Take a look at our list of the financial terms associated with trading and the markets. From beginners starting their trading journey to experts with decades of experience, all traders need to clearly understand a huge number of terms.
DBC, also known as the PowerShares DB Commodity Tracking ETF, tracks 14 commodities based on the futures curve. It aims to limit the effect of contango and maximise the effect of backwardation so that investors improve their returns. The commodities included in the ETF are gasoline, heating oil, Brent crude oil, WTI crude oil, gold, wheat, corn, soybeans, sugar, natural gas, zinc, copper, aluminium and silver.
Unlike other commodity ETFs, DBC rolls future contracts based on the shape of the future curve, rather than following a schedule. This allows the ETF to generate the best roll yield by minimising losses and maximising backwardation.
A commodity is a raw material asset such as oil, gas, gold, or wheat. Commodities can be categorised into either hard commodities or soft commodities.
What are Soft Commodities?
Soft commodities typically refer to raw materials that are grown rather than mined such as coffee beans or sugar.
What Are Hard Commodities?
Whereas hard commodities must be extracted such as natural gas or crude oil.
A commodity is often exchangeable for other commodities of the same type and can be purchased through either the spot market using cash, or through derivatives like futures.
Liquidity refers to how easily or quickly an asset can be bought or sold in a secondary market. Liquid investments can be sold readily and without paying considerable fees. This enables their holders to trade them for cash when needed.
What are the three types of liquidity?
Traders and business owners use three types of liquidity ratio to assess an enterprise. Quick ratio, cash ratio and current ratio. These different measures of liquidity are often used in tandem, but each have their own merits and applications independently.
What happens when liquidity is low?
Stocks with low liquidity are more difficult to sell. Traders may take a bigger loss if they cannot sell the shares when they want to. Liquidity risk is the risk that traders won’t find a market for their assets. This may prevent them from entering or exiting at the desired moment.
What is a good liquidity for a stock?
A stock is considered to have good liquidity when it can be easily bought or sold without significantly affecting the stock's price. This means that there are a large number of buyers and sellers actively trading the stock, and the bid-ask spread (the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept) is small.
Compound cryptocurrency is all about supply and demand. Its protocol, based on Ethereum blockchain, creates money markets with interests algorithmically derived from supply and demand levels. Users can earn or pay a floating interest rate without need for negotiating with other parties. Compound is priced in USD and tradeable through the COMP/USD symbol.
A Trading Commission is a service fee paid to a broker for services in facilitating or completing a trade.
How does a trade commission work?
Trade Commissions can be structured as a flat fee, or as a percentage of the revenue, gross margin or profit generated by the trade. At markets.com we do not charge our traders any commission fees on their trades and positions.
An economic calendar is a schedule of dates when significant news releases or events are expected, which may affect the global or local financial markets volatility as well as currency exchange rates. Traders and all functions involved in the markets and financial issues make use of the economic calendar to follow up and prepare on what is going to happen, where and when.
Due to the impact of financial events and announcements, on exchange rates, the forex market is highly affected by monetary and fiscal policy announcements. As such, traders make use the economic calendar to plan ahead on their positions and trades and to be aware of any issues that may affect them.
What is Financial Market volatility?
Financial Market volatility is the degree of variation of a trading price series over time. Many traders will consider the historic volatility of a stock. This is the fluctuations of price in a given time frame. Historic volatility creates forward looking implied volatility. This allows us to predict price variation in the future.
The Federal Open Market Committee (FOMC) is the policy-making arm of the Federal Reserve System (the Fed) which is responsible for making monetary policy decisions. The FOMC is made up of 12 members, including the seven governors of the Federal Reserve Board and five of the 12 Reserve Bank presidents.
What does the Federal Open Market Committee impact?
The FOMC meets eight times a year to set the target for the federal funds rate, which is the interest rate at which banks lend and borrow money from each other overnight. The FOMC's decisions can have a significant impact on interest rates, the economy, and the stock market. The FOMC makes key decisions about interest rates and the growth of the United States money supply. It also directs operations undertaken by the Federal Reserve System in foreign exchange markets. They consider a wide array of factors such as trends in prices and wages, employment and production, business investment and inventories, foreign exchange markets, and fiscal policy.
