Financial Glossary

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DP Non-Farm Employment Change

This data is released on a monthly basis and it tracks the levels of private employment in the US, excluding farm jobs. It is sometimes also referred to as the private payrolls report.


Financial professional who has expertise in evaluating investments and puts together buy, sell and hold recommendations for clients.


The simultaneous purchase or sale of a financial product in order to take advantage of small price differentials between markets.

Ask (offer) Price

The price at which the market is prepared to sell a product. Prices are quoted two-way as Bid/ Ask. The Ask price is also known as the Offer.

Averaging Down

When an investor buys more of a stock as the price goes down. This makes it so your aver­ age purchase price decreases.


ase and Quote Currencies

In a currency pair, the first currency is known as the base currency and the second is referred to as the quote currency. So, in the EUR/USD pair, the euro would be the base currency and the US dollar would be the quote currency.

Base Currency

The first currency in a currency pair. It shows how much the base currency is worth as measured against the second currency.


A measurement of the relationship between the price of a stock and the movement of the whole market.

Bid and ask

Every currency pair has two price quotes. The bid price represents how much of the quote currency the broker is willing to pay to buy the base currency from you. The ask price rep­ resents the amount of quote currency the broker is willing to accept to sell you the base currency.

Base Rate

The lending rate of the central bank of a given country.

Bear- Traders

Who expect prices to decline and may be holding short positions.

Black Swan

Black swan is used to describe an extremely rare and unpredictable event that triggers a perfect storm of catastrophic consequences.

Blue Chip Stocks

Blue Chip Stocks are stocks of large, Indus try-leading companies. These are market leaders and extremely popular among inventors. They’re large companies worth billions of dollars and often help shape the economy.


A name for debt which is issued for a specified period of time.


Traders who expect prices to rise and who may be holding long positions.


Companies can actually purchase back their shares of stock in what is called a share repurchase program or stock buyback

Buy DIPs

Looking to buy 20-30-pip/point pullbacks in the course of an intra-day trend.


urrency Pairs

A currency pair is, as the name suggests, a pair of currencies that represent the value of one currency against another. Currency pairs are expressed in a XXX/YYY format, such as EUR/ USD.

Candlestick Chart

A chart that indicates the trading range for the day as well as the opening and closing prices. If the open price is higher than the close price, the rectangle between the open and close price is shaded. If the close price is higher than the open price.


A point at the end of an extreme trend when traders who are holding losing positions exit those positions.

Cash Settled Futures

Cash settlement method used in certain futures and options contracts where, upon expiration or exercise, the seller of the financial instrument does not deliver the actual (physical) underlying asset but instead transfers the associated cash position.

Cash Price

The price of a product for instant delivery; i.e., the price of a product at that moment in time.

Cleared Funds

Funds that are freely available, are sent in to settle a trade.

Closing Price

The price at which a product was traded to close a position. It can also refer to the price of the last transaction in a day trading session.


An asset is given to secure a loan or as a guarantee of performance.


Raw materials are used every day by millions or billions of consumers, the prices of which are based on supply and demand.


A document exchanged by counterparts to a transaction that states the terms of said transaction.


A period of range-bound activity after an extended price move.


The tendency of an economic crisis to spread from one market to another.


A statistical event where security or asset prices decline at least 10% from a recent peak.

Counter Currency

The second listed currency in a currency pair.


One of the participants in a financial transaction.


A digital currency is formed from a series of coded transactions, the record of which is kept on a digital ledger called the blockchain. The first digital currency was Bitcoin, which has since skyrocketed in price even as others such as Ethereal have come onto the scene.


ay Trading

The practice of buying and selling within the same trading day, before the closing of the markets on that day, is called day trading.

Dealing Spread

The difference between the buying and selling price of a contract.

Deliverables Futures

Deliverable futures contracts are the forward contracts to buy or sell a certain underlying instrument with actual delivery of the under­ lying instrument occurring. Settlement occurs 30 days after the contract is purchased.


A portion of a company’s earnings that is paid to shareholders, or people that own that company’s stock, on a quarterly or annual basis.


Dovish refers to data or a policy view that suggests easier monetary policy or lower interest rates. The opposite of hawkish.

Dow Jones Industrial Average

DJIA or Dow, is a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.


The symbol for the US Dollar Index.



A central bank cutting interest rates.

Economic Bubble

When an asset class rises in value based on investor sentiment rather than actual stat-driven analysis.


European Central Bank, the central bank for the countries using the euro.

Eurozone Labor Cost Index

Measures the annualized rate of inflation in the compensation and benefits paid to civilian workers and is seen as a primary driver of overall inflation.


A share bought in which the buyer forgoes the right to receive the next dividend and instead it is given to the seller.



The Federal Reserve Bank, the central bank of the United States, or the

FOMC (Federal Open Market Committee), the policy-setting committee of the Federal Reserve.

