Glossery

  • Account Limit

    The maximum amount of money that an account is allowed to have in it.

  • After Hours Trading

    Trading on a market after the underlying market has closed.

  • AML

    Anti Money Laundering. Refers to legal controls placed on companies to prevent and report money laundering.

  • Arbitrage

    Trading on a price differential between two or more markets.

  • Ask Price

    The price at which you can buy at or bet that a market will go up.

  • Back Office

    Administration software to monitor your account, trades, positions etc.

  • Base Currency

    The first currency in a currency pair. For example in GBP/USD, GBP is the base currency. It is this currency that the exchange rate refers to, so if the exchange rate was 1.6350 then 1 unit of the base currency equals 1.6350 units of the second currency.

  • Base Rate

    Refers to the official rate of interest set by the Bank of England.

  • Basis Points

    One hundredth of a percent. ie 0.01 %. So half a percent is 50 basis points.

  • Bear Market

    A market in which the prices are in general decline.

  • Bid Ask Spread

    The difference between the bid price and the offer price.

  • Bid Price

    The price at which you can sell at or bet that a market will go down.

  • Bull Market

    A market in which the prices are in generally rising.

  • Buy

    When you BUY when you believe a market will rise or when you want to close a position that you have previously SOLD

  • Cable

    The global nickname give the currency pair GBP/USD. It derived from the cable laid under the sea from London to New York in 1850 which enabled currency prices to be sent telegraphically.

  • Cash Price

    The price of the underlying market which another market may be based on.

  • Central Bank

    The Government of a country’s banker who implements monetary policy.

  • CFD

    Contract for Difference. Margin trading on financial markets.

  • Charting

    A visual representation of the historic price movement of a market which can be used in an attempt to predict the future movement.

  • Closing Only

    When positions may only be closed and not opened.

  • Closing Price

    The last price that a market trades at. The ‘Official Close’ maybe a different to this.

  • Corporate action

    When a company structure changes or a dividend is issued etc.

  • Cost of Carry

    The actual cost to run a position from one day to the next. E.g. financing.

  • Counter currency

    The second currency in a currency pair, also known as the contra currency.

  • Cover

    To reduce or close an open position.

  • Cross Rate

    Normally refers to non major currency pairs. E.g. Aud/Cad.

  • Day trading

    Trading throughout the day without leaving positions on to run overnight.

  • Delivery

    A trade which is allowed to expire and which a physical delivery of a product occurs.

  • Deposit

    The amount that you have credited into your account.

  • Derivative

    A market that is priced using another market as its bench mark.

  • Dividend

    A share of a company’s profits that is distributed to its shareholders

  • ECB

    European Central Bank

  • Economic Indicator

    A statistic usually issued by a Government department indicating the financial state of the economy.

  • Equity

    Another word for a share.

  • ETF

    Exchange Traded Fund. Quoted on stock markets and mimics an underlying index, commodity or bonds etc.

  • Ex Dividend

    When a share is traded with no rights or obligations to the due dividend.

  • Expiry

    When a market will close and end permanently

  • Fair Value

    The difference between the underlying price and the theoretical Futures price.

  • Fast Market

    When a market is so volatile and heavily traded that it can trade outside of the current ‘screen’ price.

  • Fed

    Federal Reserve. The central bank of the USA.

  • Fill

    An order that has been completed.

  • Flat

    When you have no position.

  • FOMC

    Federal Open Market Committee. Part of the Fed reserve that controls US interest rates.

  • Front Month

    The main Futures contract of a market in which most trading takes place.

  • Futures

    A contract to buy or sell something at a specified rate on a given date.

  • FX

    Foreign exchange.

  • Gap

    When a market price ‘jumps’ significantly from the previously traded price.

  • Gearing

    A means of placing a large trade with only a small deposit through leverage.

  • GFD

    Good For the Day. Usually refers to when an order is no longer valid.

  • Grey Market

    A market that we may quote even when the actual underlying market is closed.

  • GT

    Good Till. Usually refers to when an order is no longer valid.

  • GTC

    Good Till Cancelled. Usually refers to when an order is no longer valid.

  • Hedging

    A trade that reduces your exposure or risk to another trade.

  • High

    The highest point at which a market traded.

  • Historical Trading Range

    The price history of a market.

  • Illiquid

    Very little volume can be traded without moving the price by a lot.

  • Index

    A basket of weighted markets.

  • Indication Price

    A guide price. Not an actual tradable price.

  • Inflation

    The rate at which general price levels are rising.

  • Initial Margin

    The amount of up from deposit required to place a particular trade.

  • Interbank Rates

    The interest rates that large banks quote to each other.

  • IPO

    Initial Public Offering. When a company first sells stock to the public.

  • Junk Bond

    High yielding bonds issued by companies to raise funds.

