Power-up your financial lingo, upgrade your trading skills, and own your trades.
Our Financial Dictionary is your go-to resource for clear, up-to-date definitions of the most essential and widely used terms in the industry. Designed to be part of our powerful learning tool package, it’s constantly updated to help you stay informed so you can make smarter decisions in the fast-moving financial markets.
A strategy that involves frequent buying and selling of securities to profit from short-term movements.
Trading that is done automatically by a computer using pre-set rules or instructions.
The process of distributing assets in a portfolio based on investment goals and risk tolerance.
One of the main trading sessions in the forex market, covering trading hours in Asia.
Also known as Offer Price, is the minimum price the market will accept for selling an instrument.
Securities, currencies, commodities, derivatives, indices or any other trading/investment vehicle that can be owned or controlled to produce value.
An investment strategy that aims to balance risk and reward by dividing a portfolio among asset categories
A group of financial instruments with similar characteristics, such as equities, fixed income, or commodities.
An instruction to a broker to buy or sell at the best available price.
An instruction to a broker to fill an order at or above/below a specific price.
The nickname for the Australian Dollar.
The maximum amount of asset units available for trading.
The average number of shares traded per day for a specific security, used as a liquidity indicator.
The average costs of a security, calculated by dividing the total cost by total quantity purchased.
The equity amount of an account excluding any open positions.
A visual way of seeing how a price has moved up or down during a specific time.
The first currency mentioned in a currency pair.
One hundredth of a percent.
When the market is going down and people expect prices to keep dropping.
The price a trader will have to pay for an instrument.
The difference between the Bid and Ask prices.
The first digital currency (cryptocurrency) created as a decentralised alternative to government-issued currencies.
A digital system that records transactions across a network of computers.
Statistical charts showing the price and volatility of a financial instrument at a specific timeframe.
Debt instruments where investors lend money to governments or companies in exchange for regular interest payments and repayment later.
A major global benchmark for oil prices, based on oil extracted from the North sea.
A breakout happens when the price of an asset moves above a resistance level or below a support level with strong volume.
A person (or entity) that brings together the buyers and the sellers of an instrument.
When the market is going up and investors are mostly buying because they think prices will keep going higher.
A pending order to buy at a value below market price. If the ask price reaches the pre-specified level then a long position is opened.
A pending order to buy at a value above the market price. If the ask price reaches the pre-specified level, a long position is opened.
A slang term to describe the exchange rate between the British Pound and the U.S. Dollar.
A candlestick chart graphically represents the price movement of a financial instrument. Each candlestick displays a specified time-period and the opening, closing, maximum and minimum price for that period.
A government-run bank that controls a country’s money, sets interest rates, and helps keep the economy stable.
Contract for Difference; a derivative contract between a buyer and a seller, where the seller will pay in cash the buyer the difference between an instrument’s present value and its value at a defined closing time.
The act of closing a transaction that will terminate an open transaction.
A graphic representation of data that provides a trader information regarding previous price movements.
The process of settling a trade.
An order that has been terminated and the cash settlement has been done.
The final price at which an asset is traded at the end of a trading day.
Basic goods usually used in the manufacturing of products or provision of services.
A standardised measure of financial instruments, that varies depending on the asset class, traded on an exchange.
Also known as Secondary or Quote Currency. The second currency quoted in a currency pair.
A measure of inflation, showing the average change over time in the prices paid by consumers for goods and services.
The system of money in general use in a country, such as Dollars, Euros, or Yen.
The system of money in general use in a country, such as Dollars, Euros, or Yen.
The daily time periods during which an instrument is available for trading. All times are listed in GMT.
A type of digital money that uses computer networks to secure and verify transactions. It operates without a central authority, like a bank, and is often used for online payments or investment. Examples include Bitcoin and Ethereum
A slang term to describe the exchange rate between the British Pound and the U.S. Dollar.
A trading order that is only valid for the trading day on which it is placed.
Buying or selling financial assets within a same day time frame.
The maximum price range of a future contract is allowed to move in a single day.
A pricing system where securities are quoted in decimals (like 10.25) instead of fractions (like 10¼).
The process of transferring a commodity, currency, security, or other asset from the seller to the buyer as agreed in a sales contract.
An economic concept that shows how much of a product or service people want and are willing to buy at a certain price. Generally, as prices go up, demand goes down—and as prices go down, demand goes up (if everything else stays the same).
Money transferred into an account to be used as equity for trading.
A strategy of spreading investments across different assets or sectors to reduce risk.
A dividend is a distribution of part of a company’s earnings to the company’s shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.
A stock market index that tracks the performance of 30 major U.S. companies, often used as a barometer for the overall health of the U.S. stock market. Officially called the Dow Jones Industrial Average (DJIA).
A method for a company to offer its shares directly to the public without using underwriters or investment banks. It’s a cost-effective alternative to a traditional Initial Public Offering (IPO).
Technology that allows traders to place orders directly into the market without broker intervention.
