Glossary of Trading Terms and Definitions

24 december, 2018 11:22

Glossary of Trading Terms and Definitions

Trading Terminology

When a market is making a clear, sustained move upwards or downwards, it is called a trend. Identifying the beginning and end of trends is a key part of market analysis. Trends can apply to individual assets, sectors, or even interest rates and bond yields. Treasury stock is the portion of a company’s shares that it keeps in reserve. In other words, the shares that are not available to the public and do not count towards the total amount of outstanding shares listed.

26. Pink Sheet Stocks

The size of swap is proportional to the volume of the position and depends on the current difference of interest rates of base and quoted currencies (or assets) in the interbank lending market. Moving Average is a technical analysis tool which shows the average price of an asset price over a certain period of time, smoothens price fluctuations and thus, reflects the direction and strength of a trend. An order to buy or sell the given amount of an asset at a specified price or at a better one.

Market data refers to the live streaming of trade-related data. It encompasses a range of information such as price, bid/ask quotes and market volume. Trading venues provide reports on various assets and financial instruments, which are then distributed to traders and firms.

Trading Terminology

Also referred to as Market Cap. The total value of a company which is calculated by multiplying total amount of shares with stock price. Conversely, those who put in market orders are regarded as “takers” of liquidity and are charged a modest fee by the exchange for their orders. While the rebates are typically fractions of a cent per share, they can add up to significant amounts over the millions of shares traded daily by high-frequency traders.

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.

The concept of the system was the opportunity to quickly understand the direction of the trend, its dynamics and strength by interpreting all the five components of the system combined with the price dynamics in terms of cyclical character of their interaction caused by the group dynamics of human behavior. A Forex dealer is a financial company authorized to organize foreign currency trading. The analysis of economic and political events, which may affect the future direction of prices in financial markets.

A put option is sold for leverage or for limiting your risk. P/E Ratio shows the stock price divided with the company’s earnings per share. It makes is easy to compare to other stocks.

Concentration ratio definition

Support is one of the key concepts of technical analysis. Support is defined as a price level at which the activity of asset buyers is quite significant to prevent the further sale and decrease in its price. The difference between the Bid and Ask prices.

  • A put option is sold for leverage or for limiting your risk.
  • Technical analysis requires a complex understanding of chart patterns and technical indicators.
  • While most brokers don’t charge commissions and fees on placing trades nowadays, the bid/ask spread remains the main cost to Forex traders.

This increases the supply of shares on the market and decreases the value of those shares. This is generally not something long term investors like to see. This term refers to a strong market of stocks moving up. This can even be used to reference a specific position the trader is taking.

Trading Terminology

Call option definition

A broker will normally charge a commission for the order to be executed. When a trader purchases an asset, the asset’s price drops, and if the trader purchases more, it is referred to as averaging down. An auction market is an environment that facilitates competition between buyers and sellers. In an auction market, buyers indicate the maximum price that they are willing to pay for an asset, while sellers express the lowest price that they would be comfortable accepting.

The absolute values of the indicator have no practical use therefore the dynamics of their changes is considered relative to the dynamics of the volume change. This list contains stocks which are approved for trading on the stock exchanges.

Brokers buy and sell stocks through an exchange, charging a commission to do so. A broker is simply a person who is licensed to trade stocks through the exchange. A broker can be on the trading floor or can make trades by phone or electronically. This is the difference between the bid and the ask prices of a stock, or the amount for which someone is willing to buy it and the amount for which someone is willing to sell it. For instance, if a trader is willing to trade XYZ stock for $10 and a buyer is willing to pay $9 for it, the spread is $1.

When you buy a CFD, you aren’t actually buying shares of a stock. You are buying a contract to buy x number of shares of a stock.

Trading Terminology

For real not fake dew the math an treat stocks like a bond don’t sell until it touches 500 per sheer. Simple math take 500 x 2000 what’s it come out too yes it dose one million dollors but alw weather the storm an waight an stick too your selling target price 500 an be thankfully.

Indices – One of the many different things that you can base your Binary Options trades on is any of the major wild wide indices. So for example if you think the London Stock Exchange’s FSTE 100 will rise or fall over any given time period then you will be able to place a Binary options trade on that stock index. If a trader believes that the price of an asset will not rise but fall, he can still make money on it by ‘shorting’ it. If an option is ‘out of the money’ it is usually not worth exercising given the current market price of the underlying asset. Foreign exchange reserves are foreign currency funds and various foreign assets held by a country’s central bank, or other monetary authority.

Trading Terminology