Glossary - Basel Markets Global

Trading Glossary

Forex Glossary

There is no denying that trading carries a wealth of positives, but that doesn’t stop it from being confusing to those who are embracing the global markets for the first time.

What many upstart traders will likely find is a wealth of countless terms and phrases being thrown in their direction. Thankfully, help is now at hand to help you get up to speed. The following is a complete glossary of financial terms, which provides key definitions in the simplest way possible. Whether you’re a novice trader looking to learn the ropes or an experienced trader looking to brush up, the following glossary is something that you are going to want to keep close by.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Abnormal Market Conditionsa rapid or thin market Account history a register of completed transactions, balance operations and cancelled orders in the customer’s account. Asian Sessionbetween the hours of: 23:00 to 08:00 (Tokyo) Askthe price a seller or market-maker is willing to accept for a traded instrument; also known as the offer price; a price for establishing an open Buy position. AUS 200another name for the Australian Securities Exchange (ASX 200); 200 stands for top 200 (by market capitalisation) companies listed on the ASX. AussieAussie or Ozzie are nicknames for the AUD/USD currency pair Available Marginalso called free margin; a rest of funds in the customer’s account with the deduction of margin, floating profit/loss and rollovers summary. Basel MarketsBasel Markets is a global leading brokerage in providing trading solutions for multi-asset instruments from foreign exchange, shares, indices, equities, commodities Balancea summarized financial result of all funds deposited in, and withdrawn from the customer's account, and of all closed positions in that account. Base Currencythe first currency in a currency pair (e.g. if EUR/USD rate is 1.3283 then one EUR is worth 1.3283 USD).Base Ratethe given central bank country lending rate, which is used by banks to calculate the interest rate given to borrowers. Basis Pointa unit that describes the minimum change in the price of a product. Bearslang for a trader who expect prices to decline; trader who is holding a short position.Bearish / Bear marketslang for a downtrend market (price is declining).Bidthe price at which a seller or a market maker is willing to buy a traded instrument; a price for establishing an open Sell position.BOCBank Of Canada (Canada’s central bank).BOEBank Of England (UK’s central bank).BOJBank Of Japan (Japan’s central bank).Bullslang for a trader who expect prices to rise; trader who is holding a long position.Bull / Bullish Marketslang for an uptrend market (price is rising).BundesbankGermany’s central bank; also referred to as BUBA. Buy Limita pending order for establishing an open Buy position in the customer's account. In the event that the price on the specified instrument falls to the specified level; it can be only executed at the Ask price, and then placed below the current Ask price of the specified instrument. Buy Positionan open position that represents expectation that the market price will increase (e.g. buying the base currency against the quote currency, or buying a contract for difference on an underlying security rate).Buy Stopa pending order for establishing an open Buy position in the customer’s account, in the event the price on the specified instrument rises to the specified level; can be only executed at the Ask price and placed above the current Ask price of the specified instrument.

Cableslang for the GBP/USD currency pair. CAC40short name for the French Stock Exchange; 40 stands for top 40 companies (by market capital). Candlestick Chartone of the ways to view or present a chart. The Candlestick Chart indicates the opening and closing price in a chosen date range; if the close price is higher than the open price, then that area of the candlestick is not shaded, and vice versa if the open price is higher than the close price. CBsshort for central banks. Central Bankusually a government organization that manages a country’s monetary policy. CFD (Contract for Difference)an object of a electronic transaction based on the price fluctuation of an underlying asset (e.g. stock or futures contract). Charta diagrammatic representation of historical quotes in the form of lines, bars or candlesticks. Client Log-file a text file located in the folder 'MetaTrader5/Logs' that is used for recording all requests from the client terminal; it is created in the form of separate daily files. Client Terminalthe MetaTrader 5 (hereafter called MT5) program designed for customer trading, exercising supervision over customer accounts, obtaining real-time and historical quotes, news and other market information that Basel Markets may have made available to our customers. Also commonly used for technical analysis, automated trading by expert advisors, and for customer feedback via the internal mail system. Close a request or instruction for closing a specified position at the current market price. Close Bya request or instruction for closing two locked positions on the same instrument. Commissionan amount of service payments charged to