Page 44 - PRIAA Glossary

CROSS CURRENCY INTEREST RATE SWAP
An interest rate swap where the two legs of the swap are denominated in different currencies.
CROSS OPTION
An option, typically equity or commodity, which pays out in a currency other than the local currency of the underlying asset. The two main types of cross options are quanto and composite (or “compo”).
CROSS-MARGINING
A counterparty-party protection program instituted by financial clearing corporations whereby members receive margin relief from offsetting positions at other clearing houses. As part of this program, joint clearing accounts
that have access to margin and collateral at other clearing houses were established. This margin relief is only available to clearing members, market makers and locals.
CRUDE STABILISATION
The removal of light gases and hydrogen sulphide from oil. Stabilisation “sweetens” the sour crude through the removal of hydrogen sulphide and reducing the vapour pressure and makes the oil safer to ship in tankers.
CURB TRADING
Trading that takes place outside of official market hours. The practice is illegal as per the Commodity Exchange Act.
CURRENCY FUTURE
An exchange-traded contract which requires delivery by one party to another party of a specific amount of one currency at a specified future date, in return for a specific amount of a second currency. Also known as an “FX future”.
CURRENCY HEDGING
The activity of managing the risk from exchange rate fluctuations on assets not held in the native currency of
the investment manager or portfolio. Can be enabled by purchasing appropriate amounts of futures contracts, swaps
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