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Trader's dictionary

This page presents the basic terminology of the topic of trading, which everyone who wants to start trading should know.

A
Ask
This is the price in the order book at which the trader can open a buy trade.
Asset
This is the subject of a transaction in the financial or currency market. The instruments traded by traders.
B
Bid
This is the price in the order book at which the trader can open a sell trade.
Broker
This is an employee of a brokerage company who concludes purchase and sale transactions on the financial market on behalf of the trader. A broker does not use his own capital to trade, he performs intermediary functions and earns money from commissions and fees from the transactions carried out.
Buy
This is a bargain to buy.
Buy-limit
This is a pending buy order below market prices.
Buy-stop
This is a pending buy order above market prices.
C
Capitalization
Market capitalization is the total value of a company's shares outstanding at a given time. It is calculated by multiplying the number of outstanding shares by the price per share.
Comission
This is the broker's fee for executing trades to open or close trades.
F
Flipper
This is a person who makes short-term financial transactions, selling shares immediately after buying them.
Forward
This is a contract under which one currency is exchanged for another at a predetermined date at a predetermined price
Futures
This is a type of futures transactions on a commodity or stock exchange: the purchase and sale of the terms of future contracts with the fixation of their term.
H
Hedge
It is insurance of financial risks by taking an opposite position on an asset in the market.
I
Issue
This issue in circulation of banknotes in all forms, shares, certificates, bonds and other government securities; leads to an increase in the money supply in circulation.
Issuer
This is an organization that issues securities to develop and finance its activities
L
Leverage
It is a loan that the broker gives to the investor to make a transaction for a larger amount than the investor's own capital on the account. The ratio of investor's own funds to borrowed funds is called leverage.
Liquidity
This is an opportunity to quickly sell the asset at a price close to the market.
M
Margin
This is the collateral funds that are required when using leverage. This is the amount that is "frozen" on the trading account until the position is closed. These funds are needed as a guarantee to the broker that the trader will pay for his liabilities in case of unfavorable outcome of a deal.
Mining
This is the activity of creating new structures to ensure the functioning of cryptocurrency platforms.
O
Option
It is a security that confirms an investor's right to buy or sell a product at a certain time at a predetermined price.
Order
This is an order to a broker to buy/sell a certain number of financial instruments
Oscillator
This is an indicator limited to 0% and 100% levels. Oscillators are called leading indicators due to the fact that they often reach extremes before prices reverse. Profitable oscillator signals are most likely in flat markets. However, trends leave oscillators with no chance of profitable signals because the oscillator spends most of its time in the extreme zone on a trend.
P
Pool
It is a form of association (agreement), usually temporary, in which the profits of its members go into a common fund and are distributed between them according to predetermined ratios.
S
Sell
This is a sale of a financial asset, a trade for sale.
Sell-limit
This is a pending sell order above market prices.
Sell-stop, s/s
This is a pending sell order below market prices.
Setup
This is a pricing model suitable for the transaction.
Short
Literally, it is a "short bargain," a bargain to sell.
Spot
This is a transaction. Terms of settlement in which payment for the transaction is made immediately.
Spread
This is the difference between the best buy and sell prices of the trading asset (the lower the spread, the higher the liquidity and vice versa).
Statement
These are statistics of trading results of a trader or fund.
Stock market
This is a centralized exchange market where shares of companies of a certain country are traded.
Stop-loss, sl
This is a pending order, fixing the planned loss of the trader.
Stop Out
This is a forced closing of positions in the trading terminal when there are not enough funds in the account.
Swap
This is a type of financial transaction in which the buyer (seller) of currency, securities at the time of purchase (sale) assumes the obligation to sell (buy) the currency, securities at some time.
Switch
This is a type of currency exchange transaction in which currency is bought on a "swap" basis and sold on a "forward" basis (liquidation of earlier commitments on some securities or currencies and conclusion of transactions on others)
T
Take profit, t/p
This is a pending order, fixing the planned trader's profit.
Tick
This is the minimum fluctuation of the exchange rate set by the exchange rules.
Timeframe
This is the time interval of price movements, reflected on the charts in the form of a single vertical element.
Trading
This is the purchase/sale of financial assets (instruments) on the stock exchange, with the expectation of making a profit due to changes in their exchange value.
Trading account
This is a separate account for trading in financial markets, which traders and investors open with a broker
Trailing stop
This is the level of stop-loss, which automatically follows the price movement at the distance in pips set by the trader.
Transaction
This is a transaction between two participants in the financial markets.
V
Validity
It is the reliability of the information, the absence of errors in it.
Volatility
It is a measure of the volatility of prices of various assets and exchange rates.
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