A
Abnormal Market Conditions
A term used by brokers to describe a rapidly moving or thinly traded market. Depending ... more
ABS
Asset-backed securities. These are securities backed by assets, like mortgages, which are claimable if the ... more
Account equity
The net assets of a traders account
Account history
This refers to a traders account with their broker. It is a register of their ... more
Acquisition
When the majority of shares changes hands in a company. This is typically when one ... more
Actuals
The physical assets behind traded commodity securities.
ADR
American Depositary Receipts or ADRs. These are shares of foreign companies listed on exchanges in ... more
After-hours dealing
Quick Summary: After-hours trading involves buying or selling securities outside of specified trading hours. ... more
AIM
Alternative Investment Market. A small cap stock market in the UK. Lighter listing rules reduce ... more
Alerts
Where the broker or a third party sends a notification to a trader that a ... more
Alpha
This is a measure of price performance vs a benchmark. If a trader makes 10% ... more
American Option
An option that can get exercised at any time during its life. European options can ... more
Analysts
Those that conduct analysis on markets, with the view of providing insights to market participants.... more
Annual General Meeting (AGM)
This is where shareholders meet each year to vote on the various decisions a company ... more
Annual Report
The annual audited full year accounts of a particular company along with statements from the ... more
Annuity
A guaranteed income for the rest of someones life. Historically purchased with pension lump sums. ... more
Arbitrageur
Person, or organisation that uses arbitrage as a strategy.
Asian Session
When the majority of Asian markets are open and trade. Typically 23:00 to 08:00 GMT.
Ask price
The ask price is the level at which a seller is willing to accept ... more
Asset classes
Types of asset that have similar characteristics. There are four broad classes: Equities, Foreign Exchange, ... more
Assets
Anything that is owned that is expected to generate a return to the owned. Opposite ... more
ASX 200
A term used for the index of the top 200 shares on the Australian Securities Exchange, ... more
At best
An order type that instructs the broker to get the best possible price they can ... more
At the money
A term used in options trading where the strike price of the option is similar ... more
Aussie
Aussie or Ozzie are short hand terms for the AUD/USD currency pair.
Automated trading
Where the buying and selling of securities is automated and driven by algorithms.
Available Margin
The amount of margin a trader has available to trade with. This is account balance ... more
Averaging Down
Once an intial long trade is place this is the practice of opening additional positions ... more
B
Backwardation
Backwardation occurs when a bid price exceeds the ask price. This usually occurs when ... more
Balance
A summarised financial result of all funds deposited in, and withdrawn from the customer's account, ... more
Balance of Payments
Also BoP. This is the difference between payments into or out of a country. It ... more
Balance of Trade
Also BoT. This is the difference between trade into or out of a country. Experts ... more
Balance sheet
A company's statement of assets and liabilities.
Bank of England
The UK's central bank responsible for setting interest rates for Sterling and maintaining stability in ... more
Base currency
The first currency quoted in a forex pair.
Basis point
A basis point is 0.01% and is typically used when quoting interest rate changes. A ... more
Bear market
Brief Description: A Bear Market occurs when the price of a security is falling, and ... more
Bear Raid
When bears team up to push the price of a security down, normally by short ... more
Bear Trap
When a peice of analysis points to the market falling and the price instead goes ... more
Bearer stocks
Ownership of shares is typically held on a register. The owner of bearer shares do ... more
Bet per
Short Description: The ‘Bet-per’ quantity is the minimum movement you can bet on within ... more
Bet size
The amount of money staked per point of price movement.
