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.
The amount of money in an account at the start of a business day, including all deposits, withdrawals and/or other cash and cash equivalents (= credits minus debits). If a trader has decided to close an open position, the account balance will be changed in accordance to his/her profit or loss amount.
The interest accumulated on a security from premiums and discounts that relate directly to deposit swap (interest arbitrage) deals over the period of each deal.
A market-wide movement or trend that affects nearly all stocks and sectors. The term originates from the big board used historically in the NYSE for marking price movements.
A market in which a lot of buying and selling is going on.
A market in which prices are generally rising. Also referred to as a Bull Market.
Trading of a company’s stock after the market has closed.
The historically-highest price of a security (e.g. currency, stock, index or commodity) has ever reached.
The annual rate of return on an investment. For example, a £10,000 investment at 5% per year earns £500 a year and has an APR of 5%. Also referred to as the annual percentage rate or simply APR.
Effecting sales and purchases simultaneously in the same or related securities in order to take advantage of price differentials between markets.
During the summer, starts at 00:00 GMT and lasts to 9:00 GMT and during the winter starts at 23:00 GMT and lasts to 08:00 GMT. Also known as the Tokyo trading session.
In the over-the-counter market, the term “ask” refers to the lowest price at which a broker is willing to sell a security (e.g. currency, stock, index or commodity) at any given time. The ask price, also known as the “offer” price, will almost always be higher than the “bid” price (= the highest price a broker is willing to pay to buy a security at any given time). Brokerage firms typically make money on the difference between the bid price and the ask price. This difference is called the “ask-bid spread.”
The official code for the Australian dollar.
A nickname for the Australian dollar.
A type of chart, widely used by traders and financial professionals, which is represented by horizontal rectangular bars with lengths proportional to the magnitudes of what they represent. The top of the bar is the highest point the price reached during a defined period and the bottom of the bar is the lowest. A dash on the left-hand side of the bar denotes the opening price and a dash on the right-hand side the closing price for that period.
In currency pairs, the first currency is the “base” currency (numerator) and the second currency is the “quote” currency (denominator). The value of the base currency is always one. Therefore, the quoted currency expresses the amount of the second currency compared to one base currency. In the British pound sterling/United States dollar currency pair (GBP/USD), for example, the value of the dollar is expressed in terms of one pound.
A market condition in which the prices of securities are falling 20% or more. It is generally accompanied with widespread pessimism that, in turn, sustains the flow of negative sentiments. Its opposite is a bullish market, in which the sentiment towards prices is positive.
A trader who believes that the price of a particular security will fall. The opposite of bull/bullish.
A standard or average used for comparison or to indicate an overall trend of a certain stock, bond, commodity or other security.
A nickname for the Euro-Russian rubble (EUR/RUB) pair.
In the over-the-counter market, the term “bid” refers to the highest price at which a market maker or broker is willing to pay in order to buy a security (e.g. currency, stock, index or commodity) at any given time. The bid price will almost always be lower than the “ask” price (= the lowest price a market maker or broker is willing to sell a security at any given time). Market makers and brokerage firms make money on the difference between the bid price and the ask price. This difference is called the “bid ask spread”.
The amount by which the “ask” price exceeds the “bid” price. This is essentially the difference in price between the highest price that a broker is willing to pay for a security and the lowest price for which it is willing to sell the security. The bid-ask spread is also referred to as a bid-offer spread; a buy-sell spread or simply as bid-ask.
An abbreviation for Bolsas y Mercados Españoles, the Spanish company that runs the four major stock exchanges in Spain.
The central Bank of Canada.
The central Bank of the United Kingdom.
The central Bank of Japan (also known as Nippon Ginko).
A legal contract in which a borrower (bond issuer) such as a government, credit institution or company issues a certificate by which it promises to pay a lender (bondholder) a specific rate of interest for a fixed duration and then redeem the contract at its principal value once it reaches maturity. Click here to learn about the government bonds Fortrade offers.
The amount of money given to a trader by a broker for online trading purposes. Redeeming and withdrawing bonus credit typically requires the trader to meet certain trading volumes.
A benchmark sweet light crude oil extracted from UK North Sea oilfields (also known as the BFOE Quotation and as UK OIL). It is used to price two thirds of the world’s internationally traded crude oil supplies. The two other major benchmarks are the OPEC Basket and West Texas Intermediate (WTI) Crude.
An individual agent or party who arranges transactions between buyers and sellers for a predetermined fees or commission rates.
