Foreign Exchange Software Key Terms

Review foreign exchange terms when looking for the right software for your business needs

By Jennifer Ehlenfeldt, Freelance Writer

Using foreign exchange software can make trading on the foreign currency market a lot easier, but if you aren't sure what you're looking for when shopping for software, you may do yourself more harm than good.

There are many types of foreign exchange software available. From automated systems to outsourced exchange companies, you'll need to understand what options are available. Once you have a better understanding of the options and terms, you'll be able to make a more informed software buying decision.

Forex

Forex is the term used to refer to the foreign exchange market where buyers and sellers trade currency. The term is a slang shortened from the words "foreign exchange" when referring to the international market.
Try: Read the definition of Forex at InvestorWords.

Electronic communications network (ECN)

An electronic communications network, ECN, is a trading system used by buyers and sellers to trade at set prices.
Try: The electronic communications network is defined on the U.S. Securities and Exchange Commission website.

Leverage

Leverage is defined as the amount a financial institute or other buyer uses to purchase. The amount can be financed with credit or other means and is usually used as a way to magnify a trade.
Try: Review the definition and explanation of leverage as it relates to foreign exchange trading and software at FXDD.com.

Real time quotes

Real time quotes are bulletins that include the actual currency exchange rates at any given moment. Software that includes real time quotes can benefit trading tremendously.
Try: Forex Trading Results explains how real time quotes work to your advantage as part of their software.

Outsourcing

Outsourcing simply defined means contracting labor outside of a company for any given task. As a part of foreign exchange software, the outsourcing option includes using a third-party company as a go-between. They own and operate the trading software, and you use it as a vendor.
Try: Read how outsourcing works at Direct Foreign eXchange. They offer a banking exchange program complete with software for clients to use as a means of communicating with the bank and vendors.

Automated

"Automated" refers to the process of sending information or trading on the Forex. Software that allows for simple automation, automatic trades, can streamline the exchange process.
Try: Read the definition of automated software capabilities at FX Trade Stream. They company offers a software designed specifically to streamline exchanges and keep your overhead to a minimum.