Articles

Definition of 'Expiry Date'

Definition: Expiry date is the date, as the name suggests, on which a particular contract (usually a derivative contract) expires. Every derivative contract, which is based on an underlying security such as a stock, commodity, or a currency, has an expiry date, though the underlying security usually does not have any expiry date.

A derivative contract based on an underlying security exists only for a specified period, which ends on its expiry date.

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What is the Clearing House Automated Payment System? CHAPS

Clearing House Automated Payment System Definition – The Clearing House Automated Payment System, commonly referred to as CHAPS, is the real-time gross settlement, or RTGS, system used in the United Kingdom for daily clearings of Sterling and foreign currency. CHAPS is also an electronic bank-to-bank same-day value payment made within the UK in sterling. The main benefit of CHAPS is that it is fast, secure and efficient and the money is transferred the same day. Unlike other forms of payment such as checks, CHAPS payments are irrevocable. CHAPS is one of the largest RTGS systems in the world. Banks themselves use CHAPS to move money around the financial system, but it is also used regularly for business-to-business payments, by solicitors and licensed agents to transfer the purchase price of a house between the bank accounts of those involved, and by individuals buying or selling a high-value item, such as a car, who need a secure, urgent, same-day guaranteed payment.

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END OF DAY ORDER (EOD)

A EoD validity order or ‘Day’ order is an order placed to Buy or Sell that automatically expires or is automatically cancelled if the order is not executed on the day it was placed. It is one of several different duration order types that determines how long the order is in the system before it gets canceled. Another popular validity order is the IOC order.

SAMCO trading Platforms have ‘Day’ order as the default order duration. Unless you change the validity duration, the order will be placed as ‘Day’ order by default. The orders placed using the EoD validity are only good during the day and will automatically get cancelled at the end of the day post market close if the order is not executed.

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What is the J-Curve Theory?

J-Curve Theory Definition. A J-Curve is a term used in several different fields to refer to a variety of unrelated J-shaped diagrams where a curve initially falls, but then rises to higher than the starting point. When speaking of currencies and a country’s trade balance, the J-Curve Theory states that a country’s trade deficit will worsen initially after the depreciation of its currency because higher prices on foreign imports will be greater than the reduced volume of imports. However, over time the effects of the forex change on the price of exports will lead to increased demand from abroad, and eventually the net difference between imports and exports, the country’s balance of payments, will improve. The term can also apply to new equity funds that experience high startup costs initially with related low returns. However, as time passes, the returns improve and reflect the J-pattern when charted 

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What is the Dow Theory?

The Dow Theory is a name that was subsequently attached to the various ideas presented in writings by Charles H. Dow in the late1800s regarding movements of stock prices in the market. Many technical analysts consider the Dow Theory’s definition of a trend and its perquisite of studying price dynamics as the early foundation of modern technical analysis. Since others summarized the theory from Dow’s own editorials, the issue of concern is that interpretations are necessary. Dow never laid down specific assumptions.

Dow Theory Principles

  1. The Averages Discount Everything.
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