The currency code for Bitcoin.
A slang term for one million dollars.
A market condition in which the prices of securities are rising, the general public’s views on the market are positive. Its opposite is a bearish market, in which the sentiment towards prices is negative.
A trader who believes that the price of a particular security will rise. The opposite of bear/bearish.
Taking a long position on a tradable security such as a currency pair, stock, index or commodity. Opposite of “sell” (or short position).
A slang word for the British pound sterling/United States dollar currency pair (GBP/USD). It is also used simply to refer to the GBP.
The official code for the Canadian dollar. Also known as the “Loonie”, or the “Funds”.
A type of chart widely used by traders and financial professionals which indicates the entire range of a trading session (from opening price to closing price), through the use of shaded rectangle shapes.
A stock index in which each stock is weighted according to its market capitalization. As a result, companies with a larger market-cap have more influence on price movements than companies with a lower market-cap. NASDAQ-100, the UK’s FTSE 100, France’s CAC 40 and Spain’s IBEX 35 are examples of cap-weighted indices.
An arbitrage trading strategy in which a trader holds a “long” position in a security or commodity together with a “short” position in a future contract on the same security or commodity. In this case, the security is held up until the future’s delivery date, thus covering the short position through the previously-placed investment in the long position.
An abbreviation for Chicago Board Options Exchange, the largest market in the world for the trading of exchange-traded securities and options.
A government or quasi-governmental institution that manages and controls a country’s (or group of countries’) monetary policy. Its responsibilities normally include issuing notes and coins, managing the country’s credit system and supervising over its commercial banking system. Prominent central banks include the Federal Reserve Bank, the Bank of England (BOE), the European Central Bank (ECB), the Bank of Japan (BOJ), and the People’s Bank of China (PBC).
A national or local exchange in which securities and financial instruments are traded at fixed prices without the influence of any competing market. The quoted prices of the securities listed on the market represent the only price that is available for traders looking to buy or sell a certain security. Major centralised markets around the globe include stock markets such as the TSE, security and commodity markets such as the CME and the ASE. The foreign exchange market, in contrast, is a decentralised market since there is no single, physical place where investors can go to trade on currencies.
A contract for difference, i.e. an open-ended contract with no fixed settlement date that can be closed out by the holder on demand for which the amount of the cash settlement represents the difference between the underlying asset’s price agreed at the outset of the contract and its market price at the date of the settlement of the contract.
A roll over (=renewal) of a contract which is carried out automatically by a broker or brokerage firm several days before a CFD expires.
The official currency code for the Swiss franc.
A setup to conduct currency and CFD related transactions on a recognized market, which the customer presently has or may have at any time in the future. The setup typically includes confirmation of transactions, listing of holdings, open and/or pending positions, cash and cash equivalents.
The process of closing an active trade by either selling a long position (also referred to as simply “buy”) or covering a short position (also referred to as simply “sell”).
A list of recently closed trades.
The price at which the final transaction in a security or financial instrument took place on a particular business day. Also referred to as a closing quote.
An abbreviation for Chicago Mercantile Exchange, one of the largest and most influential options and futures exchanges in the world.
The official currency code for the Chinese yuan, when traded in Hong Kong (sign: ¥). Often interchangeable with RBN, “renminbi”, the People’s Republic of China) official form of currency.
A raw material or primary agricultural product that can be bought and sold as an exchange-traded product. Typical commodities include precious metals such as gold, silver, copper and platinum; soft commodities such as sugar and coffee; cotton, corn, wheat, soybeans and other crops; and petroleum products such as gasoline, crude oil and heating oil. Commodities are traded in specific lot sizes on a commodity exchange. Click on the following links to see which precious metals, agriculture commodities and energy products are available with Fortrade.
A pair of currencies traded in the forex market that does not include the US dollar. For example, the Euro vs Japanese yen (EUR/JPY).
The exchange of one currency unit against another currency unit. The currency that is quoted (=denominator) is referred to as the base currency and the currency used as reference is called the counter currency or quote currency (=numerator). The result of a currency pair is its exchange rate. Click here to see a complete list of currency pairs available for trading.
The percentage difference between a security’s current price and its previous trading close.
A stock market index of 30 selected German companies traded on the FWB. Also called GER30. Click here for more details on the index.
The highest price at which a security or financial instrument has traded during the day.
The lowest price at which a security or financial instrument has traded during the day.
