Glossary List

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  • ACCOUNT – stands similar to a traditional personal bank account and it is used to hold funds and/or securities and maintained by the Company which services are used together with the client with the purpose of realising the client’s trading strategy.
  • ACCESS CODES – the credentials of the client needed to get access to the broker’s website and which are provided by the broker.
  • AMOUNT FOR WITHDRAWAL – a certain (minimum) fixed amount of funds possible to withdraw from the client’s account. The minimum amount is 100$ and 250$ using the wire transfer.
  • ASSET/UNDERLYING ASSET – financial instruments (currencies, commodities, stocks, futures or indices) that stand for the base asset for a derivative`s price.
  • ASSET SUB-CATEGORIES – Currencies – EUR/USD, GBP/USD, CHF/USD.
    Commodities – Wheat, Gold, Oil, Coffee.
    Stocks – Yahoo, Intel, Apple, etc.
    Indices – Nasdaq, Dow 30, S&P 500, etc.
  • BALANCE – is an amount of funds in the client’s personal trading account. The balance of the client’s account is the amount displayed after factoring in Profit & Loss.
  • BEARISH – this definition is used when the prices of certain assets are falling down. This is a state or situation on the financial market when the majority of traders are opening a “Sell” position.
  • BOND – this is a fixed-income investment from a creditor that is given for a period of time. It is quite similar to stocks, but bondholders only have the creditor’s funds in the investment.
  • BULLISH – the opposite definition to “Bearish”, used to describe the market’s behaviour when the prices are rising. The market is called bullish when the majority of traders are opening a “Buy” position.
  • CFD – a form of a derivative trading. Contract For Difference type of trading allows a trader to benefit on the change in price of an asset (currencies, commodities, stocks, indices) regardless the direction of the price and without actually owning it.
  • CLOSED POSITION – this is an investment that was realized. Either “Buy” or “Sell” orders were executed and fixed in profits or losses.
  • COLLATERAL FUNDS – refers to a margin trading. This is a capital that was added by the client to his trading account to be able to continue trading, support his opened positions. The funds in the client’s account are used as collateral in case of a margin call.
  • CONTRACT – this is a standard trading unit formed by an amount of financial assets.
  • CRYPTOCURRENCY – this is a digital currency. It has no issuing financial authority and it is not controlled by any central bank. It has now established itself as a highly profitable financial instrument. A lack of control from any financial authority makes it immune to manipulations.
  • ECONOMIC INDICATOR – these are global economy statistics that are analyzed with the purpose to predict future trends and the direction of economy of a country.
  • ENTRY RATE/STRIKE PRICE – this is the first step taken to achieve a successful trade. It is a component of a trading strategy that is used to minimize an investment risk and exclude the influence of traders’ emotions from their trading decisions. It is the price that a trader buys an asset.
  • EQUITY – represents the funds in a trader`s trading account but includes the current earnings or losses for all opened positions that are not yet realised.
  • EXPOSURE COVERAGE – this is an important part of the trading process. The amount of funds that is affordable to be lost in a trade. It is crucial to understand the exposure coverage to reduce the possible risks of a trade.
  • FOREX/FOREIGN EXCHANGE – a financial market’s trading system that consists of the simultaneous purchase of one currency and selling of another. Such types of transactions are represented on the global financial market as Forex market.
  • FUNDAMENTALS – includes all significant types of information that may have influence on the financial health of a company, economic valuation or behaviour of an asset.
  • FUNDAMENTAL ANALYSIS – is one of the two most common methods of an asset analysis used to measure its value by examining all related events, qualitative and quantitative factors that may affect its price. Traders usually use this method in an attempt to predict different assets’ possible behaviour.
  • GTC (GOOD-TILL-CANCELLED) ORDER – an order to Buy or Sell at a set price that stays in effect until the order is cancelled by the trader or the trade is completed.
  • HEDGE – is a trading strategy that has its purpose to protect a trader’s investment from a loss. The strategy is based on protecting an asset by buying other assets that move in the opposite direction.
  • IF DONE ORDER – a two-steps order. The first is a limit order and it is activated only when the expected price is reached. The second order is activated only after executing the first order. These types of orders are only set to get the suitable price of an asset when there are price fluctuations on the market.
  • INTRODUCING BROKER – a person or business that provides investing advice or counsel to an investor, but does not actually handle transactions. Generally speaking, introducing brokers make recommendations while delegating the task of executing trades to someone at the same or a different firm who operates on a trading floor. The term most often applies to brokers in the futures market.
  • IPO – An Initial Public Offering is the first time that a company’s shares are offered to the public.
  • LEADING INDICATORS – are financial statistics that forerun some events in the economic world. They predict the future financial or economic trends.
