Trading Glossary

Bear Market − A market distinguished by falling prices.

Bid − The price level at which an asset is sold.

Bull Market − A market dominated by rising prices.

CAC − The top 40 companies listed in the Paris Stock Exchange weighted by market capitalization.

Commission − The fee charged for buying or selling securities.

Contract Size − The notional amount of shares/indices/commodities/currency controlled by a CFD or options position.

DAX − An index of the top 30 companies listed in the Frankfurt Stock Exchange weighted by market capitalization.

Dividend − The element of a company’s earnings which is distributed to shareholders either bi-annually or annually. For stock, CFDs dividends are a cash modification to the account. Long position holders are credited, whereas short position holders are debited the dividend.

Dow Jones Industrial Average − An index of the 30 largest blue-chip companies listed in the United States which are price weighted.

Expiration/Expiry − A fixed duration such as option or forward contracts which expire at a predetermined date and time in the future.

FTSE 100 − An index of the top 100 companies listed in the London Stock Exchange weighted by market capitalization.

Hedge − A position that is created to specifically reduce or eliminate risk due to an unfavorable movement in price.

Interest − Charges on loans and financial instruments that reflect their risk profile.

Leverage − Leverage is the ratio of the size of the position to the amount of the deposit. It permits traders to obtain a big exposure with a moderately small outlay.

Margin − The amount required from a client to cover losses when a price moves adversely.

Market capitalization − A company’s market value calculated by the current share price times the number of issued shares.

NASDAQ − The second largest stock exchange in the United States which traditionally lists many technology companies.

Nikkei 225 − An index of the top 225 shares listed in the Tokyo Stock Exchange weighted by price.

Offer − The price level at which you can buy a financial asset.

Position − An open trade.

Realized Profit/Loss − The amount of money you have made or lost on a position once it has been closed.

Sector − A selection of company stocks within a particular industry group. More often than not an index is available to track industry groups.

Settlement − Closing a position at a predetermined market price once the market is closed.

S&P 500 − An index of the top 500 companies listed in the New York Stock Exchange (NYSE) weighted by market capitalization.

Spread − The difference between the buying and selling price of a financial instrument.

Stock Exchange − A market on which securities are traded.

Stock Index − A collection of several stocks expressed as a total price and measured against a value which has a base on a specified date in the past.

Underlying − The actual traded market or markets from which the price of a futures or option is derived.

Volatility − A measure in the change of price movements of a market over a period of time.

..................Content has been hidden....................

You can't read the all page of ebook, please click here login for view all page.
Reset