| ADR
|
American Depository Receipt
|
| AEX
|
Amsterdam Stock Exchange
|
| After hours dealing or trading
|
Securities trading after regular trading hours on organised exchanges
|
| Analyst
|
Employee of a bank, brokerage or fund manager who studies companies and makes buy-and-sell recommendations
|
| Arbitrage
|
The process where a gap between two Market Makers' prices is exploited by buying from one while simultaneously selling to the other to lock in a profit
|
| ASE
|
Athens Stock Exchange
|
| Ask or Ask Price
|
The quoted offer at which someone can Buy. Also called the Offer Price
|
| At Par
|
At a price equal to the face value of a security
|
| Auction
|
Many auctions occur in the financial markets. The most common is the Post Market Auction on the FTSE 100. This occurs from 1630 to 1635 and then the official settlement is declared
|
| Authority to Deal
|
Allowing someone to spread bet on your behalf. This will require your written notification and some cases an identity check
|
| Backwardation
|
This occurs when the bid price exceeds the offer price for a stock. This is a market distortion which usually occurs when stock is suspended or under a share repurchase scheme
|
| Base
|
A technical analysis tool. A chart pattern depicting the period when the supply and demand of a certain stock are in relative equilibrium, resulting in a narrow trading range. The merging of the support level and resistance level
|
| Base Rate
|
The interest rate at which the Bank of England provides liquidity to the GBP Money Market / retail banks
|
| Basis
|
The difference between the price of a futures contract and the underlying market
|
| Basis Point
|
Basis Points are a way of expressing variations in bond yields. One basis point is a hundredth of one per cent (0.01 per cent). Basis points also are used for interest rates
|
| Bear or Bear Market
|
A 'bear' is pessimistic about the market and expects it to fall. A 'bear market' is a term used to describe a falling market, or one that is trending lower. Opposite of a 'bull'
|
| Bet Per
|
The minimum movement you can bet on. This may differ from the underlying market tick size.
|
| Beta
|
The measure of an asset's risk in relation to the market
|
| Bid or Bid Price
|
The quoted price at which an investor can Sell a stock, index or commodity
|
| Bid-Ask Spread
|
The difference between what buyers are willing to pay and what sellers are asking for in terms of price
|
| Black Friday
|
The original Black Friday occurred on September 24, 1869, when prospectors attempted to corner the gold market
|
| Black Monday
|
Refers to October 19, 1987, when the Dow Jones Industrial Average fell 508 points on the heels of sharp drops the previous week. On Monday, October 27, 1997, the Dow dropped 554 points. While the point drop set a new record, the percentage decline was substantially less than in 1987
|
| Black-Scholes option pricing model
|
A model for pricing call options based on arbitrage arguments. Uses the stock price, the exercise price, the risk-free interest rate, the time to expiration, and the expected standard deviation of the stock return
|
| Blue Chip Stock
|
Blue Chip companies are large, well established and conservatively managed. The term refers to the highest valued poker chip.
|
| BOBL
|
Medium term (5 year) German Government Bond
|
| Bollinger Bands
|
Plus or minus two standard deviations where the standard deviations are calculated historically in a moving window estimation. Hence, the bands will widen if the most recent data is more volatile. If the prices break out of the band, this is considered a significant move
|
| Bond
|
A bond is an IOU. You effectively lend money to a company or government in return for a fixed level of income (coupon) and the guaranteed return of your investment at the end of the bond's life (known as 'the maturity date'). In return you receive a certificate that you can sell on in the secondary market.
|
| BSE
|
Brussels Stock Exchange
|
| Bull or Bull Market
|
A Bull is someone who thinks the market will rise. A 'bull market' is one that is rising, or is trending higher. The opposite to 'bear'
|
| BUND
|
Long term (10 year) German Government Bond
|
| Buy / Buy Bet
|
A bet that the price of a particular market / financial instrument will rise. Also called an Up Bet or Going Long.
|
| Buy Order
|
An instruction to Buy at a different price to where the market is currently trading
|
|
|
Advert:
Paddy Power Trader
Tight Spreads, No Commissions, No Fees. Trade
1000s of Equities, Indices, Forex and Commodities markets.
