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Glosary

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A

Action/Share

An action or share, security asset operable that guarantees the buyer ownership a part of the corporation and the right to a percentage of its assets a benefits (dividends).

Ask (Price Ask)

The ask price is the price at which you can buy a market. It is the upper end of the spread. Also known as the offer price. See also: bid.

AUS 200

Is the other name for the stock Exchange of Australia (ASX 200) it’s the 200 companies that list in the ASX (by capitalization bourse).

Aussie

Ozzie u OZ, refers to the currency pair AUD/USD.

B

Balance

The amount of money a trader has available in his trading account.

Bear market

A bear market is characterized by declining prices, pessimism and the general sale of underlying assets.

Bearish Reversal

A bearish tendency happens when an upward trend (bullish) the market begins to move in opposite position.

Bearish sentiment

A bearish sentiment refers to the negative environment around the value and future expectations of the underlying assets.

Bid

The bid price is the price at which you can sell a market. It is the lower end of the spread. See also: offer.

Bollinger Bands

Developed by John Bollinger in the decade of 1980s, Bollinger bands are an indicator of volatility use don technical analysis to measure the máximum an mínimum in relation to historical Price action.

Boiler Room

Traditionally the expression boiler room it’s to describe the fraudulent practices used to sell securities not wanted property of the members firm typically named penny stocks. In recent years the term has become synonymous of companies that use telephone sales equipment with aggressive sales techniques and distort the products that are sell.

Broker

In trading, brokers are individual or companies that act as intermediaries between buyers and sellers facilitating their trading activities in return for a commission or mark-up in the spread.

Bucket Shop

Bucket shop is expression used to describe a brokerage firm which acts as a counterpart of the positions of its clients and does not execute the orders of the traders in the market.

Bull Market

A bullish market characterized for the optimism, a rise in the prices and sells are generalized of underlying assets. The situation is often feedback because the rise in prices causes investors between the market looking to benefit.

Bullish Reversal

A bullish reversal happens when in a downward trend the market begins move to opposite direction.

Bullish Feeling

The positive feeling and the investors’ confidence increase in relation to the value and the future performance of an underlying asset or market. This positive feeling usually precedes an upward and encourages other investors to buy.

Buy Limit

Is an order that can be placed with the broker to get in a large position (buy) an asset decrease to a specified level or inferior.

Buy Stop

It is an order that can be placed with the broker to enter when the price rises to a specified level above. In contrast, a sell stop is an order to sell an asset when the price drops to a real price level.

C

Cable

The Cable is the nickname given to the British Pound and the GBP / USD currency pair. The term meaning derives from the telegraph cable that was placed below the Atlantic Ocean in 1858, used to synchronize the GBP / USD exchange rate.

Capital Risk

Is the amount of capital that a trader have available without being significantly affected in case of a lose the investment.

Carry trade

The carry trade is a strategy where currency of low interest is sold and with the funds raised gets a high interest currency and better returns. The objective of this type of trade is have benefits for the difference between the interest rates of the two currencies. Leverage is used to increase profits.

CFD

Stands for Contract For Difference. A CFD is a contract to exchange the difference in value of a financial market over a period of time. It replicates the exposure created by making the equivalent trade but without the need to make a physical purchase (or sale). You can also open a CFD without having to pay the full contract value.

Charts

For each market you can plot a chart of price movements over a specific time period. This is an important tool, allowing traders to analyse historical prices and forecast future activity.

Close

When you want to end your exposure on a CFD position you close the position. The profit or loss on the position is not realised until it is closed.

Close order

A close order is an order to automatically close an open position when the price of an asset reaches a predefined level. Closing orders are used to automatically secure profits or to prevent losing positions from unnecessarily damaging risk capital.

Contract value

The contract value of a CFD position is the full cost of the equivalent physical purchase (or sale). For instance, the contract value of 1000 Vodafone CFDs, supposing the price of Vodafone is 160p, would be 1000 x 160p, or$1600.

Currency Pairs

In Forex trading currencies are traded in pairs. Each currency is shown abbreviated with three letters and is normally separated from the currency paired by a space, a point or a slash "/". The EUR / USD pair refers to the Euro versus the US Dollar. The first currency in the pair is known as the base currency. The second currency is known as a valued currency.

