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.
Just like many of the other cryptocurrencies, Litecoin was created to improve on some of the perceived failings of Bitcoin - primarily a higher number of tokens and a much faster processing speeds.
Litecoin (LTC) is priced in USD per coin and reached a peak of $341 in December 2017. It was launched in April 2013 by Charlie Lee, a former Google software engineer.
Lee was central to a change in attitude about Bitcoin, helping it gain approval from big names. He wanted to position Litecoin as silver to Bitcoin's gold, and knew that the success of all cryptocurrencies would be tied to stalwart Bitcoin.
Litecoin uses blockchain in a similar way to Bitcoin, but has very low transaction fees and has adopted ‘Segregated Witess (SegWit) - a process by which the size of blocks in a blockchain is reduced by removing data.
Bitcoin is the first of the ‘cryptocurrencies' and remains the most stable. It was created in 2009 by Satoshi Nakamoto, whose identity remains a mystery.
His creation - Bitcoin - is a cashless currency. Balances are kept online and it is decentralised, allowing anonymity. Despite Bitcoin not being legal tender in most countries, it has continued to increase in popularity and its launch has sparked the creation of a number of other cryptocurrencies.
It is priced in USD per Bitcoin and saw a record high of $68,789.63 in Nov 2021. Bitcoin futures trade as BTC.
Bitcoin has been criticised for its links to illegal activity and the dark web, as well as the high demand for energy created by ‘mining' Bitcoins. A PIN is necessary to access your
Bitcoins, with as many as 20% of all Bitcoins thought to be lost to forgotten PINs.
Bitcoin futures allow you to speculate on, or hedge against, changes in the price of Bitcoin. Futures rollover on the last Thursday of every month.
BitcoinSV uses original Bitcoin protocol, as laid out by inventor Satoshi Nakamoto’s 2008 whitepaper. Thus, BitcoinSV should be stable, and enjoy high scalability. It is priced in USD and the instrument is tradeable using the BSV/USD spot rate.
Bitcoin Cash is the younger, more user-friendly, brother of Bitcoin. It was born in August 2017, arising from a fork of Bitcoin Classic.
It is priced in USD per Bitcoin and saw a record high of $3,816 in December 2017. Bitcoin Cash futures trade as BCC.
The break from Bitcoin Classic came about after frustration of the one MB limit. This causes major issues with transaction processing times and limits the number of transactions the network can process.
A number of solutions were proposed, with Bitcoin Cash ‘born' in mid-2017 with an increased blocksize of eight MB. Everyone who previously owned Bitcoin Classic received the same about in Bitcoin Cash.
Despite being one of the youngest cryptocurrencies, Bitcoin Cash has soared in popularity - it is now the world's third-largest cryptocurrency by market value. However, it has experienced significant volatility in its short life so far.
Platinum is one of the world's rarest metals, and mines are concentrates in just a handful of countries around the world.
Platinum is priced in USD per troy ounce. It saw a high of $2253 in March 2008, and a record low of $97.70 in January 1970.
Most of the world's platinum is produced in South Africa, which accounts for 80% of supply. Russia is a distant second with 11% and North America produces 6%.
Platinum is an important metal due to its ability to catalyse reactions and its strong resistance to corrosion. This makes it irreplaceable in a broad range of industrial and laboratory reactions, especially the catalytic converter which is the most widely used application of platinum.
The metal is also highly sought-after for jewellery, which is the second largest area of demand,
The concentration of platinum in South Africa (an often-volatile emerging market), combined with the importance of platinum as an industrial material, has led to instability in price.
What is a Position in trading?
A position in trading refers to the amount of a security or financial instrument that is held by an investor or trader. It can be a long position, where the trader has bought the security and expects its price to rise, or a short position, where the trader has sold the security and expects its price to fall. The size of the position is typically measured in units of the security or financial instrument, such as shares or contracts. The trader or investor can then make a profit or loss based on the movement of the price of that security or instrument. In addition, an open position is one that has been entered into but not yet closed or settled, and a closed position is one that has been settled or offset by an opposing trade.
An Acquisition is a business transaction where one company buys all, or part, of another company's shares or assets. This can be done in an attempt to gain control of, and expand on, the target company's market while also gaining or at least conserving resources.
There are three main forms of “pairing business together”:
As part of the Acquisition process, the acquiring company purchases the target business's shares or assets, which gives it the authority to make use of the target’s assets as if they are its own.
