Glossary

All A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

I

Immediate-or-cancel Order

Best or limited order, which must be fully or partly settled as soon as it comes on the market, whereby non-settled parts are cancelled.

Immediate-or-Cancel Order

Immediate-or-cancel orders are fully or partly settled as soon as they come onto the market, non-settled parts are deleted.

Implicit Returns

An implicit financial rate, which is produced from the acquisition of a spot tool and its sale on the futures market.

Implicit Volatility

A measure for the expected price fluctuation of the basic security, which is calculated based on the current market prices and not based on historical information on the price fluctuations of the basic securities.

In-the-money Option

An option, whose exercise price is clearly above or below the daily rate of the basic security. A call is in the money if the market value of the basic security is higher than the exercise price; a put is in the money if the market value of the basic security is lower than the exercise price.

In-the-money-Option

An option, whose exercise price is clearly above or below the daily rate of the basic security. A call is in the money if the market value of the basic security is higher than the exercise price; a put is in the money if the market value of the basic security is lower than the exercise price.

Industrial Obligations

Loans: a collective term for interest-bearing obligations with a fixed agreed duration. Both civil adjustments (e.g. federation, states and communities) and private companies (industrial obligations, industrial loans) emerge as issuers. Loans are a beneficial financial alternative to investment projects compared to conventional bank financing. A loan securitises a creditor’s claim, that is to say, pays a certain amount, which the security issuer owes the investor. This sum of money, also called nominal value, can for example be €100.00 or another amount and/or another currency. It is to be paid back to the investor at a previously agreed time. The period of time between starting to pay interest on an issue and repayment (redemption) is described as the duration of a security. If part of the duration has already expired then the remaining period until redemption is described as maturity. Loans include, for example, mortgage bonds, industrial obligations, community obligations and civil loans.

Inflation

Inflation means that the prices within a national economy increase faster than the goods volume and mostly because the amount of money is too heavily inflated. This is the case, for example if the state actuates its printing presses and circulates more bank notes than is justified by economic growth. Result: the buying power of money falls. With high inflation, the companies delay their investments because they do not know how the wages and prices for raw materials, for example for energy, will develop. The normal economic activity becomes more and more unstable. In such cases, the issuing banks apply the brakes on the interest rate and stem the growth in the money supply, if the price increase rates climb above the critical value of 2.0 percent. The issuing banks can also apply the brakes too hard with the result that the price spiral spins in the other direction. This means, goods and services can be obtained for the same, however often even for less money than for example the previous year. A sustained economic slump in the general price level, called deflation by specialists, has far more unpleasant consequences than inflation. The companies cannot mark down the prices as preferred for their products since fixed wage and capital costs are also putting pressure on the prices. At some point, production becomes unprofitable. Result: jobs are cut, production plants are shut down or moved to a foreign country, where it is cheaper to operate and wages, if possible, are reduced. The result: many firms face closure. At this stage, new investments are not initially though of based on the strength of the bad business outlook. Fatal effect: higher unemployment as a result of curbed production, hardly any investments and lower wages continue to reduce the available buying power of private households. The pressure on prices continues and a vicious circle commences. Incidentally, deflation must not be confused with regressing price increase rates for individual goods or on individual sub-segments. This is described as disinflation.

Initial Margin

A margin, which must be provided as cash or securities before the settlement of an order on the margin account.

Interest Rate

The interest calculation of the capital, expressed as a percent, which is normally calculated on an annual basis.

Interest Rate Swap

The exchange of fixed and variable interest rate obligations to, generally, identical and currency-compatible capital sums.

Internal Value

The positive difference between the current daily rate of the basic security and the lower exercise price with a call or the higher exercise price with a put. The value of an option is made up of its internal value and its current market value.

Inverse Conversion

An arbitration strategy, which consists of a combination of a short future with a synthetic long future (long call and short put with the same exercise prise).

Inverse Market

The market situation in which the futures contracts, which mature soon, are traded at higher prices than the contracts with a later maturity date. This situation often emerges if the supply does not satisfy the demand.

Invoice Total

The amount to be paid by the buyer of an interest rate-futures contract to the seller, calculated from the official final accounting price multiplied by a price factor ascertained from the stock exchange for the respective delivered loan plus accumulated interests.

IOC Order

Best or limited order, which must be fully or partly settled as soon as it comes on the market, whereby non-settled parts are cancelled.

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