A B C D E F G H I J K L M
N O P Q R S T U V W X Y Z

Bar Chart:

A type of chart which consists of four significant points: the high and the low prices, which form the vertical bar; the opening price, which is marked with a horizontal line to the left of the bar; and the closing price, which is marked with a horizontal line to the right of the bar.

Base Currency:

The first currency in a currency pair. It shows how much the base currency is worth as measured against the second currency. For example, if the USD/CHF (U.S. Dollar/Swiss Franc) rate equals 1.6215, then one USD is worth CHF 1.6215. In the forex market, the US dollar is normally considered the base currency for quotes, meaning that quotes are expressed as a unit of $1 USD per the other currency quoted in the pair. The primary exceptions to this rule are the British pound, the euro and the Australian dollar.

Basis point:

When used to describe an interest rate, a basis point is one hundredth of one percent (= 0.01%).

Bear/Bearish market:

A market that is either expected to decline or is already in the process of declining. Negative for price direction; favoring a declining market. For example, “We are bearish EUR/USD” means that we think the euro will weaken against the dollar.

Bid/Ask Spread

The difference between the bid and the ask (offer) price.

Bid price:

The lower price of a quoted spread. The level at which a client would sell or “go short” of a market. The price at which the market is prepared to buy a product. Prices are quoted two-way as Bid/Ask. In FX trading, the Bid represents the price at which a trader can sell the base currency, shown to the left in a currency pair. For example, in the quote USD/CHF 1.4527/32, the base currency is USD, and the Bid price is 1.4527, meaning you can sell one US Dollar for 1.4527 Swiss francs. In CFD trading, the Bid also represents the price at which a trader can sell the product. For example, in the quote for UK OIL 111.13/111.16, the Bid price is £111.13 for one unit of the underlying market.*

Bollinger Bands:

A tool used by technical analysts. A band plotted two standard deviations on either side of a simple moving average, which often indicates support and resistance levels

Bond:

A financial instrument that pays out a fixed coupon over a number of years as well as a principal repayment at the end of its life.

Bull/Bullish market:

A market that is either expected to rise or is already in the process of rising. Favoring a strengthening market and rising prices. For example, “We are bullish EUR/USD” means that we think the euro will strengthen against the dollar.

Buy:

To place an opening trade at the offer price of a spread in anticipation of the underlying market rising, commonly referred to as an “up trade”, “taking a long position” or “going long”.

Bear Market:

A securities market characterized thus based on declining prices.

Bid and Ask:

Highest price and lowest price that an investor will pay for a tradable.

Bonds:

A long-term debt security with a stated interest rate and fixed due dates, issued by a corporation or a government, when interest and principal must be paid. There are many variations.

Broker-dealer:

A firm that handles transactions for its customers and also purchases securities for its own account, selling them to customers

Bull Market:

A securities market characterized thus on rising prices.

Buy and Hold:

This investment strategy takes place when stocks are bought and held for long periods of time, regardless of the market’s fluctuations. It is based on the assumption that stock prices will increase over the next 10-20 years and the market as a whole will rise despite short-term fluctuations because of rising inflation or business cycles. The acquisition of a tradable for the long term rather than quick turnover.

Call option:

An agreement that allows a client the right, but not the obligation to buy and asset or any other instrument at a specified price within a specific time period.

Candlestick Chart:

A chart that indicates the trading range for the day as well as the opening and closing price. If the open price is higher than the close price, the rectangle between the open and close price is shaded. If the close price is higher than the open price, that area of the chart is not shaded.

Capital Gains:

The amount in which an asset’s selling price exceeds its initial purchase price. This is the profit that results from the sale of an investment and generally receives more favourable tax treatment than ordinary gains. An investment that hasn’t been sold yet but would result in profit if sold is an unrealized gain.

Capital Gains Distribution:

A distribution to investment company shareholders from net long-term capital gains realized by a regulated investment company on the sale of portfolio securities.

Capital Losses:

Losses resulting from selling at a loss.

Charting:

The use of charts to analyse market behavior and anticipate future price movements. Those who use charting as a trading method plot such factors as high, low, and settlement prices; average price movements; volume; and open interest. Two basic price charts are bar charts and point-and-figure charts. See Technical Analysis for more information.

Clearing:

The process by which a clearinghouse maintains records of all trades and settles margin flow on a daily market-to-market basis for its clearing member.

Close out:

The date at which futures contracts expire.

Closed Position:

Exposure to a financial contract, such as currency, that no longer exists. A position is closed by placing an equal and opposite deal to offset the open position. Once closed, a position is considered squared.