Why do companies make acquisitions?
Companies make acquisitions as there are several benefits to doing so, including lower entry barriers, growth and market influence. There are also some challenges and difficulties associated with this process. These include conflicts of cultures, redundancy, contradicting objectives and unmatched businesses.
What are the four types of acquisitions?
There are four types of acquisitions that companies perform.
The Proshares Bitcoin Strategy ETF (Bitcoin ETF) offers managed exposure to bitcoin futures contracts. The Fund does not invest directly in bitcoin and may also invest in other instruments. It’s one of the first of its kind and marks a new way to get exposure to cryptocurrency price movements.
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.
Technical analysis is a type of financial analysis that looks at historical price movements and trading volumes to predict future price movements in the market. It involves studying trends, chart patterns, momentum indicators, and other factors to make informed decisions about trading. Technical analysis can help traders and investors gain insight into market sentiment, timing their trades for optimal returns.
Why is technical analysis important?
Technical analysis is a critical component of successful financial and trading strategies. It helps investors understand the past performance of a security, identify current trends and anticipate future price movements. Technical analysis relies on mathematical calculations and charting techniques to evaluate securities, which can be an invaluable tool for traders to optimize returns and manage risk.
Which tool is best for technical analysis?
There are many tools that can be used for technical analysis, and different traders may have different preferences. Some commonly used tools include:
Ultimately, the best tool for technical analysis will depend on the individual trader's preferences and the market conditions they are trading in. it's important to use multiple tools and indicators to validate the signals and make better decisions.
A basis point (abbreviated as BP, bps or “bips”) measures changes in the interest rate of a financial instrument. It is also used describe the percentage change in the value of financial instruments or the rate change of an index. They are less ambiguous than percentages as they represent an absolute, set figure instead of a ratio.
Why do we use Basis Points?
In the bond market, a basis point is used to refer to the yield that a bond pays to the investor. They are also used when referring to the cost of mutual funds and exchange-traded funds.
IDU, also known as the iShares US Utilities ETF, tracks a broad range of market-cap-weighted US utilities stock. This asset provides exposure to US electricity, gas and water companies and has 51 holdings.
This ETF is an opportunity for traders looking for exposure to the sector, or to US holdings. Stocks included in the portfolio include Nextera Energy Inc, Duke Energy Corp, Dominion Energy Inc and Southern. It is comprised of 56.67% electric utilities, 31.10% multi-utilities, 5.3 gas utilities. Water utilities and independent power producers or energy traders make up the remainder.
An open position in trading refers to a trade that has been entered into but not yet closed or settled. The position remains open until the trader decides to close it by executing an opposing order or if the order reaches its expiration. It can refer to a long or short position in a security or financial instrument.
When should you close your position?
A trader should close their position in trading when their predetermined criteria for exiting the trade have been met, such as reaching a certain profit level or stop-loss point. It could also be closed because the trade no longer aligns with their overall strategy or market conditions have changed.
A long position is a market position where the investor has purchased a security such as a stock, commodity, or currency in expectation of it increasing in value. The holder of the position will benefit if the asset increases in value. A long position may also refer to an investor buying an option, where they will be able to purchase an underlying security at a specific price on or before the expiration date.
What is riskier a long or a short position?
A short position is considered riskier than a long position because the potential loss is theoretically unlimited, while the potential profit is limited to the amount of depreciation in the value of the security. When an investor short sells a stock, they borrow shares from someone else and sell them, with the hope that the price will drop so they can buy the shares back at a lower price and return them to the lender, pocketing the difference. In case the price of the stock rises instead, the loss for the short seller is theoretically unlimited as there is no limit to how high the stock price can go.
When should I buy a long position?
When an investor believes that the market will rise, they could consider purchasing a long position.
How can I protect my long position?
Protecting a long position often involves setting up a stop-loss order, which automatically sells the asset at a predetermined price. This ensures that any sharp market drops don't result in excessive losses for the investor.
Stock dilution is the decrease in existing shareholders' ownership of a company as a result of the issuance of new shares. It typically occurs when companies raise capital by issuing additional shares, thereby reducing the stake of existing shareholders.
Why do companies dilute stock?