the customer’s account. Contracta standard unit on the Forex market (e.g. 1 lot). Contract Detailsparameters of an instrument specified by Basel Markets for customer trading and published on the Basel Markets website. Counterpartyone of the participants in a financial transaction. Currency Pair traded instrument based on the change of the value of one currency against another currency. Customer a physical or juridical person; a signatory of the Customer Agreement with Basel Markets. Customer Account (Account)our customer’s personal system register of transactions, orders and balance operations. Data Feeda stream of quotes in Basel Markets' MT5 trading platform. Dealeran Basel Market's employee responsible for accepting customer requests, executing customer orders and carrying out the liquidation of customer open positions in the event of a Stop Out. Deficitnegative balance for a trade or payment (i.e. not enough money). Demo Accountpractice account. Depomoney deposited on an account. Dispute, Complaint, Claiman event that occurs when our customers believe that Basel Markets' actions or inactions are erroneous or contradictory to what is found in the Terms or/and the Basel Markets Customer Agreement, and vice versa. Dividend Adjustment an adjustment that is applied when a share passes its ex-dividend date (including the ex-date of any special dividend) in the underlying stock market. DJIA or Dowshort for the Dow Jones Industrial Average or US30. Doverefers to easier monetary policy or lower interest rates; opposite to hawkish. Downtrenddeclining price action, which can be described as lower-lows and lower-highs. ECBEuropean Central Bank. ECNElectronic Communication Network, which eliminates the third party in executing an order. Equitya net worth of funds in the customer’s account. EST/EDTNew York City time zone (United States Eastern Standard Time/Eastern Daylight Time). ESTX50short for the Euronext 50 index. European Sessionbetween the hours of: 07:00 to 16:00 (London). Exchange Executionorder execution mode where a transaction order is passed to an external gateway connected to an exchange or another liquidity provider. Exotic paira less traded currency pair. Expert Advisora program written in MQL5 (MetaQuotes Language 5) and executed by the Client Terminal for the purpose of automated trading in the customer’s account. Expiryan instruction for cancellation of a pending order at a specified time and date. Explicit Erroran event where the position opening or closing price significantly differs from the market price being actual at the moment of execution; an event where the execution of the customer’s order or request is inconsistent with the order or request by general meaning. FEDThe Federal Reserve Bank (USA central bank). Fillmeans the order has been successfully executed. Fill or Killorder type where if the order cannot be filled, then it will be cancelled (killed). Floating Profit/Lossa difference value between the customer account’s equity and balance. FOMCThe Federal Open Market Committee is the policy-setting committee of the FED. Foreign Exchange''Forex (FX) is the global market for buying one currency and selling another.'' FRA40other name of CAC 40. FTSE 100short name for UK 100 index. G7a group of seven nations including USA, Japan, Germany, UK, France, Italy and Canada. G8G7 + Russia. Gapsignificant difference between the two consecutive quotes; may be shown on charts as a blank field between bars or candles when the time period between the two quotes covers the bars or candlestick’s close time. GDPGross Domestic Product is the total value of a country's output, income, or expenditure produced within its physical borders. Hawkishrefers to easier monetary policy or higher interest rates: opposite to dove. Hedgecombination of positions or a position that reduces the risk of your primary position Hedged marginBasel Markets' margin requirements for maintaining locked positions. HK40 / HKHIshort name for Hong Kong Seng Index. Initial Margin (Margin) Basel Markets’ requirement for security collateral to open a position. Instant Executiona request execution type that means all quotes shown in the Client Terminal can be accepted by Basel Markets for customer trading, with no preliminary requests for quotes. INXsymbol for S&P 500 index. JPN225short name for the NIKKEI index. Kiwislang for the NZD/USD currency pair. Leveragetransaction size/margin ratio (e.g. 1:100 leverage means the customer needs to have 1% of the transaction size in his/her account as security collateral or margin). LIBORThe London Inter-Bank Offered Rate, which banks use as a base for international lending. Locked Positionconsists of equal long and short positions on the same instrument; locked positions require 50% of summarized margin for both positions. Logincustomer account’s unique identification number. London Sessionbetween the hours of: 08:00 to 17:00 (London). Long Positionwhen the pair’s base currency is bought, the position is deemed long. Loonieslang for Canadian dollar, which is also known as Funds. Lota transaction size unit in MT5, where: 1 lot is equal to a contract on 100000 base currency units for currency pairs; 1 lot is equal to one unit of an underlying security for stock CFDs. Lot