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Discover some of the most common terms associated with trading CFDs available from WRC1
A
Account
A record of all transactions.
Asset
It is generally a resource or an item of variable value.
Ask Price
The price at which the buyer is willing to buy.
Average True Range (ATR)
ATR analyzes market volatility by examining price ranges over a certain time period.
B
Bid Price
The price at which the owner is willing to sell. The quoted price for the asset.
Basis Point
It is a financial measuring unit that equals one-hundredth of a percentage point (0.01%). Changes in interest rates, bond yields, and other financial percentages are typically represented using it.
Buy Limit
It is a pending order to execute the process of opening a trading purchase transaction when the price reaches a level lower than the current market price, meaning that it believes that the price will reach to a certain extent and goes up again.
Buy Stop
A pending purchase order placed by the trader in the market to buy at a price higher than the current market price, meaning that he believes that the price will continue on an upward path if It exceeded or penetrated specific resistance areas.
Bull/Bullish Market
It is the maintenance of a certain asset on the rise in price and the upward trend in the market.
Bear/Bearish Market
It is the maintenance of a certain asset on the decline in price and the downward trend in the market.
C
Chart
It is a graph showing the movement of securities
Commodity
A raw resource or basic agricultural product, such as gold or wheat, that may be bought and sold.
Currency Pair
A pair consisting of two different currencies that are traded in a forex trade. for example: EUR/USD.
D
Derivative
A derivative is a financial contract whose value is determined by an underlying asset. Derivatives are complicated financial products that can take the shape of options, futures, swaps, or other sophisticated financial instruments. They are used to manage risk, speculate on market movements, and offer leverage.
Day Trading
A trading strategy in which traders purchase and sell financial products on the same trading day in order to profit from price swings.
E
Exchange-Traded Fund (ETF)
An ETF is a form of investment that combines funds from several participants to purchase a portfolio of assets such as stocks, bonds, or commodities.
Expiration Date
The day at which a futures or option contract expires.
Equity
The ownership stake in a business or asset, typically represented by stock shares.
F
Free Margin
It is the amount of money available in the trading account that can be used to open new positions/deals.
Fill or Kill
When the investor has a specific price at which he wants to execute the transaction, he places an "execution or cancellation" order, where if the transaction is not executed at the specified price, it will be cancelled.
G
Good 'Til Canceled (GTC)
A form of order in which an investor orders a broker to hold an order open until it is either completed or canceled.
Golden cross
An upward crossover of a short-term moving average over a long-term moving average
H
Hedge
Investors use a covering order to protect themselves from risks that may result from adverse price movement in the market. A covering order is the opening of a position Trade opposite to the current position, in order to reduce the losses that you may incur from price fluctuations.
High-Frequency Trading (HFT)
A trading approach that employs powerful computers to execute a huge number of trades at extreme speed.
I
Index
A statistical metric that follows the performance of a basket of assets, such as stocks or bonds, in a certain market.
Initial margin
The proportion of the position size that must be deposited as collateral for a trader to initiate a leveraged position.
Inside bid and ask
The current range of values for an asset's highest bid and lowest ask prices.
J
Junk Bond
Junk bonds are often issued by corporations with questionable financials or in industries experiencing considerable transformation.
Joint account
A brokerage account with two or more owners.
K
Keltner Channel
A technical analysis indicator used to monitor the volatility of a security's price changes.
L
Leverage
It is the financial leverage provided by the broker to increase the purchasing power of the trader by giving him the possibility of depositing a small amount of money and trading in larger volumes. Leverage is expressed in the form of a percentage, where if it is 1:100, for example, the purchasing power of the trader is increased 100 times.
Liquidity
The capacity of an asset or security to be purchased or sold quickly without significantly altering its price is referred to as liquidity.
M
Margin
It is the amount of money required to be available on the trading account to maintain the open position.
Margin Call
Is a notice informing you that funds must be added to the trading account to maintain open positions.
N
Nominal Value
The original declared value of a financial instrument, such as a bond or stock, is referred to as nominal value. This value is used to determine the instrument's worth in terms of dividends and interest payments.
Notional value
A leveraged position's total value, determined by multiplying the position size by the underlying asset's price.
O
Over-the-Counter (OTC)
A market in which securities are exchanged directly between two entities as opposed to on a controlled exchange.
Options
A financial arrangement in which the holder has the option but not the obligation to purchase or dispose of an underlying asset at a given price and time.
Overbought
A situation when an asset's price has increased too quickly and too much and needs to be corrected.