Bid
Traders can go short at the bid price. The terminology is from the broker point ... more
Bid-Ask Spread
The difference between the price the trader and buy at and the price they can ... more
Binary Bet
A binary bet offers a win or loss outcome, nothing in between. Binary options are ... more
Black Box Trading
Also referred to as automatic or algorythmic trading. The trader does not need to see ... more
Blue Chip
Well established, big companies. A blue chip is an expensive chip on the poker table.... more
BoC
Bank Of Canada.... more
BoE
Bank of England... more
BoE Rate Decision
Brief Summary: The Bank of England's interest rate decision is announced following the meeting ... more
BoJ
Bank Of Japan... more
Bollinger bands
A technical indicator developed by John Bollinger. The bands help a trader visualise changes in ... more
Bonds
Tradable debt issued by governments and companies. Wikipedia entry.... more
Book Building
When a new share is issued book buiding is the process institutions go through to ... more
Book Value
A valuation of something using its net assets on the balance sheet. A very rough ... more
Bottom Fishing
When a trader buys an asset cheaply at the bottom of its fall.
Bottom Up Analysis
A form of fundamental analysis which starts with analysis of the individual parts. Bottom up ... more
Breakdown
Occurs when a price 'breaks down' below a support area.
Breakout
Occurs when a price 'breaks out' above a resistance area.
Brent crude
A type of oil extracted from the North Sea, off the UK. Because of its ... more
Brexit
The process of the United Kingdom (UK) leaving the European Union (EU) – it is ... more
BRIC
BRIC stands for the emerging economies - Brazil, Russia, India and China.
Broker
Provides access to the financial markets for traders. Brokers come in all shapes and sizes. ... more
Bull market
Quick Summary: A Bull Market is any financial market where prices are rising or ... more
Bullish and bearish markets
Brief Summary: A bullish market means that the price is going up and ... more
Bulls
Bulls are market participants and commentators that beleive the price of a security will rise.... more
Bund
The name given to German bonds.
Bundesbank
Germany’s central bank; also known as BUBA. Bank's website.... more
Buy
When a trader goes long a financial instrument they will buy it.
Buy Limit
An order type where the trader wishes to go long at the limit price or ... more
Buy on opening
When a trader buys at the beginning of a trading session.
Buy Stop
An order type where the trader wishes to go long above the current market price.... more
Buyback
When companies purchase their own shares. This reduces the amount of shares issued.
C
Cable
Another name for the GBP – USD exchange. Around half a trillion dollars is traded ... more
CAC40
Cotation Assistée en Continu. The short name for the headline french index which includes 40 ... more
Call
An option that gives the purchaser the right, but not the obligation, to buy a ... more
Candlestick Chart
A type of chart using a security's opening, closing, high and low price for a ... more
Capital
The economic resource used to buy assets, normally with the view to provide a product or ... more
Capital Gains Tax
Also, CGT. A tax on the profits obtained from a capital investment or transaction. ... more
Carry trade
A forex trading strategy of borrowing funds in a low-interest rate currency and buying assets ... more
Cash call
When your broker asks you to deposit more cash into your brokerage account to cover ... more
Cash or spot market
Summary: Also known as a spot market, cash markets are different to futures contracts, ... more
Cash price
Also spot price. The price now to transact in the underlying asset.
CFD
Contract for difference. An OTC financial derivative where the counterparties agree to exchange the change ... more
Chart Patterns
Technical analysts use repeatable chart patterns to try to spot changes or continuations in participant ... more
Chartist
A market participant or commentator that uses charts to analyse the price of a security.... more
Charts
A graphical representation of the price of a financial instrument. We cover charts in detail ... more
Circuit Breakers
When exchanges stop the trading in a security that has fallen significantly. This is done ... more
Close a position
When a trader places a trade to reduce their position to zero. They are closing ... more
Close to the money
In options trading when the underlying price of the security is close to the strike ... more
Closing price
A security's last price in a trading period.
Closing trade
A trade to close a position. Most trading requires the trader to place the opposite ... more
CME
The Chicago Mercantile Exchange.... more
Collateral
The resources put up by the trader to enter a trade. Requested by the counterparty ... more
Commercial Paper
How big companies finance short-term cash flow. Like bonds but without the coupon, instead, the APR ... more
Commission
A charge levied on a client to place trades in certain asset types. FX and ... more
Commodities
A commodity is any physical product whose prices are subject to supply and demand. ... more
Consolidation
When price moves sideways for an extended period of time.
