Ask
The current market price for purchasing a trading product
Asset
An asset refers to any product traded on the global financial markets, such as currencies stocks, indices
and commodities.
Bear Market
A bear market has falling prices and is seen as weak, leading traders to sell
Bid
The current market price for selling a trading product
Bond
A bond is an asset that is issued for a given time-frame and used as a means of raising capital.
Bull Market
A bull market has rising prices and is seen as strong, leading traders to buy
CFD
(Contract for Difference) A Contract for Difference (CFD) is a derivative, which is a means of trading
virtually on the changing value of an underlying asset, without having to buy the actual trading product.
Types of Contracts for Difference including commodities such as gold, stocks like Netflix and indices like
the NASDAQ.
Commodity
Commodities are raw materials traded on the global markets. These include energy products such as crude oil
and natural gas, agricultural products like wheat and coffee, as well as precious metals such as gold and
silver.
Derivative
A derivative is a contract for buying or selling an underlying asset that is commonly used to diversify a
trading portfolio.
Dividend
A dividend is a portion of a corporation’s returns that are disbursed to shareholders.
Future
Futures are contracts that are set to take effect at a predetermined future date. At the time the contract
is made the transaction price is set.
Fundamental Analysis
Fundamental analysis is a way of anticipating the direction an asset will move based on social, political
and environmental factors as well as economic indicators such as the GDP or the consumer price index.
Hedging
Hedging is a strategy for minimizing exposure by opening a secondary position to mitigate risk if the
investor’s primary position results in a loss.
Index
An index is a global market exchange, where stocks are traded. Examples of indices include the Japanese
NIKKEI, the American Dow Jones.
Leverage
Leverage is a loan from the broker that enables the trader to boost their trading power, increasing their
market position to hundreds of times its size.
Long Position
A long position refers to buying an asset because the price is projected to go up.
Lots
Lots are a measurement of the size of a trading position, with one lot equaling 100,000 units of the base
currency for the transaction
Overnight Position
An overnight position is a trade that is kept open from the end of one business day, until the start of
following one.
Pip
A pip is the smallest unit of measurement for any foreign currency, and refers to the digit in the fourth
decimal place, i.e. 0.0001.
Resistance
Resistance refers to the highest point for an asset’s fluctuating price at which it will stop rising
Short Position
A short position refers to selling an asset because the price is projected to drop. Spread The spread is the
difference between an asset’s buy and sell prices.
Spread
The spread is the difference between an asset’s buy and sell prices.
Stock
A stock, which is traded on an exchange, represents company’s profits. A stock’s value rises and falls,
along with the changing fortunes of the company. Examples of popular stocks include Instagram, Amazon, Nokia
and Nike.
Stop Loss
A stop loss is a risk management tool that enables the trader to prevent further losses if the price keeps
moving in the wrong direction. It is an order to automatically close a trade that is proving unsuccessful,
as soon as it hits a pre-set point below the opening price.
Support
Support refers to the lowest point for an asset’s fluctuating price at which it will stop falling
Take Profit
A take profit is a risk management tool that enables the trader to prevent the loss of all their gains if
the price suddenly reverses direction before they have been able to close the position. It is an order to
automatically close a successful trade, as soon as it hits a pre-set point above the opening price.
Technical Analysis
Technical analysis is a way of anticipating the direction an asset will move based patterns identified from
its previous performance, shown in trading charts.
Volatility
Volatility is an increase of fluctuation in the trading price. Such a state of enhanced market activity
presents greater investment opportunities for traders.
Yield
The yield is the amount of profit generated by a trade
