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Glossary Of Trading
Base Currency
The first currency quoted in a forex pair upon which the value of the pair is determined. The pair’s value is equal to the amount of counter currency (the second currency quoted) required to buy/sell one unit of the Base currency (the pair). If 1 EURUSD – a currency pair in which the Euro is the Base currency and the US Dollar is the Counter currency – equals 1.1.000, 1 Euro equals 1.1000 US Dollars.
Bear Market
A market for an asset whose value is declining. A bear market is characteristically corroborated by a 20% loss of value over a specified time period.
Bid price
The price that one party is prepared to bid for a counterparty’s asset. In forex and CFD trading, the broker determines the bid price.
Bid/Ask Spread
The disparity between Bid and Ask prices represents the broker’s (money changer’s) profit for administering a transaction/position.
Binary Option
An option on an asset whose payout is determined when the option is purchased and whose expiration can either be “in the money” (successful) or “out of the money” (unsuccessful).
Blockchain
A shared online ledger in which data is maintained in closed sequentially developing, verifiable data blocks.
Blue Chip Shares
Shares of large and well-known companies.
Bretton Woods
The New Hampshire location of the resort at which the world’s major economic powers post-World War-2 agreed to peg their currencies to the US Dollar, which would be itself pegged to the Gold Standard, thereby de-pegging their own currencies from the commodity.
Broker
A 3rd party that negotiates a transaction between 2 other parties – a buyer and a seller.
Bull Market
A market for an asset whose value is increasing.