A company’s profit divided by its number of shares; used to measure profitability.
A schedule of important economic events and data releases (like GDP or interest rates) that may affect the markets.
Macroeconomic data that shows the strength of an economy and its financial market.
An ECN broker connects traders directly to other participants in the forex market using an electronic system. This setup often results in tighter bid/ask spreads because it combines price quotes from various sources.
A smaller-sized futures contract traded electronically on the Chicago Mercantile Exchange. E-Minis represent a fraction of standard futures contracts and are available for major indexes like the S&P 500, Nasdaq 100, and Russell 2000.
A pending order to open a trade when the market reaches a specific price level.
The value of an investor’s or company’s ownership interest, calculated by subtracting total liabilities from total assets. In trading, it can also refer to the available funds in an account after accounting for losses and gains.
The native cryptocurrency of the Ethereum blockchain, used to pay for transactions and smart contracts.
A blockchain platform that supports smart contracts and decentralised apps, powered by Ether (ETH).
One of the world’s largest markets for trading futures and options, focused mainly on European financial products. It handles trades in instruments like German bonds, Swiss debt, and European stock indexes, and also manages contract settlements.
The official currency of the Eurozone, used by many countries in the European Union.
A bond issued in a currency that is different from the currency of the country where it is sold. For example, a dollar-denominated bond issued in Europe. These bonds are usually grouped by the currency they’re issued in, such as Euro/Dollar or Euro/Yen.
An informal meeting of finance ministers from EU countries that use the euro. It was first held in 1998 and officially recognised in 2009 under the EU Treaty.
A type of investment fund that trades on stock exchanges, holding assets like stocks or bonds.
The value of one currency compared to another, used in forex trading.
The process of completing a buy or sell order in the market.
The last day a trading contract or option is valid and can be exercised or settled.
Fair value is the price at which a willing buyer and seller agree to trade, assuming both act freely. Many investments have a fair value set by the market where they are bought and sold.
The official currency of the Eurozone, used by many countries in the European Union.
A bond issued in a currency that is different from the currency of the country where it is sold. For example, a dollar-denominated bond issued in Europe. These bonds are usually grouped by the currency they’re issued in, such as Euro/Dollar or Euro/Yen.
A type of investment fund that trades on stock exchanges, holding assets like stocks or bonds.
A standardised agreement to buy or sell an asset at a set price on a future date.
A term for a central bank or policymaker favoring higher interest rates to fight inflation.
Is a technique to protect one’s self against potential loss, or, more usually, to invest in order to offset potential loss (or gain) that results from a similar investment.
A pooled investment fund that uses advanced strategies to earn returns, often with higher risk.
The highest traded price and the lowest traded price for a given period.
Stocks that pay higher-than-average dividends, providing regular income to investors.
The time an investment is owned before it is sold.
One of the largest stock exchanges in Asia, where shares of companies from Hong Kong, China, and other regions are traded.
Stocks that pay higher-than-average dividends, providing regular income to investors.
A market that moves sideways, with no clear upward or downward direction.
A group of securities used to measure market performance, like the S&P 500 or Dow Jones
The official currency of Japan and one of the most traded currencies in the forex market.
A nickname for the New Zealand Dollar (NZD) in forex trading.
An investment with a lower chance of losing money, such as government bonds or savings accounts. These usually offer smaller but more stable returns.
A type of trading account that allows you to borrow money from a broker to trade larger positions than your actual capital. It uses leverage, increasing both potential profits and risks.
A broker’s demand for a trader to deposit more funds to maintain an open position due to losses.
A percentage that shows the health of your margin account. It’s calculated by dividing your equity by the used margin. A low margin level may trigger a margin call.
A broker or firm that provides liquidity by always offering to buy and sell a currency pair.
An investment fund that pools money from many investors to buy a diversified portfolio of stocks, bonds, or other assets. It’s managed by a professional fund manager.
The amount of money a trader needs to open or maintain a leveraged position.
A single account held by a broker or financial institution that aggregates the trades of multiple clients, making it easier to manage and execute orders collectively.
An order placed to buy or sell a financial instrument that has not yet been executed or canceled. It remains active until filled or withdrawn.
The current sum of a trader’s profits and losses on all his open positions.
A trade that has been entered but not yet closed, meaning the trader still holds the asset or contract.
Expenses a company incurs during its normal business operations, like rent, salaries, and utilities
The risk of loss resulting from inadequate or failed internal processes, people, or systems.
A real-time list of buy and sell orders for a financial instrument, showing prices and quantities.
A trade that is kept open past the trading day into the next day, potentially incurring overnight fees or swaps.
A decentralised market where financial instruments, like currencies or stocks, are traded directly between parties without going through a formal exchange.
The financial benefit on an investment over a defined period.
An order to buy or sell a financial instrument at a specified price in the future, which will be executed only when the market reaches that price.
The smallest price change in a currency pair, usually 0.0001 for most pairs.
An open trade or transaction in an asset.
