Trading A-Z

A

Account
A virtual place where all your online trading funds are stored. The account is where all transactions involving your funds take place and are recorded.
Account Balance
The amount of money in a trading account. It takes in to account completed transactions. It does not include open positions .if no positions are open balance can be equal to equity.
Appreciation
The process of increase in the value of a financial product due to increased demand.
Arbitrage
The practice of taking advantage of countervailing prices in different markets by the purchase or sale of an instrument, and the simultaneous taking of an equal and opposite position in a related market to profit from small price differentials.
Ask, Offer
The price, or rate, that a willing seller is prepared to sell at.
Aussie
The Australian Dollar.
ASK Price
The buying price of a Financial Instrument
Abuse Trading
Any of the following actions such as, but not limited to, placing “buy stop” or “sell stop” Orders prior to the release of financial data, arbitrage, manipulations, lag trading, usage of server latency, price manipulation, time manipulation, hunting of trading benefits, a combination of faster/slower feeds, abuse of the cancellation of trades features available on the Platform or use without the prior and written consent of the Company of any software which applies artificial intelligence analysis to the Company’s systems and/or Platform and/or Client’s Trading Account
Access Code
The username and password given by the Company to the Client for accessing the Company’s Platform
At-Best Order
Instructions to make a transaction at the last available price before the market closes.
At-the-close Order
Instructions to make a transaction at the best possible price upon entering the market.
At-the-opening Order
Instructions to make a transaction at the price at which the market opens.
Authorized Forex Dealer
A financial institution authorized by a regulatory agency to act as a dealer in foreign currency trading.

B

Back Office
The administration and support personel of a financial company.
Balance of Payments
The record of all transactions made between entities in one country and the rest of the world over a defined period of time.
Business Day
Any day in which normal business operations are conducted. Notable exceptions: 25 December, 1 January and any locally or internationally recognised holidays announced on the TradeApp website.
Balance of Trade
The difference between a country's import and export payments.
Bar Chart
A chart which illustrates the price range of an asset by using its open/close and high/low values over a set period of time.
Basis Point
A unit equal to 1/100th of a percentage point.
Bear
A ‘bear’ is an investor who expects the market to fall and/or acts accordingly.
Bid Price
The selling price of an asset.
Bear Market
A market characterised by declining asset prices and self-sustaining negative expectations.
Bid
The price a buyer is willing to pay.
Big Figure
Dealer jargon for the digits left of the decimal point of a price quote: for example, the '107' in 107.30.
Bonds
An official IOU with a serial number and an interest rate issued by an entity looking to borrow capital. A tradable financial instrument.
Breakout
The movement of the price of an asset through a level of resistance into a steep rise.
Breakdown
The movement of the price of an asset through a level of support into a sharp decline.
Broker
An individual or a company acting as an intermediary between buyers and sellers for a fee or commission.
Buba
A nickname for the Bundesbank, the Central Bank of Germany.
Bull
An investor who believes in the impending upturn of a particular market. The opposite of a bear.
Bull Market
A market characterized by rising asset prices and positive expectations.
Balance
The amount of money in a trading account.
Base Currency
The first currency in a currency pair.