P
Pip
It is the smallest price change that can be seen in exchange rates. The prices of currency pairs are in most cases displayed to four decimal places. The term "PIP" stands for "percentage in point".
Position
It is a transaction that takes place in the market.
R
Risk Management
They are strategies and tools that traders use to reduce financial risks as much as possible.
Return on Investment (ROI)
It is the return on investment, usually calculated as a percentage of the invested capital.
Resistance Line
It is a level in the price in which the shares or currencies have difficulty breaking through to the top, and this may result in a price decrease instead of an increase.
S
Scalping
It is a method of trading that is done by selling and then buying (or buying and then selling) an asset in a very short period of time with the aim of making a small profit.
Sell Limit
It is a pending sell order placed by a trader in the market to sell at a price lower or higher than the current market price. This means that the order may only be filled at the designated price or better.
Sell Stop
It is a pending sell order placed by the trader in the market to sell at a price higher than the current market price, i.e. it is a better selling price than the current market price.
Stop Loss
It is a pending order whose aim is to close a deal that actually exists in the market, whether it is a buy or sell deal, at a specific price, in order to avoid further losses and get out of the deal.
Spike
It is a sudden movement of the price in an upward or downward direction in a short period of time.
Spread
It is the difference between the buying and selling price of a currency pair.
Support Line
It is a level in the price in which the shares or currencies find it difficult to break through to the bottom, and this may result in an increase in the price instead of a decrease.
T
Take Profit
It is a pending order whose aim is to close a deal that actually exists in the market, whether it is a buy or sell deal, at a specific price, and be satisfied with the profits achieved.
Technical Analysis
Traders use technical analysis to predict price movement by studying the market and past data using charts and trading indicators.
U
Unit Trust
An investment fund of this kind allows participants to pool their funds to purchase a portfolio of stocks, bonds, or other assets.
V
Volatility
This term refers to the volatility level of a particular currency pair or financial asset.
Volume
The number or value of securities traded during a specified period.
W
White Knight
A takeover candidate who intervenes to save a business from a hostile acquisition.
Y
Yield Curve
A chart that shows bond rates at various maturities and can be used to predict future economic situations.
Z
Zero-Sum Game
A circumstance when one person's benefit is precisely offset by another person's loss.
Glossary
Discover some of the most common terms associated with trading CFDs available from WRC1
A
Account
A record of all transactions.
Asset
It is generally a resource or an item of variable value.
Ask Price
The price at which the buyer is willing to buy.
Average True Range (ATR)
ATR analyzes market volatility by examining price ranges over a certain time period.
B
Bid Price
The price at which the owner is willing to sell. The quoted price for the asset.
Basis Point
It is a financial measuring unit that equals one-hundredth of a percentage point (0.01%). Changes in interest rates, bond yields, and other financial percentages are typically represented using it.
Buy Limit
It is a pending order to execute the process of opening a trading purchase transaction when the price reaches a level lower than the current market price, meaning that it believes that the price will reach to a certain extent and goes up again.
Buy Stop
A pending purchase order placed by the trader in the market to buy at a price higher than the current market price, meaning that he believes that the price will continue on an upward path if It exceeded or penetrated specific resistance areas.
Bull/Bullish Market
It is the maintenance of a certain asset on the rise in price and the upward trend in the market.
Bear/Bearish Market
It is the maintenance of a certain asset on the decline in price and the downward trend in the market.
C
Chart
It is a graph showing the movement of securities
Commodity
A raw resource or basic agricultural product, such as gold or wheat, that may be bought and sold.
Currency Pair
A pair consisting of two different currencies that are traded in a forex trade. for example: EUR/USD.
D
Derivative
A derivative is a financial contract whose value is determined by an underlying asset. Derivatives are complicated financial products that can take the shape of options, futures, swaps, or other sophisticated financial instruments. They are used to manage risk, speculate on market movements, and offer leverage.
Day Trading
A trading strategy in which traders purchase and sell financial products on the same trading day in order to profit from price swings.
E
Exchange-Traded Fund (ETF)
An ETF is a form of investment that combines funds from several participants to purchase a portfolio of assets such as stocks, bonds, or commodities.
Expiration Date
The day at which a futures or option contract expires.
Equity
The ownership stake in a business or asset, typically represented by stock shares.
F
Free Margin
It is the amount of money available in the trading account that can be used to open new positions/deals.
Fill or Kill
When the investor has a specific price at which he wants to execute the transaction, he places an "execution or cancellation" order, where if the transaction is not executed at the specified price, it will be cancelled.
