A | B | C | D | E | F | G | H | I | L | M | O | P | R | S | T | U | V |
- A -
Ask price - (or offer price) - The higher price of a quoted spread. It is the level at which a customer would buy a security in a market.
American Depository Receipts (ADRs) - Certificates that are issued by a bank of US origin and traded in the U.S. as domestic shares. The certificates represent the foreign securities that the bank holds in that security's country of origin.
- B -
Backwardation - This is when the price for immediate delivery of a commodity is higher than the price of delivery for a future date.
Base Rate - The official rate at which the Central Banks of various countries will lend to the retail banks. Changes in these base rates can have a large impact on markets.
Bear - A term describing someone who expects a market to fall commonly referred to as being "bearish." A bear market is not a simple decline but a substantial drop in the prices of a range of issues over a defined period of time.
Bearish engulfing patternA chart pattern that consists of a small green candlestick with short shadows or tails followed by a large red candlestick that eclipses or "engulfs" the small green one. The pattern is a bearish indicator and is more powerful at the top of an uptrend.
Behavioural finance - A field of research which seeks to understand the role played by cognitive and emotional biases in the investment decision-making process.
Bid price - The lower price of a quoted spread. It is the level at which a client would sell a security in a market.
Bull - A term describing someone who expects a market to rise commonly referred to as being "bullish." Further, a bull market is one that is expected to rise or is already in the process of rising.
Bund - The European bond contract often referred to as the German Bund.
Buy - (or up trade, long, take) - This is when somebody buys a security. They expect the security to rise. You can also buy at the offer price to close an existing short position.
- C -
CAC 40 - The French stock market index of the 40 most liquid French stocks.
Call option - The right, but not the obligation, to buy at a fixed price on or before a predetermined date.
Candlestick - Commonly used chart which depicts the range of price movement over a given time interval.
Cash market (spot market) - The underlying security market on which a futures or options contract is based.
Contract For Difference (CFD) - A Contract for Difference is an agreement between you and Delta Index to exchange the difference in value of a particular share between the time at which the contract is opened and the time at which it is closed.
Closed position - A long or short position that no longer remains open.
Commissions - is the cost charged to a client for opening and closing a CFD position.
Contango - This is when the price for immediate delivery of a commodity is lower than the price of delivery for a future date.
Contract month - The month during which a futures contract expires.
Contrarian - Someone who does the opposite of the majority at any particular time.
Cover - This is the act of selling a long position, or buying back a short position.
CPI - (Consumers Price Index) - measures the average price paid by consumers for a basket of goods and services.
- D -
DAX 30 - is a blue chip stock market index consisting of the 30 major German companies traded on the Frankfurt stock exchange.
Discount - refers to a derivative market which is trading below the current market price.
Divergence: - When the price of an asset and an indicator, index or other related asset move in opposite directions. In technical analysis, divergence is considered either positive or negative, both of which are signals of major shifts in the direction of the price. Positive divergence occurs when the price of a security makes a new low while the indicator starts to climb upward. Negative divergence happens when the price of the security makes a new high, but the indicator fails to do the same and instead closes lower than the previous high.
Dividend - is a cash distribution made by a company to its shareholders and applicable to every share that they hold in relation to that company.
Dow Jones Industrial Average - DJIA - The average of 30 of the largest and most widely held public companies in the United States.
- E -
Equity - (or holdings, securities, shares, stocks) - They represent the right to ownership of a proportion of the company by whom they are.
ETFs - Exchange Traded Funds - Shares on different sectors within the stock market. Delta Index quotes a China ETF, which follows the 25 largest companies in China.
EuroStoxx 50 - A Euro stick index of the 50 most liquid blue chip European stocks denominated in Euro.
Expiry date - The date on which a contract will expire, and after which can no longer be traded.
Expiry price - (or make-up, settlement price) - This is the official price when a future expires.
Euribor - is the rate at which the euro interbank term deposits within the Eurozone are offered by one prime bank to another prime bank.
