ARBITRAGE: The concurrent buy or sale of a financial product to take benefit of slight price differentials between markets.
ASSET: It is a resource with an economic worth that someone, a business, or a country owns or governs, anticipating that it will provide a future benefit.
ASK PRICE: The lowest price at which a seller will sell the product. Prices are quoted two-way as Bid/Ask. The Ask price is also known as the Offer.
AUSSIE: Refers to the Australian Dollar/U.S. Dollar currency pair. Also, “Oz” or “Ozzie.”
BASE CURRENCY: This refers to the first currency in a currency pair. It displays how much the base currency is worth as measured against the second currency. For example, if the USD/EUR (U.S. Dollar/Euro) rate equals 1.6215, one USD is worth EUR 1.6215.
BEAR MARKET: Bear markets emerge when product prices drop 20% or more for a maintained time. It defines circumstances where securities prices fall 20% or more from current highs amid discouragement and adverse investor presumption.
BID PRICE: The price at which the market is ready to purchase a product. Prices are quoted two-way as Bid/Ask. In F.X. trading, the Bid defines the price at which a trader can sell the base currency, displayed to the left in a currency pair.
BITCOIN MINING: Bitcoin mining is forming new bitcoin by solving puzzles. It consists of computing systems equipped with specialized chips competing to solve mathematical puzzles.
BLOCKCHAIN: A blockchain is a distributed database or logs transmitted among a computer network’s nodes.
BOC: Bank of Canada, the central bank of Canada.
BOE: Bank of England, the central bank of the U.K.
BOJ: Bank of Japan, the central bank of Japan.
Financial Services Provider: A person or corporation that works as an intermediary, obtaining buyers and sellers concurrently for a fee or commission.
BULL MARKET: Bull markets emerge when asset prices rise for a sustained duration, trust is gliding, and traders are keen to buy securities, thus forming a buyer’s market.
BUCK: Financial markets slang for one million units of a dollar-based currency pair or the U.S. dollar.
BUNDESBANK: Central bank of Germany.
BUY: Taking a long position on a financial asset.
CALL OPTION: A currency exchange manipulates the interest rate disparity between two countries. By trading a currency with a low-interest rate and purchasing a currency with a high interest rate, the trader will acquire the interest difference between the two countries while this transaction is forthcoming.
CASH PRICE: The price of a derivative for concurrent delivery, i.e., the price of a derivative at that instant.
CENTRAL BANK: A government or quasi-governmental association that controls a country’s financial guidelines. For example, Federal Reserve is the U.S. central bank.
COMMODITY CURRENCIES: Currencies of countries whose exports are industriously based on natural resources, usually explicitly referring to Canada, Australia, and Russia.
COUNTER CURRENCY: It is the second listed currency in a currency pair.
CPI: Acronym for Consumer Price Index, an estimation of inflation.
CURRENCY: Any money administered by a government or central bank and utilized as lawful tender and a base for trade.
DAY TRADER: Speculators who take positions in assets and then liquidate those positions before the closing of the exact trading day.
DEFICIT: An adverse ratio of trade or expenses.
DERIVATIVE: A financial contract based on the value of an underlying asset. Some derivative contracts’ most common underlying assets are indices, equities, commodities, and currencies.
DIVERGENCE: Divergence refers to when the price of a currency pair advances in one path while the trend indicator advances in the opposing path. With divergence, there can be positive and adverse alerts.
DIVIDEND: The number of a company’s profits allocated to its shareholders – is generally defined as a worth per stake.
ECB: European Central Bank, the central bank for the countries using the euro.
ECONOMIC INDICATOR: A government-issued statistic that demonstrates recent economic development and strength. Common indicators include unemployment rates, Gross Domestic Product (GDP), inflation, retail sales, and more.
EQUITY: Equity describes the quantity of money that a company’s shareholders would replace if all of the assets were liquidated and the company’s debt was paid off.
FED: The Federal Reserve Bank is the central bank of the United States.
FLAT/SQUARE: Dealer jargon used to describe a position that has been reversed, e.g., you purchased $500,000 and then sold it, resulting in a neutral (flat) position.
FOLLOW-THROUGH: New purchasing or selling interest after a price level is Financial Services Provider in one direction. Usually, the absence of follow-through suggests that a direction change will not be sustained and may revert.
FOMC: Federal Open Market Committee, the U.S. Federal Reserve’s policy-setting committee.
FOMC MINUTES: The minutes of FOMC policy-setting meetings are published three weeks after a meeting. The minutes provide more insight into the FOMC’s discussions and potentially cause substantial market reactions.
FOREIGN EXCHANGE/Financial Services: The concurrent buying of one currency and selling of another. The global trade market is referred to as the Financial Services or F.X. market.
FRA40: This is the acronym for the index of the top forty (by market capitalization) French-listed firms. FRA40 is also referred to as CAC40.
