Terminology

Balance: Value of the Client trading account that excludes P&L on open positions. It equals to all deposits minus withdrawals and P&L from closed positions.

Bear Market: A market characterized by falling prices and pessimistic investor sentiment.

Bull Market: A market condition in which prices are either rising or are expected to rise

Bid-Ask Spread: The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask) for a security.

Blue Chip Stocks: Stocks of well-established, large-cap companies with a history of stable performance.

Candlestick Chart: A visual representation of price movements in a specified time frame, displaying open, close, high, and low prices as candlestick shapes.

Chart Patterns: Specific formations or shapes created by price movements on a financial chart that traders use to identify potential market trends and predict future price movements based on historical price behavior.

Day Trading: The practice of buying and selling financial instruments within the same trading day or even multiple times over the course of a day.

Diversification: Spreading investments across various asset classes, sectors, and geographical regions to mitigate risk.

Dividend: A dividend is a distribution of a portion of a company’s earnings, decided by the board of directors, paid to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.

ETF (Exchange-Traded Fund) is a type of investment fund that holds a collection of assets, such as stocks or bonds, and is traded on stock exchanges, typically designed to track the performance of a specific index.

Equity: Client’s current account’s value – it equals to balance plus any P&L from open positions.

Forex (Foreign Exchange): The global marketplace for trading currencies, where one currency is exchanged for another at an agreed-upon exchange rate.

IPO (Initial Public Offering): The first sale of a company’s stock to the public, marking its transition from a private to a publicly-traded company.

Index: Is a hypothetical portfolio of investment holdings that represents a segment of the financial market. For example, S&P 500, which tracks 500 of the largest U.S. companies.

Intraday Trading: Trading that occurs within the same trading day, with positions opened and closed before the market closes.

Limit Order: Is an order to buy or sell at a specified price or better. A Buy Limit order (a limit order to buy) is executed at the specified limit price or lower (i.e., better). Conversely, a Sell Limit order (a limit order to sell) is executed at the specified limit price or higher (again, better). Unlike a market order, where you simply press “buy”/”sell” and let the market choose the price, you have to specify a price when using a limit order.

Long Position: Is the buying of a security such as a stock, commodity or currency with the expectation that the asset will rise in value.

Liquidity: The ease with which an asset can be bought or sold without significantly affecting its price.

Margin: Margin is the amount of equity contributed by an investor as a percentage of the total market value of a margin account, and it represents the collateral required to borrow funds from a broker for trading or investing.

Margin Call: A requirement from a broker or dealer for additional funds or other collateral to bring the margin up to a required level – thereby guaranteeing performance on a position that has moved against the customer.

Market Order: Is an instruction to the broker to buy or sell an investment immediately at the best available current price.

Portfolio: A collection of securities, including stocks, bonds, and other investments, held by an investor.

Penny Stocks: Low-priced stocks that typically trade at less than $5 per share and often represent small companies with limited liquidity.

Research Tools: Resources provided by the broker, such as market analysis, stock screeners, and financial news, to help users make informed investment decisions.

Risk Management: Strategies and techniques used to mitigate risks and protect investments from adverse market movements.

Risk Tolerance: The level of risk an investor is comfortable with when making investment decisions.

Stop-Loss (S/L): Is an order placed with a broker to sell a security when it reaches a certain price. Stop loss orders are designed to limit an investor’s loss on a position in a security.

Short Position: A short position is a trading strategy where an investor borrows shares of a security and sells them on the open market, anticipating that the price will decline. The investor plans to buy back the shares at a lower price in the future to return them to the lender, profiting from the difference.

Trading Hours: The specific hours during which the broker’s platform allows trading in various markets, such as stock exchanges and commodities markets.

Trading Platform: The software or online interface that allows users to place orders, conduct research, and manage their investments.

Technical Analysis: Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume, to forecast future price movements. It primarily focuses on price patterns and market trends rather than internal factors.

Volatility: A statistical measure of a market or a security’s price movements over time, it is calculated by using standard deviation.

Value Investing: An investment strategy that involves selecting undervalued stocks based on fundamentals, such as earnings and book value.