Glossary Of Trading

Scalping

Opening and closing positions rapidly with the intention of locking in small profits.

SEC

The US Securities & Exchange Commission is the US regulator of financial markets.

Security

A documented and tradeable asset -mainly stocks and bonds, but also documented derivatives.

Shares (stocks)

Partial ownership of a company that is sold by the company owners to acquire additional funding. Public shares are sold on the primary market of a recognized stock exchange. Shares may be common (voting) shares, which provide the shareholder with the right to vote at board meetings, or preferred, in which case they may only be used as instruments for trade and/or investment. Common shareholders are remunerated after all other debt holders and preferred shareholder in case of bankruptcy.

Short Position

A position that is profitable if an asset’s value falls.

Signal

A notification, usually derived from technical indicators, that a position should be long or short.

Slippage

The allowable difference between a quoted price on a platform and the price at which an order can be executed.

Spot Rate

An asset’s current market price.

Spread

The variance between the quoted buy and sell price of an asset. In forex it represents the moneychanger’s or broker’s profit on a trade.

Stock Exchange (bourse)

A location or entity where shares are first sold (offered on the primary market) and then traded (secondary market).

Stop Loss Order (S/L)

An order to close a losing position as the asset achieves a specified value. This is the maximum loss a trader is prepared to take on a position. A trailing stop loss is defined by its distance from the current market rate, moving up or down to maintain profits but not to increase losses.

Support

The price level that traders believe represents the lowest value an asset can reach. At this point, traders begin buying the undervalued asset in hopes of future profits, and the price begins to rise due to excess-demand.

Surplus

A trade balance that is positive as a result of income (exports on the national level) being greater than cost (imports, on the national level).