C

Cable
A nickname for the British pound.
Call Option
A contract that allows its holder to buy a given amount of an asset at a specified price within a specific time period.
Cancel Order
Instructions to cancel an unexecuted order.
Candlestick Chart
A chart which illustrates the price range of an asset over a set period of time by using its open/close and high/low values. If the open price is higher than the close price, the body of the candlestick is shaded. If the close price is higher than the open price, that area is not shaded.
Capital Markets
A medium to long-term investment market where entities with free capital and entities in need of capital trade assets.
Central Bank
A governmental entity in charge of the monetary system for a nation with responsibilities ranging from currency printing to overall monetary policy.
Chart
A graphic representation of the fluctuations of the price of an asset over a period of time.
Chartist
An individual who uses charts with historical data on the price of an asset to forecast its future trends.
Choppy Market
A situation where asset prices swing up and down significantly, most often over a short period of time.
Clearing
The process of settling a trade.
Client Trading Account or Account
An online account provided to you by TradeApp which allows you to use the TradeApp trading platform.
Closed Position
In forex trading, to buy/sell the exact amount of currency required to offset the amount sold/ bought with an open position.
Closing price
The final price at which an asset is traded on a particular trading day.
Collateral
Assets that a borrower offers to a lender to secure a loan.
Commission
A transaction fee charged by a broker.
Commodity
Basic raw materials intended for use or consumption that individuals or institutions buy and sell.
Consolidation
A period of little fluctuation in the value of an asset.
Confirmation
A document stating the terms of a transaction.
Contract
The standard unit in trading options typically equal to 100 shares of stock.
Counter Party
The party on the other side of a transaction.
Cross Rate
The exchange rate between two currencies which are not the official currency in the country of quoting: e.g., a USD/EUR quote in Japan.
Currency
Any generally accepted form of money issued by a government and circulated within an economy to serve as a medium of exchange.
Currency Forward
A private, tailor-made agreement between two parties that specifies the price at which a currency can be bought or sold at a future date.
Currency Future
A standardised, publicly-traded contract that specifies the price at which a currency can be bought or sold at a future date.
Currency Option
A contract that gives a buyer the right to buy or sell a certain currency at a specified price during a set period of time.
Currency Pair
The ratio between two currencies which shows how much of the second listed currency is needed to buy one unit of the first. For example, EUR/USD 1.2500 means that 1.25 US dollars are required to buy one euro.
Currency Risk
The risk of potential losses resulting from a unfavorable change in currency exchange rates.
CFDs
An abbreviation for Contract For Differences: a method of settlement in trading where both losses and gains are paid in cash. With CFDs, investors have all the benefits and risks of owning an asset without actually owning it.

D

Daily Chart
A graph that uses candlesticks to show the movements of an asset in a single day or its daily price movements over a specified time frame.
Day Order
Instructions to buy or sell an asset on a specific date. The order automatically expires if not executed on that date.
Day Trading
The purchase and sale of an asset within a single trading day.
Dealer
An individual or a company buying or selling assets for their own account and on their own behalf.
Deficit
A negative balance in trade or payments.
Deflation
A decline in prices for goods and services that comes with a negative inflation rate.
Delivery
The transfer of possession of an asset to its successful buyer.
Deposit
A client’s transfer of funds into his/her trading account for trading purposes.
Depreciation
A decline in the value of an asset.
Derivative
A financial instrument with a value derived from and determined by that of another asset, most often a currency, a commodity, stock, etc.
Devaluation
An intentional decrease of the value of a country's currency.
Dividend
The distribution of profit among a corporation's shareholders through cash or stock payments.
Dovish
1. Promoting a monetary policy based on the belief that low interest rates increase employment. 2. Unlikely to take strong actions, concilliatory: the opposite of hawkish.

Е

ECB (European Central Bank)
The central bank of the 19 European Union countries which have adopted the euro.
Economic Indicator
Statistical data on economic growth and stability used to analyze investment possibilities.
EIA (Energy Information Administration)
The official US information source on energy reserves such as petroleum and natural gas.
EMU (Economic and Monetary Union)
Economic and monetary arrangements such as the single currency, the Euro, ensuring a single market for goods, services, capital and labour within the European Union.
End of Day (Mark-to-Market)
The value of an asset portfolio adjusted to reflect the latest closing prices.
Equity
In online trading, this is the balance available in a trading account MINUS the current loss on all open positions and PLUS the current profit on all open positions.
Euro
The currency of the European Monetary Union.
Eurozone
The 19 member-countries of the European Union which have adopted the euro.
Exchange Rate
The rate at which one currency can be exchanged for another.
Execution
The completion of an order or a deal.
Execution Date
The date on which a trade occurs.
Exotic Currencies
Currencies which are traded rarely and low volume.
Expiration Time
The exact time when an option contract expires.
ETF (Exchange Traded Fund)
A investment fund that can be traded on exchanges like a single asset.

