Financial Glossary

Cable

A term referring to the sterling/US dollar exchange rate: the rate was originally transmitted between the London and New York exchanges via the transatlantic telegraph cable beginning in the mid-1800s, hence the name.

CAC 40

A market capitalisation weighted index of the largest 40 companies listed on the Paris stock exchange. The CAC index is published by the Societe des Bourse Francaises

Candlestick chart

As with a bar chart, this graph shows the high, low, opening and closing prices, and the shape of the candle reflects the relationship between these prices. The candles are either green or red, depending on whether the closing price is higher than the opening price (green) or below it (red). The main body, or ‘wax’, represents the range between the opening and closing price and the ‘wicks’ show the highs and lows. It shows a visual representation of the prevailing trend and current market sentim

Capital

The wealth, either monetary or in assets, owned by an individual or company.

Carry cost

The cost incurred as a result of holding a position (e.g. The carry cost incorporated into the price of a commodity future consists of insurance costs, storage costs, interest charges and other related costs).

Carry trade

A strategy in which a trader sells a certain currency with a low interest rate and uses the funds to purchase a different currency yielding a higher interest rate, attempting to capture the difference between the rates. Common low yielding currencies include the USD and JYP and common high yielding currencies include the AUD and NZD.

Cash market

The actual, underlying market on which derivatives contracts are based.

Cash price

The price of an asset for immediate delivery. In other words, the actual price of an instrument right now. This term is often used for stock indices, whereas the synonymous term of spot is more often applied to forex and commodity prices. Also see Spot rate.

Central bank

A government or quasi-governmental organisation that manages a country's monetary policy. For example, the UK’s central bank is the Bank of England, and the US central bank is the Federal Reserve.

Channel

An upward or downward trend on a chart where the boundaries are marked by two straight lines. A break above or below the channel lines signals a potential change in trend.