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.
Markets for buying and selling derivative instruments. There are two major types of derivative markets: regulated futures and option markets and over-the-counter markets.
A downloadable software through which traders can access financial markets, open, edit and close online trading positions and receive live streaming of quotes, graphs and other technical indicators, via a PC or Mac desktop or laptop computer.
The central Bank of the Federal Republic of Germany (equivalent to the Federal Reserve Bank), and the most important member of the European System of Central Banks (ESCB).
An official change in the price of a security or financial instrument, especially in regards to a currency (where it means a decrease in the value of its exchange rate). The opposite of revaluation.
A dividend is a way of a company to distribute a percentage of its net earnings to its shareholders. The dividend amount is decided by the company’s board of directors, and can be issued as a cash payment, shares or other assets.
Most commonly, the dividend is determined in terms of money per share, which means that each shareholder will get a dividend respectively to his holdings, for example:
In case you own 1,000 shares, and the dividend announced is $3 per share – you will get $3,000.
Other common way of quoting a dividend is terms of percentage of current market price, which is also known as “yield”, for example:
If you hold 1,000 shares, the current market price is 100, and the dividend announced is 2% – it means you will get $2 for every share you hold, which are $2,000.
Other ways to pay a dividend are: Shares (giving out shares instead of cash), property, interim and more.
When a dividend is paid, the company’s value is immediately effected for the simple reason that the cash it is giving out as a dividend will no longer belong to the company, so its share price decreases in the rate of the dividend payment.
The change in the share’s price is taking place in the ex-dividend date.
As a result, Fortrade needs to credit/debit the clients holding the dividend paying share during the ex-date, in order to cover for the paid dividend and making sure that all of our shareholding clients will receive the dividend and won’t be effected by “fake” declines of the share’s price.
* The term “fake” refers to market price movements that are not a result of real market conditions, but a result of a synthetic conditions like dividend payout.
- All client holding a dividend paying share in a short position during the ex-dividend day will be debited in the size of the dividend.For example:If you hold 1,000 shares in a short position in an opening price of $110 while the current market price is $100, and the paid dividend is equal to $2 per share → The share price will drop in $2 in the ex-dividend day, meaning that you will earn more money in your short position due to the “fake” share price movement, so Fortrade will have to charge that exact amount (with no further fees or commission) to your commission.
P&L before the ex-dividend day → 1,000 * (110 – 100) = $10,000
<shares amount * (opening price – market price before the dividend payout)>
P&L after the ex-dividend day (assuming there were no other real market effects on the share price) → 1,000 * (110 – 98) = $12,000
<shares amount * (opening price – current market price)>Dividend charge → 1,000 * $2 = $2,000 <shares amount * dividend paid per share)>
Final P&L calculation → 1,000 (110 – 98) – 2,000 = $10,000
<shares amount * (opening price – current market price) – Dividend amount>
- All client holding a dividend paying share in a long position during the ex-dividend day will be credited in the size of the dividend.For example:If you hold 1,000 shares in a long position in an opening price of $90 while the current market price is $100, and the paid dividend is equal to $2 per share → The share price will drop in $2 in the ex-dividend day, meaning that you will lose money in your long position due to the “fake” share price movement, so Fortrade will have to credit you with that exact amount (with no further fees or commission) to your commission.
P&L before the ex-dividend day → 1,000 * (100 – 90) = $10,000
<shares amount * (market price before the dividend payout – Opening Price)>
P&L after the ex-dividend day (assuming there were no other real market effects on the share price) → 1,000 * (98 – 90) = $8,000
<shares amount * (Current market price – Opening Price)>Dividend credit → 1,000 * $2 = $2,000
<shares amount * dividend paid per share)>
Final P&L calculation → 1,000 (98 – 90) + 2,000 = $10,000
<shares amount * (Current market price – Opening Price) + Dividend amount>
** All dividends credits/charges will appear in the “commission” column of the position.
An abbreviation for the Dow Jones Industrial Average (also known as the US30 index or simply The Dow). For more details on the index, click here.
The official currency code for Danish krone.
A situation in which each successive peak or trough on a security’s price chart is lower than the ones preceding it. The opposite situation is an uptrend.
A government-issued statistic (such as a country’s Gross Domestic Product (GDP), Consumer Price Index (CPI), industrial production or unemployment rate), which allows analysis of the economy’s performance as a whole.