F

FED (Federal Reserve)
The Central Bank of the USA.
FATCA (Foreign Account Tax Compliance Act)
A US anti-tax avoidance law requiring all global financial companies to report details of US account holders with more than $50,000 to US tax authories.
Finmins
Short for Finance Ministers.
Fixed Exchange Rate
When a currency's exchange rate does not move freely but is fixed on a pre-determined rate to a another foreign currency or the price of gold.
Flip
To buy an asset and sell it soon after for profit following a sharp rise in price.
Floating Exchange Rate
When a currency's exchange rate is allowed to move freely depending on supply and demand in the foreign exchange market.
FOK Order (Fill-or-Kill Order)
Instructions to immediately execute a transaction or otherwise cancel it.
FOMC (Federal Open Market Committee)
A committee that sets US monetary policy and determines the country's two key interest rates.
Foreign Exchange Market (FX, FOREX)
The buying and selling of currencies by governments, financial institutions and individuals in a particular financial centre or in the world as a whole.
FOREX Market Hours
The working hours of the foreign exchange market. It is open 24 hours, 5 days a week.
FOREX Scalping
A trading strategy of short-term buying and selling of foreign currencies to make profits, in terms of minutes. The Company reserves the right to cancel any trades that have been closed within the two (2)-minute limit.
Forward Contract
An agreement to buy or sell an asset at a specified future date and at a predetermined price. Less regulated than futures contracts and more popular in currency trading.
Fundamental Analysis
A method of evaluating an asset by examining related economic, financial, and other qualitative and quantitative factors so as to compare the evaluation with the asset's current market price.
Futures Contract
An agreement to buy or sell a stated amount of an asset at a specific future date and at a pre-agreed price. A more formal and regulated version of forward contracts, futures are traded on official exchanges.

G

G7 (The Group of Seven)
A forum of the world's seven biggest economies - USA, Japan, UK, France, Germany, Italy, and Canada.
G8 (The Group of Eight)
G7 countries plus Russia.
Gap
When the price of an asset at the start of a trading is not within the previous day's range.
GDP (Gross Domestic Product)
The total value of the domestic output of goods and services of a country's economy over a specified period.
GFD Order (Good for the day Order)
A pending transaction order which expires the same day it is entered.
GNP (Gross National Product)
The total value of the domestic output of goods and services of a country's economy PLUS the country's earnings from overseas investments MINUS what foreigners living in the country earn there and send back home.
Greenback
A nickname for the United States dollar.
GTC Order (Good-till-cancelled Order)
A pending transaction order which is valid until executed or cancelled.

H

Hawkish
1. Promoting a monetary policy based on the belief that high interest rates keep inflation in check. 2. Aggressive, unlikely to compromise: the opposite of dovish.
Hedge
A trading position – or a combination of positions – which reduces the risk of financial loss from another trading position.
High/Low
The highest and the lowest price at which an asset was traded on a particular trading day.

I

IMF (International Monetary Fund)
Аn international organisation financed largely by industrialised countries that provides funds under strict policy conditions to countries with debt or balance of payments difficulties.
Inflation
The rate at which the price for goods and services in a country rises while the purchasing power of the local currency decreases.
Initial Margin
A percentage of the purchase price of an asset (that can be purchased on margin) that an investor must pay before the transaction can be executed.
Interbank market
A money market created by banks with short-term funding needs which borrow from banks with surplus funds.
Interest rate
The amount a lender charges a borrower for the use of the former's assets.
Intraday
Another way of saying 'within the day'.
Intraday trading
The purchase and sale of an asset within a single trading day. Also day trading
IPO (Initial Public Offering)
The first sale of a company’s shares to the public, leading to a stock market listing.
IRS (Interest Rate Swaps)
An exchange of two loans with different interest rates (one fixed, the other floating).
ISO Currency Code
Standardised three-letter acronym for each country's currency issued by the International Organization for Standardization.

J

Joint Venture
Agreement between two or more companies to cooperate on a particular project or a business that serves their mutual interests. The parties take a share in the capital of the joint venture company and share costs and earnings in proportion to that share.

