoid charging transaction based commissions by charging a flat fee on a portfolio. Example: Commissions will vary and in many cases are regulated … Continue reading How Do Financial Broker Commissions Work?
How to Use Leverage in Financial Market?
Funds to a company are provided by either shareholders or creditors. The debt-equity ratio is the ratio of long term debt and shareholders equity. It is a measure of the leverage of a company. Leverage structure Ratio is based on the relationship between borrowed funds and owner’s capital. Example: Suppose you purchase a house valued at … Continue reading How to Use Leverage in Financial Market?
What is Fannie Mae?
Fannie Mae, is a government sponsored enterprise (GSE), founded in the United States in 1938 by congress. The Federal National Mortgage Association, which is the enterprises official name, was created during the Great Depression to make more mortgages available to low-income borrowers. Fannie Mae is one of two of the largest purchasers of mortgages in … Continue reading What is Fannie Mae?
What is FSA?
The Financial Services Authority was responsible for the regulating the financial services industry in the United Kingdom between 2001 and 2013. The regulatory body operated independently from the U.K. government, but was assigned by the Treasury. In the wake of the 2008 financial crisis the FSA was restructured in 2013. Example: The Financial Conduct Authority and … Continue reading What is FSA?
What is MLP?
A Master Limited Partnership is a public company that combines the tax benefits of a limited partnership with the liquidity of publicly traded securities. They are categories under Section 7704 of the Internal Revenue Code. Most MLP provide robust dividends by operating in the petroleum and natural gas storage and transportation business. Example: These public … Continue reading What is MLP?
What do Interest Rates Decision Impact?
The interest rate decision generally refers to a change in sovereign interest rates that occur at a regularly schedule monetary policy meeting held by a central bank. Each central bank, sets interest rate policy by establishing a deposit rate or borrowing rate for commercial banks in that country. Example: This is the most widely watched … Continue reading What do Interest Rates Decision Impact?