Closing:

The process of stopping (closing) a live trade by executing a trade that is the exact opposite of the open trade.

Closing Price:

The price at which a product was traded to close a position. It can also refer to the price of the last transaction in a day trading session.

Closed Trades:

Positions that have been either liquidated or offset.

Contract:

LThe standard unit of forex trading.

Controlled Risk:

A position which has a limited risk because of a Guaranteed Stop.

Correction:

Any price reaction within the market leading to an adjustment by as much as one- to two-thirds of the previous gain.

Counter Currency:

The second listed currency in a currency pair.

Counterparty:

One of the participants in a financial transaction.

CPI:

Consumer Price Index. A basket of goods whose change in price is used to measure the inflation rate of a country.

CPIX:

The new Consumer Price Index used in a country to measure the inflation rate. CPIX strips out the effect of interest rates in measuring inflation.

Cross:

A pair of currencies that does not include the U.S. dollar.

Currency:

Any form of money issued by a government or central bank and used as legal tender and a basis for trade

Currency Pair:

The two currencies that make up a foreign exchange rate. For example EUR/USD (Euro/U.S. Dollar).

Currency Risk:

The probability of an adverse change in exchange rates. CURRENCY SYMBOLS A three-letter symbol that represents a specific currency. For example, USD (U.S. Dollar).

Current Account:

The sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). The balance of trade is typically the key component to the current account.

Cycle:

A variation where a point of observation returns to its origin.

Daily Range:

The difference between the high and low price during one trading day.

Day Trader:

Speculators who take positions in commodities and then liquidate those positions prior to the close of the same trading day.

Day Trading:

Making an open and close trade in the same product in one day.

Depreciation:

The decrease in value of an asset over time.

Derivative:

A financial contract whose value is based on the value of an underlying asset. Some of the most common underlying assets for derivative contracts are indices, equities, commodities and currencies.

Divergence:

In technical analysis, a situation where price and momentum move in opposite directions, such as prices rising while momentum is falling. Divergence is considered either positive (bullish) or negative (bearish); both kinds of divergence signal major shifts in price direction. Positive/bullish divergence occurs when the price of a security makes a new low while the momentum indicator starts to climb upward. Negative/bearish divergence happens when the price of the security makes a new high, but the indicator fails to do the same and instead moves lower. Divergences frequently occur in extended price moves and frequently resolve with the price reversing direction to follow the momentum indicator.

Dividend:

Stockholder payment of a share of a company’s profits.

Double Bottom:

The price action of a security or market average where it has declined (advanced) two times to the same approximate level, indicating the existence of a support (resistance) level and a possibility that the downward (upward) trend has ended..

Double Top:

(See Double Bottom) A price pattern seen on a chart. The patterns occurs when prices rise to a resistance level on significant volume, retreat to a support level, and subsequently return to the resistance level on decreased volume. Prices then decline and break through the support level, marking the beginning of a new downtrend in the price of the stock.

Downtrend:

Price action consisting of lower lows and lower highs.

Earnings Estimates:

The estimated earnings projected for a company for a fiscal year.

Economic Indicator:

A government-issued statistic that indicates current economic growth and stability. Common indicators include employment rates, Gross Domestic Product (GDP), inflation, retail sales, etc.

End Of |Day Order (EOD):

An order to buy or sell at a specified price that remains open until the end of the trading day, typically at 5pm/17:00 New York time.

Entry:

The point at which a trader gets into a position in the market.

EST/EDT:

The time zone of New York City, which stands for United States Eastern Standard Time/Eastern Daylight time.

Estimated EPS Change:

(%) Change in estimated mean earnings for the current fiscal year for the last month, last three months and last six months to the current month

EURO:

The currency of the Eurozone.

European Monetary Union (EMU):

An umbrella name for the group of policies that aims to coordinate economic and fiscal policies across EU Member States.

European Session:

07:00 – 16:00 (London)

Ex-Dividend Date:

The day on or after which the right to receive a current dividend is not automatically transferred to a buyer.

Exit:

The point at which a trader closes out of a trade.

Expiry Date:

The date on which a contract will expire, after which it can no longer be traded.  The precise date and time when an option will expire. The two most common option expiries are 10:00am ET (also referred to as 10:00 NY time or NY cut) and 3:00pm Tokyo time (also referred to as 15:00 Tokyo time or Tokyo cut). These time periods frequently see an increase in activity as option hedges unwind in the spot market

Exposure:

The amount of funds invested in a particular type of security and/or market sector or industry and is usually expressed as a percentage of total portfolio holdings. It is the amount an investor has at risk or the amount he/she can lose.