Commodities

The commodities are raw material with a standard quality and quantity that can be negotiated. Are divided in two main categories: “hard commodities” like oil, gold,silver and platinum and “soft commodities” like wheat, corn, coffee and sugar that are grown and harvested.

CPI (Consume Price Index)

"Consumer price index" is a monthly economic indicator that measures changes in the prices of assets and services purchased by consumers. Consumer Price include the most of inflation experienced by a country.

CCI (Commodity Channel Index)

A technical indicator that is often used to detect the overbought / oversold states of the market.

Commission

The rate a broker takes to manage an operation

CBs

Central Banks

CAC 40

The CAC40 (Cottation Assistée en Continu) is the French stock market. This is a measure weighted by capitalization of the 40 most important companies among the 100 with the largest market capitalization in Euronext Paris.

D

DAX (Deutscher Aktien Index)

It is a total return index of 30 leading German companies listed on the Frankfurt stock exchange.

Day Trading

"Day trading" is the operation of buying and selling an underlying asset in a single day of trading to benefit from market fluctuations and usually with high leverage to obtain returns from small movements in prices.

Demo

A Demo Account is a risk-free trading account that allows you to make virtual trades on the online platform. It is a great way to find out more about CFD trading without risking your funds. Open a Demo Account.

Derivatives

A derivative is a financial instrument that has no intrinsic value but derives its value from another financial instrument, asset, index, exchange rate, etc. CFDs, swaps, forwards and futures are some examples of derivative contracts.

DJIA

Dow Jones Industrial Average

Divisa base

The base currency of a pair is the pair's first currency. The exchange rate determined refers to how much the second currency valued in the pair is needed to buy a unit of the base currency.

Dividend

It is a payment made by a corporation to his shareholders, usually as a distribution of profits.

Dove

In "dove" refers to when a central banker or economic adviser favors policies that keep interest rates low, arguing that inflation is not an imminent risk for the country in question.

E

ECN (Electronic Communication Network)

An "Electronic Communication Networks" allows traders to receive the best bid and ask price when they operate, adding prices from different liquidity funds providers. The ECN orders are transferred directly to the interbank networks, anonymously and without trading desk intervention.

Equity

Is the balance of your account plus the addition or subtraction unrealized profits or losses that you have, in that time, from the open positions.

ECB

European Central Bank

Economic Calendar

The economic calendar is used to monitor the economic data that will be published in each country or region. Data publications are classified according to the impact in the market.

Economic indicators

Are economic reports that are published by individual nations or economic regions. They are used by investors to try to determine the overall health and potential investment sectors in the countries or regions concerned.

European Session

The European session is the second trading session of each trading day. Europe operates between 7am and 4pm GMT. This schedule is modified when summer schedule is established.

Expiry

The date/time at which your CFD will be closed and settled automatically, i.e. the end of the contract period. If you want to extend your position you can specify that you want it to rollover. There is no expiry date/time if your position is a Rolling Contract.

F

Free Margin

Free Margin refers to funds in a trading account that are not currently being used to guarantee open positions. It is calculated as follows: Free Margin = Equity - Margin.

FOMC (Federal Open Market Commitee)

The members of “Federal Reserve Open Market Committee” are the responsible to vote for the level of interest rates of USA. That´s why when one of the members have a scheduled public intervention or an announcement of the reunion its considerate high impact economic indicator.

Forward

"Forwards" are private agreements where a buyer and seller agree a price for an asset and delay delivery at a specified date. This could be days, weeks, months or even years. When the contract expires, the buyer has an obligation to buy and the seller has an obligation to sell at the price established in the contract, regardless of current market conditions.

Futures

Futures contracts allow buyers and sellers to reach an agreement on the price of an asset later. A buyer of futures contracts is positioned 'long', waiting for the asset to rise in price. The seller is positioned 'short' expecting a decrease in the price of said asset. Futures are similar to forwards, where both contracts guarantee a price for a deferred transaction over time, however, futures contracts differ from forwards in various respects.