Apply for an Account.
|
|
| Cable
|
Market nickname for Sterling/US dollar exchange rate
|
| CAC 40 Index
|
A Stock Index of 40 of the 100 largest companies listed on the forward segment of the official list of the Paris Bourse
|
| Call or Call Option
|
A 'call' option gives the purchaser the right, but not the obligation, to buy at a pre-arranged fixed price. A 'put' is the opposite of a 'call'.
|
| Capital Gains Tax
|
A tax on investment profits. Spread betting winnings are free of any UK Capital Gains Tax under current UK laws
|
| Cash or Spot
|
The current level of an underlying market
|
| CBOT
|
Chicago Board of Trade
|
| CFD
|
Contract For Difference. A leverage share trading product
|
| Chartist
|
Person who analyses markets with the use of charts
|
| Closing Price
|
The price at which a product was traded to close the open position. Also refers to the price of the last transaction in a days trading session
|
| Closing Trade
|
A second bet of equal size to the initial bet but in the opposite direction, therefore closing out the trade and resulting in a profit or loss
|
| CME
|
Chicago Mercantile Exchange
|
| COMEX
|
Commodity Exchange (part of NYMEX)
|
| Commodities or Commodity Markets
|
Physical products, such as foods or metals, whose prices are subject to supply and demand. These are usually traded via Futures Contracts
|
| Compliance Department
|
A department in all organised stock exchanges employed to ensure that all companies, traders and brokerage firms comply with the Financial Services Authority
|
| Contingent if done order
|
Instructions you give to attach a stop loss and/or limit order to your opening order if it is triggered and filled
|
| Contract Note
|
The confirmation of your trade describing the market, the unit of trading, the action (buy or sell), the price and the expiry date. Can be e-mailed or sent by post
|
| Controlled Risk Bet
|
A bet which has a maximum permissible loss
|
| Cost of Carry
|
The interest intrinsic in share futures prices, excluding any dividends payable during the contract period
|
| CPI
|
Consumer Price Index, used as a measure of inflation
|
| Credit Account
|
A Credit Account is often available to clients subject to their financial status and original proof of funds. Approval of a credit account will be at the discretion of Operator and will be subject to certain financial conditions
|
| Credit Allocation
|
The credit allocation will allow a client to maintain unrealised losses without paying margin. As the markets move up and down positions will acquire unrealised profit or loss, as long as the clients open positions remain within the credit allocation then no funds will be due
|
| Cross Rates
|
Foreign exchange rate between two currencies other than the US dollar
|
| Currencies
|
Money in public circulation
|
| Currency future
|
A financial future contract for the delivery of a specified foreign currency
|
| Daily Bet
|
A position taken during the day where the expiry of the contract is at an agreed time on the same day, usually the market closing price. ie Bets that must be settled on the day they are made
|
| DAX
|
Dax 30 or DAX - The index of the Germany's top 30 companies, in terms of order book volume and market capitalisation.
|
| Day Trading
|
Opening and closing of a position in the same contract in one day
|
| Dealing (Trading) Desk
|
You phone a Dealing Desk in order to trade
|
| Delist (de-list)
|
To remove a stock's listing on an exchange
|
| Deliver
|
The sale of a futures contract may require the seller to deliver the commodity during the delivery month, if the short position is not offset prior to that time
|
| Delivery Date
|
Date by which a seller must fulfill the obligations of a forward or futures contract
|
| Delivery Month
|
The specified month in which a futures contract is delivered or expires. These are normally March, June, September and December but may also be on a 1-2-3 month cycle e.g. January, February, March.
|
| Delta
|
The ratio of the change in price of an option to the change in price of the underlying asset
|
| Deposit
|
Funds that need to be on your account in order to place or hold a bet. It is not the total amount that can be lost on a trade.