THE FUNDAMENTAL ANALYSIS: THE EVALUATION OF ALL INFORMATION AVAILABLE ON A TRADABLE PRODUCT TO DETERMINE ITS FUTURE PERSPECTIVE AND PREDICT ITS FUTURE PRICE. In fundamental analysis, non-measurable and subjective judgments are frequently done alongside quantitative measures.
FUNDS: This term refers to many forms of active hedge funds. A synonym for the USD/CAD (U.S. Dollar/Canadian Dollar) currency pair.
FUTURE: It is an agreement between two partakes to execute a transaction at a defined time in the future at a price agreed upon in the present.
FUTURES CONTRACT: An agreement to exchange a good or instrument at a predetermined price and quantity grade at a future date. Futures are typically traded on an exchange (Exchange- Traded Contracts – ETC), as opposed to Forwards, termed Over The Counter (OTC) contracts. A contract that is NOT traded on an exchange is an OTC.
GROSS DOMESTIC PRODUCT: It refers to the total worth of a nation’s output, revenue, or expenditures produced inside its physical borders.
GROSS NATIONAL PRODUCT: The sum of the gross domestic product and revenue derived through investments or labor abroad.
GUARANTEED ORDER: A sort of order safeguards a trader against market gapping. It promises to fulfill your order at the requested price.
GUARANTEED STOP: A stop-loss order that ensures your position will be closed at a level you choose if the market moves to or beyond that level. It is assured regardless of market conditions.
HAWK/HAWKISH: Monetary officials of a country are described as hawkish when they believe that higher interest rates are necessary, typically to battle inflation or slow rapid economic expansion, or both.
HEDGE: A position or group of positions that mitigates the risk associated with your principal position.
HIT THE BID: To sell at the current market bid price.
INDUSTRIAL PRODUCTION: Measures the absolute value of the products produced by factories, mining, and utilities. This data can serve as a leading indicator of employment and personal income since it frequently responds swiftly to changes in the business cycle.
INFLATION: A state of the economy in which the cost of products increases, diminishing consumers’ purchasing power
INTEREST: Interest is the cash change resulting from receiving or being owed the notional amount of equity in a position.
ISM MANUFACTURING INDEX: This index gauges the health of the U.S. manufacturing industry by polling executives about their projections for production, new orders, inventories, employment, and deliveries in the future. Values above 50 often denote expansion, whereas those below 50 denote contraction.
KIWI: Nickname for NZD/USD (New Zealand Dollar/U.S. Dollar).
KNOCK-INS: A type of option strategy where the underlying product must trade at a specific price before a previously purchased option becomes active. Knock-ins are utilized when an option is activated to lower the underlying option’s premium costs and can start hedging operations.
The percentage or fractional increase you can trade from the amount of capital you have accessible is referred to as leverage, also known as margin. Trades can be made at notional values that are far higher than the capital available to the dealer. A leverage ratio of 100:1 indicates, for instance, that you can trade with a notional value that is 100 times larger than the money in your trading account.
LIMITS/LIMIT ORDER: An order that aims to buy at prices below the going rate or sell at prices above the going rate. A limit order limits the highest price that may be paid or the lowest price that may be received.
LIQUID MARKET: A market that is sufficiently liquid has both enough buyers and sellers for the price to move smoothly.
LIQUIDATION: The act of terminating a current position by carrying out an offset transaction.
LONG POSITION: It increases in value in response to rising market prices. The position is extended when the base currency in the pair is purchased. The assumption behind taking this position is that the market would increase.
LOT: A unit used to calculate the value of a transaction. Deal value always equates to an integer quantity of lots.
MACRO: A long-term trader that relies their trade decisions on fundamental analysis is known as a macro trader. The holding duration of a macro transaction might range from many years to just six months.
MANUFACTURING PRODUCTION: Measures the overall production of the manufacturing component of the Industrial Production numbers. Only the 13 subsectors directly related to manufacturing are measured in this data. Approximately 80% of all industrial production is in the manufacturing sector.
MARGIN CALL: A request for additional dollars or other collateral from a Financial Services Provider or dealer on a position that has moved against the client.
MARKET MAKER: A dealer who consistently quotes both the ask and bid prices and is prepared to create a two-sided market for any financial instrument is known as a market maker.
MARKET ORDER: A market order is a request to purchase or sell something at the going rate.
NASDAQ 100: This index is referred to by the acronym NAS100.
NET POSITION: The amount of currency purchased or sold in inverse transactions has not yet offset what is known as the “net position.”
OFFER/ASK PRICE: The price the market is willing to accept for a particular good or service. Bid/Offer quotes for prices are two-way quotes. The Ask price is another name for the Offer price. The Ask, displayed to the right in a currency pair, is the cost at which a trader can purchase the base currency.
OPEN ORDER: A purchase order will be carried out once the market reaches the desired price. They are usually applied to orders that are good until canceled.