Flat or Flat Reading

Economic data readings matching the previous period’s levels that are unchanged.

Fin Tech

Fin Tech is a culturally shortened derivation of the words Financial Technology. It refers to the use of technology that is used to automate and provide innovation to, financial services.

FOMC Minutes

Written record of FOMC policy-setting meetings are released three weeks following a meeting. The minutes provide more insight into the FOMC’s deliberations and can generate significant market reactions.


The Foreign Exchange Market (FX) is the largest in the world, with the highest amount of liquidity.

Forward Points

The pips added to or subtracted from the current exchange rate in order to calculate a forward price.

Fundamental Analysis

Analysis that seeks to assess which stocks are valuable, and which are not, through analyzing sales, P/E ratio, profits, EPS (earnings per share), and other factors.

Futures Contract

Trading futures involves buyers and sellers who agree to trade a specified asset in a particular amount at a particular date at a particular price.



Group of 7 Nations – United States, Japan, Germany, United Kingdom, France, Italy, and Canada.


Group of 8 – G7 nation plus Russia.


This group of 20 finance ministers and central bank governors from 19 countries is the primary global economic council. The 20th member of the G-20 is the European Union. The G-20 includes the G-7, which a group of the world’s most developed economies, including the United States, the United Kingdom, France, Germany, Italy, Japan, and Canada.

Going Long

The purchase of a stock, commodity or currency for investment or speculation with the expectation of the price increasing.



Every 100 pips in the FX market starting with 000.

Hair Cut

In simplest stock market terms, a haircut is an extremely thin spread between the bids and ask prices of a given stock. It can also refer to a situation in which a stock price gets reduced by a specific.


A position or combination of positions that reduces the risk of your primary position.



A stock index, or stock market index, is an index that measures a stock market or a subset of the stock market that helps investors compare current price levels with past prices to calculate market performance. It is computed from the prices of selected stocks. Examples are the Dow Jones Industrial Average and Standard & Poor’s 500.

Initial Public Offering (IPO)

An IPO is the first sale or offering of a stock by a company to the public. It happens when a com pony decides to go public rather than remain solely owned by private or inside investors.

Initial Margin Requirement

The initial deposit of collateral required to enter into a position.

Institutional Investors

These large companies or firms buy and sell securities along the lines of their investment strategy, along with facilitating trades for members and shareholders.

Introducing Broker

A person or corporate entity which introduces account to a broker in return for a fee.


ast Dealing Time

The last time you may trade a particular product.

Leading Indicators

Statistics that are considered to predict future economic activity.


Lots are the unit of measurement used to ex­ press trade size. There are three common lot sizes; a standard lot which is equal to $100,000 of a currency, a mini-lot which is equal to $10,000 of a currency, and a micro-lot which is equal to $1,000 of currency.


When you make a trade with a forex broker, the broker offers you credit to hold a much larger trading position than you could afford with your own capital. Leverage rates are usually expressed as ratios, for example, 50:1. This means you can hold a position fifty times larger than your account balance.


The London Inter-Bank Offered Rate. Banks use LIBOR as a base rate for international lending.


A measurement of how easily an asset such as stocks, cash, real estate, or valuables could be bought or sold without affecting the standard price.


ajors / Minors

Currency pairs are generally split into two different categories. Major Currency pairs all involve the US dollar and are more frequently traded. Minor currency pairs are those which don’t include the dollar.


This refers to the initial deposit you need to make in a trade, in order to utilize leverage. Margin requirements are expressed as a per­centage of the whole trading position.

Margin Call

Demand for additional funds, or equivalent, because of adverse price movement or some other contingency.


Abbreviation for month-over-month, which is the change in a data series relative to the prior month’s level.


A series of technical studies (e.g., RSI, MACO, Stochastics, Momentum) that assesses the rate of change in prices.

Moving Average

A stock’s average price-per-share during a specific period of time is called its moving average.


et Position

The amount of currency bought or sold yet been offset by opposite transaction.


This American Stock exchange is the second largest marketplace in the world in terms of market cap.



If a market is said to be trading offered, it means a pair is attracting heavy selling interest or offers.

Options Trading

This sale of a buyer-seller contract allows the purchaser to have the right without obligation to buy or sell a certain security at a certain price and on or before a certain date.


An instruction to execute a trade.



The hang-in value between two cur­rencies is expressed through a unit of measurement known as a pip. If the EUR/USO pair was to rise from $1.1001 to $1.1002, that in­ crease of $0.0001 is equal to one pip. In major currency pairs, pips are the fourth decimal place in a quote.

Political Risk

Exposure to changes in governmental policy which may have an adverse effect on an in­ vector’s position.


A collection of investments owned by an entity.


The amount by which the forward or futures price exceeds the spot price.

Pull Back 

The tendency of a trending market to retrace .

