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Discount

Trading Term

Discount is a term that is generally used in trading to describe when something is selling below its normal price. An asset or fund is described as being at discount when its market price is below its net asset value. In the money markets, it is the action of buying financial paper at less than par value. In the foreign exchange markets it is a margin by which the forward rates falls below spot (cash). In futures markets, discount is sometimes referred to as “backwardation”.

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