Bank for International SettlementsThe Bank for International Settlements (BIS) is a global financial institution owned by central banks. Based in Basel, Switzerland, there are representative offices in Hong Kong and Mexico City.
The BIS's original members were Switzerland, Germany, Belgium, France, Britain, Italy, the United States and Japan.
Bank of ChinaThe Bank of China is one of China's four largest state-owned commercial banks. It is a subsidiary of the People’s Bank of China. However, it maintains close relations in management, administration, and cooperation in several areas with the subsidiary.
Bank of EnglandThe Bank of England (BoE) is the central bank for the United Kingdom, acting as the government's bank and lender of last resort. With headquarters in the City of London, it issues currency and oversees monetary policy. It is the UK equivalent of the Federal Reserve in the United States.
Bar chartA type of chart which consists of four significant points: the high and the low prices, which form the vertical bar; the opening price, which is marked with a horizontal line to the left of the bar; and the closing price, which is marked with a horizontal line to the right of the bar.
Base currencyThe first currency in a currency pair. It shows how much the base currency is worth as measured against the second currency. For example, if the USD/CHF (U.S. Dollar/Swiss Franc) rate equals 1.6215, then one USD is worth CHF 1.6215. In the forex market, the US dollar is normally considered the base currency for quotes, meaning that quotes are expressed as a unit of $1 USD per the other currency quoted in the pair. The primary exceptions to this rule are the British pound, the euro and the Australian dollar.
Base rateThe base rate, or base interest rate, is the interest rate that a central bank – like the Bank of England or Federal Reserve – will charge to lend money to commercial banks. Adjusting the base rate helps a central bank regulate the economy by encouraging or discouraging spending as required.
BasingA chart pattern used in technical analysis that shows when demand and supply of a product are almost equal. It results in a narrow trading range and the merging of support and resistance levels.
Basis pointBasis points, also known as bps (pronounced ‘bips’), describe the percentage change in the value of financial instruments or the rate change in an index or other benchmark. Basis points mostly refer to changes in interest rates and bond yields. One basis point is equivalent to 0.01%.
Bear marketA bear market is any market that experiences a fall of around 20% or more from its recent high. Most commonly applied to stock markets, the term can also be used for anything that is traded, including currencies and commodities. A bear market is the opposite of a bull market.
Bid priceBid price, or simply bid, describes what a buyer is willing to pay for a security. It is contrasted with the ask price, the amount a seller is willing to sell a security for. The difference between the two is known as the ‘spread’, which is the cost traders pay to open and close positions.
The bid/ask spread is the difference between a market’s buy (bid) price and sell (ask) price. For example, if the actual price of a market is £100, the bid price might be £101 and the ask price £99. This makes the spread £2.
Every trade that is made requires one seller to be willing to offer the market or asset at the same price that a buyer is willing to take that same market. Therefore, the bid price can also be considered as the highest price a trader is willing to enter a market at. The ask price is the lowest price a trader is willing to offer that market at.[PF1]
As a market’s price moves, so too will the bid and ask prices. The spread often stays constant, even when the price rises or falls. An exception to this is when volatility hits and there’s added uncertainty to the markets.
Different markets will have different spreads. For example, spreads are often higher for volatile, unpredictable markets. There’s a greater risk to the broker as prices are more likely to move heavily in either direction.
To offset the increase in risk, market makers will set a higher spread by raising the buy price and lowering the sell price. If a market is experiencing a lack of liquidity, spreads may also be larger as it’s more difficult to match a buyer with a seller.
Scalpers, who look for small profits by opening and closing multiple trades over a short period, are particularly impacted by the bid/ask spread. Every position traded will incur the cost of the spread, so the small gains made from scalping must be greater than this cost to be profitable.
For those with a longer-term outlook, the spread is far less significant as it’s assumed the profit incurred from any long-term price move will greatly outweigh the cost of the spread.
Do you buy at the bid or ask?
Assets are always bought at the bid price. The term bid and buy in this context are interchangeable, so often the bid price will simply be called the buy price. Similarly, the ask price is the same as the sell price.If you want to long a market, this means taking up a buy position. You will open the buy position at the bid price. By going long on a market, you are hoping its price rises and you can close out the position at the ask price for a profit. Alternatively, if you are shorting a market, you will open the position at the ask price and close it at the bid price.
Bollinger bandsA tool used by technical analysts that consists of a band plotted two standard deviations on either side of a simple moving average. It is used to find support and resistance levels.
BondsA bond is a fixed-income investment that represents a loan made by an investor to a borrower (who is typically corporate or governmental). It can be illustrated as an I.O.U. between the lender and borrower that includes the details of the loan and its payments.
British Retail Consortium (BRC) shop price index
The British Retail Consortium (BRC) is a . The BRC aims to drive positive change in the retail industry and influence its members to thrive for the benefit of consumers.
The BRC releases several different pieces of monthly data, such as the Retail Sales Monitor (RSM) report and the Shop Price Index (SPI), that provide detailed insights into the performance of the retail industry.
Although not members, many banks and financial service providers such as Santander, Lloyds and PayPal are ‘associates’ of the BRC. Associates get access to exclusive data and analysis from the retail industry that contains valuable information such as consumer habits and behaviour. They also gain direct commercial links to all retail members.
In joining the BRC, retail members get brand and profit protection, as well as expert regulatory and operational assistance.
Notable associate members:
- Google UK
- Lloyds Banking Group
- PayPal (UK) Limited
- Visa Europe
Notable retail members:
What is the British Retail Consortium report?
The British Retail Consortium report, also known as the BRC-KPMG Retail Sales Monitor (RSM), is a monthly report on retail performance in the UK. The participating members represent over 60% of the total retail industry based on turnover.
The RSM is seen as a key economic indicator due to the scale of the industry it covers and can be used as a gauge of consumer demand. Although not as significant to the markets as the UK monthly retail sales, traders can still benefit from the RSM report as it gives a substantial indication of the retail performance of its members over the last month.
BrokerA financial broker is a third-party coordinating the sale of financial securities between parties selling securities and those purchasing them. Brokers are individuals or firms acting as intermediaries between investors and trading exchanges.
Exchanges only accept orders from their members, either individuals or firms. Therefore, traders and investors require exchange members' services to make financial transactions. Brokers get compensated for their services in several ways; commissions, fees or paid directly by the exchange.
BuckThe word buck is a slang term for one US dollar. The word’s use traces back to 1748, forty-four years before the first US dollar became minted.
Bull marketA bull market describes any market in which prices are rising or are expected to rise imminently. Typically applied to stock markets, the term can also be used for anything that is traded, including currencies and commodities. A bull market is the opposite of a bear market.
BullsTraders who expect prices to rise and who may be holding long positions.
BuyTaking a long position on a product.