Arcatrades | Glossary
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Glossary

A

Account Equity

The total cost of the investor’s capital, including all types of accounts and all possible costs.

Account Equity Percent

The share of equity on all types of accounts (cash, margin, short) in percent, including costs.

Aggressive Growth Funds

Mutual funds, focused on the shares of small companies with the potential for significant profits and growth.

Annual Percentage Rate (APR)

The total cost of borrowing for the year, which includes interest payments and additional payments.

Annual Percentage Yield (APY)

Annual interest income – Total return on investment for the year. APY includes dividend and interest income without taking into account the gain from the increase in the exchange value.

ASK Price – Ask, offer price

The lowest price at which someone wants to sell this share, option, futures, currency.

Audi

Audi is the slang name for the AUD / USD pair.

Assets

Economic resources owned or controlled by the enterprise. For example, money, securities, buildings, etc., which can be sold.

B

Basis

The total cost that an investor pays for the purchase of a security or other asset. This parameter is used for tax purposes to determine the increment or loss of equity after the sale of the asset.

Basis Point

The base point is the hundredth part of a percent. Usually the term refers to bonds. If the yield of a bond changes from 5.24% to 5.47%, it means a rise of 23 basis points.

BID Price

the Bid price is the price at which the currency is bought at the current moment.

Bull

Bull-speculator, a trader who trades to raise the price of an asset.

Bear

A bear is a speculator, a trader or a player in the financial market who trades to lower the price of an asset.

Blue Chips

this term describes securities or shares of the most reliable and liquid companies. Companies that produce such chips are characterized by high liquidity, a large volume of capitalization and a stable payment of dividends.

Forex Broker

A company or an individual that acts as an intermediary between a trader and the international currency market Forex. For execution of the orders of the trader, the Broker imposes a commission.

Budget Deficit

The amount of government spending exceeds revenue.

C

Cable

The slang name of the GBP / USD currency pair.

Capital Market

A market where long-term debt is traded (the maturity of which exceeds one year).

Capital Growth

Increasing capital – increasing investment by raising prices or reinvesting profits.

Consumer Price Index (CPI)

an indicator of the change in the price of goods or services over a certain period of the average consumer. The value of this index is expressed as a percentage.

Capitalization

The cash value of all securities issued by the company. It is obtained by multiplying the number of shares by the value of one paper. Obviously, the price is not constant and changes every day depending on the rate of securities.

Cash dividend

Dividend paid to shareholders of the company in cash. The size of the dividend is usually calculated on the basis of profitability of the company and taxable income.

Commodity

Exchange commodity, commodities – commodities, metals that investors can buy or sell as a rule through futures contracts.

CFD

A contract for a difference – A financial instrument based on a change in the exchange rate of a particular asset (shares, futures, commodities, or index).

Chicago Mercantile Exchange (CME)

Chicago Mercantile Exchange

Commission

A commission is a broker’s reward for the execution of a trade warrant.

Currency basket

a set of currencies that exists to control the dynamics of the price of the national currency on the market, to establish an objective correlation of rates or to create an international unit of account that minimizes the currency risks in international trade. Nowadays, the currency basket principle is used to link the rouble exchange rate to the dollar and Euro, as well as for international lending to needy countries.

Cross rates

The exchange rate of one currency to another, expressed as the ratio of two exchange rates calculated through a third currency. For example, a Swiss bank purchases or sells a franc for Japanese yen, then it is obvious that it uses the values of CHF / USD and USD / JPY for the cross-rate calculation of CHF / JPY.

Currency Future

A financial futures contract for the delivery of a certain foreign currency.

D

Debt market

The market on which debt instruments are traded.

Default

Failure to make timely interest and principal payments on debt obligations, failure to comply with the terms of the loan bond issue agreement.

DAX100

German index Dax100 – a trading instrument that included 100 shares of blue chips of Germany quoted on the Berlin Stock Exchange.

Delivery

Supply – Proposal and receipt of a real product or financial instrument when executing a futures contract.

Dollar Bonds

Municipal income bonds quoted in dollars.

The Dow Jones Industrial Average (DJIA) – The Dow Jones index

this index collects 30 of the largest corporations and companies of the United States of America such as Boeing CO, General Electric CO, Intel CORP and many other giants. That is why this index is by far a very important indicator for all traders. First used as an indicator in the late 19th century by Charles Dow and Edward Jones.

Day Trading

Intra-day trading – such traders are still called intraday, which means that deals are closed before the end of trading sessions and do not move to the next day.

F

Federal Funds Rate

The interest rate on which banks with excess reserves in their regional branch of the Federal Reserve Bank are lending to other banks. Usually, the federal funds rate is indicative of the direction in which US interest rates are moving.