G
Good 'Til Canceled (GTC)
A form of order in which an investor orders a broker to hold an order open until it is either completed or canceled.
Golden cross
An upward crossover of a short-term moving average over a long-term moving average
H
Hedge
Investors use a covering order to protect themselves from risks that may result from adverse price movement in the market. A covering order is the opening of a position Trade opposite to the current position, in order to reduce the losses that you may incur from price fluctuations.
High-Frequency Trading (HFT)
A trading approach that employs powerful computers to execute a huge number of trades at extreme speed.
I
Index
A statistical metric that follows the performance of a basket of assets, such as stocks or bonds, in a certain market.
Initial margin
The proportion of the position size that must be deposited as collateral for a trader to initiate a leveraged position.
Inside bid and ask
The current range of values for an asset's highest bid and lowest ask prices.
J
Junk Bond
Junk bonds are often issued by corporations with questionable financials or in industries experiencing considerable transformation.
Joint account
A brokerage account with two or more owners.
K
Keltner Channel
A technical analysis indicator used to monitor the volatility of a security's price changes.
L
Leverage
It is the financial leverage provided by the broker to increase the purchasing power of the trader by giving him the possibility of depositing a small amount of money and trading in larger volumes. Leverage is expressed in the form of a percentage, where if it is 1:100, for example, the purchasing power of the trader is increased 100 times.
Liquidity
The capacity of an asset or security to be purchased or sold quickly without significantly altering its price is referred to as liquidity.
M
Margin
It is the amount of money required to be available on the trading account to maintain the open position.
Margin Call
Is a notice informing you that funds must be added to the trading account to maintain open positions.
N
Nominal Value
The original declared value of a financial instrument, such as a bond or stock, is referred to as nominal value. This value is used to determine the instrument's worth in terms of dividends and interest payments.
Notional value
A leveraged position's total value, determined by multiplying the position size by the underlying asset's price.
O
Over-the-Counter (OTC)
A market in which securities are exchanged directly between two entities as opposed to on a controlled exchange.
Options
A financial arrangement in which the holder has the option but not the obligation to purchase or dispose of an underlying asset at a given price and time.
Overbought
A situation when an asset's price has increased too quickly and too much and needs to be corrected.
P
Pip
It is the smallest price change that can be seen in exchange rates. The prices of currency pairs are in most cases displayed to four decimal places. The term "PIP" stands for "percentage in point".
Position
It is a transaction that takes place in the market.
R
Risk Management
They are strategies and tools that traders use to reduce financial risks as much as possible.
Return on Investment (ROI)
It is the return on investment, usually calculated as a percentage of the invested capital.
Resistance Line
It is a level in the price in which the shares or currencies have difficulty breaking through to the top, and this may result in a price decrease instead of an increase.
S
Scalping
It is a method of trading that is done by selling and then buying (or buying and then selling) an asset in a very short period of time with the aim of making a small profit.
Sell Limit
It is a pending sell order placed by a trader in the market to sell at a price lower or higher than the current market price. This means that the order may only be filled at the designated price or better.
Sell Stop
It is a pending sell order placed by the trader in the market to sell at a price higher than the current market price, i.e. it is a better selling price than the current market price.
Stop Loss
It is a pending order whose aim is to close a deal that actually exists in the market, whether it is a buy or sell deal, at a specific price, in order to avoid further losses and get out of the deal.
Spike
It is a sudden movement of the price in an upward or downward direction in a short period of time.
Spread
It is the difference between the buying and selling price of a currency pair.
Support Line
It is a level in the price in which the shares or currencies find it difficult to break through to the bottom, and this may result in an increase in the price instead of a decrease.
T
Take Profit
It is a pending order whose aim is to close a deal that actually exists in the market, whether it is a buy or sell deal, at a specific price, and be satisfied with the profits achieved.
Technical Analysis
Traders use technical analysis to predict price movement by studying the market and past data using charts and trading indicators.
U
Unit Trust
An investment fund of this kind allows participants to pool their funds to purchase a portfolio of stocks, bonds, or other assets.
V
Volatility
This term refers to the volatility level of a particular currency pair or financial asset.
Volume
The number or value of securities traded during a specified period.
W
White Knight
A takeover candidate who intervenes to save a business from a hostile acquisition.
Y
Yield Curve
A chart that shows bond rates at various maturities and can be used to predict future economic situations.
Z
Zero-Sum Game
A circumstance when one person's benefit is precisely offset by another person's loss.