- F -
Fair value - This is the consensus value that a security should be trading at. It can often deviate from its actual value.
Fibonacci retracement - is a popular tool among technical traders and is based on the key numbers identified by mathematician Leonardo Fibonacci in the thirteenth century. However, Fibonacci's sequence of numbers is not as important as the mathematical relationships, expressed as ratios, between the numbers in the series. In technical analysis, Fibonacci retracement is created by taking two extreme points (usually a major peak and trough) on a stock chart and dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%. Once these levels are identified, horizontal lines are drawn and used to identify possible support and resistance levels
Fill - This is the term used to describe when a market order has been executed.
Flotation - the process of changing a private company into a public company by issuing shares and soliciting the public to purchase them. Known as an equity's "IPO", initial public offering.
FTSE 100 - The index of the UK's top 100 public quoted companies as rated by market capitalisation.
Future - A term used to designate all contracts covering the sale of financial instruments or physical commodities for future delivery at a future price.
Frankfurt Stock Exchange - is a stock exchange located in Frankfurt, Germany.
- G -
Gapping - When a market opens or trades through the specified level of a market order without actually trading at the price of the market order and often occurs during times of volatility.
GDP - (Gross Domestic Product) - The total market value of all final goods and services produced in a country in a given year, equal to total consumer investment and government spending plus the value of exports minus the value of imports.
Gearing - (or leverage) - This refers to the fact that leveraged trading allows the client to buy (or sell) a financial product with substantially less money than the actual full market value of that financial product. Gearing results in magnified profits and losses.
GFD - (Good for the day) - This applies to market orders. It signifies that the order can only be filled on the day it is lodged and if not executed will expire at the close of the relevant underlying market on the specified day.
GTC - (Good 'til cancelled) - This applies to market orders. It signifies that the order will be open and carried forward indefinitely until it is either filled or cancelled by the client.
Gray market - Quotes that are offered where there is no underlying market. An Initial Public Offering is an example of this, is not currently available on the market.
Guaranteed Stop Loss - An order that, for a small premium, is guaranteed to limit a client's losses, both during and outside of market hours to the amount specified. The client does not suffer from slippage or gapping issues as a result.
- H -
Harami – A candlestick formation were the body of today’s candle is totally engulfed within the previous days body. This is usually seen as a reversal signal.
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Hedge - The action of reducing the risk of an outright position in one market by taking an opposite position in a similar or derivative market.
Hostile takeover - One company bidding to buy another against the wishes of the latter's board.
- I -
Illiquid - A market that does not have much trading volume.
Inside day – A trading day in which the daily price range for any given security is within the price range of the previous day. It can signal a reversal of a prolonged trend.
Insider dealing - This is any use of information that is not already public knowledge to gain financially.
Interim dividends - When a company distributes profits to shareholders at stages during the financial year.
Interim report - The requirement for each stock exchange quoted company to release interim reports periodically during their financial year. E.g. American exchanges require quarterly reporting.
IPO - An Initial Public Offering (IPO) is the first sale of stock by a private company to the public.
- L -
Leverage - (or gearing) - This refers to the fact that leveraged trading allows the client to buy (or sell) a financial product with substantially less money than the actual full market value of that financial product. Results in magnified profits and losses.
Limit Down - is the maximum price drop allowed in a futures contracts on a single trading day.
Limit Order - An optional order to either sell above the current market level or buy below that level at a price specified by you. The limit order allows you to take profits at a specified level.
Limit up - is the maximum price increase allowed in a futures contract in a single trading day.
Liquid market - A market with a high degree of volume, often resulting from a large number of buyers and sellers.
London Stock Exchange (LSE) - is a stock exchange located in London, England.
Lot - (or contract size, lot size) - The minimum amount that can be traded in the underlying futures or options exchange.
- M -
MACD ( Moving Average Convergence/ Divergence) - – A popular technical analysis indicator which combines characteristics of a moving average and a momentum indicator. It triggers a sell signal when the blue MACD line crosses down through the red “trigger” line and vice versa.
