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