Base, term, contra, dealt currency
September 25, 2010
If an FX dealer quotes a currency rate – say USDCHF – as 0.9877 that means USD is the base currency and CHF the term currency. The rate quoted is CHF/USD, the number of Swiss Francs to the US Dollar. If a client trades at the quoted rate, then the dealt currency is the one that specifies the unit of the trade. So if USD is the dealt currency, and the trade size is 10,000,000 then we’re trading 10,000,000USD. Which means a trade size of 987,700CHF. In this case CHF is the contra currency.