|
| Derivative
|
A financial contract whose value is based on or derived from, a traditional security (such as a stock or bond), an asset (such as a commodity) or a market index. Financial spread betting is a derivative product
|
| Deutsche Borse
|
Germany's major securities market, including the Frankfurt Stock Exchange
|
| Differential Market
|
Some companies will quote some Differential prices such as the difference between Wall Street and the FTSE
|
| Discount
|
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, December is at a discount of 50 to March.
|
| Dividend
|
Portion of a company's earnings paid to stockholders. Clients who have Spread Betting Buy positions in share contracts are not entitled to dividend payments. Dividends are paid at a company's discretion.
|
| DJIA
|
Dow Jones Industrial Average. The index that reflects the performance of the top 30 US blue-chip stocks
|
| Double Witching Day
|
The last trading day before expiry of options and futures on the same underlying asset
|
| Down Bet
|
A bet taken in anticipation of a falling market. Also referred to as a 'Sell' or 'Going Short'.
|
|
|
Advert:
Paddy Power Trader
Tight Spreads, No Commissions, No Fees. Trade
1000s of Equities, Indices, Forex and Commodities markets.
Apply for an Account.
|
|
| ECB
|
European Central Bank
|
| Economic Indicators
|
The key statistics of the economy that reveal the direction the economy is heading in
|
| EDSP
|
Exchange Delivery Settlement Price. Used by many markets to arrive at the Expiry Price. The average traded price over a set period that determines the settlement price for some futures contracts
|
| ETF
|
Exchange Traded Funds
|
| EUREX
|
European derivatives exchange formed in 1998
|
| Euro
|
European Currency unit introduced on January 1, 1999
|
| Eurodollar
|
Exchange rate between EU member states whose currency is denominated in Euros and the US dollar
|
| EURONEXT
|
European securities and derivatives exchange
|
| Ex-Dividend
|
Without dividend, that is, the purchase of stock will not receive the most recent declared dividend. Shares paying a dividend often drop in value on their ex-dividend date
|
| Expiry Date
|
The date that a spread bet expires. The trade is settled automatically on this date unless the trader closes the bet beforehand or instructs the bookmaker to roll the bet over to the next expiry date. Not to be confused with Last Day of Trading
|
| Expiry Price
|
Price at which contracts are settled if they are left to expiry
|
| Exposure
|
Describes how much of your portfolio is invested in a particular sector
|
| Fair Value
|
This is the theoretical price at which a futures contract should trade. Fair values for stock indices are determined by differentials in interest rates and dividend payments
|
| Fast Market
|
Excessively rapid trading in a specific security that causes a delay in its electronic updating
|
| FIFO
|
First In, First Out. This is how multiple positions are arranged meaning that if more than one position is open in the same contract, the trade that was made second cannot be closed until all of the first one is
|
| Fill
|
The execution of an opening or closing order and the price it is executed at
|
| Flat
|
Indicating neither growth nor decline. Term is often used when a particular market in trading in a tight range
|
| Floatation
|
When a company's shares are offered to investors and quoted on an exchange for the first time
|
| Foreign Exchange or FX or Forex
|
Currency of another country
|
| Forex
|
An abbreviation for Foreign Exchange
|
| FSA
|
The Financial Services Authority. The governing body that regulates the financial services industry including spread betting. Enforces strict rules on the conduct of spread betting in the UK. Superseded the SFA on the April 29, 2000
|
| FTSE
|
Financial Times Stock Exchange. These firms are jointly responsible for the compilation and maintenance of the main stock indices reflecting the performance of the UK's top shares
|
| FTSE 100
|
The index that highlights the performance of the UK's top 100 companies, as ranked by their market capitalisation. Sometimes referred to as UK100
|
| FTSE 250 or FTSE MID 250
|
The index of the next 250 companies, after the top 100
|
| FTSE 350
|
The index of the top 350 UK companies by market capitalisation. It is a combination of the FTSE 100 and FTSE 250 stocks.