Contango
This is when the futures price of a security is above the cash price at ... more
Contingent orders
These are orders that instuct a broker to another action if filled. The typically action ... more
Contract Expiry Date
The date a trade expiries, if applicable.
Contract length
The length of time a contract is open for before it expires.
Contract month
The month during which a contract or bet expires.
Contract note
A confirmation from a broker that a trade has been placed.
Contract size
The minimum amount a product can be traded in. Normally these are standardised, like a ... more
Contrary opinion
An approach to trading where traders take the opposite view and therefore position of the ... more
Controlled risk bet
A trade where the maximum downside is predefined, usually with a guaranteed stop loss order.... more
Convertible stock
A loan that the owner can convert to ordinary shares in that company, given a ... more
Corporate action
An event that requires approval or notification of the shareholders of a business. Paying dividend ... more
Cost of carry
The cost to a trader of maintaining a position. This might be in form of ... more
Counterparty
You need at least two parties in a financial transaction, they are counterparties.
Coupon
The interest payment on a bond. We introduce bonds in our course.... more
CPI
Consumer price index, a measure of inflation excluding housing costs.
Credit account
For those with excellent credit some brokers will provide a credit account. This means the ... more
Credit limit
The amount of credit given to a trader by a broker. Hardly done anymore.... more
Credit Rating
An entities perceived ability to repay its debt. Provided by credit rating agencies. AAA is ... more
Crystallisation
When a position is closed the trader crystalises the profit or loss.
Currency cross
The rate to exchange two currencies.
Currency futures
A future is an agreement to buy or sell something at future point in time. ... more
Currency options
A option is the right to buy or sell something in the future but not ... more
Currency Pair
The exchange of two currencies.
Currency peg
When one currency's exchange rate is fixed, or pegged, at a set rate or a ... more
Cut and reverse
When a position is fully reversed and an opposing position taken in a single trade.... more
Cyclical shares
Equities that follow the economic cycle. For example banking shares typically rise and fall with ... more
D
Daily bets
Spread bets that close at the end of the trading day. These used to expire ... more
DAX
The German stock index, representing 30 of the largest German companies that trade on the ... more
Day order
When a trader places and order that is open for the day. If the price ... more
Day trader
Someone that trades in a short term time horizon. Typically, not leaving opening positions overnight.... more
Day trading
A day trader attempts to make a profit by making short, sharp transactions on ... more
Dealer
Normally a company or person traders go to buy or sell securities from.
Debenture
A form or capital, similar to debt, issued by companies and backed by particular assets. ... more
Debt
A form of capital funding where there is an obligation to repay what is borrowed, ... more
Deep in the money
In options trading, this means when the strike price is the right side of the ... more
Deep out of the money
In options trading, this means when the strike price is the wrong side of the ... more
Delta
The rate at which a derivative's price changes relative to the price of the underlying ... more
Demo Account
A broker's practice account. Does not use real funds.
Deposit
The funds placed on account with their broker to act as margin.
Derivatives
Brief Overview: A derivative is a security whose price is dependant on or derived ... more
DFB
See daily funded bet.
Digital options
A digital option pays out a fixed amount when the price of an intstrument moves ... more
Dividend
A dividend is a variable payment from a company to its shareholders. We touch on ... more
Dividend Adjustment
An adjustment made to an equity derivative to reflect a dividend in the underlying. Typically ... more
Dividend yield
The amount an investor generates annually as a percentage from their investment in a share. ... more
DJIA
Dow Jones Industrial Average. An index of 30 large US blue chip shares.
DMA
Direct Market Access. Provides advanced trader direct access to large liquidity providers and exchanges. Bypasses ... more
Double bottom
A price pattern forming at the bottom of a trend, interpreted by technical analysts as ... more
Double top
A price pattern forming at the top of a trend, interpreted by technical analysts as ... more
Dove
Refers to someone that is relaxed about leaving interest rates low; opposite to a hawk.... more
Dow
Short hand for the Dow Jones Industrial Average.