  • LEVERAGE – is a trading strategy which is based on a borrowed capital to have the possibility to open positions of greater volume that a trader’s equity.
  • LIMIT ORDER – an order created to set a certain price of an asset to open a buy or sell position once the expected price is reached.
  • LONG POSITION – is a definition which is used to describe the Buy order of an asset at a given price. Long position means the expectation of the bullish market.
  • MAINTENANCE MARGIN – is a certain limit after which an investor can receive a margin call from the broker. A trader has to make sure that he has enough equity to cover his open positions.
  • MARGIN CALL – is a brokerage firm’s request to deposit additional capital to the client’s trading account so that it is brought up to the required level of the maintenance margin.
  • MARGIN USAGE – means an act of purchasing an asset when a trader pays only a certain part of the asset’s full value and gets the rest from the bank or his broker. The broker may act as a lender and the funds in the trading account are used as collateral on the loan’s balance.
  • MARKET MAKER – is a financial institution which is ready at any moment of the trading day with a firm ask and bid price.
  • MARKET ORDER – is an immediate order execution at the current market price. This type of order guarantees execution and it has lower commissions due to the minimum work that brokers need to do to.
  • NET EXPOSURE – is the difference between a trader’s long and short exposure shown in a percentage form. It is a measure that shows the extent to which a trader’s trading account capital is exposed to market fluctuations. This difference equals the sum of the weights of the long positions less the value of the sum of the weights of short positions.
  • OPEN ORDER – is a Buy or a Sell order that stays in effect until either the order is canceled or executed.
  • OPEN POSITION – is an opened trade that can be closed in profit or in loss. When the position is closed, all profits and losses are fixed and the amount of it is added to the trader’s balance or taken from it.
  • OPEN P&L – Profits and Losses, indicates a trader’s gains or losses in all his opened positions.
  • ORDER EXECUTION – the service which is responsible for executing a trader’s order with the best available price.
  • OVERNIGHT POSITION – is a trading position that is not closed by the end of the trading day and is held overnight. The end of the forex trading day is at 5.00 PM EST.
  • PAIR – a quotation of the traded currencies. The value of a currency is displayed as a rate and it is determined by its comparison to another currency in the quotation.
  • PIP (POINT IN PERCENTAGE) – is a smallest amount by which a currency quote can change.
  • PORTFOLIO – is a number of certain assets which are held by a trader at the moment. These may be different asset classes and/or types of investments that create an appropriate risk-return portfolio allocation.
  • POSITION – is an amount of a securities, commodities or currencies that are owned (a long position) or borrowed and then sold (a short position) by an individual, institution or dealer.
  • PROFIT – is a financial revenue that is received when the amount of earned reward is realized from a closed position.
  • QUOTE – is the last price at which an asset was traded, meaning the most recent price on which a buyer and seller agreed and at which some amount of the asset was transacted.
  • RANGE – the difference between the low and high prices for an asset over a specific time period. Range indicates an asset’s price volatility. The more volatile is the asset, the wider the range.
  • RISK – a possibility of an investment’s reward to be different from the expected amount of profit. There is also a chance included to lose some or all of the invested capital.
  • RISK MANAGEMENT – a strategy that consists of determining and evaluating possible financial risks and using trading approaches to adapt to risk exposures.
  • ROLLOVER – is the action that occurs at end of trading day, where all opened positions are rolled over to the next business day. This happens in FX trading when a trader does not want to actually buy the traded currencies but prefer to continue trading until the position is closed.
  • SELL – refers to the process of liquidating an opened Buy position.
  • SHORT POSITION – is the type of trading when a trader opens a Sell position for an asset with the expectation of the price to fall after some time.
  • SPREAD – is the difference between the bid and the ask price of an asset.
  • STOP ENTRY ORDER – is an order to buy an asset when its price reaches a certain level to guarantee a higher possibility to achieve a predetermined entry price, fixing the profit
  • STOP LOSS ORDER – is an order to sell an asset once its price is reaching a specific negative level. This type of order is used to minimize a possibility of greater losses.
  • SWAP – means a process of exchanging one financial instrument for another between interested parties. This exchange always occurs at a predetermined time and it is specified in the contract.
  • T/P – is an order similar to the stop-loss, however it is used by traders who set a certain rate or a number of pips from the current price level for their current positions to be closed in profit automatically once the desired price is reached.
  • TRADE SIZE – is a standard amount of a financial instrument in trading.
  • TRADING HOURS – is a period of time that consists of one business day in a financial market, from the opening bell to the closing bell.
  • TRADING PLATFORM – is a computer software program that is used in order to buy and sell assets in the financial market over a network with a financial intermediary.
  • TREND – is the general direction of a market, its prices or economy. It may be rising or falling.
  • TURNOVER – is the volume or value of assets that are traded on the market during a certain period of time.