|
| FTSE ALL SHARE
|
An index covering about 800 shares representing 98% of UK market value. There are indices for business sub-sectors as well. This is the aggregation of the FTSE 100, FTSE 250 and FTSE Small Cap Indices
|
| FTSE Small Cap
|
The FTSE companies outside the FTSE 350 Index. Represents about 2% of the UK market capitalisation.
|
| Fundamental Analysis
|
Examination of a company's financials, assets, management, market niche, and products to determine value
|
| Futures
|
Entering a contract now to fix a price for the future. At expiry the difference between the contract price and the actual settlement price is usually paid or received
|
| Futures Contract
|
Trading contract that specifies a future date for delivery of an object
|
| FX
|
An abbreviation for Foreign Exchange
|
|
|
Advert:
Paddy Power Trader
Tight Spreads, No Commissions, No Fees. Trade
1000s of Equities, Indices, Forex and Commodities markets.
Apply for an Account.
|
|
| Gamma
|
The ratio of a change in the option delta to a small change in the price of the asset on which the option is written
|
| Gap
|
Where the market trades through a level specified by the client in an order. Market gaps are common during times of volatility. A 'Guaranteed Order' protects against gapping
|
| Gaps Through
|
The market trades through the level specified in your order, without actually trading at that given level.
|
| Gearing
|
The use of debt to increase exposure to high risk/reward. Gearing is also known as leverage. Gearing is the ratio of a company's borrowing to its assets. A highly geared company is one that has a lot of debt as a proportion of its total assets. Gearing also relates to the Notional Trading Requirement when compared to the total underlying value of a trade. Financial Spread Betting is a leveraged product because you do not have to fund your total exposure when opening a position, only part of it, which is referred to as Trading on Margin
|
| Gilts
|
UK Government Bonds. So called because the certificates were originally gilt edged.
|
| Good For The Day (GFD)
|
An order, which if not filled, expires at close of business on the day it is received
|
| Good Till Cancelled (GTC)
|
An order that will be carried forward indefinitely until it is either filled or cancelled by you
|
| Good Till Date
|
An order, which if not filled, expires at close of business on a date specified by you
|
| Grey Market
|
A term for informal markets that are not listed on any exchange, for example IPOs and political bets
|
| Guaranteed order
|
For a small fee you can protect an order against the risk of any market gaps
|
| Guaranteed Stop
|
This is a controlled risk bet where you are guaranteed to exit your position at your chosen level irrespective of volatility. You may incur a small initial charge
|
| Hedge or Hedging
|
Reducing the risk of an outright position in one market by the buying or selling of contracts in a similar or derivative market, eg 'hedging a Short FTSE position by Buying a FTSE Call option'.
|
| HKFE
|
Hong Kong Futures Exchange
|
| IMM
|
International Monetary Market
|
| Index or Indices
|
A statistical indicator that represents the total value of the stocks that constitute it eg the FTSE and Dow Jones are both indices. It often services as a barometer for a given market or industry and acts as a benchmark from which financial or economic performance is measured
|
| Index Futures
|
A futures contract on an index in the futures market
|
|
|
Advert:
Paddy Power Trader
Tight Spreads, No Commissions, No Fees. Trade
1000s of Equities, Indices, Forex and Commodities markets.
Apply for an Account.