FED

Federal Reserve System, central bank of United States

Fill

Meaning order executed successfully

Flat/square

Neutral state when all positions are closed and the investor not exposed to market movements.

Forex (Foreign Exchange)

Abbreviation of assets

Flow analysis

The order flow analysis uses the flow of purchase and sell orders to explain exchange rates and to predict future movements.

Fundamental Analysis

The Analysis fundamental is a method of market analysis firstly focused on external factors that affects the price of an asset. The analyst focus on the geopolitical, economic and the social environment with macroeconomic factors. The purpose of such a method of analysis is to identify if asset is above or below of its price and take the appropriate position.

G

Gap

The difference between the closing price and the opening price. Since the currency market operates 24 hours a day, a gap usually only happens on FX during the weekends between the close of Friday and the opening price on Monday. However, gaps happen when the main news causes prices go off.

Gapping

When a market moves to a new price without moving through the prices in between, for instance in response to shock news.

GDP (Gross Domestic Product)

Gross Domestic Product is an economic indicator that measures changes in the total value of goods and services produced by an economic region or country (adjusted for inflation). GDP provides a comprehensive state of economic activity and is considered as the most important scale of an economy's health.

Gearing

The ability, when trading on margin, to gain exposure without making the full contract value. For example, when you open a position with a value of $10,000 by putting down a margin deposit of $1000 you have a gearing ratio of 10:1. Also known as leverage.

Good for the day

Orders "Good for the day," refers to those orders valid until the end of the trading day, at which time they are automatically closed.

Guppy

The Guppy is the nickname that receives in the market the currency pair GBP / JPY

H

Hawk

A central banker, or financial adviser whose policies are defined by a concern for interest rates. Hawks tend to prefer policies that keep high interest rates in order to keep low inflation.

Hedge

Hedging is a way for investors to reduce risk exposure by opening positions on two instruments inversely correlated or otherwise cancelable among themselves.

"Hot money"

Describes the movement or flow of speculative investments from one economy to another to benefit from a higher interest rate.

I

Index

Represent the health of a market or economy sector. For example, the S&P 500, one of the most popular benchmarks in the US stock market, measures the value of the top 500 US companies and accounts for about 75% of the US market.

IMM (International Money Market)

A division of the Chicago Mercantile Exchange (CME) that deals with the trading of currency and interest rates.

IMF (International Monetary Fund)

The IMF works to foster global growth and economic stability. It provides advice and funding to members in economic difficulties and works with developing countries to help them achieve macroeconomic stability and reduce poverty.

J

Jawboning

"Jawboning" is the use of rhetoric to influence economic and political events rather instead to intervene directly by legislation. Central bank discourses tend to fall into this category as they seek to influence market sentiment and interest rates without modifying their policy”

JPN225

Also known as NKY 225 O Nikkei 225, it is an index of Japanese stocks.

K

Kiwi

Is the nickname of New Zealand dollar receives on the market.

L

Latency

Refers to the time interval between the action of placing an order to market and its execution. A low latency it would be ideal and means that a trader has a greater chance of securing a quoted price for an instrument before the market moves.

Leverage

The leverage allows investors to make a larger investment tan their capital would allow and thus potentially increase their profits by investing only a percentage of the total value of the assets at issue. Q-Smart offer to his clients a leverage of to up 1:500.

Limits/limit order

An order for a broker to buy an asset for a predetermined or lower price, or to sell the asset for a predetermined or better price. This price is called the limit price. A limit order differs from a stop order in that it can only be made at the limit price or better.

Limit order

An order to close your position should the market hit a specified price more favourable to you than the current price. You use a limit order to take your profit on a position automatically when the price reaches your target.

Limited Order

Limits the price at which a trader is willing to buy or sell.

Liquidity

Refers difficulty or ease to sell or buy an asset in a market. A high liquid asset is one that can be bought and sold in large quantities without that activity substancially affect it market price

Long

You go long when you buy a market, expecting the price to rise. See also: short.

Long position

Open a long position is to buying with the expectation that it will increase its value.

