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Glossary

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.

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.

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.

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.

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 - 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.

Grey Market - A market that we may quote even when the actual underlying market is closed.

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.

IPO - Initial Public Offering. When a company first sells stock to the public.

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.

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.

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.

Overbought - 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.

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.

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 - 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 Finveo and ours with you.

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.