Sizean amount of base currency units or underlying asset units that is specified by Basel Markets' contract as a transaction size per 1 standard lot. Margina summarized value of the customer’s account funds that is reserved as security collateral for maintaining that customer’s open position; in accordance with Basel Markets’ margin requirements. Margin Levelan equity/margin percentage ratio. Margin Tradinga customer trading service utilising the leveraged technique, which allows the customer to make transactions exceeding his/her account deposit. Market Executionorder execution mode where a transaction is processed at the best price available on a trade server. Market Openingthe time when instruments become available for customer trading after weekends, holidays, regular closing intervals or server downtimes. Market Orderan electronic instruction for opening a position in the customer’s account, at the current market price. Modifya request for modification of a pending order level; a request for placement, cancellation or modification, or Stop Loss & Take Profit levels on an open position or pending order. MT5 Basel Marketsa software platform designed for online trading, which is the technology base for Basel Markets' customer trading services; consisting of MT5 Client Terminal (customer terminal), MT5 Server, MT5 Data Center, MT5 Multiterminal, MT5 Mobile and MT5 Smartphone. Multiple Close Bya request or instruction to close all locked positions in a customer's account New York Sessionbetween the hours of: 08:00am to 05:00pm (New York time) Normal Market Conditionsthe opposite of a rapid market; where there are no market data errors. Open Positiona contract for buying or selling an instrument within the customer’s account; the first part of a complete transaction and an obligation to make an equal counter transaction afterwards; also treated as the customer’s obligation to satisfy Basel Markets’ margin requirements and to maintain, without notice or demand from Basel Markets, a sufficient account balance at all times that continuously meets Basel Markets’ margin requirements and the equity/margin minimum ratio specified by Basel Markets (e.g. a minimum ratio of 30%). Orderan electronic instruction for opening or closing a position in the customer’s account on a specified instrument, in the event its price reaches the specified level. Order Levela price specified by the customer in the order placement request as an instruction for opening a position in his/her account, at this price and under conditions determined by the order type. Over The Counter (OTC)describes any transaction that is not conducted via an exchange. Pending Orderan electronic instruction for opening a position in the customer’s account, in the event the price of a specified instrument reaches a specified level; the customer is enabled to use pending orders that include Buy Limit, Sell Limit, Buy Stop and Sell Stop. Platform Time Zonethe time which the Basel Markets server is synchronized with; a time zone which is used for recording any events into the server log-file; Basel Markets MT5 is currently synchronized with GMT+2 or GMT+3 during Daylight Savings. Pointa minimum price change (e.g. 0.0001 for EUR/USD); also called a Pip. Pricea two-way quote consisting of Bid and Ask prices; a position’s opening or closing price; an order level. Price Gapan event where the current Bid price is above the previous Ask price and vice versa. Quotean electronic message about the current price displayed in the Client Terminal, which consists of demand price (Bid) and supply price (Ask). Quotes BaseBasel Markets' server archive file, which contains historical quotes. Quotingproviding the customer with quotes that Basel Markets may accept for buying or selling instruments in his/her account. Rapid Marketmarket conditions characterized by significant price changes in short periods of time that frequently cause wide gaps between consecutive quote values; commonly occurs immediately before and/or after important events (e.g. key economic reports on any G7 countries, press conferences by G7 financial ministers or central banks’ chairmen, central bank’ decisions on interest rates, market interventions, political or natural force majeure such as war or terrorism). Ratethe base currency value in the quoted currency for a currency pair; the underlying asset value for a CFD. Requestan electronic instruction for opening or closing a position, placement, cancellation or modification of an order that is given by the customer via the Client Terminal; a query for a two-way quote. Sell Limita pending order for establishing an open Sell position in the customer’s account, in the event the price on the specified instrument rises to the specified level; can only be executed at Bid price and placed above the current Bid price of the specified instrument. Sell Positionan open position, which represents expectation that the market price will decline (e.g. selling the base currency against the quote currency or selling a contract for difference on an underlying security rate). Sell Stopa pending order for establishing an open Sell position in the customer’s account, in the event the price on the specified instrument falls to the specified