London session

7 am to 4 pm London time (0700 to 1600 GMT during the Winter)

LSE (London Stock Exchange)

It is a international exchange group based in London.

M

Margin

Margin refers to the funds that traders must have in their account to guarantee their open positions.

Margin Call

A "margin call" is a request from the broker to a trader to deposit more funds into his trading account to continue guarantee his open positions.

Margin level

Margin level is the margin that a trader has available to open new positions.

Market-neutral

A CFD provider that mirrors every bet it takes from clients by trading in the underlying market will be market-neutral. This is because the provider has no financial interest in how the market performs. Qsmart Limited is a market-neutral provider. Find out more about market-neutral execution.

Market Entry

It is an order that enters the current price, regardless of that price. These can be long or short.

Market Order

An order to Market is an order to buy or sell at the current market price. It is executed at the moment that the trader executes a sale or buy order.

Margin percentage

This figure is used by Qsmart Limited to determine your initial margin requirement when you open a CFD position. On our web-based platform you can reduce your margin requirement by attaching a stop-loss order to your position. Find out more.

Micro batch

Is one-hundredth of a batch; in Forex trading, a micro batch represents 1,000 units of the base currency of a pair.

Mini BATCH

A mini batch is one-tenth of a batch; in currency trading a mini batch represents 10,000 units of the base currency of a pair.

MoM (Month over Month)

The change of information, news of a month unlike with the previous month.

N

NASDAQ-100

The NASDAQ is the stock market of large corporations in the United States. The NASDAQ-100 is a weighted modified capitalization index of the 100 non-financial companies.

New order

An order to open a position automatically should the market hit a specified price level. If the price level is not reached the position will not be opened.

Nikkei 225 Index

A weighted average price index that contains the 225 most important companies of the Tokyo Stock Exchange.

No Dealing Desk (NDD)

Brokers who operate a model without a Trading Desk pass their clients' operations directly to liquidity providers. They dont intervene between the market and the trader.

O

OCO (One-cancels-the other-order)

A pair of orders, if you execute an order, the other is automatically canceled.

OECD (The Organization for Economic Cooperation and Development)

The Organization for Economic Cooperation and Development is a group of the 34 most developed countries. The objective of the OECD is to promote the economic and social well-being of countries around the world.

Offer

The offer price is the price at which you can buy a market. It is the upper end of the spread. Also known as the ask price. See also: bid.

Online platform

The software you use to deal via the internet. With Qsmart Limited you don’t have to download this software, you simply go to our website and use your unique login details to access the platform. Or you can use the popular MT4 download platform.

Open

When you buy or sell a market you open a CFD position. This gives you exposure to the market until you close the position.

Open order

An entry order is an order to automatically open a position when the price of an asset reaches a certain Price.

Option

A contract that gives the buyer the right, but not the obligation, to buy something at a fixed price in a fixed period.

Open position

An operation that remains open.

Order

An order is an instruction from a trader to a broker to buy or sell a share.

P

Pending order

A pending order is an instruction to buy and sell an instrument when there are conditions specified by the trader. Pending orders are structured in two categories, limited orders and stop orders.

Petrodollar

Petrodollars are US dollars generated by the sale of oil. Because crude oil is traded in US dollars, each transaction involves an exchange of dollars.

Period

In trading a period is a unit of time standardized when monitoring an asset. In a candle chart, each candle refers to a period, which, depending on the time observed by the trader, refers to 1 minute, 5 minutes, 15 minutes, 30 minutes, 1 hour, 4 hours, 1 day, 1 week and 1 month, respectively

PIP

A pip (or percentage in points) is the smallest unit when we describe the value of a currency pair. This is normally the fourth decimal or the 1 / 10,000 of the currency pair quote.)

PIP Value

The value of a PIP is related to the value of each pip in a trade, converted to the currency of the trader's account. Knowing the value of pip is important to trader’s cause allows to determine how their profits or loss levels affect any small movement or swing in price.

Point

For non-forex markets, one unit of the price is known as a point. Your profit/loss is determined by the change in points times your unit stake.

Portfolio

A portfolio is a selection of financial assets held by an investor. These may include stocks, bonds, commodities, options contracts, mutual fund investments and quoted funds among other assets.