Soybeans are a “soft” commodity - referring to those that are grown and not mined. It is one of the world's most important legumes and is an essential source of protein. It is used extensively in cooking, both soybeans and soy oil, and is also used for animal feed in the form of soy meal.
Soybean is priced in USD per bushel. In July 2012, Soybeans reached an all-time high of $1790, while it reached a low of $208 in September 1959.
The US are the biggest producers of Soybeans, followed by Brazil, Argentina and Paraguay. Together they account for 85% of total production, and 94% of total exports. China is the biggest importer of soybeans.
The price of soybeans is affected by a number of factors, including growing conditions, the demand for biofuel and the strength of USD.
Soybean futures allow you to speculate on, or hedge against, changes in the price of soybeans. Futures rollover on the fourth Friday of February, April, June, October, and December.
Market capitalization, commonly referred to as market cap, is a measure of a company's size and is calculated by multiplying the total number of its shares outstanding by the current market price of each share. Market cap can be used to help assess how much a company is worth in the eyes of investors.
Is high market cap good?
A high market capitalization (market cap) generally indicates that a company is well-established, has a strong financial performance, and is considered to be a reliable investment by the market. High market cap companies are often considered to be blue-chip stocks and are more stable and less risky than lower market cap companies.
However, a high market cap does not guarantee that a company will perform well in the future, it just reflects the current market's perception of the company, the stock price and the number of shares outstanding. The company may still be facing internal or external challenges, and the stock may be overvalued. Therefore, it's always important to do your own research and analysis before investing in any stock regardless of its market capitalization.
What is a good market capitalization?
A good market capitalization for an investment depends on the investor's individual preferences and goals. Generally, companies with a high market capitalization are considered to be well-established and financially stable, making them a more reliable investment. However, it is important to note that high market capitalization does not always guarantee future performance.
Is it better to have a small or large market cap?
Small-cap companies tend to be more risky but have higher growth potential. Large-cap companies are considered to be more stable but have lower growth potential. At the end of the day it will all depend on the investor's preference for risk and tolerance for profit/loss.
DBC, also known as the PowerShares DB Commodity Tracking ETF, tracks 14 commodities based on the futures curve. It aims to limit the effect of contango and maximise the effect of backwardation so that investors improve their returns. The commodities included in the ETF are gasoline, heating oil, Brent crude oil, WTI crude oil, gold, wheat, corn, soybeans, sugar, natural gas, zinc, copper, aluminium and silver.
Unlike other commodity ETFs, DBC rolls future contracts based on the shape of the future curve, rather than following a schedule. This allows the ETF to generate the best roll yield by minimising losses and maximising backwardation.
A commodity is a raw material asset such as oil, gas, gold, or wheat. Commodities can be categorised into either hard commodities or soft commodities.
What are Soft Commodities?
Soft commodities typically refer to raw materials that are grown rather than mined such as coffee beans or sugar.
What Are Hard Commodities?
Whereas hard commodities must be extracted such as natural gas or crude oil.
A commodity is often exchangeable for other commodities of the same type and can be purchased through either the spot market using cash, or through derivatives like futures.
Compound cryptocurrency is all about supply and demand. Its protocol, based on Ethereum blockchain, creates money markets with interests algorithmically derived from supply and demand levels. Users can earn or pay a floating interest rate without need for negotiating with other parties. Compound is priced in USD and tradeable through the COMP/USD symbol.
An economic calendar is a schedule of dates when significant news releases or events are expected, which may affect the global or local financial markets volatility as well as currency exchange rates. Traders and all functions involved in the markets and financial issues make use of the economic calendar to follow up and prepare on what is going to happen, where and when.
Due to the impact of financial events and announcements, on exchange rates, the forex market is highly affected by monetary and fiscal policy announcements. As such, traders make use the economic calendar to plan ahead on their positions and trades and to be aware of any issues that may affect them.
What is Financial Market volatility?
Financial Market volatility is the degree of variation of a trading price series over time. Many traders will consider the historic volatility of a stock. This is the fluctuations of price in a given time frame. Historic volatility creates forward looking implied volatility. This allows us to predict price variation in the future.