K

Kangaroo
A nickname for the shares of Australian companies.
Kiwi
A nickname for the New Zealand dollar.

L

Leverage
An investment strategy of borrowing (money, assets, capital) to increase exposure to the financial market without actual extra investment.
LIBOR (London Interbank Offered Rate)
The benchmark interest rate at which banks lend funds to one another in the international interbank market.
Limit Order
Instructions to execute a transaction at a specific price or better (a minimum price for selling and a maximum price for buying).
Liquid Market
A low-spread, low volatility market with many bids and offers and numerous buyers and sellers.
Liquidation
Liquidation occurs when all open positions close automatically as the account does not have sufficient margin to support them.
Liquidity
The degree to which an asset can be quickly bought or sold in the market without affecting the asset's price.
Liquidity Provider
An individual or an institution acting as the both the buyer and seller of a particular asset, who in doing so creates a market for the asset.
Long Position
Buying an asset in the expectation that its price will rise.
Loonie
A nickname for the Canadian dollar.
Lot
A fixed/standardised quantity of assets defined as a unit for trading purposes.

M

Margin
The monetary requirement for a leveraged position.
Margin call
An alert that the client is nearing the maintenance margin. A deposit margin is when the client cannot open a position due to low funds.
Market Maker
Synonymous to a Liquidity Provider and usually has positions on both sides, not “buys or sells”.
Market Order
Instructions to buy or sell an asset immediately at the best possible price.
Mini Forex Account
A trading account which allows beginner traders to enter the market using smaller trade lot quantities—10,000 units rather than the standard 100,000—thus lowering the risk of financial loss.
Money Markets
A market in which money is borrowed and lent through the sale and purchase of assets with a maturity of a year or less.
MPC (Monetary Policy Committee)
A Bank of England committee in charge of the official interest rate in the United Kingdom among other monetary policy decisions.
Margin Close-Out Protection
The closure of all open positions when the sum of the funds in your trading account and any net profits from your open positions falls to less than half of the required margin protection. The closure of “all open positions” may not trigger if your MCO method is not ‘close all’.
Margin Level (Margin%)
The relation of the margin as a percentage in relation to the equity and the exposure/volume of open positions.

N

NAFTA (North American Free Trade Agreement)
A 1994 trade agreement between the US, Canada and Mexico which eliminated tariffs between member countries and created the world's largest free trade area at the time.
NFA (National Futures Association)
An independent self-regulatory organization for the U.S. futures and derivatives markets.
NYSE (New York Stock Exchange)
The world's largest stock market.

O

OCO (One-cancels-the-other) Order
A pair of transaction orders accompanied by the instruction that if either is executed, the other is automatically cancelled. Used for market entry and risk mitigation.
Offer
The price at which an asset is offered for purchase. Also Ask, Ask price, Ask rate.
OPEC (Organization of the Petroleum Exporting Countries)
An organization of 12 nations that produce and sell oil and which tries to keep the price of oil at a suitable level.
Open Order
Instructions to buy or sell an asset that remain valid until the transaction is either cancelled by the customer, until it is executed, or until it expires.
Open Position
When a position in an asset has not yet been offset by an opposing transaction, i.e. closed.
Options
A contract that entitles the holder to buy or sell an asset at a specific price on or before a certain date. A call option is the right to buy and a put option is the right to sell.
Order
An investor's instructions to a broker or brokerage firm to purchase or sell a security.
Oscillator
A tool for technical analysis which can indicate if the price of a particular asset is unjustifiably high or unjustifiably low.
Overnight Position
A trading position which is not closed by the end of the trading day.