Dow Jones Industrial Average
Brief Summary: An index created to see how 30 of the largest publicly owned ... more
Down bet
A trade or bet where the trader believes the price will fall
Downtrend
When prices are generally falling, defined as lower lows and lower highs in price.... more
Drawdown
The amount the equity balance in a trading account falls by, either in a trade ... more
Dutch Auction
An auction process where the price starts high and is gradually lowed. Very useful when ... more
E
Earnings per share
Also EPS. Its the net earnings of a company divided by the number of shares ... more
EBITDA
Earning Before Interest Tax Depreciation and Amortization. A profit measure of a company that approximates ... more
ECN
Electronic Communication Network, which amalgamates liquidity for the trader.
Economic indicators
Economic indicators are pieces of economic data that are used by investors to ... more
EDSP
Exchange Delivery Settlement Price. The price at which an exchange settles a derivative, like a ... more
Elliot wave theory
A theory about how markets behave. We go into detail in our course. ... more
Emerging markets
Countries with developing economies. Generally considered high risk and high reward.
Equities
Typically shares or indices of shares. Ordinary shares share the economic gains from a company ... more
ESTX50
Euronext 50 index.
ETFs
Exchange Traded Fund. An investment fund traded on a recognized exchange. The fund can give ... more
Euribor
Euro Inter Bank Offered Rate. This is the rate banks can borrow form one another ... more
Eurodollars
Dollar denominated deposits held outside the US, and thus outside the control of the US ... more
European Central Bank
Short Summary: The European Central Bank (ECB) is the central bank responsible for the ... more
European Session
07:00 to 16:00 London time.
F
FCA
Financial Conduct Authority, the UK's financial services regulator. ... more
FED
The FED is the Federal Reserve Bank and its the US's central bank. It is ... more
Federal Reserve
See FED.
Flat price or position
Quick Summary: A flat price is one that is neither rising nor falling. In ... more
FOMC
The Federal Open Market Committee is the branch of the Federal Reserve bank in charge ... more
Forex
Shorthand for foreign exchange trading. When one country's currency is traded for another.
FTSE 250
An index of the medium-sized shares listed on the LSE's main market. These are the ... more
FTSE 350
An index of the top 350 companies listed on the LSE by market capitalisation. It ... more
FTSE100
Brief Summary: The FTSE 100 is an index of the top 100 performing blue-chip ... more
Fundamental analysis
Fundamental analysis involves evaluating a security’s value by examining economic, financial and other factors. This ... more
Futures contract
Brief Overview: A futures contract is an agreement to buy or sell a commodity ... more
G
Gapping
A gap is when a stock price sharply rises or falls but no trading ... more
Gearing
Another name for leverage. Debt to equity proportions on a trade or portfolio.
GFD
An order type that is 'Good For the Day'. If not filled it will expire ... more
Going long
Summary: A long bet refers to a transaction by a trader who believes the ... more
GTC
Good Till Cancelled. An order type that is live until cancelled by the trader. ... more
Guaranteed stop
Summary: Similar to a guaranteed order, this is a bet where a spread betting ... more
H
Hang Seng
An index of the thirty three largest companies on the Hong Kong stock exchange. ... more
Head and shoulders
A complex price pattern that forms in an uptrend and suggests a reversal. We teach ... more
Hedging
Quick Summary: Traders will hedge a bet in order to reduce the risk associated ... more
I
Illiquid
A market without much trade happening, this can result in the price jumping around on ... more
Index
The aggregate performance of a group of individual equities. Examples include the FTSE100, DJIA and Dax indices. ... more
Inflation
Quick Summary: Inflation is the rate at which the level of prices for goods ... more
Initial margin requirement
A spread better will require an initial margin requirement to cover a certain percentage ... more
Initial Margin Requirement
To open a spread bet, CFD or forex trade the trader must put up cash ... more
Interest Rates
Brief Summary: An interest rate is the amount charged, expressed as a percentage of ... more
IPO
Initial Public Offering. The process of floating a new company on a stock market. ... more
J
Junk bonds
Brief overview: A junk bond is a higher-risk bond that has a speculative appeal ... more
K
Kiwi
Slang term for the NZDUSD currency pair.
