Day Trading Terminology: The Top Terms Every Trader Should Know!

The process of reducing risk via investments is called ‘hedging’. Fundamental analysis is a method of evaluating the intrinsic value of an asset and analysing the factors that could influence its price in the future. This form of analysis is based on external events and influences, as well as financial statements and industry trends. Fill is the term used to refer to the satisfying of an order to trade a financial asset. It is the basic act of any market transaction – when an order has been completed, it is often referred to as ‘filled’ or as the order having been executed.

An annual general meeting is a yearly gathering between the shareholders of a company and its board of directors. Generally, this is the only time that the directors and shareholders will meet throughout the year, so it is a chance for the directors to present the company’s annual report. When they experience strong demand, these stocks can quickly move %. A customs duty rate is unbound if it was never subject to a tariff concession during any GATT round of tariff negotiations . The supply-side ability of a country to benefit from the opportunities offered by the world market and MFN or preferential access to markets. Measure under which a good is subject to a MFN tariff, but a certain quantity (the ‘quota’) is admitted at a lower, sometimes zero, tariff.

The writer faces infinite risk because the stock price could continue to rise increasing losses significantly. Vega represents the rate of change between an option’s value and the underlying asset’simplied volatility. Vega indicates the amount an option’s price changes given a 1% change in implied volatility.

Ex-Dividend – The interval between the announcement and the payment of the next dividend for a stock. Governance – Factors that relate to the management and oversight of companies and investee entities, e.g., board structure, pay. Default – Failure of a debtor to make timely payments of interest and principal as they come due or to meet some other provision of a bond indenture. Annualized – A procedure where figures covering a period of less than one year are extended to cover a 12-month period. Alpha – The amount of return expected from an investment from its inherent value.

Second level sub-category (4-digit) used in the Harmonized System nomenclature. Third level sub-category (3-digit) used in the SITC nomenclature. Extension of the SMART model to simulate the https://day-trading.info/ partial equilibrium impact of tariff reductions in a multi-market framework. A block of developing countries led by Brazil, China and India that emerged just before the Cancun meeting.

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From our startup lab to our cutting-edge research, we broaden access to capital for diverse entrepreneurs and spotlight their success. Our insightful research, advisory and investing capabilities give us unique and broad perspective on sustainability topics. A group of companies that are part of the same industry and have the same kind of business. This is not an offer or solicitation in any jurisdiction where Firstrade is not authorized to conduct securities transaction. An estimate of the time to maturity for a pool of mortgage-backed securities. Also known as an index, it is the mathematical calculation that indicates the value of a group of securities.

When a stock is going “to the moon,” it means it’s increasing in stock price. In the Reddit forum, the phrase “to the moon” is often accompanied by a rocket emoji. “GUH” is an internet term used to mean someone is annoyed or upset. In the context of WallStreetBets, GUH is likely to be used when someone has lost a lot of money on an investment.

A purchasing managers index is an economic indicator comprised of monthly reports and surveys from private sector manufacturing firms. The index surveys product managers, who are the individuals that buy the materials needed for a company to manufacture its products. A pullback is a temporary pause or dip in an asset’s overall trend. The term is sometimes used interchangeably with ‘retracement’ or ‘consolidation’. However, a pullback should not be confused with a reversal, which is a more permanent move against the prevailing trend. A market maker is an individual or institution that buys and sells large amounts of a particular asset in order to facilitate liquidity.

MetaTrader is an electronic trading platform which is popular among traders around the world. A lot is a standardised group of assets that is traded instead of a single asset. Leverage is a concept that can enable you to multiply your exposure to a financial market without committing extra investment capital. Inflation is the increase in the cost of goods and services in an economy. As that in turn means that each unit of the currency’s economy is worth less of any good or service, inflation can also be viewed as a devaluing of currency. Helicopter money is the term used for a large sum of new money that is printed and distributed among the public, to stimulate the economy during a recession or when interest rates fall to zero.

Like the name suggests, it’s often an olive branch aiming to bolster economic growth in a depressed market. In trading, short describes a trade that will incur a profit if the asset being traded falls in price. It is also often referred to as going short, shorting or sometimes selling. Reserves are the liquid assets set aside for future use by an individual, central bank or business. Usually they are in the form of currency or a commodity, such as gold.