An index calculated by averaging the percentage change of each of the listed stocks included in the group, regardless of their market cap or economic size (i.e. sales and earnings). In this sense, it is different from a cap-weighted index, in which stocks are weighted on a daily basis according to their total market value. Most of the widely used indices such as the S&P 500 offer equal weight versions in addition to their cap-weighed indices.
The amount of money in an account that is available for trading. Equivalent to the trader’s ‘Open P&L’ + ‘Account Balance’.
The official currency code for the official currency of the Eurozone.
A stock market index consisting of Europe’s 50 leading blue-chip companies. Click here for more details.
The central bank for Europe’s single currency, the euro. Its main task is to maintain the euro’s purchasing power and ensure the stability of the Eurozone.
Starts at 7:00 GMT and lasts to 16:00-17:00 GMT. Also known as the London trading session for Forex.
The carrying out of an order to purchase or sell a security or financial instrument.
Also referred to as emerging-market currency pairs. Exotics are characterized as being illiquid, and are associated with a relatively lower trading volume than the Majors and Minors. Some examples of exotic currency pairs include: USD/TRY (US dollar to Turkish lira), USD/MXN (US dollar to Mexican peso), and EUR/ZAR (euro to South African rand). For more detailed information about the currency pairs you can trade at Fortrade, click here.
The time at which an option or future contract lapses.
The date at which a security or financial instrument expires or becomes due for settlement. Also called “maturity date”.
A type of moving average that gives more weight to recent price changes, meaning it reacts much quicker than a simple moving average.
The central banking system for the United States. Considered the largest monetary authority in the world.
The highest and lowest prices that a security or financial instrument has traded in the last 52 weeks.
The official financial regulatory body in the United Kingdom. In charge of regulating financial brokerage firms and online financial service providers, ensuring they implement and maintain strict conduct standards and security procedures. Click here to see Fortrade on the FCA website.
A tradable asset/security of any kind whose value is either determined directly (cash or cash equivalent instrument) or indirectly (derivative instrument). Cash instruments include securities such as loans and deposits. Derivative instruments include underlying entities such as stocks, indices and interest rates. Click here to see a full list of financial instruments you can trade on with Fortrade.
A summary of all transactions and positions (both long and short) between a broker and a client. Also known as an “Account statement”.
With regard to online trading, financial strength reflects a trader’s ability to open new trades from within a trading platform. It is calculated according to his/her free margin (i.e., the difference between equity and used margin).
A term with three different meanings: with regard to market movements, a flat market is neither rising nor falling; when referring to a specific asset, a flat asset is a financial instrument that has neither gained nor lost interest; with regard to trading, a trader is said to have a flat trading position if he is neither long nor short.
A financial institution or system for dealing in the currencies of other countries. Also known as forex or FX.
A global decentralized market for the trading of foreign currencies. In terms of trading volume, the FX market is the largest financial market in the world, with a daily turnover of more than 5 trillion dollars.
A forward contract, colloquially known as a forward, is an agreement to buy or sell a commodity, security or financial instrument at a specified future date at a specified price. It is a completed contract and the commodity or financial asset will be delivered, unlike an option which offers a choice of whether or not to complete the trade. Unlike futures contracts forwards are not contracts with standard terms. They are tailor-made between the buyer and seller for each trade and are bought and sold over the counter (OTC) and not on an exchange.
An agreement to purchase or sell a financial instrument or security (e.g. a commodity, stock, index), over the counter (OTC), at a future date and at a fixed price. Unlike futures contracts, forward contracts do not have specific, predetermined terms but rather are customized per trader.
Refers to the available margin a trader has in order to open a trading position in a security or financial instrument. Free margin is therefore equivalent to the trader’s ‘Equity’ – ‘Used Margin’. Free margin increases or decreases according to the trader’s total profits earned or losses realized.
A stock market index consisting of the top 100 companies (by market capitalization) trading on the London Stock Exchange. Also called UK100. For more details on the index click here.
An agreement to purchase or sell a financial instrument or security (e.g. a commodity, stock, index), at a future date and at a fixed price. Futures contracts are traded on a futures exchange or futures market according to standardised terms (i.e. predetermined quantities for each specific type).
A market for purchasing and selling futures contracts of a financial instrument or security at a future date and at a fixed price.
An abbreviation for Frankfurt Stock Exchange (also referred to as Börse Frankfurt).
The official currency code for the British pound sterling.
An abbreviation for gross domestic profit, one of the primary indicators used to measure the health of a country’s economy.