L
LIBOR
London Interbank Offered Rate. The rate at which banks are happy to lend to each ... more
LIFFE
London International Financial Futures and Options Exchange. Now owned by Euronext.... more
London Stock Exchange
The UK main stock exchange.
Long
When a trader buys an asset they become long the asset and hope to profit ... more
Long gilt
UK government bonds with maturities longer than 10 years.
Long Position
When a trader is betting the price will rise, they will take a long position.... more
Loonie
A trading term for the Canadian dollar.
Lot
A standardised FX transaction size equal to 100,000 of the base currency.
M
Margin call
When a broker requests additional funds are placed on account to keep positions open. ... more
Market capitalisation
A company’s market capitalisation is the total value of all of its outstanding shares. ... more
Market gap
A market gap is when the price of a stock quickly increases or decreases.... more
Market hours
The opening hours for a market. Markets can sometimes be traded after hours.
N
O
Offer price
Brief Summary: The offer price is the highest price that a buyer will pay ... more
P
R
Recession
A recession is period of negative economic growth over the period of at least ... more
Resistance
Support and resistance levels are an extremely important concept in technical trading. A large ... more
RSI
The Relative Strength Index is a popular technical analysis indicator. It measures momentum in a price ... more
S
Scalper
A trader that scalps - see scalp
Scalping
Summary: A scalper is a trader who attempts to make profits from small price ... more
SEC
The US Securities and Exchange Commission.... more
Selling
Summary: Selling an asset involves liquidating the asset in exchange for cash that was ... more
Shorting
Summary: Shorting is when a trader sells an asset that they do not own, ... more
Swissy
Short hand for the Swiss Franc.
T
Tick size
Summary: The tick size is the smallest measurable amount the price of a financial ... more
Trailing stops
A trailing stop is a stop order that is set a certain percentage away ... more
Treasury bonds
Government-issued bonds.
Trend
When a price moves in a certain direction consistently.
Triple Witching
A quarterly event whereby index futures, index options and options of individual equities expire.... more
TSE
Tokyo Stock Exchange
Turnover
The total sales of a company in a given period.
U
UK100
A broker name for the FTSE 100 index. For trademark reasons brokers aren't allowed to ... more
Underlying instrument
An underlying instrument is an asset that gives derivatives their value, and the term ... more
Uptick
When price moves up by its smallest increment.
Uptrend
A sequential series of higher highs and higher lows.
US Unemployment rate
Brief Summary: The Unemployment Rate released by the US Department of Labor is reported ... more
US30
Quick Summary: A broker name for the Dow Jones Industrial Average, the benchmark bluechip US ... more
V
Virtual trading
Also practice trading. Brokers will normally provide a virtual account to practice trade with virtual ... more
VIX
A really important measure of expected future volatility as implied by the pricing of options ... more
Volatility
Volatility describes how quick and how much the price of a security or market ... more
Volume
The number of shares or units changing hand in a particular security.
W
Wall Street
The street in downtown Manhattan at the heart of America's financial industry. The term Wall ... more
Warrant
The right to buy new shares at a set price in a company at a ... more
What is a base rate?
Brief Overview: The base rate is the interest rate that the central bank of ... more
What is a Central Bank?
Quick Summary: A central bank or monetary authority is a monopolised and often nationalised ... more
What is arbitrage?
Short Description: Arbitrage involves simultaneously buying and selling a security at two different prices ... more
What is GDP?
Quick Summary: Gross Domestic Product is a measure of the total value of ... more
What is margin?
A margin is the amount of money needed in a trading account in order ... more
What is NFP?
Brief Summary: The nonfarm payrolls figure released by the US Department of Labor ... more
Whipsaw
When the price in a market is volatile it can create a scenario when a ... more
Working order
Orders that have been placed by the trader but not filled.
WTI
West Texas Intermediate oil is a type of oil. Because of its constituent elements and ... more
Y
Yield
Summary: The yield is the income return from an investment. This can refer to ... more