how handles work
handles are often used in futures and equities markets where they are also known as the big figure or big fig the decimal or fractional part of the price is sometimes referred to as the dollar price or the stem traders often refer to only the handle of a price quote since it is assumed that other market participants know the stem of the quote for example if s p 500 futures are trading at 2885 43 the handle could be conveyed simply as 2885 or shortened to just the 85 handle if the price drops to 2875 90 a trader may say that the index has dropped ten handles in the foreign exchange markets the minimum price movement is called a pip since many of the foreign exchange instruments are quoted out four or five decimal places it is considered simpler to refer to the last two places when discussing the bids and asks rather than include the handle which tends to be known by the participants handles and foreign exchange marketsforeign exchange encompasses an enormous range of transactions everything from currency conversions by a traveler at an airport kiosk to billion dollar international payments made by corporations financial institutions and governments specific examples include the financing of imports and exports as well as speculative investment positions with no underlying goods or services increasing globalization has corresponded with a significant uptick in the number of foreign exchange transactions amid the expansive global foreign exchange market spot markets and forward markets frequently use the term handle spot markets are markets for financial instruments such as commodities and securities that can be traded immediately or on the spot spot markets rely on spot prices or current market prices this stands in contrast with the forwards market which works with prices at a later date in both cases participants in these markets must understand the handle and stem of their price quotes spot markets may be organized exchanges or over the counter otc markets although the spot exchange rate is the earliest value date in general the standard settlement date for is two business days after the transaction date some exceptions exist including transactions for crude oil in this case goods are sold at spot prices but the physical delivery happens on a later date 