A collection of investments owned by an individual or institution.
An economic indicator that measures the average change in selling prices received by producers for their goods, often used to predict inflation.
The movement of a currency or asset’s price, often used to make trading decisions.
A market indicator that shows changes in price trends, helping traders decide when to buy or sell.
The amount of money gained or lost on a trade or investment.
An investment strategy that uses mathematical models and data analysis to decide what to buy or sell.
A central bank policy where money is injected into the economy by buying government securities to lower interest rates and boost economic activity.
The current bid and ask prices available for a specific asset, showing what buyers are willing to pay and sellers are asking.
The latest price at which an asset was traded, reflecting the most recent agreement between buyers and sellers.
The second currency in a forex pair, used to measure the value of the first (base) currency. It’s also called the “counter currency.”
The price or value of one currency compared to another in forex trading. It shows how much of one currency is needed to buy one unit of another.
Recession is a significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade.
A technical indicator that measures how fast and how much a price has moved. It helps traders spot if an asset is overbought or oversold.
A currency that is widely held by governments and central banks as part of their foreign exchange reserves, like the U.S. Dollar or Euro.
Shows how efficiently a company uses its assets to generate profit.
A measure of how well a company uses its shareholders’ money to make profits.
A digital currency and payment network designed for fast, low-cost international money transfers.
The process of evaluating potential losses or uncertainties in an investment or decision. It includes looking at possible changes in cash flow, stock returns, and the chances of success or failure.
A fee charged to a trader for keeping a position open overnight. Each open trade may have its own rollover fee, based on interest rate differences between currencies.
An index tracking the 500 largest publicly traded companies in the U.S., often used to represent the overall market.
A trading strategy focused on making many small profits from minor price changes.
A financial asset like stocks, bonds, or options that can be traded.
A pending sell order set at a price above the current market price.
A pending sell order set at a price below the current market price.
A trade opened when a trader expects the price of an asset to decrease.
A marketplace where shares of publicly traded companies are bought and sold.
An order to automatically close a trade to limit losses at a specified price.
A margin level where the broker automatically closes losing positions to prevent the account from going negative.
The total amount of a product or service available to consumers at a given price or range of prices.
A fee paid or earned for holding a trading position overnight, based on interest rate differences.
A trading style that holds positions for several days or weeks to profit from expected price moves.
A nickname for the Swiss Franc (CHF) currency in forex trading.
An order set to automatically close a trade when it reaches a specific profit level.
The total number of shares or contracts traded during a specific time period.
A method of analysing market data—like price charts and trading volume—to predict future price movements.
A tool used in charts to help traders spot trends, patterns, or signals for buying or selling.
The smallest possible price movement of a trading instrument.
The difference between a country’s exports and imports. A positive balance means more exports; a negative one means more imports.
Software that allows traders to place trades, view charts, and manage accounts.
Specific hours during which trading happens (e.g., London Session, New York Session).
The amount of a financial asset involved in a trade.
A straight line drawn on a chart to show the general direction (upward or downward) of an asset’s price over time.
A long-term, low-risk debt security issued by the U.S. government.
A stop-loss order that moves with the market price to lock in profits. It closes the trade if the price moves against you by a set amount or percentage.
The total volume of all completed trades over a certain time period.
The official currency of the United States and one of the most widely traded currencies in the world.
The actual asset (like a stock, currency, or commodity) that a derivative or contract is based on.
When an asset or currency is priced lower than its true or fair market value.
The number of people applying for unemployment benefits, often used to measure the health of the job market.
The percentage of the labor force that is jobless and actively seeking work.
The portion of a trader’s funds set aside as collateral to keep open positions active. It remains locked until the position is closed.
The interest rate that U.S. banks charge their most creditworthy business customers.
A market condition where prices are consistently rising over time.
A trade that occurs at a higher price than the previous one — often a signal of rising demand.
The agreed date when both sides of a trade settle and exchange funds.
A pool of money collected from investors to invest in startup companies and small businesses with high growth potential.
VIXX is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market’s expected volatility over the next 30 days.
A measure of how much the price of a security or market index fluctuates over time.
The total number of shares or contracts traded during a specific time period. Each completed trade between a buyer and seller adds to the volume count.
The agreed date when both sides of a trade settle and Software used to send, receive, and store cryptocurrency tokens.
exchange funds.
A currency that has lost significant value over time, often due to poor economic conditions like high inflation and budget deficits.
Trading days when a stock’s price moves a lot between its high and low, indicating high volatility compared to previous days.
Taking money out of a trading or investment account.
An international organisation providing financial assistance and advice to developing countries.
The money a company has available to cover its day-to-day expenses, calculated as current assets minus current liabilities.
A currency traded outside its home country’s markets. The term “xeno” means foreign or strange.
Another term for a billion.
The income earned from an investment, like interest or dividends.
A slang nickname for the EUR/JPY currency pair in forex trading.
A specific price range or area on a chart where traders expect support or resistance.
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