Position Trader

A "position trader" is a trader who is not aware of short-term fluctuations in price action but seeks to capitalize on primary trends. Position traders tend to maintain a security over months or even years; in this respect, they are completely opposed to day traders.

Profit

Positive amount of money earned when closing the order.

Q

Quote

For forex markets, one unit of the price is known as a pip. Your profit/loss is determined by the change in pips times your unit stake. (Where forex is priced to an extra digit one pip will be the penultimate digit quoted.)

R

Rally

A rally refers to an upward movement in price action. Rallies happen in market conditions with an abundance of buyers and no sellers. This demand causes increase in the price and only can be reversed with the entry of sellers to the market.

RBA

Reserve Bank of Australia

RBNZ

Reserve Bank of New Zealand

Requote

This happens when a provider cannot open your position at the price quoted, for example if the market price is moving quickly and the provider gives you a revised quote. Qsmart Limited never uses requotes, either on our web-based platform or the MT4 platform. If we can’t open your position we will simply reject your trade.

Reversal

Is a complete change in the direction of a trend. If a security is in a bullish trend, a reverse mark the beginning of a bearish trend. If we are facing a bearish trend, then a reverse is the beginning of a new bullish trend.

Reserve Asset

A reserve asset is held by central and commercial banks to buy commodities, title bonds to influence exchange rates. This asset is held in reserve to minimize the risk in the exchange rate.

Resistance level

A price level in which the intensive sale is probably happen, making difficult for the price to rise above that level.

Risk

The possibility of investing could be the loss of money for the investor.

Risk Loathing

The risk loathing is characterized by the resistance to take positions estimated as a risk. The objective of a risk-averse investor is to minimize uncertainty. On trading, this means to invest in safe-haven assets such certificates like the gold.

Rolling Daily

A Rolling Daily position will stay open from one trading day to the next, unless you choose to close the position. This may incur a debit or credit for every day the position is held overnight. Find out more.

Rollover

In Forex trading a rollover happens when a position is held open overnight without being liquidated (two days is the date for currency trading). For the position to remain open, it must be closed and reopened so that the scheduled delivery date is deferred.

S

Scalping

Scalping is a trading strategy in which traders seek to benefit from small changes in prices, opening and closing a long number of positions in each trading session. In this way, the risk is limited and the benefits are accumulated due to the high number of trades executed. Scalpers operate manually or employ automated strategies.

Sets

Sets are used to standardize the amounts of financial instruments and underlying assets. In Forex, a lot refers to 100,000 units of the base currency of a pair.

Settlement

The process of realising profit or loss on individual positions. When you close your position, or it is closed automatically on expiry, the final profit or loss on the position is determined and your account adjusted accordingly.

Short

You go short when you sell a market, expecting the price to fall. See also: long.

Size

The amount you wish to bet per point or pip movement in the price. For example,$10 per point on UK 100 is a bet size of$10.

Slippage

Slippage is the difference between the price that a trader expects when completing an order and which is currently executed. Slippage tends to occur when liquidity is low or in volatile markets, particularly in the moments before or after significant data releases.

Spread

The gap between the bid price and the offer price for a particular market. The smaller the spread, the less your cost of trading that market.

Spread betting

A way to bet on the movements of financial markets with variable returns. This is another form of margin trading offered by Qsmart Limited. Find out more.

Stop-loss

An order to close your position automatically when the price reaches a specified level. A stop-loss order is an important risk management tool, although you should note that stops can be subject to gapping and slippage in volatile market conditions.

Spikes

Spikes are relatively long movements in price action, positive or negative, of short lenght in time.

Spot

The spot market is a cash market where the assets are traded with immediate delivery, unlike forwards or futures markets where it is agreed for a later date.

Spread

Bid and Ask prices are determined by the maximum amount that a buyer is willing to pay for a unit of an asset and the minimum that a seller would agree to sell. The spread is the difference between the two figures.

Swap

Swap is the interest that accrues when you hold a position in a currency pair overnight. All foreign exchange transactions carry a loan in a currency (listed) to acquire another currency (base), by holding such positions overnight, an interest is charged in each currency of the pair.

