Glossary

In any circumstances that you have trouble about any terms about the market
check the Glossary.

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  • Account Limit
    The maximum amount of money that an account is allowed to have in it.
  • After Hours Trading
    Trading on a market after the underlying market has closed.
  • AML
    Anti Money Laundering. Refers to legal controls placed on companies to prevent and report money laundering.
  • Arbitrage
    Trading on a price differential between two or more markets.
  • Ask Price
    The price at which you can buy at or bet that a market will go up.
  • Back Office
    Administration software to monitor your account, trades, positions etc.
  • Base Currency
    The first currency in a currency pair. For example in GBP/USD, GBP is the base currency. It is this currency that the exchange rate refers to, so if the exchange rate was 1.6350 then 1 unit of the base currency equals 1.6350 units of the second currency.
  • Base Rate
    Refers to the official rate of interest set by the Bank of England.
  • Basis Points
    One hundredth of a percent. ie 0.01 %. So half a percent is 50 basis points.
  • Bear Market
    A market in which the prices are in general decline.
  • Bid Ask Spread
    The difference between the bid price and the offer price.
  • Bid Price
    The price at which you can sell at or bet that a market will go down.
  • Bull Market
    A market in which the prices are in generally rising.
  • Buy
    When you BUY when you believe a market will rise or when you want to close a position that you have previously SOLD.
  • Cable
    The global nickname give the currency pair GBP/USD. It derived from the cable laid under the sea from London to New York in 1850 which enabled currency prices to be sent telegraphically.
  • Cash Price
    The price of the underlying market which another market may be based on.
  • Central Bank
    The Government of a country’s banker who implements monetary policy.
  • CFD
    Contract for Difference. Margin trading on financial markets.
  • Charting
    A visual representation of the historic price movement of a market which can be used in an attempt to predict the future movement.
  • Closing Only
    When positions may only be closed and not opened.
  • Closing Price
    The last price that a market trades at. The ‘Official Close’ maybe a different to this.
  • Corporate action
    When a company structure changes or a dividend is issued etc.
  • Cost of Carry
    The actual cost to run a position from one day to the next. E.g. financing.
  • Counter currency
    The second currency in a currency pair, also known as the contra currency.
  • Cover
    To reduce or close an open position.
  • Cross Rate
    Normally refers to non major currency pairs. E.g. Aud/Cad.
  • Day trading
    Trading throughout the day without leaving positions on to run overnight.
  • Delivery
    A trade which is allowed to expire and which a physical delivery of a product occurs.
  • Deposit
    The amount that you have credited into your account.
  • Derivative
    A market that is priced using another market as its bench mark.
  • Dividend
    A share of a company’s profits that is distributed to its shareholders.
  • ECB
    European Central Bank
  • Economic Indicator
    A statistic usually issued by a Government department indicating the financial state of the economy.
  • Equity
    Another word for a share.
  • ETF
    Exchange Traded Fund. Quoted on stock markets and mimics an underlying index, commodity or bonds etc.
  • Ex Dividend
    When a share is traded with no rights or obligations to the due dividend.
  • Expiry
    When a market will close and end permanently.
  • Fair Value
    The difference between the underlying price and the theoretical Futures price.
  • Fast Market
    When a market is so volatile and heavily traded that it can trade outside of the current ‘screen’ price.
  • Fed
    Federal Reserve. The central bank of the USA
  • Fill
    An order that has been completed.
  • Flat
    When you have no position.
  • FOMC
    Federal Open Market Committee. Part of the Fed reserve that controls US interest rates.
  • Front Month
    The main Futures contract of a market in which most trading takes place.
  • Futures
    A contract to buy or sell something at a specified rate on a given date.
  • FX
    Foreign exchange.
  • Gap
    When a market price ‘jumps’ significantly from the previously traded price.
  • Gearing
    A means of placing a large trade with only a small deposit through leverage.
  • GFD
    Good For the Day. Usually refers to when an order is no longer valid.
  • Grey Market
    A market that we may quote even when the actual underlying market is closed.
  • GT
    Good Till. Usually refers to when an order is no longer valid.
  • GTC
    Good Till Cancelled. Usually refers to when an order is no longer valid.
  • Hedging
    A trade that reduces your exposure or risk to another trade.
  • High
    The highest point at which a market traded.
  • Historical Trading Range
    The price history of a market.
  • Illiquid
    Very little volume can be traded without moving the price by a lot.
  • Index
    A basket of weighted markets.
  • Indication Price
    A guide price. Not an actual tradable price.
  • Inflation
    The rate at which general price levels are rising.
  • Initial Margin
    The amount of up from deposit required to place a particular trade.
  • Junk Bond
    High yielding bonds issued by companies to raise funds.
  • KYC
    Know Your Customers. An obligation on companies to know the identity, experience and requirements of their customers.
  • Last Trading Day
    The last day in which trading is permitted before a market expires.
  • Leverage
    A means of placing a large trade with only a small deposit through gearing.
  • Libor
    London Interbank Offered Rate. The interest rate that commercial banks lend to each other in the UK. There is a fixing everyday at 11am which is used for a lot of global calculations.
  • Limit Down
    The maximum that a market is allowed to fall at any one time by its regulators.
  • Limit Order
    An order to buy or sell at a more advantageous level than where the market last traded.