Equity:

Ownership interest in a corporation in the form of common stock or preferred stock. It is also referred to as shareholders equity, net worth, or book value.

Federal Reserve Bank:

The governing central bank of the US.

Fill:

When an order has been fully executed.

Flat or Flat Reading:

Economic data readings matching the previous period’s levels that are unchanged.

Future Volatility:

A prediction of what volatility may be like in the future.

Futures contract:

Futures contracts are traded on organized exchanges. The asset, which is the subject of the forward contract, the size of the contract, and the delivery date, are standardised and specified in the contract terms by the exchange. The counter-parties can close out their positions.

Fundamental Analysis:

Fundamental analysis is the method used to evaluate the value of a security in which the investor carefully examines the company’s financials, operation, earnings, growth potential, assets, debt, management, products and competition. This type of analysis takes into account the variables that directly relate to the company itself.

Gap/Gapping:

A quick market move in which prices skip several levels without any trades occurring. Gaps usually follow economic data or news announcements.

Gearing (also known as leverage):

Gearing refers to trading a notional value that is greater than the amount of capital a trader is required to hold in his or her trading account. It is expressed as a percentage or a fraction.

GMT (Greenwich Mean Time):

The most commonly referred time zone in the forex market. GMT does not change during the year, as opposed to daylight savings/summer time.

Going Long:

The purchase of a stock, commodity or currency for investment or speculation – with the expectation of the price increasing.

Going Short:

The selling of a currency or product not owned by the seller – with the expectation of the price decreasing.

Good For Day:

An order that will expire at the end of the day if it is not filled.

Good ‘Til Cancelled Order (GTC):

An order to buy or sell at a specified price that remains open until filled or until the client cancels.

Head and Shoulders:

When the middle price peak of a given tradable is higher than those around it.

Hedge / Hedging:

The act of employing another related derivative in order to protect an existing open position.

High:

The highest price of the day for a particular futures contract.

In the money:

Describes the moneyness of the option, I.e. the market price is at a favourable level when compared to the strike price.

Index:

A group of stocks used by financial markets as a benchmark for performance.

Inflation:

An economic condition whereby prices for consumer goods rise, eroding purchasing power.

Initial Margin Requirement:

The initial deposit of collateral required to enter into a position.

Interbank Rates:

The foreign exchange rates which large international banks quote to each other.

Interest:

Adjustments in cash to reflect the effect of owing or receiving the notional amount of equity of a CFD position.

JSE:

Johannesburg Stock Exchange

Leading Indicators:

Statistics that are considered to predict future economic activity.

Level:

A price zone or particular price that is significant from a technical standpoint or based on reported orders/option interest.

Leverage:

Also known as margin, this is the percentage or fractional increase you can trade from the amount of capital you have available. It allows traders to trade notional values far higher than the capital they have. For example, leverage of 100:1 means you can trade a notional value 100 times greater than the capital in your trading account.

Liability:

Potential loss, debt or financial obligation.

Liquid Market:

A market which has sufficient numbers of buyers and sellers for the price to move in a smooth manner.

Limit order:

An order that must be executed at a specified price level

Liquidity:

A market characterised by the ability to buy and sell with relative ease.

Long call:

Having a long position on a Call option.

Long / Go long:

Holding or opening a “buy” position in anticipation of the underlying market rising.

London Session:

08:00 – 17:00 (London).

Long Position:

A position that appreciates in value if market price increases. When the base currency in the pair is bought, the position is said to be long. This position is taken with the expectation that the market will rise.

Long put:

Having a long position on a Put option.

Longs:

Traders who have bought a product.

Lot:

A unit to measure the amount of the deal. The value of the deal always corresponds to an integer number of lots.

Long:

Establishing ownership of the responsibilities of a buyer of a tradable; holding securities in anticipation of a price increase in that security.

Low:

The lowest price of the day for a particular futures contract.

Margin:

The deposit or available credit needed on your account in order to have your positions open.

Margin call:

A request to a client to deposit more funds in their trading account to bring their margin account balance up to a required level.

Market order:

An order to buy or sell a futures contract of a given delivery month, to be filled at the best possible price and as soon as possible.

Market to market:

The practice of revaluing an instrument to reflect the current values of the relevant market variables.

Marked to Market:

At the end of each business day the open positions carried in an account held at a brokerage firm are credited or debited funds based on the settlement price of the open positions that day.

Market Maker:

A broker or bank continually prepared to make a two-way price to purchase or sell for a security or currency.