|
|
| Indicators
|
Indices, either positive or negative, which indicate the strength and significant trends in a nation's economy. eg inflation, interest rates and employment figures are all indictors
|
| Inflation
|
The rate at which the general level of prices for goods and services is rising
|
| Initial Margin Requirement
|
This is the amount needed on deposit or credit in order to place a trade. Also known as Notional Trading Requirement (NTR). This can be reduced by placing a stop loss
|
| Inside Information
|
Material information about a company that has not yet been made public. It is illegal for holders of this information to make trades based on it
|
| Interest Rate
|
Cost for the use of capital expressed as a percentage of the sum of money borrowed
|
| Interim Dividends
|
A company's distribution of profits to shareholders halfway through the financial year
|
| Interim Report
|
Financial statement that reflects only a limited period of a company's financial statement, not the entire fiscal year. All companies quoted on the London stock exchange must release an interim report after the first 6 months of their financial year. It tends to concentrate on profitability, and may be used to justify an interim dividend
|
| In-the-money Option
|
A Put Option that has a strike price higher than the underlying future price, or a call option with a strike price lower than the underlying futures price
|
| Intrinsic Value
|
The value of an option if it were to expire immediately with the underlying stock at its current price
|
| IPE
|
International Petroleum Exchange
|
| IPO
|
Initial Public Offering. A private company's first offer of stock to the public
|
| Issued Share Capital
|
Total amount of shares that have been issued
|
| Lagging Indicators
|
Economic indicators that follow rather than precede a country's overall pace of economic activity
|
| Last Day of Dealing
|
The last Day on which you can open or close a trade in a relevant market. Not to be confused with Expiry Date
|
| Last Trade
|
Normally the last traded price in a particular market
|
| Leading Indicators
|
Economic indicators that change before the economy changes
|
| Leverage
|
Leverage is the ratio between the initial outlay and the equivalent position in the underlying market. Leverage is the realisation that a large return can be obtained from a relatively small outlay with risks attached. Also known as gearing
|
| Liability
|
Debt, financial obligation or potential loss
|
| LIBOR
|
London Inter Bank Offer Rate. The reference level fixed daily at which London banks will lend money to each other.
|
| LIFFE
|
London International Financial Futures and Options Exchange
|
| Limit Order
|
An order to buy or sell a product when it hits a certain price. A limit order is placed when you want to do a trade at a better price than the current quote. Limit orders can be filled at better levels than expected. This can occur when markets do not move smoothly. They "gap" from one price to another at times and your limit order will be filled at the next price
|
| Limit Up / Limit Down
|
The maximum price change, up or down, a product is permitted by some exchanges during one day of trading
|
| Liquid / Illiquid
|
The volume of business that can be transacted in the market. Highly liquid markets typically have narrow spreads and can accommodate large deal sizes. Illiquid markets have wide spreads, small deal sizes and are often erratic
|
| LME
|
London Mercantile Exchange
|
| Long
|
A bet taken in anticipation of a rising market, an 'up bet'. To Go Long means to Buy
|
| LSE
|
London Stock Exchange
|
| Margin
|
The deposit or available credit needed on your account in order to start / maintain your positions open
|
| Margin Calculation
|
Margin is often calculated as £/tic x (stop loss + Initial Spread) eg A Client buys £75 per tic of Vodafone Future with a stop loss of 50 tics, Margin Required = £75 x (50+6) = £4200
|
| Margin Call or Margining
|
The practice by which an Operator can request that you deposit further funds to run a larger or loss making position
|
| Market Capitalisation
|
The market value of a company. The total number of shares in issue multiplied by the share price. Often abbreviated to 'Market Cap'
|
| Market Gap
|
A term used when the price of a stock rapidly increases or decreases in a direction away from its last price range
|
| Market Maker
|
A dealer who makes a two-way bid and offer price giving a customer the opportunity to buy or sell
|
| Market On Close Order
|
A specific order to open or close a position at the price that a market closes, but is not guaranteed
|
| Market On Open Order
|
A specific order to open or close a position at the price that a market opens, but is not guaranteed
|
| Market Order
|
An order to have a position opened or closed when the underlying market trades at the specified price. Market orders are then filled at the current market price. Also known as a Market Price Order
|
| MATIF
|
March Terme International de France (Paris futures market)
|
| Maturity Date
|
The date and time at which a bet expires
|
| Mid Price
|
The price half-way between the buy and sell prices
|
| Minimum Size
|
The minimum bet size per point in a particular market
|
| MSI
|
Milan Stock Exchange
|