Greenwich mean time, the most commonly referred time zone in the forex market. Often interchangeable with coordinated universal time (UTC).
One of the most actively-traded commodities on the market. The standard trading unit for one contract is 10 troy ounces. For more information on this commodity click here.
A debt security issued by a national government, generally with a promise to pay periodic interest payments at the security’s maturity or end date. In most cases, a government bond is issued in the country’s own currency. Also called “sovereign bond”.
An individual person, business or company’s taxable income before deducting expenditures (credits and taxes).
The official currency code for Hong Kong dollar.
The official currency code for the Croatian kuna.
An abbreviation for Hong Kong’s Hang Seng index. Also called the HK40. For more details on the index click here.
The official currency code for the Hungarian forint.
Introducing broker. A person, company or corporation that introduces traders to a broker in return for a certain payment fee. Please see our Partnerships page for more specific details.
The principal stock market index of the Iberian Exchange (Bolsa de Madrid). For more details on the index click here.
Securities and other financial instruments are considered illiquid if there are few traders buying and selling them. An illiquid market is one with few participants and a low-volume trading activity. The opposite of liquidity.
An abbreviation for International Monetary Fund. The IMF promotes global monetary cooperation and provides policy advice, financing and technical assistance to help countries build and maintain macroeconomic stability. It consists of over 180 member countries.
A statistical measure of the change in value of an economy or a securities market. The US’s S&P500, the UK’s FTSE100 and Germany’s DAX30 are just a few examples of indices. You can find a list of some of the most popular indices we offer here.
The percentage of the purchase price of securities that the trader can purchase for (either in cash or in marginable securities).
The money periodically paid by a lender to a creditor in return for use of money lent or for postponing the payment of a debt. It is usually predetermined according to the size of the loan/debt, duration and interest rate.
A percentage representing the charged return on a security (e.g. a loan or debt) by a lender to a creditor. Interest rare is typically given on an annual basis (known as the annual percentage rate).
A trading activity in which traders frequently buy and sell securities, foreign currencies or derivatives throughout the day in the hope of making a substantial profit in a short period of time. Intraday trading can be highly speculative in nature and carry substantial risk of loss. If you are a day trader or are thinking about intraday trading, please read our complete Risk Disclosure Statement beforehand. Click here to open a 100% free intraday trading account today.
The official currency code for the Japanese yen.
An industry that is essential to a country’s economy.
A common name for the New Zealand dollar.
The last day (during the month) in which a trader can deal in a particular product. May differ from the contract’s expiry date.
The last time (during the day) in which a trader can deal in a particular product. May differ from the contract’s expiry date.
The use of borrowed capital for an investment in order to significantly increase the profits that can be made from it. For example, with a leverage ratio of 1:200, a trader can trade a notional amount 200 times greater than his/her available capital (i.e. $200 for each $1).
The ability of a security or financial instrument to be bought or sold with ease, or (in relation to a financial market), the ability to carry out large volumes of trades. The opposite of illiquid.
An abbreviation for London Stock Exchange.
The currency code for Litecoin.
In foreign exchange, the seven most commonly-traded pairs are the EUR/USD (euro-US dollar), USD/JPY (US dollar-Japanese yen), GBP/USD (British pound sterling-US dollar), USD/CHF (US dollar-Swiss franc), AUD/USD (Australian dollar-US dollar) and NZD/USD (New Zealand dollar-US dollar). All currency pairs have the US dollar as their base (=nominator) or quote (=denominator) currency. Of these, the EUR/USD is by-far the most popular currency pair in the world, representing nearly one-third of the entire FX market. For more detailed information about the currency pairs you can trade at Fortrade, click here.
In financial markets, margin refers to the required collateral an investor must deposit to hold a trading position in a security or financial instrument.
A request promoting the trader to deposit additional funds in order to avoid being stopped out. A margin call (sometimes also referred to as “maintenance call”) is made when a position falls below the trader’s initial margin requirement. If it cannot be met, the broker will sell securities and/or automatically close trades in order to cover the margin requirement.
The total market value of a public company’s outstanding shares (computed as market price times the number of shares).
An investment company or broker who maintains firm bid and ask prices in a given security or financial instrument by continuously standing ready to buy or sell that same security at its publicly-quoted price.
An order to buy or sell at the current market price.
The possibly that the value of a security of financial instrument will experience losses due to performance factors such as adverse price movements, national or global macroeconomic changes. Also called “systematic risk”.
