School Articles

Intrinsic value is a difference between the price of the underlying instrument and the strike price of the given asset.

Overheated economy occurs in the countries that have been having extremely good economic performance which resulted in high levels of inflation and overproducing. High prices are also quite often the consequence of the overheated economy. It usually results in recession.

Spot trade is an instant purchase of any of the financial instruments – currencies, commodities or shares. The majority of the spot contracts include a physical delivery of the instrument to the trader who purchased them. The difference in value of the spot and futures of the instrument is counted via the time value of the payment which is based on interest rates and time maturity.

Eurodollar is a term that is used to describe a denominated dollar deposits which are held in the foreign banks or in the branches of American banks overseas. Eurodollars are not subjected to US Federal Reserve bank regulations. Earlier in history these deposits were held almost exclusively in Europe, hence the name.

A dealing desk is a real object that can be met in foreign banks. It is very much real desk that is used as a workplace for traders and forex dealers. The main feature of the dealing desks is that many of those, belonging to the same company can be seen around the world as forex market is open 24/7.

Dealing desks are also used by financial companies and banks in order to execute trades on their own.

Purchasing power is a term used to determine the quantity of the goods and services that one unit of a certain currency can buy. Purchasing power is a perfect tool in order to see the inflation rate of the country – the higher the inflation the lower is the purchasing power.