| NASDAQ
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National Association of Securities Dealers Automated Quotation System. A composite index that reflects the performance of high tech stocks in the US. An Index of 100 of the largest domestic and international securities listed on the Nasdaq Stock Market based on market capitalisation
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| Nikkei
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Refers to the price-weighted average of 225 stocks of the first section of the Tokyo Stock Exchange
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| Normal Market Size (NMS)
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The amount that can be traded on a typical market price quote. For shares this is calculated on the previous year's average daily turnover of each individual stock - currently 2.5% of the total volume of shares for each company. Market makers are not obliged to provide a quote for a transaction above normal market size
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| Notional Trading Requirement
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This is the amount needed on deposit in order to place a trade. Also known as Initial Margin Requirement (IMR)
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| NYBOT
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New York Board of Trade
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| NYMEX
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New York Mercantile Exchange
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| NYSE
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New York Stock Exchange
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| OCO
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see One Cancels the Other
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| Offer / Offer Price
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The price at which you can Buy a stock, index or commodity. Also called the ask
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| One Cancels the Other (OCO)
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Two linked orders where, if one is filled, the other is automatically cancelled. With One Cancels the Other (OCO) orders you can leave two separate opening orders in the same market so that if one of them is triggered and filled, the other is cancelled. This leaves you with just the one open position
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| Open position
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A long or short position whose value will change with a change in prices ie trades that are currently running within a portfolio and are yet to be closed (settled)
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| Open Trade Equity (OTE)
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Unrealised profit or loss on an open position.
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| Operator
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A company that offers trading eg a Spread Betting firm like Financial Spreads
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| Option or Options
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A financial derivative instrument that gives the right, but not obligation, to purchase (call) or sell (put) a fixed amount of stock at a specified price and within a certain time limit.
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| Option Writer
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Also called the option seller; the party who grants a right to trade a security at a given price in the future
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| Order
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A Buy or Sell instruction given by a client to a dealer. ie a pending trade that is only executed as a trade when the trader's conditions are met. eg a spread bettor might place an order to buy an index future if its price falls to a certain level
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| Order Book
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A term used for the SETS system employed in London. Orders to buy and sell are allowed to collect on an order book where they can match and execute against one another
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| Orders Aware Margining (OAM)
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A calculation that takes into account active stop orders to reduce the overall margin requirement
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| 'OTE' Inclusion Ratio
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The proportion of Open Trade Equity (OTE) that can be used to finance current or future trades
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|
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| Our Quote
|
The two-way (bid/offer) price made by the Operator on which you can trade. Orders can often be left based on the 'Our Quote', meaning they will not be triggered or filled until the Operator Buy or Sell price hits the specific level
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| Our Quote Order
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A stop, or limit, is usually placed on the basis of Our Quote. An order will be filled if it matches the Buy or Sell price of the Operator
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| Out-of-the-money Option
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A call option is out of the money if the strike price is greater than the market price of the underlying security. That is, you have the right to purchase a security at a price higher than the market price, which is not valuable. A put option is out of the money if the strike price is lower than the market price of the underlying security.
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| Par Value
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Face value of a security
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| Partial Fill or Part Fill
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Where the client has specified that they wish only part of their stake filled on a closing order
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| Penny Shares
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Firms with a low market capitalisation. Many stocks on smaller exchanges such as AIM are penny shares
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| Pip
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Percentage in Point. This is normally used in FX trades and refers to the last quoted digit of a foreign exchange rate
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| Portfolio
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A collection of investments, real and/or financial
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| Power of Attorney
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Authorising someone to spread bet on your behalf. Same as Authority to Deal
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| Premium (1)
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The amount by which one contract month differs from another month in the same instrument, e.g. December FTSE is trading at 6300 whilst March is at 6350 thus March is at a premium of 50 over December.
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| Premium (2)
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The premium is the amount paid for an option
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| Pull an Order
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Cancel an order
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| Put or Put Option
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A financial derivative instrument used in options trading. A put would give an investor the right, but not the obligation, to sell shares at a fixed price up to a predetermined date. The opposite of a 'put' is a 'call'.
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| Quarterly Bets
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Bets that remain valid for a quarter of a year, but which can be closed out any time before the expiry date
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| Quote
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see Our Quote
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| Real Time
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A real-time stock or bond quote is one that states a security's most recent price as opposed to a delayed quote
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| Recession
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Downturn in a country's economy, as measure by a decline in GDP
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| Resistance Level
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A price level above which it is supposedly difficult for a security or market to rise
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| Retail Investor
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Small individual investors who commit capital for their personal account rather than on behalf of another
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| Reuters
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International news and quotation service based in London
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| Rights Issue
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A privilege allowing existing shareholders to buy shares shortly before they are offered to the public at a specified and usually discounted price. This is usually in proportion to the number of shares already owned
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| Risk Adverse
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Someone who seeks the least risky products
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| Risk Lover
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Someone who seeks the most risky products, in the hope of higher returns
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| ROCE
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Return On Capital Employed
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| Rollover
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Transferring a trade that is near expiry into the next contract period
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| S&P 500
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'S&P' stands for Standard & Poor's (an international credit rating company). It defines the broader US equity market, tracking the performance of the top 500 US companies.