The maximum amount of funds that can be allocated for a long or short position according to the specific trading requirements of a security or financial instrument a trader wishes to trade on.
The minimum amount of funds that can be allocated for a long or short position according to the trading requirements of a certain security or financial instrument. May also vary according to a trader’s specific account balance.
Currency pairs that are less liquid than the majors and crosses. Most Minors include one of the three major non-US dollar currencies (euro, pound and yen). Some examples of minor currencies pairs are: EUR/CHF (euro to Swiss franc), EUR/NZD (euro to New Zealand dollar), GBP/AUD (pound to Australian dollar), GBP/JPY (pound to Japanese yen), and CAD/JPY (Canadian dollar to Japanese yen). For more information about the specific currency pairs you can trade at Fortrade, click here.
A downloadable mobile application through which traders can access financial markets, open, edit and close online trading positions and receive live streaming of quotes, graphs and other technical indicators.
An indicator frequently used in technical analysis to identify and demonstrate the average value of a security or financial instrument’s price over a specific period of time. The MA is used to smooth out price data and to help confirm price trends and directions. Also referred to as a simple moving average or SMA. There are three main types of moving averages used in the field of forex trading: simple, weighted and exponential.
The official currency code for the Mexican peso.
An abbreviation for National Association of Securities Dealers Automated Quotations. It is the second-largest stock market both in the US and worldwide.
A stock market index consisting of the 100 largest non-financial companies listed on the NASDAQ stock market. Also abbreviated as NAS100. Its ticker symbol is NDX. Click here for more details on the index.
An individual person, business or company’s taxable income after detecting expenditures (credits and taxes). The formula for calculating net earnings is: total revenue – total expenses = net earnings.
The difference better a trader’s long (buy) and short (sell) positions at any given time. For example, if he/she has 4 long positions and 2 short positions, his/her net position would be: 4 – 2 = 2.
A stock market index consisting of the top 225 companies (by market capitalization) trading on the Tokyo Stock Exchange. Also called Nikkei Stock Average, Nikkei 225 or JPN 225. Click here for more details about the index.
The official currency code for the Norwegian krone.
Starts at 12:00-13:00 GMT and lasts to 21:00-22:00 GMT. Also known as the New York trading session.
An abbreviation for New York Stock Exchange.
The official currency code for the New Zealand dollar.
An abbreviation for Organization for Economic Co-operation and Development.
A weighted average of oil prices collected from the Organization of Petroleum Exporting Countries (a group of 13 major oil producing countries). OPEC Basket’s average oil price is based on the production and exports of each country. The two other leading benchmarks are the Brent and West Texas Intermediate (WTI) Crude.
A financial statement that summarizes the trader’s total profits earned or losses realized from his/her current trading positions. Also known as “Open Profit and Loss”.
Any trade that has been entered and has not yet been closed with an opposite trade. An open position can exist following a long position (also referred to as simply “buy”) or short position (also referred to as simply “sell”).
The first quoted price of a security at the beginning of a given time period (i.e., day, hour, minute). Also referred to as opening price or opening quote.
Any and all open buy (long) and/or sell (short) positions in a trader’s online trading account.
A market for purchasing and selling contracts of a financial instrument or security directly via a telephone or computer network as opposed to on a centralised market (such as the NYSE, the LSE or the FWB).
A situation in which a security or financial instrument is believed to be more profitable than the overall market. Also known as “market outperform”. Opposite of underperform.
A trade that remains open overnight from one business day to another.
A financial statement that summarizes the trader’s total profits earned or losses realized from his/her current trading positions. Also known as a “statement of profit and loss”.
Payment Card Industry Data Security Standard (PCI DSS). A proprietary information security standard for financial institutions and organizations that make online transactions using major credit card and debit card providers (Visa, MasterCard, American Express, etc.). Administered and managed by the international Payment Card Industry Security Standards Council, PCI DSS is designed to increase data protection of card holders and reduce the risk of credit card fraud. Brokerage firms such as Fortrade must comply with this standard in order to maintain accreditation.
The highest point (i.e. price, rate, value) of a specified security or financial instrument at a specified time.
An order that has not yet been executed and therefore has not yet become an actual trade. It can, for example, be an order that a trader states his/her intention of ‘buying’ or ‘selling’ a financial instrument only when it reaches (touches) above or below a certain price level.