OPEN POSITION: A trade that is active and has a corresponding unrealized profit and loss that has not yet been offset by a deal that is equally and oppositely valued.
OPTION: A derivative is a product that grants the right, but not the duty, to buy or sell it at a particular price before a specific date.
PAIR: The practice of quoting two currencies in foreign exchange.
PIPS: The smallest unit of value for any foreign currency is a pip, one digit added to or subtracted from the fourth decimal point, or 0.0001.
POLITICAL RISK: Political risk is the potential for governmental policy alterations to impact an investor’s position negatively.
PRICE TRANSPARENCY: Refers to equally available quotes to all market participants.
PULLBACK: A trending market’s propensity to reverse some gains before resuming its trend.
QUOTE: An approximate market price, typically employed solely for informational purposes.
RALLY: A price increase following a fall.
RANGE: When a price fluctuates within predetermined high and low parameters without departing from them.
RATE: The cost of one currency in relation to another, generally applied in trading.
RESISTANCE LEVEL: A price that could serve as a resistance level. Opposition to support.
RISK: Exposure to uncertain change is most frequently used to refer to unfavorable change.
RISK MANAGEMENT: Risk management is the practice of reducing and/or controlling exposure to different types of risk via the use of financial research and trading tactics.
SELL: Taking a short position in anticipation of a market decline.
SHORT POSITION: A position in the market that gains from a drop in price is referred to as a short position. The position is referred to as short when the base currency in the pair is sold.
SLIPPAGE: The discrepancy between the price sought and the price received is generally brought on by shifting market circumstances.
SLIPPERY: When the market seems poised for a swift move in any direction, it is said to be “slippery.”
SLOPPY: Trading conditions that are choppy and/or lack any discernible trend or follow-through.
SPOT MARKET: A market where goods are exchanged immediately at their market price.
SPOT PRICE: The price on the open market. Spot transaction settlement typically takes place in two working days.
SPOT TRADE: Buying or selling something that will be delivered immediately (as opposed to a date in the future). Usually, spot contracts are settled online.
SPREAD: The price differential between the offer and bid.
S&P 500: The S&P 500 is referred to as SPX500.
STOCK EXCHANGE: A marketplace for trading securities.
STOCK INDEX: The total price of a group of stocks, represented against a base number, that enables a comparison of the current performance of the group of companies.
STOP LOSS ORDER: A buy above the current price or sell below the current price (to close a long position) order (to close a short position). Stop loss orders are a crucial tool for risk management. You can lessen your potential loss should the market move against you by establishing stop loss orders against open holdings.
STOP ORDER: A stop order is a request to purchase or sell something once a specific price has been reached. The stop order becomes a market order and is executed at the best price when the price is reached. Keep in mind that stop orders are susceptible to slippage and market gaps and may not necessarily be executed at the stop level if the market does not trade at this price.
SWAP: The simultaneous selling and purchase of the same quantity of a particular currency at a forward exchange rate is referred to as a currency swap.
TECHNICAL ANALYSIS: Technical analysis is the technique of examining price history charts to identify trends that may indicate how prices will move in the future.
TICK (SIZE): The smallest increase or decrease in price.
TRADE SIZE: The number of units in a contract or lot of a given product.
TRADING BID: A pair is acting strongly and/or going higher; new bids are continually entering the market, driving prices higher.
TRADING RANGE: The difference between a stock’s highest and lowest price, typically defined in terms of a time frame. The 52-week trading range, for instance.
TREND: A change in price that results in a net change in value. Higher highs and higher lows indicate an uptrend. Lower highs and lower lows indicate a downtrend.
TURNOVER: Turnover is the sum of all performed transactions’ monetary worth or volume in a certain time frame.
UGLY: Describes harsh and swift market conditions that are merciless.
UNDERLYING: A product’s price is generated from the actual traded market, which is the underlying factor.
UNEMPLOYMENT RATE: Calculates the proportion of the labor force that is both unemployed and actively looking for work.
UPTICK: A new price quote that is more expensive than the first.
US30: The Dow Jones index’s abbreviation.
VOLATILITY: A term that describes dynamic markets that frequently offer trading chances.
WHIPSAW: A highly volatile market is one in which an equally sharp reversal swiftly follows an abrupt price change.
WHOLESALE PRICES: Measures changes in prices paid by retailers for finished items at wholesale pricing. Typically, inflationary forces manifest before the headline retail.
WORKING ORDER: A limit order that has been requested but not yet filled is known as a “working order.”
XAG/USD: A symbol for the silver index is XAG/USD.
XAU/USD: Gold Index symbol is XAU/USD.
YARD: One trillion.
YIELD: The percentage of an investment’s return.
YOY: The acronym YOY stands for year over year.
YUAN: The foundation unit of currency in China is the Yuan. The Yuan serves as the basic unit of the Chinese currency known as the renminbi.