Margin - The deposit or available credit needed on your account in order to open and retain your position. Different contracts have different margin requirements.
Margin call - A margin call occurs when an investor using margin is required to deposit additional funds to ensure their account valuation is above the required margin level.
Market Order - An order to buy or sell a trade at the current bid or offer.
Market capitalisation - This is the overall value of a company. It is calculated by multiplying the number of shares issued by the current share price.
Merger - This is when two companies combine to form one entity in all respects.
- N -
NASDAQ 100 - is an American index, which includes 100 of the largest domestic and international non-financial securities listed on the NASDAQ.
Net change - The difference between the closing price of an instrument on the day's trading and the previous day's closing price. Net change can be positive or negative.
New order - An instruction to either buy or sell at a level that is more favourable than the current price of the specified financial instrument. The possibility exists that the order will never be filled. New York Stock Exchange
(NYSE) - is a New York City-based stock exchange. It is the largest stock exchange in the world by dollar volume.
New York Mercantile Exchange (NYMEX) - is the world's largest physical commodity futures exchange, located in New York City.
Nikkei 225 - A Japanese stock index of the 225 largest Japanese stocks.
Noise - This is normal everyday market movement up and down, which occurs in financial markets.
- O -
Offer price - (or ask price) - The higher price of a quoted spread. It is the level at which a customer would buy a security.
OCO - (or order cancels order, one cancels the other) - This is where you have two orders, one above and one below, the current market price and where the first to be executed automatically cancels the other.
Open position - Any position that is not yet closed on your account.
- P -
PPI - Producers Price Index (PPI) - measures price changes in the manufacturing sector.
Price earnings ratio - A valuation ratio of a company's current share price compared to its pre-share earnings.
Premium - The amount by which a bond or stick sells above its par value.
Profits warning - This is an unexpected announcement of negative news in relation to a company's profits for the next period.
Put option - The right, but not the obligation, to sell at a fixed price on or before a predetermined date.
- R -
Rights issue - This is when a company invites existing shareholders to buy additional shares prior to their public offering.
RSI (Relative Strength Index) - An indicator used in technical analysis to determine the momentum of a security. It is mainly used by traders as a guide to establish when markets are overbought or oversold. Typically a market is described as overbought when the RSI level is above 70 and oversold when below 30
Russell 2000 - The index measures the performance of the smallest 2,000 companies in the Russell 3000 Index of the 3,000 largest U.S. companies in terms of market capitalisation.
- S -
S&P 500 - An American index of the 500 largest capitalisation American stocks.
Sell - To place an opening trade at the bid price of a trade in anticipation of the underlying market falling, commonly referred to as a 'down trade', 'taking a short position' or 'going short'. You can of course also sell at the bid price to close an existing long position.
Short interest - The total number of shares of a security that have been sold short and not yet repurchased. Stocks with a high short interest are vulnerable to short squeezes.
Short squeeze - A situation in which a lack of supply and an excess demand for a traded stock forces the price upward.
Slippage - This is the price difference between where an order is placed, and where it is actually filled. It usually occurs in extremely volatile markets.
SMI 30 - The Swiss stock market index of the 30 most liquid Swiss stocks.
Spread - The difference between the sell (bid) and buy (offer) prices.
Stop loss - The level below the purchase price at which you want to automatically close your trade, generally used to control losses.
- T -
Technical analysis - A method of forecasting market movements that analyzes price movement, trading volume, and numerical and chart-based data.
Tokyo Stock Exchange (TSE) - is the second largest stock exchange in the world by monetary volume located in Tokyo, Japan
Trailing stops - A stop-loss order that follows the prevailing price trend.
Trade balance - The difference between net imports and net exports over a period of time.
- V -
Valuation price - The price used for the revaluation of open positions.
Volatility - This is a measure of a stock's tendency to move up and down in price, based on its daily price history over the latest 12 months. A market that moves a great deal is said to be of high volatility and one that is quiet is said to have low volatility.
Volume - The shares that are traded for a given market within a specified time period.