The central bank for the People’s Republic of China, and the second largest national monetary authority after the Federal Reserve Bank of the United States.
A numeral point a security or financial instrument’s price which denotes the smallest amount by which it can change. In forex, most currencies have four decimal places, and a pip is therefore one unit of the fourth decimal point (i.e. 0.0001 of the currency’s value). In some currencies, such as the Japanese yen, a pip may at the second decimal point – making it worth 0.01 of the currency.
The official currency code for the Polish zloty.
A collection of investments held by an individual trader or financial entity.
The net balance of trades held by a trader in his/her account at any given time. There are three types of positions a trader can hold: flat (i.e., no security bought or sold), long (i.e., more security bought then sold) or short (more security sold then bought).
The amount of a security or financial instrument a trader buys (a long position) or sells (a short position).
A trading account fully-integrated and identical to an actual online trading account. Using a practice account, traders can experience trading first hand, as well as develop and practice trading strategies in an absolute risk-free environment. Here at Fortrade we allow traders to easily switch between real trading (“real mode”) and practice trading (“practice mode”), and vice versa – at any time and from anywhere. Click here to open a 100% free practice account today.
With regard to currency and foreign exchange markets, a premium rate is the interest rate a broker or brokerage firm quotes to a certain security or financial instrument in order to compensate for the difference in national interest rates.
A security or financial instrument’s closing rate on the previous day of trading.
A financial gain, especially the difference between the amount earned and the amount spent in security or financial instrument trading.
A reduction in price or demand of a certain security or financial instrument (from its peak). Also referred to as a price reversal.
The number of puts (options to sell traded assets) in relation to the number of calls (options to buy traded assets). Acts as an important indicator for determining the general market trend.
Denoting or relating to something measured by quantifiable data (i.e. objective properties such as amount, percentage or ratio).
Occurring every three months.
An indicative cost estimate to buy/sell a certain security or financial instrument.
A sustained increase in the price of a security or financial instrument. Typically refers to a recovery from a period of decline.
The difference between the highest and lowest price of a security or financial instrument during a given trading session.
The value of one currency for the purpose of conversion to another currency unit. For example, the exchange rate of the euro (EUR) against the US dollar (USD).
Reserve Bank of Australia, the central bank of Australia.
Reserve Bank of New Zealand, the central bank of New Zealand.
The amount of money gained liquidating a position.
The amount of money lost from liquidating a position.
A price “ceiling” above which it is supposedly difficult for a market, security or financial instrument to rise. The opposite of support level.
An official change in the price of a security or financial instrument, especially in regards to a currency (where it means an increase in the value of its exchange rate). The opposite of devaluation.
A particular predetermined date at which a trading contract is rolled-over, hence automatically renewed by the broker or brokerage firm.
The official currency code for Russian ruble.
An American stock index comprising 500 of the leading blue-chip companies in the country (also called SPX500). Widely regarded the leading indicator of the US stock market. Click here for more details.
A separately-managed account used by a brokerage firm to keep clients’ money separate from its own funds.
The official currency code for Swedish krona.
Taking a short position on a tradable security, such as a currency pair, stock, index or commodity. Opposite of “buy” (or long position).
The official currency code for Singapore dollar.
The buying back of a security or financial instrument that was earlier sold (in a short position) so as to close out (exit) that position.
A situation in which traders holding short positions find the market or security’s price has not fallen as they hoped (i.e. the demand price exceeds the supply price), and as a result hurry to cover their positions, which in turn causes a sharp increase in the market or security’s price.
One of the most actively-traded commodities on the market. The standard trading unit for one contract is 1,000 troy ounces. For more information on this commodity click here.
The difference between the requested price of a trade and its executed price. Mostly occurs during periods of relatively high market volatility. Fortrade traders enjoy exceptionally low slippage rates. Click here for more information.
Swiss National Bank, the central bank of Switzerland.
A trade which requires immediate settlement (in most cases: two business days after its execution).
The difference between a bid (the price a broker or dealer is willing to buy a security or financial instrument) and ask (the price a broker or dealer is willing to sell a security or financial instrument).
Secure Sockets Layer. Provides and maintains a consistent connection between browsers and websites, allowing secure transmission of users’ personal data.
A nickname for the British Pound (GBP).
A market order which automatically closes the position of an unprofitable security or financial instrument when it reaches a specified price, for the purpose of limiting loss and preventing slippage. An S/L can be used in both long (buy) and short (sell) positions. Also known as a “stop order” or “stop-market order”.
