Login Register





TRADING GLOSSARY

With ABFX you will experience an institutional currency trading experience with super-fast Forex trading execution and RAW ECN spreads.

Our Forex glossary is a perfect tool to make your steps in the Forex market more confident, where you can find the definitions of all main trading terms. Also, we’ve developed an A to Z index to make your navigation easier.

Trading Glossary Index

 
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.
 
Bear Market 
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.
 
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.
 
 
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 Markets
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.
 
Interbank Rates 
The interest rates that large banks quote to each other.
 
 
Junk Bond 
High yielding bonds issued by companies to raise funds.
 
JPN225
A name for the NEKKEI index.
 
 
 
KYC 
Know Your Customers. An obligation on companies to know the identity, experience and requirements of their customers.
 
 
Illiquid 
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.
 
 
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.
 
 
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.
 
 
 
 
 
 
P&L 
Profit and Loss.
 
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.
 
 
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.
 
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 GKFS 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.
 
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.
 
 
 
XAG/USD
Symbol for Silver Index.
 
XAU/USD
Symbol for Gold Index.
 
XAX.X
Symbol for AMEX Composite Index.
 
 
 
Yard 
A slang term usually referring to a billion.
 
Yield 
The rate of return from an investment.
 
 
 
Zew 

 

The Center of European economic research – non-commercial research institute founded in1990, which is located in Hamburg.
 
 

Demo Account

Practice trading today in a risk-free environment.

Start Trading Now

Practice trading today in a risk-free environment.
overlay
We're here to help-however whenever you need it
Contact Us
client
client
client
client
client

Hello!

Click one of our representatives below to chat on WhatsApp or send us an email to contact@alphabetafx.com

Support Customer Service 1
60182246432
Sales Customer Service 2
60182246432
Live Chat Customer Service 3
Call us to +44 2036958896 from 27/7 Support
Hello! What can I do for you?
×