Swissy

Swissy is the nickname of market Swiss Franc.

SEC (Securities and Exchange Commission)

The U.S. Securities and Exchange Commission (SEC) is an independent, federal government agency responsible for protecting investors, maintaining fair and orderly functioning of securities markets, and facilitating capital formation

Selloff

When the fall in prices creates panic among investors who then sell their shares, which adds to the decline in prices in a downward spiral of self-reinforcement.

Share

It represents the proportional part of a company's property and the right to receive part of the profits.

Short selling

The short sale is to ask borrow a security and sell it with the intention of comparing it again later at a lower price and returning it to the lender.

S&P 500

The S & P 500 index is a benchmark weighted average of the shares of 500 largest listed companies on the NYSE.

Stop Loss

An order to minimize losses that a trader would fall, if a trade were to move in a profitless direction. This is done automatically closing an open trade when the price reaches a predefined level by the trader.

Short Position

Taking a short position is selling with the expectation that the value will fall.

T

Trailing Stop

A special kind of stop-loss order used to lock in your profit on successful positions. Your stop level moves automatically, by set increments (say 10 points), when the market moves in your favour. When the market moves against you it works just like a normal stop to close your position.

Technical indicators

Are a kind of mathematical process applied to characteristics of historical price of shares to determine volume, volatility and strength of the share price. This is done to predict the future price movements.

TREND

A trend is the prevailing direction in a particular market or asset moves.

Tick

A tick is the difference between the current market price and the last quoted price; in other words, it is the quantity that has moved the market in a lapse of time. Unlike pip, a tick is not a fixed number, it fluctuates in real time, depending on market conditions.

Trade Balance

The Trade Balance is an economic indicator that measures the monthly changes in the difference between the value of goods and services imported and exported by a country or region. A negative figure indicates a trade deficit; a positive figure indicates a trade surplus.

Technical Analysis

The technical analysis is the study of the historical behavior of the market, through graphs, that tries to predict possible future price movements.

The North American session

The North American session is the last session of each trading day, with a time from 12pm and 8am GMT. This schedule is modified when daylight saving time is established.

Take Profit Order

An order to liquidate a position and obtain the corresponding benefits once the price action reaches a certain level predefined by the trader.

Technical Analysis

The technical analysis is a method that evaluate the interns factors that affect the Price of the asset

U

Underlying market

The futures market or exchange price upon which our quote is based. Each CFD price we offer is derived from a real-world market.

Uptick

A Price for an instrument that is higher than the previous transaction.

Ugly duckling

Stock in a company that is underperforming but has the potential to significantly improve. Ugly duckling stocks can be thought of as “down, but not out.” These stocks might be considered speculative investments now, but they have potential to improve and turn around because the company was strong in the past and is showing current signs of strength despite many weaknesses.

Uptick rule

One of the rule of SEC requires all short sales transactions to be in a price higher than the previous transaction. This prevents short sellers sells in a declining market.

Used margin

The amount of money a trading account has already used to hold open positions.

V

Volatility

Volatility is a measure of the tendency of an underlying asset to oscillate between highs and lows. Volatility is measured by analyzing the historical price action of an underlying asset for certain periods of time ranging from 30 days to 12 months.

Value Date

This is the date on which the financial instrument that was bought or sold must be delivered.

W

Wedge

It is used in technical analysis to discover a pattern in which trend lines drawn above and below a price chart converge in an arrow shape.

WTI (West Texas Intermediate)

Light crude, which is the main point of reference for the US oil market. WTI is the underlying commodity of the oil futures contracts of the New York Mercantile Exchange.

X

XAG

Abbreviation for silver

XAU

Abbreviation for gold

Y

Yuppy

The Yuppy is the nickname that receives the currency pair EUR / JPY in the market.

Yuan

The base of the Chinese currency.

YoY (Year over year)

Is a method of evaluating two or more measured events to compare the results at one time period with those of a comparable time period on an annualized basis. YOY performance is frequently used by investors seeking to gauge whether a company's financial performance is improving or worsening.

Yard

A financial term meaning one billion.