Return On Assets

Because the right to exercise early has some value, an American option typically carries a higher premium than an otherwise identical European option. This is because the early exercise feature is desirable and commands a premium. A long call can be used to speculate on the price of the underlying rising, since it has unlimited upside potential but the maximum loss is the premium paid for the option. Stockstotrade.com needs to review the security of your connection before proceeding. MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security. MarketBeat is providing this page as a way for investors to become familiar with basic investing terms.

As mentioned earlier, call options allow the holder to buy an underlying security at the stated strike price by the expiration date called the expiry. The holder has no obligation to buy the asset if they do not want to purchase the asset. Traders and investors buy and sell options for several reasons. Options speculation allows a trader to hold a leveraged position in an asset at a lower cost than buying shares of the asset. Investors use options to hedge or reduce the risk exposure of their portfolios.

Fair value definition

Was first introduced by Bill Williams in the 1990s with the idea that markets trend a small portion of the time while remaining in a sideways range for most of the time. The CTS database contains all WTO Members’ cross rate of exchange concessions on goods at the national tariff line level in a standardized format. The database was established as a working tool only, without implications as to the legal status of the information therein.

A market order is an instruction from a trader to a broker to execute a trade immediately at the best available price. Deposit margin is the amount a trader needs to put up in order to open a leveraged trading position. It can also be known as the initial margin, or just as the deposit.

At a minimum, these studies indicate at least 50% of aspiring day traders will not be profitable. This reiterates that consistently making money trading stocks is not easy. Day Trading is a high risk activity and can result in the loss of your entire investment.

An industry’s concentration ratio is the size of a certain number of firms in an industry compared to its total size. It is used to calculate one or more firms’ dominance of their sector. When a market, instrument or sector is on an upward trend, it is generally referred to as a bull market.

Annual report – The yearly audited record of a corporation or a mutual fund’s condition and performance that is distributed to shareholders. Assuming I took a short put option on nifty at premium of 50 rs, i took 4 lots which would cost me 5000 rs. If the premium of the above position goes up to 100 and I don’t have money in my trading account.

Yield definition

First level sub-category (2-digit) used in the Harmonized System nomenclature. In WITS, refers to all product categories for a given level of details . Cluster selection is used in WITS in order to select many same level product categories in one click. The first two digits of CCCN and HS numbers represent the chapter level. Product categories are defined on an ad hoc basis to compile summary reports by sectors, stages of processing, etc.

Usually, a stock index is made up of a set number of the top shares from a given exchange. A sprint is a type of simplified digital 100 option, differing from standard digital 100s in their expiry and pricing. They are also known as sprint markets, and are only available with IG. In finance, the spread is the difference in price between the buy and sell prices quoted for an asset.

Day Trading Terminology: Bulls vs. Bears

The AVE is calculated from the actual duty collection or from the unit value of imports. For example, the AVE of a specific duty of $1.00 per KG levied on a product with a unit value of $10.00 per KG is equal to 10% ($1.00/$10.00). An ad valorem duty is based on the value of the dutiable item and expressed in percentage terms for example, a duty of 20 percent on the value of automobiles. 52 Week High – A security’s trading high point over the last 52-week period.

Commodity definition

The risk of buying put options is limited to the loss of the premium if the option expires worthlessly. If the underlying stock price does not move above the strike price by the expiration date, the option expires worthlessly. The holder is not required to buy the shares but will lose the premium paid for the call.

Market capitalisation is an easy way for investors to determine a company’s size, which can help to assess the risk of investing in its shares. The Ichimoku Cloud is a technical analysis indicator that defines support and resistance levels, gauges momentum and provides trading signals. In Japanese, it is called the ‘Ichimoku Kinko Hyo’ which roughly means ‘one look equilibrium chart’ – because with just one look, traders can receive a range of information.

Operating as part of the London Stock Exchange , the RNS provides businesses with information that can help them to comply with their disclosure obligations. In trading, risks are the ways in which an investment can end up losing you money. Risk management is the process of identifying potential risks in your investment portfolio, and taking steps to mitigate accordingly. Quantitative easing is an economic monetary policy intended to lower interest rates and increase money supply. It saw an increase in profile and use after the 2008 financial crash and subsequent recession. A parent company is one which has a controlling or majority interest in another company, which gives it the right to control the subsidiary’s operations.