Purchasing Manager Index (PMI) 

An economic indicator which indicates the performance of manufacturing companies.



An indicative market price, normally used for information purposes only.



A recovery in price after a period of decline. 


When a price is trading between a defined high and low, moving within these two bound­ arise without breaking out from them. 

Real Money 

Traders of significant size including pension funds, asset managers, insurance companies, etc. They are viewed as indicators of major long-term market interest, as opposed to shorter-term, in-tra-day speculators.

Realized profit/loss 

The amount of money you have made or lost when a position has been closed. 

Resistance Level 

A price that may act as a ceiling. The opposite of support. 

Retail Investor 

An individual investor who trades with money from personal wealth, rather than on behalf of an institution. 


When a pegged currency is allowed to strengthen or rise as a result of official ac­tions; the opposite of a devaluation. 

Risk Management 

The employment of financial analysis and trading techniques to reduce and/or control exposure to various types of risk. 


A rollover is the simultaneous closing of an open position for today’s value date and the opening of the same position for the next day’s value date at a price reflecting the inter­est rate differential between the two curren­cies. 

Round Trip 

A trade that has been opened and subse­quently closed by an equal and opposite deal.


&P 500 Index

500 different large-cap companies are listed in the Standard and Poor’s Index. A popular stock market index that fol­lows their price and performance.


The difference between the bid and ask price is known as the spread. This is expressed in pips.


Slippage refers to situations in which you re­ceive a different trade execution price than in­ tended. This can happen for a number of rea­ sons, including slow software and large order sizes. Slippage is neither positive nor negative, the same term is used whether the execution price has fallen orisons. 


The Securities and Exchange Commission.


The process by which a trade is entered into the books, recording the counterparts to a transaction.

Shor Covering 

After a decline, traders who earlier went short begin buying back.

Short Selling 

When you short-sell a stock, you borrow shares from someone else with the promise to return them at a point down the road. You then sell the stock for a profit. It’s a way to take advantage of a stock that you believe will de­ crease in price.

Short Squeeze 

A situation in which traders are heavily posi­tioned on the short side and a market catalyst causes them to cover (buy) in a hurry, causing a sharp price increase.


The difference between the price that was re-quested and the price obtained typically due to changing market conditions.


A term used when the market feels like it is rea­dy for a quick move in any direction.


Choppy trading conditions that lack any meaningful trend and/or follow-through.

Sovereign Names

Refers to central banks active in the spot market.

Spot Commodity

The actual physical commodity, as distin­guished from the futures.

Spot Market

A market whereby products are traded at their market price for immediate exchange.


The difference between the bid and offer prices.


Purchase and sales are in balance and thus the dealer has no open position.

Stop loss order

Stop-loss orders are an important risk man­agement tool. By setting stop-loss orders against open positions you can limit your po­tential downside should the market move against you.

Strike Price

The defined price at which the holder of an option can buy or sell the product.


A currency swap is the simultaneous sale and purchase of the same amount of a given cur­rency at a forward exchange rate.



Traders who base their decisions on technical or trading charts Analysis.

Tick (size)

A minimum change in price up or down.


A central bank hiking interest rate.


An illiquid, slippery or choppy market enviro­nment. A light-volume market that produces erratic trading conditions.

The Non-Farm Payrolls

This data also tracks the monthly change in the number of jobs created by the US econo­my, excluding the agricultural ones.

Trading Bid

A pair is acting strong and/or moving higher; bids keep entering the market and pushing prices up.


When both a bid and offer rate is quoted for a forex transaction.


Price movement that produces a net change in value.

Trading Halt

A postponement to trading that is not a sus­pension from trading.


S Prime Rate

The interest rate at which US banks will lend to their prime corporate customers.

UK Claimant Count

Rate Measures the number of people claiming un­employment benefits. The claimant counts fig­ures tend to be lower than the unemployment data since not all of the unemployed are eligi­ble for benefits.


Describing unforgiving market conditions that can be violent and quick.


alue Date

Also known as the maturity date, it is the date on which counterparts to a ­financial transaction agree to settle their respective obligations, i.e., exchanging payments.  


Referring to active markets that often present trade opportunities.


The number of shares of stock traded during a particular time period, normally measured in average daily trading volume. Volume can also mean the number of shares you pur­chase of a given stock. For instance, buying 2,000 shares of a company is a higher-volume purchase than buying 20 shares.


edge Chart Pattern

Chart formation that shows a narrowing price range over time, where price highs in an ascending wedge decrease incrementally, or in a descending wedge, price de­ clines are incrementally smaller.

Working Order

Where a limit order has been requested but not yet filled.


Slang for a highly volatile market where a sharp price movement is quickly followed by a sharp reversal.



Often refers to the measure of the return on investment that is received from the payment of a dividend. This is determined by dividing the annual dividend amount by the price paid for the stock.

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