  • Limit Up
    The maximum that a market is allowed to rise at any one time by its regulators.
  • Liquid
    When a market has a lot of buying and selling volume going through, not affecting the price.
  • Long Position
    When you have a position in which you benefit from a rising price.
  • Lot
    A preset trading amount. On MT4 platform this is 100,000.
  • Low
    The lowest point at which a market traded.
  • P&L
    Profit and Loss.
  • Manifest Error
    When a wrong price has been dealt on.
  • Margin Call
    When you are called for additional margin as you do not have enough to allow for the adverse price movement in the position you hold.
  • Margin
    The amount of deposit required to fund a position.
  • Mark to Market
    The value of a position based on the current price.
  • Market Capitalisation
    The value of a company.
  • Market Order
    An instruction to buy or sell at wherever the price is at the moment.
  • Maximum trade size
    The maximum stake that can be traded at any one time.
  • MIS
    Market Information Sheets.
  • Net position
    Total position held.
  • Normal market size
    The usual volume that is traded in particular market.
  • Notional
    The nominal or face value of something.
  • OCO
    One Cancels Other. Two orders placed, where if one is completed it cancels the other.
  • Offer
    The price at which you can buy at.
  • Open position
    Any current trades which have been opened and not yet closed.
  • Order
    An instruction to initiate a trade when a specific price is reached.
  • OTC
    Over The Counter. A market not traded on a recognised exchange.
  • Our quote
    The price at which GKFX is willing to buy or sell at.
  • Over bought
    When a market has been aggressively bought causing the price to move to unsustainably high levels.
  • Over Sold
    When a market has been aggressively sold causing the price to move to unsustainably low levels.
  • Pip
    A term usually used in FX to refer to the smallest increment that a price can move by.
  • Point
    A term used in any market referring to the smallest increment that a price can move by.
  • Position
    Any current trades which have been opened and not yet closed.
  • Quote
    A two-way market price containing the bid price and the offer price.
  • Realised P&L
    The actual profit or loss made after a position has been closed.
    Resistance
    A level where technical analysts believe selling will occur.
  • Retail Investor
    Someone who invests or trades in a non-professional capacity.
  • Rights issue
    Where a company sells new shares to raise capital.
  • Risk
    The exposure to something where the outcome is unknown to varying degrees.
  • Rollover
    A procedure when a position which is approaching expiry is moved to the next contract expiry date.
  • Running P&L
    Your current profit or loss based on up to date prices.
  • SEC
    Securities and Exchange Commission (US regulatory authority).
  • Sell
    When you SELL when you believe a market will fall or when you want to close a position that you have previously BOUGHT.
  • Settlement
    When a market will close and end permanently.
  • Short position
    When you have a position in which you benefit from a falling price.
  • Slippage
    The difference between the level which an order was left at and the actual price it was filled at. This amount may increase during times of extreme volatility.
  • Spot
    The underlying main cash price, usually referring to FX.
  • Spread
    The difference between the Bid price and the Offer price.
  • Stamp Duty
    A government tax imposed on the purchase of shares.
  • Stop Loss
    An order linked to an open position that will close it at a predetermined level which is further away than at present, thus limiting your loss.
  • Stop
    An order to sell or buy at a worse level than at present. This will normally open a new position, but could be used to close a position (but it is not linked to anything).
  • Support Level
    Commonly known as Support; a level where technical analysts believe buying will occur.
  • Takeover
    The transfer of ownership from one group to another.
  • Technical Analysis
    Analysing charts and information to look for patterns or trends to help make predictions on future price movements.
  • Terms of Business
    Your legal contract with GKFX and ours with you.
  • Tick
    A term used in any market referring to the smallest increment that a price can move by.
  • Trading range
    The high and low prices that have actually traded during a given time.
  • Trailing stop
    A stop loss order which automatically moves if you are in profit so that you keep reducing your potential loss.
  • Underlying asset
    The core market from which other prices may be linked or related to.
  • Up Bet
    When you BUY when you believe a market will rise or when you want to close a position that you have previously SOLD.
  • Volatility
    The amount something moves in proportion to time.
  • Warrant
    An option to buy a stock at a given price at some time in the future.
  • Yard
    A slang term usually referring to a billion.
  • Yield
    The rate of return from an investment.


Risk Warning: Trading in Forex/ CFDs and other derivatives is highly speculative and carries a high level of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent advice if necessary. Speculate only with funds that you can afford to lose. Domain usage rights belong to RHL Ltd. BDS Ltd Registration No. 8424660-1 is authorized and regulated by the Financial Services Authority (the FSA, License no. SD047) Registered address: Suite 3 Global Village, Jivan’s Complex, Mont Fleuri, Mahe, Seychelles. RHL Ltd. is a registered company of St. Vincent and the Grenadines, Number 25956 BC 2020 by the Registrar of IBC, and registered by the Financial Services Authority, and whose address is Suite 305, Griffith Corporate, P.O.Box 1510, Beachmont Kingstown St. Vincent and The Grenadines. Regional Restrictions: RHL Ltd. does not provide services to residents of the USA. RegalX is a trademark of Regal Holdings Ltd.

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