Companies dilute stock to raise capital for future growth and investments, often through the sale of additional shares. This allows companies to raise money without having to take out loans or issue bonds. Diluting stock can help reduce overall debt and create a healthier financial situation for the company.
Is stock dilution a good thing?
It depends. If done properly, diluting stock can help raise funds for business operations and growth. It also encourages investors to purchase shares due to the lower price per share. However, too much dilution can weaken shareholder equity and damage investor confidence.
What does dilution do to stock price?
Dilution decreases a stock's price by decreasing its earnings per share (EPS). This happens when a company issues new shares to the public, increasing the total number of shares outstanding and resulting in lower EPS for existing shareholders. Dilution can also occur through corporate acquisitions, mergers or issuing debt that is converted into equity.
Delisting is the removal of a security from a stock exchange. This can happen voluntarily by the company, or involuntarily by the exchange if the security no longer meets certain listing criteria. When a security is delisted, it cannot be traded on the exchange, although investors may still hold it as an unlisted investment.
What happens when stock is delisted?
A company can undergo voluntary or compulsory delisting.
• In voluntary delisting, a company removes its own securities / shares from a stock exchange.
• In compulsory (or involuntary) delisting, the securities of a company are removed by regulatory functions, usually for not complying with Listing Agreement.
Can I sell delisted shares?
Delisted stocks often continue to trade over-the-counter. Shareholders can still trade the stock, though it is likely that the market will be less liquid.
Will I get my money back if a stock is delisted?
It depends on the type of delisting. Generally, investors receive their initial investment if a stock is voluntarily delisted. However, in cases of involuntary delisting, investors may not be entitled to any reimbursement.
Equity is the value of a trader's account, representing the total assets minus any margin used to open trades. It reflects their financial position and potential financial outcomes from any trading activities as they currently stand. Traders can use equity to decide when to enter or exit positions and what size positions to take.
What is difference equity and stock?
For traders, stock and equity are synonymous terms as stocks represent equity ownership in a company. Assets, liabilities, and shareholders' equity are items found on the balance sheet.
What is difference between equity and account balance?
Equity is the total account balance including profits/losses from open positions, whereas the account balance is simply the total money deposited in an account before any trades have been made.
Technology Select Sector SPDR Fund (XLK) tracks US tech companies within the S&P 500. This asset uses the Technology Select Sector Index as its tracking benchmark. As the tech firms in the index are just drawn from the S&P 500, there are some odd inclusions such as financial payment processors and telecoms companies.
The index comprises just 69 holdings from the tech sector, with two accounting for more than a third of the index – Microsoft Corp and Apple Inc. Other holdings include Visa, Intel and Cisco.
Lithium and Battery Tech ETF (LIT) tracks a market-cap weighted index of global lithium miners and battery producers. The asset invests in the full cycle of lithium, from mining to refining and battery production.
For this reason, it doesn't offer the exposure of other assets to metals and mining sectors, instead is an investment for niche lithium exposure. Holdings in the ETF include Tesla, Albemarle corp, Panasonic, Samsung SDI and Enersys.
ACWI stands for All Country World Index and this ETF is designed to provide a broad reflection of the performance of equity markets around the world comprising stocks from 23 developed and 24 emerging markets. It’s owned by Morgan Stanley Capital International (MSCI).
The ETF tracks nearly 2,500 stocks, including Apple, Microsoft, Amazon and Facebook. Stocks from five countries make up 72.6% of the ACWI, those being the USA, Japan, the UK, France and China. The remaining 27.4% comprises stocks from the other 42 countries. The ACWI is used as a benchmark of performance by fund managers, and is considered a good way to diversify a portfolio.
Consumer Price Index or CPI is a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services. Indexes are available for the U.S. and various geographic areas. It is considered as one of the most popular measures of inflation and deflation. CPI is also used to estimate the purchasing power of a country’s currency.
How is CPI Calculated?
CPI is calculated by considering Key contributors, including retail and services businesses as well as the U.S. rental housing market (housing accounts for approx. 30% of the CPI). There are several CPI variations:
• CPI-U index reviews the spending habits of urban consumers in the U.S.A. This constitutes for approx. 88% of the U.S population.
• CPI-W index for calculates changes in the costs of benefits paid to “urban wage earners and clerical workers,” which is used to calculate changes in the costs of benefits paid via Social Security.
• CPI ex-food and energy – is highly volatile and thus is excluded from the overall CPI.