The Federal Open Market Committee (FOMC) is the policy-making arm of the Federal Reserve System (the Fed) which is responsible for making monetary policy decisions. The FOMC is made up of 12 members, including the seven governors of the Federal Reserve Board and five of the 12 Reserve Bank presidents.
What does the Federal Open Market Committee impact?
The FOMC meets eight times a year to set the target for the federal funds rate, which is the interest rate at which banks lend and borrow money from each other overnight. The FOMC's decisions can have a significant impact on interest rates, the economy, and the stock market. The FOMC makes key decisions about interest rates and the growth of the United States money supply. It also directs operations undertaken by the Federal Reserve System in foreign exchange markets. They consider a wide array of factors such as trends in prices and wages, employment and production, business investment and inventories, foreign exchange markets, and fiscal policy.
Liquidity refers to how easily or quickly an asset can be bought or sold in a secondary market. Liquid investments can be sold readily and without paying considerable fees. This enables their holders to trade them for cash when needed.
What are the three types of liquidity?
Traders and business owners use three types of liquidity ratio to assess an enterprise. Quick ratio, cash ratio and current ratio. These different measures of liquidity are often used in tandem, but each have their own merits and applications independently.
What happens when liquidity is low?
Stocks with low liquidity are more difficult to sell. Traders may take a bigger loss if they cannot sell the shares when they want to. Liquidity risk is the risk that traders won’t find a market for their assets. This may prevent them from entering or exiting at the desired moment.
What is a good liquidity for a stock?
A stock is considered to have good liquidity when it can be easily bought or sold without significantly affecting the stock's price. This means that there are a large number of buyers and sellers actively trading the stock, and the bid-ask spread (the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept) is small.
Market capitalization, commonly referred to as market cap, is a measure of a company's size and is calculated by multiplying the total number of its shares outstanding by the current market price of each share. Market cap can be used to help assess how much a company is worth in the eyes of investors.
Is high market cap good?
A high market capitalization (market cap) generally indicates that a company is well-established, has a strong financial performance, and is considered to be a reliable investment by the market. High market cap companies are often considered to be blue-chip stocks and are more stable and less risky than lower market cap companies.
However, a high market cap does not guarantee that a company will perform well in the future, it just reflects the current market's perception of the company, the stock price and the number of shares outstanding. The company may still be facing internal or external challenges, and the stock may be overvalued. Therefore, it's always important to do your own research and analysis before investing in any stock regardless of its market capitalization.
What is a good market capitalization?
A good market capitalization for an investment depends on the investor's individual preferences and goals. Generally, companies with a high market capitalization are considered to be well-established and financially stable, making them a more reliable investment. However, it is important to note that high market capitalization does not always guarantee future performance.
Is it better to have a small or large market cap?
Small-cap companies tend to be more risky but have higher growth potential. Large-cap companies are considered to be more stable but have lower growth potential. At the end of the day it will all depend on the investor's preference for risk and tolerance for profit/loss.
A Trading Commission is a service fee paid to a broker for services in facilitating or completing a trade.
How does a trade commission work?
Trade Commissions can be structured as a flat fee, or as a percentage of the revenue, gross margin or profit generated by the trade. At markets.com we do not charge our traders any commission fees on their trades and positions.
Soybeans are a “soft” commodity - referring to those that are grown and not mined. It is one of the world's most important legumes and is an essential source of protein. It is used extensively in cooking, both soybeans and soy oil, and is also used for animal feed in the form of soy meal.
Soybean is priced in USD per bushel. In July 2012, Soybeans reached an all-time high of $1790, while it reached a low of $208 in September 1959.
The US are the biggest producers of Soybeans, followed by Brazil, Argentina and Paraguay. Together they account for 85% of total production, and 94% of total exports. China is the biggest importer of soybeans.
The price of soybeans is affected by a number of factors, including growing conditions, the demand for biofuel and the strength of USD.
Soybean futures allow you to speculate on, or hedge against, changes in the price of soybeans. Futures rollover on the fourth Friday of February, April, June, October, and December.
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