Hot potato trading is the quick passing of currency inventory imbalances (due to an exogenous shift in the demand and supply of currencies) around the inter-dealer market.
Hot Potato Trading
Related Terms
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Over-the-counter trading, or OTC trading, refers to a trade that is not made on a formal exchange. Instead, most OTC trades will be between two parties, and are often handled via a dealer...
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The Business Inventories report measures the total amount of inventories held by manufacturers, wholesalers, and retailers in the country.
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The bid/ask spread is the difference between the bid and ask price. The “ask” price is also known as the “offer” price. It’s the difference between the buyer’s and seller’s prices. The “bid “represents demand and the “ask” represents supply for an asset. In other words, it’s what the buyer is willing to pay for […]
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Liquidity describes the extent to which an asset can be bought and sold quickly, and at stable prices, and converted to cash. Liquidity refers to how quickly and at what cost one can sell an asset,...
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Internalization refers to the process whereby a dealer seeks to match staggered offsetting client trading flows on its own books instead of immediately trading the associated inventory imbalance in...