Utilities Staples Select Sector SPDR Fund (XLU) tracks US utilities companies within the S&P 500. This asset uses the Utilities Select Sector Index as its tracking benchmark. The fund is concentrated to just a few large firms, as the index comprises just 30 holdings from the utilities sector. This can be a pro or a con depending on your trading strategy.
Top holdings include Nextera Energy Inc, Duke Energy Corp, Dominion Energy Inc and Southern Co.
The Financial Conduct Authority (FCA) is a regulatory body in the United Kingdom that oversees and regulates financial firms to ensure they operate in an honest and fair manner, and to protect consumers. It is responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
The FCA’s functions include:
• Regulating the conduct of 50,000 businesses
• Supervising 48,000 firms
• Setting specific standards for 18,000 firms
What are the main objectives of the FCA?
The main objectives of the Financial Conduct Authority (FCA) are to protect consumers, protect and enhance the integrity of the UK financial system, and promote competition in the interests of consumers. This includes taking action to address any conduct that falls below the standards the FCA expects and working to ensure that firms compete in ways that are fair, transparent and not detrimental to consumers.
The Sprott Silver Investment Trust (PSLV) seeks to provide a secure, convenient, and exchange-traded investment alternative for investors interested in holding physical silver bullion without the inconvenience that is typical of a direct investment in physical silver bullion. The Trust intends to achieve this by investing primarily in long-term holdings of unencumbered, fully allocated, physical silver bullion and does not speculate with regard to short-term changes in silver prices.
Bitcoin is the first of the ‘cryptocurrencies' and remains the most stable. It was created in 2009 by Satoshi Nakamoto, whose identity remains a mystery.
His creation - Bitcoin - is a cashless currency. Balances are kept online and it is decentralised, allowing anonymity. Despite Bitcoin not being legal tender in most countries, it has continued to increase in popularity and its launch has sparked the creation of a number of other cryptocurrencies
It is priced in USD per Bitcoin and saw a record high of $68,789.63 in November 2021. Bitcoin futures trade as BTC.
Bitcoin has been criticised for its links to illegal activity and the dark web, as well as the high demand for energy created by ‘mining' Bitcoins. A PIN is necessary to access your Bitcoins, with as many as 20% of all Bitcoins thought to be lost to forgotten PINs
Bitcoin futures allow you to speculate on, or hedge against, changes in the price of Bitcoin. Futures rollover on the last Thursday of every month.
The CBOE Volatility Index, also known as the VIX Index, is a benchmark index which tracks market expectations of future volatility. Markets consider it a leading indicator of volatility on the US equity market. It is often known colloquially as the “Fear Index”.
The VIX Index is calculated based upon the price of options for the S&P 500, which is considered a barometer of the US stock market. Changes in the price of options reflect upon the demand for hedging or speculating tools and therefore upon market expectations of volatility.
By aggregating the weighted bid/ask prices of put and call options for the S&P 500, the VIX creates a simple, trackable measure of expected volatility over the next 30 days.
The VIX itself is not a tradable product, but it is used as the basis for options and futures. Our VIXX futures allow you to hedge against volatility, speculate on changes in US market conditions, or diversify your indices portfolio.
Futures rollover on the second Friday of every month.
The Cboe Volatility Index (VIX) represents the market’s expectations for near-term price changes of the S&P 500 Index (SPX). The Cboe Volatility Index is used to track volatility within that index. As it is derived from the prices of SPX index options, it generates a 30-day forward potential of volatility.
How is the CBOE volatility index calculated?
Volatility is often seen as a way to measure and speculate on market sentiment, as well as assessing risks. The VIX is calculated through the prices of SPX index options and is represented as a percentage. If the VIX value increases, it is likely that the S&P 500 is falling, and if the VIX value declines, then the S&P 500 is likely to be experiencing stability.
How do you trade the CBOE VIX?
The CBOE VIX can be traded on most major financial markets. To trade it, you need to buy or sell contracts for the futures, options or exchange-traded products linked to it. Trading in these contracts can be done through a broker and usually requires a margin account.
Volatility is the amount of uncertainty or risk associated with the size of changes in a security's value. It is measured by calculating the standard deviation of returns over a given period. High volatility means the price of an asset can change dramatically over a short time period in either direction. Traders often take advantage of volatility by speculating on stocks, options, and other financial instruments.
