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Glossary

  • A

    Arbitrage

    The simultaneous purchase and sale of two different, but closely related, securities to take advantage of a disparity in their prices.

    ask

    The price at which you can buy. It is the higher of the two prices quoted. Also referred to as ‘Offer’.

  • B

    Backwardation

    This occurs when the bid price exceeds the offer price for a stock. This is a market distortion and usually will correct itself quickly.

    Bear

    A market characterized based on declining prices.

    Bid

    This is the price at which you can sell. It is the lower of the two prices quoted.

    Bonds

    A long-term debt security with a stated interest rate and fixed due dates, issued by a corporation or a government, when interest and principal must be paid. There are many variations.

    Bull

    A market characterized on rising prices.

  • C

    Cable

    A commonly used term to describe the exchange rate between British pound sterling and the U.S. dollar.

    CFD

    Contract For Difference.

    Commodity

    These are markets where raw or primary products are exchanged (like gold and oil). These commodities are traded on regulated exchanges, in which they are bought and sold in standardised contract sizes. We quote prices derived from the underlying futures markets of the relevant contracts.

    CPI

    Consumer Price Index.

  • D

    Derivative

    A security whose price is derived from an underlying asset (e.g. a share, currency, commodity or index) and may not give the holder any actual rights to the underlying asset.

  • E

    ECB

    European Central Bank.

    Equities

    Also known as shares or stocks. Equities represent a share ownership in a company.

    Expiry Date

    The date and time on which the relevant contract expires. Once this time has passed you are no longer able trade this market and your position will be closed at the settlement price.

    Expiry Price

    The price at which contracts are settled when left to expire.

  • F

    Fair Value

    Price at which theoretical future contracts should be trading above or below the leading future contract. Fair values for stock indices are determined by differentials in interest rates and dividend payments.

    Fast Market

    Rapid trading in a specific security that causes a delay in its electronic updating.

    FCA

    The FCA is an independent body that regulates the financial services industry in the UK. City Credit Capital(CCC) is an FCA regulated company. This means you can trade safely and securely, knowing your money is protected by some of the toughest financial regulations in the world.

    FIFO

    First In, First Out. The order in which trades will be closed unless otherwise specified.

    Fill

    The execution of an order.

    Futures Contract

    A futures contract is an agreement to conduct a transaction at some specified time in the future where the price is agreed now. Therefore, it means that the expiry date is at some point in the future. Our future contracts are cash settled so you will never be required to actually deliver, or take delivery of, the physical product.

    FX

    Also known as Currency or Forex. FX markets trade one state or economic bloc’s currency against another’s ( known as a cross rate ). You trade the first currency pair against the other. (i.e GBP/USD is Sterling against US Dollar. If you buy this pair you are anticipating that the Sterling will rally against the US Dollar).

  • G

    Gap

    Where the market trades through a level specified by the client in an order. Market gaps are common during times of volatility.

    GTC

    Good Till Cancelled. An order to buy or sell a market that remains active until the order is executed or is cancelled.

    GFD

    Good For the Day. An order to buy or sell a market at a set price that is active until the close of business on the day the order is placed or until the order has been filled.

  • H

    Hedging

    The action of reducing the risk on a position in one market by taking an opposing position in a similar or derivative market.

  • I

    IMM

    International Monetary Market.

    Index Futures

    A futures contract on an index in the futures market.

    Indices

    The plural for Index. Indices are a customised basket of securities that track a particular market or segment.

    Inflation

    The rate at which the general level of prices for goods and services is rising.

  • L

    LIBOR

    London Interbank Offered Rate.

    Limit

    An order to either sell above the current market level or buy below that level at a price specified by you. You can get filled at a better level than you set. You cannot get filled at a worse level than you set.

    Limit Down

    Price change down a product is allowed to make during one day of trading.

    Limit Up

    Price change up a product is allowed to make during one day of trading.

    Long

    An open buy position.

  • M

    Margin

    The amount of funds used to maintain an open position. Also known as margined trading.

    Margin Call

    A call from your broker for further funds to be deposited in the account to support additional exposure from running losses. In lieu of physical margin calls, this term is now used to refer to the auto closing of your positions when funds are no longer available to maintain them.

    Meta Trader 4

    Also known as MT4, is an electronic trading platform widely used by online retail foreign exchange speculative traders. The software is licensed to foreign exchange brokers who provide the software to their clients.

  • N

    NMS

    Normal Market Size.

  • O

    OCO

    One Cancels Other. Where you have two orders which ,when one executes, automatically cancels the other.

    Offer

    The price at which you can buy. It is the higher of the two prices quoted. Also referred to as ‘Ask’.

    Order

    An instruction to make a trade at a price that is not currently available in the market.

  • S

    Settlement

    The price at which we settle a position at expiry date. The basis of settlement for each contract can be found in the Market Information Sheets.

    Short

    An open sell position.

    Slippage

    The difference between the expected price of a trade, and the price the trade actually executes at.

    Spot

    Immediate delivery.

    Spread

    The difference between the buy and sell sides of our quote.

    Stop Order

    An order to either buy above the current market level or sell below that level at a price specified by you. You can get filled at a worse level than you set.

  • T

    Tick

    Also known as pip. The smallest incremental move/price movement in a contract.

  • V

    Volatility

    A term to describe and quantify the relative movement of a given market in the recent past. A market that moves a great deal is said to be volatile.

Disclaimer
CFD and Fx trading can result in losses that exceed your deposits. Ensure you understand the risks.