Terminology

Balance: Value of the Client trading account that excludes P&L on open positions. It equals to all deposits minus withdrawals and P&L from closed positions.

Bear Market: A market characterized by falling prices and pessimistic investor sentiment.

Bull Market: A market condition in which prices are either rising or are expected to rise

Bid-Ask Spread: The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask) for a security.

Blue Chip Stocks: Stocks of well-established, large-cap companies with a history of stable performance.

Commission: A fee charged by the broker for executing trades on behalf of the client.

Candlestick Chart: A visual representation of price movements in a specified time frame, displaying open, close, high, and low prices as candlestick shapes.

Chart Patterns: Patterns functioning as indicators of future price movement.

Day Trading: The practice of buying and selling financial instruments within the same trading day or even multiple times over the course of a day.

Diversification: Spreading investments across various asset classes, sectors, and geographical regions to mitigate risk.

Dividend: A dividend is a distribution of a portion of a company’s earnings, decided by the board of directors, paid to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.

ETF (Exchange-Traded Fund): A financial instrument consisting of different groups of securities, which are usually tracking the performance of an index.

Equity: Client’s current account’s value – it equals to balance plus any P&L from open positions.

Forex (Foreign Exchange): The global marketplace for trading currencies, where one currency is exchanged for another at an agreed-upon exchange rate.

IPO (Initial Public Offering): The first sale of a company’s stock to the public, marking its transition from a private to a publicly-traded company.

Index: Is a hypothetical portfolio of investment holdings that represents a segment of the financial market. For example, S&P 500, which tracks 500 of the largest U.S. companies.

Intraday Trading: Trading that occurs within the same trading day, with positions opened and closed before the market closes.

Limit Order: Is an order to buy or sell at a specified price or better. A Buy Limit order (a limit order to buy) is executed at the specified limit price or lower (i.e., better). Conversely, a Sell Limit order (a limit order to sell) is executed at the specified limit price or higher (again, better). Unlike a market order, where you simply press “buy”/”sell” and let the market choose the price, you have to specify a price when using a limit order.

Long Position: Is the buying of a security such as a stock, commodity or currency with the expectation that the asset will rise in value.

Liquidity: The ease with which an asset can be bought or sold without significantly affecting its price.

Margin: Margin is the collateral that the Client has to deposit with the broker to cover the credit risk on the money borrowed from a broker to purchase an investment and is the difference between the total value of an investment and the loan amount.

Margin Call: A requirement from a broker or dealer for additional funds or other collateral to bring the margin up to a required level – thereby guaranteeing performance on a position that has moved against the customer.

Market Order: Is an instruction to the broker to buy or sell an investment immediately at the best available current price.

Portfolio: A collection of securities, including stocks, bonds, and other investments, held by an investor.

Penny Stocks: Low-priced stocks that typically trade at less than $5 per share and often represent small companies with limited liquidity.

Research Tools: Resources provided by the broker, such as market analysis, stock screeners, and financial news, to help users make informed investment decisions.

Risk Management: Strategies and techniques used to mitigate risks and protect investments from adverse market movements.

Risk Tolerance: The level of risk an investor is comfortable with when making investment decisions.

Stop-Loss (S/L): Is an order placed with a broker to sell a security when it reaches a certain price. Stop loss orders are designed to limit an investor’s loss on a position in a security.

Short Position: Is a directional trading or investment strategy where the investor sells shares of borrowed stock in the open market. The expectation of the investor is that the price of the stock will decrease over time, at which point the he will purchase the shares in the open market and return the shares to the broker which he borrowed them from.

Trading Hours: The specific hours during which the broker’s platform allows trading in various markets, such as stock exchanges and commodities markets.

Trading Platform: The software or online interface that allows users to place orders, conduct research, and manage their investments.

Technical Analysis: A type of analysis that focuses on the internal factors that can impact an asset’s price.

Volatility: A statistical measure of a market or a security’s price movements over time, it is calculated by using standard deviation.

Value Investing: An investment strategy that involves selecting undervalued stocks based on fundamentals, such as earnings and book value.