  • KYC

    Know Your Customers. An obligation on companies to know the identity, experience and requirements of their customers.

  • Last Trading Day

    The last day in which trading is permitted before a market expires.

  • Leverage

    A means of placing a large trade with only a small deposit through gearing.

  • Libor

    London Interbank Offered Rate. The interest rate that commercial banks lend to each other in the UK. There is a fixing everyday at 11am which is used for a lot of global calculations.

  • Limit Down

    The maximum that a market is allowed to fall at any one time by its regulators.

  • Limit Order

    An order to buy or sell at a more advantageous level than where the market last traded.

  • Limit Up

    The maximum that a market is allowed to rise at any one time by its regulators.

  • Liquid

    When a market has a lot of buying and selling volume going through, not affecting the price.

  • Long Position

    When you have a position in which you benefit from a rising price.

  • Lot

    A preset trading amount. On MT4 platform this is 100,000.

  • Low

    The lowest point at which a market traded.

  • Manifest Error

    When a wrong price has been dealt on.

  • Margin Call

    When you are called for additional margin as you do not have enough to allow for the adverse price movement in the position you hold.

  • Margin

    The amount of deposit required to fund a position.

  • Mark to Market

    The value of a position based on the current price.

  • Market Capitalisation

    The value of a company.

  • Market Order

    An instruction to buy or sell at wherever the price is at the moment.

  • Maximum trade size

    The maximum stake that can be traded at any one time.

  • MIS

    Market Information Sheets.

  • Net position

    Total position held.

  • Normal market size

    The usual volume that is traded in particular market.

  • Notional

    The nominal or face value of something.

  • OCO

    One Cancels Other. Two orders placed, where if one is completed it cancels the other.

  • Offer

    The price at which you can buy at.

  • Open position

    Any current trades which have been opened and not yet closed.

  • Order

    An instruction to initiate a trade when a specific price is reached.

  • OTC

    Over The Counter. A market not traded on a recognised exchange.

  • Our quote

    The price at which GKFX is willing to buy or sell at.

  • Over bought

    When a market has been aggressively bought causing the price to move to unsustainably high levels.

  • Over Sold

    When a market has been aggressively sold causing the price to move to unsustainably low levels

  • P&L

    Profit and Loss.

  • Pip

    A term usually used in FX to refer to the smallest increment that a price can move by.

  • Point

    A term used in any market referring to the smallest increment that a price can move by.

  • Position

    Any current trades which have been opened and not yet closed.

  • Quote

    A two-way market price containing the bid price and the offer price.

  • Realised P&L

    The actual profit or loss made after a position has been closed.

  • Resistance

    A level where technical analysts believe selling will occur.

  • Retail Investor

    Someone who invests or trades in a non-professional capacity.

  • Rights issue

    Where a company sells new shares to raise capital.

  • Risk

    The exposure to something where the outcome is unknown to varying degrees.

  • Rollover

    A procedure when a position which is approaching expiry is moved to the next contract expiry date.

  • Running P&L

    Your current profit or loss based on up to date prices.

  • SEC

    Securities and Exchange Commission (US regulatory authority).

  • Sell

    When you SELL when you believe a market will fall or when you want to close a position that you have previously BOUGHT.

  • Settlement

    When a market will close and end permanently.

  • Short position

    When you have a position in which you benefit from a falling price.

  • Slippage

    The difference between the level which an order was left at and the actual price it was filled at. This amount may increase during times of extreme volatility.

  • Spot

    The underlying main cash price, usually referring to FX.

  • Spread

    The difference between the Bid price and the Offer price.

  • Stamp Duty

    A government tax imposed on the purchase of shares.

  • Stop Loss

    An order linked to an open position that will close it at a predetermined level which is further away than at present, thus limiting your loss.

  • Stop

    An order to sell or buy at a worse level than at present. This will normally open a new position, but could be used to close a position (but it is not linked to anything).

  • Support Level

    Commonly known as Support; a level where technical analysts believe buying will occur

  • Takeover

    The transfer of ownership from one group to another.

  • Technical Analysis

    Analysing charts and information to look for patterns or trends to help make predictions on future price movements.

  • Terms of Business

    Your legal contract with GKFS and ours with you.

  • Tick

    A term used in any market referring to the smallest increment that a price can move by.

  • Trading range

    The high and low prices that have actually traded during a given time.

  • Trailing stop

    A stop loss order which automatically moves if you are in profit so that you keep reducing your potential loss.

  • Underlying asset

    The core market from which other prices may be linked or related to.

  • Up Bet

    When you BUY when you believe a market will rise or when you want to close a position that you have previously SOLD.

  • Volatility

    The amount something moves in proportion to time.

  • Warrant

    An option to buy a stock at a given price at some time in the future.


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  • Yard

    A slang term usually referring to a billion.

  • Yield

    The rate of return from an investment.


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