Glossary of Terms

Search common forex trading terms and definitions from A to Z.

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Below is a glossary of terms that are used in the online trading industry. Select the first letter of the word you are seeking from the list above to jump to the appropriate section of the glossary.

Derivative

A financial instrument or security whose value is derived from and is dependent on the value of another underlying asset or financial instrument (such as an exchange rate, commodity, stock, index, bond or mortgage contract). The main use of derivatives is to lower risk for one party while offering a potentially high return at a higher risk to another party. There are four main types of derivatives contracts: forwards, options, futures and swaps.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.