A margin level (depicted in percent) at which a trading platform will automatically close open trading positions (starting from the least profitable position and until the margin level margin level requirement is met) in order to prevent further potential losses.
A price “floor” below which it is believed a market, security or financial instrument will not reach. The opposite of resistance level.
Swap is the overnight charge/credit amount for an open position.
The amount reflects the interest rate difference between the central banks (based on market rates and spreads) of the two assets involved.
Swaps are credited or debited once for each day of the week, with the exception of Wednesday, on which they are credited or debited 3 times their regular amount.
Swap charges are released on a weekly basis by the financial institutes which Fortrade works with, and are calculated and determined according to various risk management criteria and market conditions.
The swap premium is calculated in the following manner:
Pip Value (Depending On Trade Size) * swap rate in Pips * Number of Nights = Swap charge/credit
You open a short position (Sell) on EUR/USD for 1 lot with an account based in USD:
1 Lot = 100,000
1 Pip Value = 10 USD
Swap Rate = -3.2839 Points (equivalent to 0.32839 Pips)
Number of Nights = 1
Swap Premium: 10 * 0.32839 * 1 = 3.2839 USD
You open a long position (Buy) on Crude oil for 1 lot (1,000 barrels) with an account based in USD:
Swap Rate = -0.3807
1 Cent Value = 10 USD
Number of Nights = 1
Swap Premium: 10 * -0.3807 * 1 = -3.807 USD
A nickname for the US dollar-Swiss franc (USD/CHF) pair.
Symbol for the EURO STOXX 50 index, Europe’s leading stock index for the Eurozone.
A market order which automatically closes the position of a profitable security or financial instrument when it reaches a predetermined price level that is suitable for the trader. A T/P can be used in both long (buy) and short (sell) positions.
The time left from the value date of a loan, contract or option until its expiry date (expressed in years, months or days).
The foreign exchange market is divided into three trading sessions: the Asian (or Tokyo), European (or London) and North American (or New York). Also referred to simply as The Forex Three.
The smallest possible change in the price of a security or financial instrument (either up or down).
Specified blocks or portions of trades. The value of a trade corresponds to an integral number of trading units. For example, gold and silver contracts are bought and sold in lot sizes of 10 and 1,000 troy ounces, respectively.
The general and prevailing attitude of traders towards a certain market, security or financial instrument, depict in percentages of currently open buy and sell orders.
A stop order is used to automatically close a position at a certain percentage or dollar decimal value away from (above/below) a security or financial instrument’s market price. As its name indicates, the stop order “trails” or follows the market price, thus ensuring an upward adjustment of the stop trigger (when the market trend is bullish) and a downward adjustment of the stop trigger (when the market trend is bearish).
The general direction of a market or of the price of a security or financial instrument. The terms “bull” and “bear” are often used to describe the two main types of trends – upward and downward, respectively.
The official currency code for Turkish lira.
An abbreviation for Tokyo Stock Exchange.
A situation in which a security or financial instrument is believed to be less profitable than the overall market. Also known as “market underperformer”. Opposite of outperform.
A situation in which each successive peak or trough on a security’s price chart is higher than the ones preceding it. The opposite situation is a downtrend.
Interest-bearing debt-instruments issued by the United States Department of the Treasury to finance the federal debt of the United States. In CFD trading, the three most actively-traded treasury securities are: the US 5 year treasury note (often symbolised as US5Y), the US 10 year treasury note (often symbolised as US10Y) and the US 30 year treasury bond (often symbolized as US30Y).
The official currency code for the United States dollar.
Coordinated universal time. Often interchangeable with Greenwich mean time (GMT).
A tendency in a market, security or financial instrument to fluctuate sharply on a regular basis.
A non-downloadable software application through which traders can access financial markets, open, edit and close online trading positions and receive live streaming of quotes, graphs and other technical indicators, via a web browser.
A type of moving average that gives even more weight to recent price changes than an exponential moving average (EMA), meaning it reacts very quickly to potential market trends.
The official standard code for 1 troy ounce of silver (considered as a currency). Click here for more details.
The exchange rate for silver to US dollar.
The official standard code for one troy ounce of gold (considered as a currency). Click here for more details.
The exchange rate for Gold to US dollar.
Currency market slang for one billion units of a currency. Derives from the French milliard.
The percentage rate of return on a security or financial investment (typically paid in the form of dividends and calculated at an annual rate).