Saturday 23rd of September 2017

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. 

Basis Points 

One hundredth of a percent. ie 0.01 %. So half a percent is 50 basis points.

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.

Cable 

The global nickname give the currency pair GBP/USD. It derived from the cable laid under the sea from London to New York in 1850 which enabled currency prices to be sent telegraphically. 

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.

Charting 

A visual representation of the historic price movement of a market which can be used in an attempt to predict the future movement.

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.

Delivery 

A trade which is allowed to expire and which a physical delivery of a product occurs.

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 

The 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.

GFD 

Good For the Day. Usually refers to when an order is no longer valid. 

Grey Market 

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

GT 

Good Till. Usually refers to when an order is no longer valid.

GTC 

Good Till Cancelled. Usually refers to when an order is no longer valid.

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.

Junk Bond 

High yielding bonds issued by companies to raise funds.

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.

Mark to Market 

The value of a position based on the current price.

Market Capitalisation 

The value of a company.

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.

Our quote 

The price at which GKFX is willing to buy or sell at.

Over bought 

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.

P&L 

Profit and Loss.

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.

Running P&L 

Your current profit or loss based on up to date prices.

SEC 

Securities and Exchange Commission (US regulatory authority).

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.

Stamp Duty 

A government tax imposed on the purchase of shares. 

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 GKFS and ours with you.

Tick 

A term used in any market referring to the smallest increment that a price can move by.

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.

Yard 

A slang term usually referring to a billion.

Yield 

The rate of return from an investment.

Why GI Partners

Offering some of the tightest spreads and lowest margins across the industry.

  • Providing you with competitive spreads
  • Help you make better-informed trading decisions
  • Excellent products and quality service
  • Providing trading mobile application download
  • Client funds are held in segregated accounts