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|
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|
| SEAQ
|
Stock Exchange Automated Quotations. The quote driven system for trading UK shares
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| Sector
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Used to characterise a group of securities that are similar with respect to type and industry
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| Securities
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The collective name given to stocks and shares
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| Sell or Sell Bet
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Trading on a lower (bid) price because you think the market will fall. A bet that will be profitable if the price falls. Also called a Down Bet, Going Short or Taking a Short Position
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| SETS
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Stock Electronic Trading Service. The order driven system used to trade FTSE 100, ex-FTSE 100 and reserve shares
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| Settlement Price
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The price at which a bet is closed
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| Shares
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Shares represent ownership of part of a company. They are also known as equities
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| Short
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Trading on a lower (bid) price because you think the market will fall. A bet that will be profitable if the price falls. Also called a Down Bet, Going Short or Taking a Short Position
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| Shorting
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Refers to selling an asset that you do not own with the aim of buying it back cheaper at a later date. In spread betting, it refers to placing a 'down bet' or a trade in anticipation of a falling market. To go short means to sell
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| Slippage
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See Gap or Market Gap
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| SOQ
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Special Opening Quotation. The settlement price mechanism for some US future contracts
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| Speculate
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A estimation made following research
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| Spike
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Sharp up or down movement in the value of something
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| Spot market
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Market in which commodities are bought and sold for cash and immediate delivery
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| Spread
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The difference between the Sell and Buy (bid and offer) prices
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| Stake
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The bet size per unit of movement. In Spread Betting this is NOT the total amount you could lose
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| Stop Loss
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A pre-determined level at which a bet will be closed to limit your loss if the price moves against you. Stop losses are not always guaranteed and can be filled at worse levels than expected. This can occur when markets do not move smoothly. They "gap" from one price to another at times and your stop loss will be filled at the next print
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| Stop Order
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Stops are Orders to Sell below, or buy above, the current price. Stop orders are normally placed to close an existing position and restrict losses in the event of an adverse market movement. They can also be used to initiate a new position if the price breaks through a perceived support/resistance level
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| Straddle
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Purchase or sale of an equal number of puts and calls with the same terms at the same time
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| Strangle
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Buying or selling an out-of-the-money put option and call option on the same underlying instrument, with the same expiration. Profits are made only if there is a drastic change in the underlying instrument's price
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| Strategy
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Plan of action for achieving a goal
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| Strike Price
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The stated price per share for which underlying stock may be purchased or sold by the option holder upon exercise of the option contract
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| Supply and Demand
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Economic theory that simply states price is a function of the market, supply and demand
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| Support Level
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A price level below which it is supposedly difficult for a security or market to fall. That is, the price level at which a market tends to stop falling because there is more demand than supply; can be identified on a technical basis by seeing where the stock has bottomed out in the past
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| Suspended Trading
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Temporary halt in trading in a particular security, in advance of a major news announcement or to correct an imbalance of orders to buy and sell
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| Takeover
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Acquiring control of a corporation by stock purchase or exchange
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| Taking a view
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Forming an opinion as to where market prices are headed and acting on it
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| Target Price
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Maximum retail price for a product under development. In the context of takeovers, the price at which an acquirer aims to buy a target firm. In the context of options, the price of the underlying security at which an option will become in the money. In the context of stocks, the price that someone hopes a stock will reach in a certain time period
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| Tax
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Under current UK legislation, any capital gains made through financial spread betting is tax free
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| Technical Analysis
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Analysis of a financial market by charting its performance, using historical patterns, and focusing on trends
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| Tic or Tick or Tick Size
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The standardised minimum price movement of a spread bet
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| Time to Maturity
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The time remaining until a financial contract expires
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| Time Value
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Portion of an option price that is in excess of the intrinsic value, due to the amount of volatility in the stock. Sometimes referred to as premium. Time value is positively related to the length of time remaining until expiration
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| Trade Balance
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Overall difference between a country's imports and exports
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| Trading Range
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Range between the highest and lowest prices at which a stock is traded
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| Triple Witching Day
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A day on which at least three types of derivative contracts, eg Stock Index Options, Stock Options and Stock Index Futures, expire. Also known as Freaky Friday, Triple Witching Days and often produces high volatility in the markets. Triple Witching Days are most common on the third Friday of March, June, September and December
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| Triple Witching Hour
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The final hour of trading on Triple Witching Day
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| Unencumbered Funds
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Funds that trading margin is not using ie available trading resources
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| Up Bet
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A bet taken in anticipation of a rising market, to 'go long'. Also called a Buy or Going Long
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| Variation Margin
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Same as Open Trade Equity (OTE) eg any running profit from an open position can be used as additional margin. Conversely, any running loss will need to be funded, especially if there is no stop loss in place
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| Volatility
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Describes the propensity of a market price to change rapidly
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| Wall Street
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Refers to the index of the top 30 US traded stocks
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| Warrant
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A derivative product that is a certificate that authorises the holder to buy securities at a certain price. Warrants are like call options, but with much longer time spans, sometimes years
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| Watch List
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A list of markets selected for special surveillance
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| Waived NTR
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The Waived Notional Trading Requirement ("WNTR") will allow clients to open positions without placing funds or maintaining funds on deposit. The client can maintain and keep open all positions until expiry as long as the client remains within the WNTR limit and the credit allocation
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| Working Order
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An order remains working until it is filled or deleted
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| Year End
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End of accounting period when the books are closed out
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