Futures Price

The price at which the parties to a futures contract agree to make a deal on the settlement day.

Federal Reserve System (FRS)

The Central Bank of the United States of America which includes the 12 largest banks and is authorized to regulate the monetary policy of the United States and also supervise the activities of all banks operating in the United States.

Futures Contract

A contract for the purchase of goods or the sale of a financial asset with delivery for a future date.

G

Government Securities

Government securities – Free-floating securities issued by the Ministry of Finance of the country.

Gross Domestic Product (GDP)

Gross domestic product – this indicator is of great importance for the economy and any country. Shows the aggregate value and services of all goods produced in the current year on the territory of the country.

GAP

the gap price on the graph between the last two bars.

H

Hedger

a company or individual that uses derivatives to reduce or eliminate price risk, usually for commodity deliveries. For example, a corn clap producer will attempt to hedge the risks associated with a poor corn crop.

I

International Monetary Market (IMM)

The international money market – the division of the Chicago Mercantile Exchange for trading in financial futures. It was founded in 1972.

Initial public offering (IPO)

The first placement of the company’s shares on the stock exchange.

L

LOT

designation of the volume of securities or units of the base currency on the trading platform.

Leverage

the ratio of the amount of investment and the volume of trading transactions of the trader. Leverage provides an opportunity to operate large volumes of currencies.

Long

Long term deal open for purchase.

London Metals Exchange (LME)

The oldest and largest exchange in Europe where futures for non-ferrous metals are traded. It is based in the centre of London and was founded in 1571. Today, all types of non-ferrous metals are traded on the exchange and the volume of trades has reached 12 trillion US dollars.

M

Margin

Monetary support necessary to maintain open positions. For each financial instrument, the margin is different and specified in the financial instrument specification.

Maturity

for bonds – the date of payment of the principal amount of the bond.

Margin Call

a situation in which the balance on the trading account of the trader falls below the minimum allowable rate after which the stop-out follows.

Market Order

an order to the broker to instantly open positions on a specified financial instrument.

N

NASDAQ index

The OTC index index published by the National Association of Securities Dealers and based on its quotes. The consolidated NASDAQ index is based on the weighted market value of shares of issuers specializing in the field of high technology.

Non-Fund Payrolls

the publication of data on new jobs in the non-agricultural sector. The report is published every first Friday of the current month. Very volatile news that often comes out with indicators on unemployment in the US.

New York Stock Exchange (NYSE)

New York Stock Exchange
This exchange was founded in 1792 and is the largest in the United States of America.

O

Offset – offset, reimbursement, compensation

closing of long positions (long) or short (short) by execution of the opposite operation. More relates to futures or option trading.

Overnight

move the position to the next trading day.

Organization of Petroleum Exporting Countries (OPEC)

Organization of countries of oil products significantly participating in world exports, which was established to regulate prices and produce oil. The association includes countries such as: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

Open Interest

The specific number of non-redeemed futures on a specific paper that have not yet been liquidated either through a compensating Offset transaction or delivery.

P

Performance Bond – Security deposit

Funds that a client of his broker or clearing house must deposit. Typically, this name is used for futures accounts

Pending order

A pending transaction – or an order that expects a certain valuable level to be executed.

Profit

Profit is the result of a deal with a profit.

Pips

A point is a unit of measure in a quotation of a trading instrument, usually the last number in the asset’s value (0.0001 or 0.00001)

Q

Quality spread

The difference between the yield of treasury obligations and the yield of a single industrial bond with a rating of A.

Quoting

the process of providing the client with quotes for making trading transactions.

R

Reserve currency

A foreign currency that the central bank or other regulatory authority accumulates to carry out currency interventions or settle intergovernmental claims.

Rate

The value of a financial asset in monetary terms.

Rollover

The process of extending the expiration of a financial instrument.

S

Settlement price

used to determine the income, losses, the need to make additional security deposits for the supply of financial instruments.

Spot Date

The current price is the current market price of a physical commodity or security.

Spread

the difference between the price of the seller (ask) and the buyer (bid) in a two-way quote.

Swap

The difference in interest rates on loans of two currencies, credited to the account when moving an open trading position for the next day.

T

Trader

A trader is a participant in the financial market making trade transactions in order to make a profit.

Transaction

the FOREX market – a financial transaction for the purchase or sale of an asset (currency, shares, futures contracts)

Y

Yankee bonds

Foreign bonds, nominated in US dollars, bought out by foreign banks or companies in the United States. As a rule, such bonds are registered with the Securities and Exchange Commission SEC.

Yield

The interest rate of the income paid on shares in the form of dividends, or the effective rate of interest paid on bonds or bills.