What causes market volatility?
Market volatility can be caused by a variety of factors including economic data releases, political events, changes in interest rates, and unexpected news or events. It can also be caused by changes in investor sentiment, speculation and market manipulation.
How do you know if a market is volatile?
A market is considered volatile if prices change rapidly, unpredictably, and significantly. This can be measured using volatility indices or by analyzing price movements and fluctuations over time.
Bitcoin is the first of the ‘cryptocurrencies' and remains the most stable. It was created in 2009 by Satoshi Nakamoto, whose identity remains a mystery.
His creation - Bitcoin - is a cashless currency. Balances are kept online and it is decentralised, allowing anonymity. Despite Bitcoin not being legal tender in most countries, it has continued to increase in popularity and its launch has sparked the creation of a number of other cryptocurrencies.
It is priced in USD per Bitcoin and saw a record high of $68,789.63 in Nov 2021. Bitcoin futures trade as BTC.
Bitcoin has been criticised for its links to illegal activity and the dark web, as well as the high demand for energy created by ‘mining' Bitcoins. A PIN is necessary to access your
Bitcoins, with as many as 20% of all Bitcoins thought to be lost to forgotten PINs.
Bitcoin futures allow you to speculate on, or hedge against, changes in the price of Bitcoin. Futures rollover on the last Thursday of every month.
BitcoinSV uses original Bitcoin protocol, as laid out by inventor Satoshi Nakamoto’s 2008 whitepaper. Thus, BitcoinSV should be stable, and enjoy high scalability. It is priced in USD and the instrument is tradeable using the BSV/USD spot rate.
Bitcoin Cash is the younger, more user-friendly, brother of Bitcoin. It was born in August 2017, arising from a fork of Bitcoin Classic.
It is priced in USD per Bitcoin and saw a record high of $3,816 in December 2017. Bitcoin Cash futures trade as BCC.
The break from Bitcoin Classic came about after frustration of the one MB limit. This causes major issues with transaction processing times and limits the number of transactions the network can process.
A number of solutions were proposed, with Bitcoin Cash ‘born' in mid-2017 with an increased blocksize of eight MB. Everyone who previously owned Bitcoin Classic received the same about in Bitcoin Cash.
Despite being one of the youngest cryptocurrencies, Bitcoin Cash has soared in popularity - it is now the world's third-largest cryptocurrency by market value. However, it has experienced significant volatility in its short life so far.
An Acquisition is a business transaction where one company buys all, or part, of another company's shares or assets. This can be done in an attempt to gain control of, and expand on, the target company's market while also gaining or at least conserving resources.
There are three main forms of “pairing business together”:
As part of the Acquisition process, the acquiring company purchases the target business's shares or assets, which gives it the authority to make use of the target’s assets as if they are its own.
Why do companies make acquisitions?
Companies make acquisitions as there are several benefits to doing so, including lower entry barriers, growth and market influence. There are also some challenges and difficulties associated with this process. These include conflicts of cultures, redundancy, contradicting objectives and unmatched businesses.
What are the four types of acquisitions?
There are four types of acquisitions that companies perform.
A basis point (abbreviated as BP, bps or “bips”) measures changes in the interest rate of a financial instrument. It is also used describe the percentage change in the value of financial instruments or the rate change of an index. They are less ambiguous than percentages as they represent an absolute, set figure instead of a ratio.
Why do we use Basis Points?
In the bond market, a basis point is used to refer to the yield that a bond pays to the investor. They are also used when referring to the cost of mutual funds and exchange-traded funds.
Delisting is the removal of a security from a stock exchange. This can happen voluntarily by the company, or involuntarily by the exchange if the security no longer meets certain listing criteria. When a security is delisted, it cannot be traded on the exchange, although investors may still hold it as an unlisted investment.
What happens when stock is delisted?
A company can undergo voluntary or compulsory delisting.
• In voluntary delisting, a company removes its own securities / shares from a stock exchange.
• In compulsory (or involuntary) delisting, the securities of a company are removed by regulatory functions, usually for not complying with Listing Agreement.
Can I sell delisted shares?
Delisted stocks often continue to trade over-the-counter. Shareholders can still trade the stock, though it is likely that the market will be less liquid.
Will I get my money back if a stock is delisted?
