Trading Glossary – Understand Every Term
Explore key financial and trading terms explained clearly, from A to Z.
- Over 150 trading and investing definitions
- Clear, concise, and beginner-friendly
- Search terms alphabetically or by category
Glossary of Trading Terms
A
- Ask Price - The lowest price a seller is willing to accept for an asset.
- Arbitrage - The simultaneous buying and selling of an asset to profit from a price difference.
B
- Bear Market - A market condition where prices are falling.
- Bid Price - The highest price a buyer is willing to pay for an asset.
C
- Candlestick Chart - A chart type used to show price movements.
- CFD (Contract for Difference) - A financial derivative allowing traders to speculate on asset price movements.
D
- Day Trading - Buying and selling financial instruments within the same trading day.
E
- Equity - Ownership of assets that may have debts or other liabilities attached to them.
F
- Forex - The global currency exchange market.
- Fundamental Analysis - Analyzing financial statements and economic data to forecast asset movements.
G
- Gap - A break between prices on a chart that occurs when the price moves sharply up or down.
H
- Hedge - An investment made to reduce the risk of adverse price movements.
I
- Index - A statistical measure of the performance of a group of assets.
- IPO - Initial Public Offering, the first sale of stock by a private company to the public.
J
- Jobless Claims - A report indicating the number of people filing for unemployment.
K
- KYC (Know Your Customer) - A process of verifying the identity of clients.
L
- Liquidity - The ease with which an asset can be converted into cash.
M
- Margin - The money borrowed from a broker to trade.
- Market Order - An order to buy or sell immediately at the current market price.
N
- NAV - Net Asset Value, used to value mutual funds.
- NFP - Non-Farm Payrolls, a key economic indicator in the US.
O
- Open Interest - The total number of open derivative contracts.
P
- Pip - The smallest price move in a currency pair.
- Portfolio - A collection of financial investments.
Q
- Quantitative Easing - A monetary policy used by central banks to stimulate the economy.
R
- Resistance - A price level where selling pressure is expected to be strong.
- Risk Management - Strategies to minimize potential losses.
S
- Spread - The difference between the bid and ask price.
- Stop Loss - An order placed to sell a security when it reaches a certain price.
T
- Take Profit - An order that closes a trade once a certain profit level is reached.
- Technical Analysis - Analyzing price charts and indicators to forecast movements.
U
- Underlying Asset - The financial asset upon which a derivative’s value is based.
V
- Volatility - A statistical measure of the dispersion of returns.
W
- Whipsaw - A condition where a security’s price heads in one direction but then moves quickly in the opposite direction.
X
- XD - Ex-dividend date, the day on which a stock begins trading without the value of its next dividend payment.
Y
- Yield - The income return on an investment.
Z
- Zero-Coupon Bond - A bond that doesn’t pay interest but is traded at a deep discount.