level; can only be executed at Bid price and placed below the current Bid price of the specified instrument. Serverthe MT5 server that transmits requests from the Client Terminal to dealers, sends (i.e. news, quotes, execution confirmations) to the Client Terminal and records all messages related to the customer trading process; it maintains mutual liabilities between Basel Markets and our customer, which are formalised in the Basel Markets Customer Agreement, contract details and margin requirements. Server Log-filea text file generated by the MT5 server that is used for recording all events related to customer trading and platform performance, including all dialogues between client terminals and dealers. Session Gapa price gap between the first quote of the current market session and the last quote of the previous market session. Slippagea parameter of Expert Advisor that sets-up the maximum difference between the requested price and the dealer’s price, that is acceptable to Expert Advisor for opening a position in the customer’s account; a difference between the order’s price and its actual price execution. Spike or Data Erroran incorrect quote generated by the server because of a data feed error; commonly looks like a significant price gap returning close to the previous level on the next price update, with no signs of rapid market around; Basel Markets has the discretion, but not the obligation, to remove such errors from its quotes database. Split Closea partial position closing (e.g. closing 0.5 lots of 2 lots). Spreadthe difference between Bid and Ask price, which is evaluated in points. Stop Losan order for closing a specified open position at a specified level, in the event the price moves in an unfavourable direction; can only be executed at Bid price and placed below the current Bid price with reference to Buy positions; can be only executed at Ask price and placed above the current Ask price with reference to Sell positions Stop Outa compulsory closing of the customer’s open positions by Basel Markets, in the event the customer’s account does not satisfy Basel Markets’ margin requirements. STP Straight Through Processing, i.e. passing all transactions electronically to the execution venue without human intervention SWAPan amount of overnight adjustments paid or charged to the customer’s account at 23.59 in the platform’s time zone, in accordance with values specified in Basel Markets contract details; it is a daily settlement for margin trading services. Swissyslang for the Swiss Franc. Symbolan object of an electronic transaction (e.g. currency pair, stock CFD, futures CFD); an instrument within MT5. Take Profitan order for closing a specified open position at a specified level, in the event the price moves in a favourable direction; can be only executed at Bid price and placed above the current Bid price with reference to Buy positions; can be only executed at Ask price and placed below the current Ask price with reference to Sell positions. Thin Marketperiods of low trading activity and amounts of quotes per time, as compared to normal market conditions (e.g. periods between 21.00 and 00.00 GMT and before Christmas holidays). Ticketa unique identification number of a position, order or balance operation in the customer's account. Trailing Stopa built-in option of the Client Terminal that automatically adjusts a Stop Loss order level by a specified amount of points, if the favourable price motion exceeds this amount; it only works with the Client Terminal connected to the server. Transactionan operation consisting of two equal counter trades in a specified instrument. Transaction Sizelot size multiplied by the amount of lots. U-Shaped Recoverya chart shape showing a gradual price rise back to its previous peak, after gradual decline. UK OILshort name for Brent Crude Oil. UK100short name for the FTSE 100 index. Upticka new price quote, at a price higher than the previous quote. US OILshort name for WTI Crude Oil. US30short name for the Dow Jones index. V-Shaped Recoverya chart shape showing recovery that involves a sharp rise to a previous peak, after a sharp decline. Value datethe future date on which counterparts to a financial transaction agree to determine the value of a product’s price; for a spot foreign exchange trade this date is normally two business days after a transaction is agreed. Volatilitymeasure for fluctuation of price of a financial instrument over time; delegate to an active market that represents trading opportunities. W-Shaped Recoverya chart shape showing a change of sharp decline, rise, decline and ending with another sharp rise; the middle part of the shape can be lower than two price peaks on each side. Whipsawslang for a very high volatility market where price is moving similar to a ‘whipsaw’ at work; the price movement is followed by a sharp and quick reversal movement. Working orderStop or Limit orders that have been placed but not filled yet. XAG/USDsymbol for the Silver Index. XAU/USDsymbol for the Gold Index. Year Over Year (YOY)any measurable event that recurs annually; a popular way to compare the performance of investments. Yieldthe percentage based income return on an investment.

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