P

Pending Orders
Orders which allow traders to buy and sell assets at a pre-defined price in the future. There are four types of pending orders: buy stop, sell stop, buy limit and sell limit.
Pip (Percentage in point)
The smallest price move that an exchange rate can make based on market convention.
Position
The amount of an asset owned by an individual or an institution. There are two general types of positions: short, which are borrowed and then sold, and long, which are owned and then sold.
PreMarket
A period of trading activity that occurs before the regular market session, typically between 8:00 a.m. and 9:30 a.m.
Premium
The price paid to buy an option contract which gives the holder the right but not the obligation to buy or sell the underlying asset at a specified strike price.
Profit/Loss (P&L)
The actual gain or loss resulting from trading activities on closed positions plus the unrealised gain or loss on open positions on assets the value of which has been adjusted to reflect the latest closing prices.
Put Option
A contract that allows its holder to sell a given amount of an asset at a specified price within a specific time period.

Q

Quote
The most recent price at which a buyer and seller agreed to trade an asset.

R

Rally
A period of sustained increase in the value of a particular asset, especially after a period of losses.
Range
The difference between the highest and lowest price at which an asset has traded over a given period.
Rate
The value of one nation's currency versus that of the currency of another nation. Also exchange rate.
RBA (Reserve Bank of Australia)
The central bank of Australia.
Resistance Level
A price above which an asset has difficulty rising, because of the intensive selling at that price level.
Requote
When an investor initiates a trade at a certain price, but the broker returns the request with a different quote. Typical of fast-moving, dynamic markets.
Risk Management
The process of analyzing exposure to risk in a particular investment and determining how to best handle such exposure to minimise the risk.
Rollover
Transferring a trading position from one day to the following.

S

Scalping Trades
To buy and quickly sell small quantities of assets in order to make small but fast profits.
Settlement
The delivery of assets or certificates for asset ownership in exchange for payment after the successful completion of a trade.
Short Position
Selling an asset with the intention of repurchasing it later at a lower price.
Slippage
When assets are bought at higher prices or sold at lower prices than those wanted, most often in dynamic markets.
Spot
A transaction that occurs immediately with funds usually changing hands within two business days after the deal is struck.
Spot Price
The current market price at which an asset is traded with settlement usually taking place within two business days.
Spread
The difference between the prices at which a trader will buy and sell an asset; the difference between bid and ask rates.
Sterling
Another name for the British pound.
Stock
A share in a corporation held by an individual or a business entity which share represents their claim on part of the corporation's assets and earnings.
Stop-Loss Order
Instructions to buy or sell once the price of an asset reaches a certain value so as to minimise investor loss.
Support Level
The lowest price to which an asset will generally fall because of the intensive buying at that level.
Swap
An agreement to exchange currencies with a commitment to re-exchange them at a specific date at a predefined exchange rate.
Swissie
A nickname for the Swiss franc.

T

Take Profit Order
A limit order specifying the exact price at which to close an open position for a profit.
Technical Analysis
A method of predicting future movements in asset prices that focuses on historical trends in price, volume and other variables rather than the characteristics of the asset.
Tick
In a financial market, the smallest unit of change in the price of an asset.
Tomorrow Next (Tom/Next)
A short-term transaction where a currency is simultaneously bought and sold over two separate business days, those being tomorrow and the following day (the day after tomorrow which is also the day of delivery).
Two Way Price
A quote that gives both the bid and the ask price of a security, informing potential traders of the current price at which they could buy or sell the security.
Transaction
An agreement between a buyer and a seller to exchange an asset for payment.

U

US Prime Rate
The interest rate at which US banks will lend to their prime corporate customers.
Underlying Asset
A financial instrument (stock, futures, commodity, currency, index) on the value of which the price of a derivative is based.
Underlying Market
The market where the underlying asset of a CFD is traded.

V

Value Date
A future date used in determining the value of an asset which fluctuates in price for the purposes of a transaction between two or more parties. The value date – or maturity date – is also when the parties exchange payments.
Volatility
The extent to which the price of an asset changes over time. High volatility implies rapid and large swings over a relatively short period of time; low volatility implies much smaller and less frequent changes in value.
Volume
The total amount of activity on a market, usually measured by the number of assets that have been traded in a particular period of time.

W

Wall Street
A street in New York where the most important US financial institutions are located. Synonymous with the US finance sector.
WTO (World Trade Organization)
An organisation formed in 1995 to control trade agreements between countries and to set rules on international trade.

X

Y

Z