Market Risk:

The uncertainty of returns attributable to fluctuation of the entire market.

Market Sentiment:

Crowd psychology, typically a measurement of bullish or bearish attitudes among investors and traders.

>Market Timing:

Using analytical tools to devise entry and exit methods.

Market Value:

Company value determined by investors, obtained by multiplying the current price of company stock by the common shares outstanding.

Momentum:

A series of technical studies (e.g. RSI, MACD, Stochastics, Momentum) that assesses the rate of change in prices.

Net Position:

The amount of currency bought or sold which has not yet been offset by opposite transactions.

New York Session:

8:00am – 5:00pm (New York time)..

Offer/Ask Price:

The price at which the market is prepared to sell a product. Prices are quoted two-way as Bid/Offer. The Offer price is also known as the Ask. The Ask represents the price at which a trader can buy the base currency, which is shown to the right in a currency pair. For example, in the quote USD/CHF 1.4527/32, the base currency is USD, and the ask price is 1.4532, meaning you can buy one US dollar for 1.4532 Swiss francs.

Open Position:

An active trade with corresponding unrealized P&L, which has not been offset by an equal and opposite deal.

Order:

An instruction to execute a trade. ORDER BOOK A system used to show market depth of traders willing to buy and sell at prices beyond the best available. OVER THE COUNTER (OTC) Used to describe any transaction that is not conducted via an exchange.

>Overbought:

Market prices that have risen too steeply and too fast.

Oversold:

Market prices that have declined too steeply and too fast.

Overbought/Oversold Indicator:

An indicator that attempts to define when prices have moved too far and too fast in either direction and thus are vulnerable to a reaction.

Offer price:

The higher price of a quoted spread. The level at which a client would buy or “go long” of a market.

Open positions:

Any unexpired positions that you hold on your account.

Out the money:

Describes the moneyness of the option, I.e. the market price is at an unfavourable level when compared to the strike price.

P&L:

Profit and loss.

Pair:

The forex quoting convention of matching one currency against the other.

Partial close:

A partial close is when you end an open bet before it would normally expire, by taking the equal and opposite side, but not for the full amount originally staked. You could do this to lock in an early profit or to cut a loss.

Pips:

The smallest unit of price for any foreign currency, pips refer to digits added to or subtracted from the fourth decimal place, i.e. 0.0001.

Political Risk:

Exposure to changes in governmental policy which may have an adverse effect on an investor’s position.

Portfolio:

A collection of investments owned by an entity.

Position:

The net total holdings of a given product.

Price/Earnings Ratio:

Stock price divided by annual earnings per share.

Profit:

The difference between the cost price and the sale price, when the sale price is higher than the cost price.

Profit Taking:

Selling trades that have appreciated since initial purchase in order to take advantage of the appreciation.

Put option:

An agreement that allows a client the right, but not the obligation to sell and asset or any other instrument at a specified price within a specific time period..

Rally:

A significant short-term recovery in the price of a financial instrument or of a market in general after a period of decline.

Range:

When a price is trading between a defined high and low, moving within these two boundaries without breaking out from them.

Rate:

The price of one currency in terms of another, typically used for dealing purposes.

Realized Profit/Loss:

The amount of money you have made or lost when a position has been closed.

Resistance Level:

A price that may act as a ceiling. The opposite of support.

Retail Investor:

An individual investor who trades with money from personal wealth, rather than on behalf of an institution.

Retail Sales:

Measures the monthly retail sales of all goods and services sold by retailers based on a sampling of different types and sizes. This data provides a look into consumer spending behavior, which is a key determinant of growth in all major economies.

Risk:

Exposure to uncertain change, most often used with a negative connotation of adverse change.

Risk Management:

The employment of financial analysis and trading techniques to reduce and/or control exposure to various types of risk.

Rollover:

Closing an existing position and opening the equivalent position in respect of the next contract period at reduced spreads.

SAFEX:

South African Futures Exchange.

Sell:

To place an opening trade at the bid price of a spread in anticipation of the underlying market falling, commonly referred to as a “down trade”, “taking a short position” or “going short”.

Shading:

Commission paid upfront on a trade.

Short call:

Having a short position on a Call option.

Short put:

Having a short position on a Put option.

Short / Go short:

Holding or opening a “Sell” position in anticipation of the underlying market falling.

Shorts:

Traders who have sold, or shorted, a product, or those who are bearish on the market.

Short Position:

An investment position that benefits from a decline in market price. When the base currency in the pair is sold, the position is said to be short.

Short Selling:

This is the borrowing of a security or commodity futures contract from a broker and selling it with the understanding that is must later be bought back and returned to the broker. This strategy aims to profit from falling prices of stock and the investor’s stockbroker will borrow the shares with the promise that the investor will return them later. The profit is the difference at which the stock was sold and the cost to buy it back, minus any expenses and commissions.

Simple Moving Average SMA:

A simple average of a pre-defined number of price bars. For example, a 50 period daily chart SMA is the average closing price of the previous 50 daily closing bars. Any time interval can be applied.

Spike:

A sharp rise in price in a single day or two; may be as great as 15-30%, indicating the time for an immediate sale.

Spot price:

The price for immediate delivery.

Spread:

The difference between the sell (bid) and buy (offer) prices.

Spread trading:

Spread trading is a geared (leveraged) product enabling clients to match the market exposure at a fraction of the cost, whilst providing a fast, flexible way to trade the price movement of the underlying market, regardless of the direction.

Stock Index:

The combined price of a group of stocks – expressed against a base number – to allow assessment of how the group of companies is performing relative to the past.

Stop Entry Order:

This is an order placed to buy above the current price, or to sell below the current price. These orders are useful if you believe the market is heading in one direction and you have a target entry price.

Stop Loss:

The risk management technique in which the trade is liquidated to halt any further decline in value.

Stop loss level:

The maximum loss on a CFD or future that a client is prepared to accept.

Stop loss order:

This is an order placed to sell below the current price (to close a long position), or to buy above the current price (to close a short position). Stop loss orders are an important risk management tool. By setting stop loss orders against open positions you can limit your potential downside should the market move against you. Remember that stop orders do not guarantee your execution price – a stop order is triggered once the stop level is reached, and will be executed at the next available price.

Stop order:

An order to buy or sell when the market reaches a specified point. A stop order to buy becomes a market order when the futures contract trades (or is bid) at or above the stop price. A stop order to sell becomes a market order when the futures contract trades (or is offered) at or below the stop price.

Support:

A price that acts as a floor for past or future price movements.

Support Levels:

A technique used in technical analysis that indicates a specific price ceiling and floor at which a given exchange rate will automatically correct itself. Opposite of resistance.

Take profit level:

The level at which an investor wants to close out his or her position in a profit.

Technical Analysis:

Technical analysis is the method of evaluating securities by analyzing market data through the use of stock charts of price, volume, and open interest, in order to predict future market trends. This method assumes that market psychology influences trading in a fashion that enables prediction of when a stock will rise or fall. The intrinsic value of the security is not considered, but instead the overall state of the market is examined. A form of market analysis that studies demand and supply for securities and commodities based on trading volume and price studies. Using charts and modeling techniques, technicians attempt to identify price trends in a market.

Ticker:

Shows the current and/or recent history of a currency in the format of either a graph or table.

T/P:

Stands for “take profit.” Refers to limit orders that look to sell above the level that was bought, or buy back below the level that was sold.

Trade Balance:

Measures the difference in value between imported and exported goods and services. Nations with trade surpluses (exports greater than imports), such as Japan, tend to see their currencies appreciate, while countries with trade deficits (imports greater than exports), such as the US, tend to see their currencies weaken.

Trade Size:

The number of units of product in a contract or lot.

Trailing stop:

A Trailing Stop is a free facility that offers clients the ability to have their Stop Loss or Guaranteed Stop Loss automatically moved as the market moves in favor of their position.

Trend:

Price movement that produces a net change in value. An uptrend is identified by higher highs and higher lows. A downtrend is identified by lower highs and lower lows.

Trending Market:

Price moves in a single direction, generally closing at an extreme for the day.

Trendless:

Price movement that vacillates to the degree that a clear trend cannot be identified.

Trust account / Trading account:

Funds deposited by the client into an interest-bearing account for trading purposes.

Turnover:

The total money value or volume of all executed transactions in a given time period.

Underlying asset:

The asset on which the price of a derivative depends such as a stock, commodity future, currency, index.

Unrealised profit/loss:

Profit/loss that is made on an open position. Once the position is closed out, the profit/loss becomes realized and the relevant bank account is credited/debited.

Volatile market:

A market in which there are severe price fluctuations.

Volatility:

A measurement of the change in price over a given period. It is often expressed as a percentage and computed as the annualized standard deviation of the percentage change in daily price.The state at which the price of a security moves up or down and is found by calculating the annualized standard deviations of daily change in price. High volatility is when a stock moves up and down rapidly over short periods of time. If the stock price almost never changes then it has low volatility.

Volume:

The shares traded for a given market or tradable within a specified time period.