It depends on the type of delisting. Generally, investors receive their initial investment if a stock is voluntarily delisted. However, in cases of involuntary delisting, investors may not be entitled to any reimbursement.
ACWI stands for All Country World Index and this ETF is designed to provide a broad reflection of the performance of equity markets around the world comprising stocks from 23 developed and 24 emerging markets. It’s owned by Morgan Stanley Capital International (MSCI).
The ETF tracks nearly 2,500 stocks, including Apple, Microsoft, Amazon and Facebook. Stocks from five countries make up 72.6% of the ACWI, those being the USA, Japan, the UK, France and China. The remaining 27.4% comprises stocks from the other 42 countries. The ACWI is used as a benchmark of performance by fund managers, and is considered a good way to diversify a portfolio.
Consumer Price Index or CPI is a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services. Indexes are available for the U.S. and various geographic areas. It is considered as one of the most popular measures of inflation and deflation. CPI is also used to estimate the purchasing power of a country’s currency.
How is CPI Calculated?
CPI is calculated by considering Key contributors, including retail and services businesses as well as the U.S. rental housing market (housing accounts for approx. 30% of the CPI). There are several CPI variations:
• CPI-U index reviews the spending habits of urban consumers in the U.S.A. This constitutes for approx. 88% of the U.S population.
• CPI-W index for calculates changes in the costs of benefits paid to “urban wage earners and clerical workers,” which is used to calculate changes in the costs of benefits paid via Social Security.
• CPI ex-food and energy – is highly volatile and thus is excluded from the overall CPI.
Bitcoin is the first of the ‘cryptocurrencies' and remains the most stable. It was created in 2009 by Satoshi Nakamoto, whose identity remains a mystery.
His creation - Bitcoin - is a cashless currency. Balances are kept online and it is decentralised, allowing anonymity. Despite Bitcoin not being legal tender in most countries, it has continued to increase in popularity and its launch has sparked the creation of a number of other cryptocurrencies
It is priced in USD per Bitcoin and saw a record high of $68,789.63 in November 2021. Bitcoin futures trade as BTC.
Bitcoin has been criticised for its links to illegal activity and the dark web, as well as the high demand for energy created by ‘mining' Bitcoins. A PIN is necessary to access your Bitcoins, with as many as 20% of all Bitcoins thought to be lost to forgotten PINs
Bitcoin futures allow you to speculate on, or hedge against, changes in the price of Bitcoin. Futures rollover on the last Thursday of every month.
The Cboe Volatility Index (VIX) represents the market’s expectations for near-term price changes of the S&P 500 Index (SPX). The Cboe Volatility Index is used to track volatility within that index. As it is derived from the prices of SPX index options, it generates a 30-day forward potential of volatility.
How is the CBOE volatility index calculated?
Volatility is often seen as a way to measure and speculate on market sentiment, as well as assessing risks. The VIX is calculated through the prices of SPX index options and is represented as a percentage. If the VIX value increases, it is likely that the S&P 500 is falling, and if the VIX value declines, then the S&P 500 is likely to be experiencing stability.
How do you trade the CBOE VIX?
The CBOE VIX can be traded on most major financial markets. To trade it, you need to buy or sell contracts for the futures, options or exchange-traded products linked to it. Trading in these contracts can be done through a broker and usually requires a margin account.
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.
Equity is the value of a trader's account, representing the total assets minus any margin used to open trades. It reflects their financial position and potential financial outcomes from any trading activities as they currently stand. Traders can use equity to decide when to enter or exit positions and what size positions to take.
What is difference equity and stock?
For traders, stock and equity are synonymous terms as stocks represent equity ownership in a company. Assets, liabilities, and shareholders' equity are items found on the balance sheet.
What is difference between equity and account balance?
Equity is the total account balance including profits/losses from open positions, whereas the account balance is simply the total money deposited in an account before any trades have been made.
The Financial Conduct Authority (FCA) is a regulatory body in the United Kingdom that oversees and regulates financial firms to ensure they operate in an honest and fair manner, and to protect consumers. It is responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
The FCA’s functions include:
• Regulating the conduct of 50,000 businesses
• Supervising 48,000 firms
• Setting specific standards for 18,000 firms
What are the main objectives of the FCA?
The main objectives of the Financial Conduct Authority (FCA) are to protect consumers, protect and enhance the integrity of the UK financial system, and promote competition in the interests of consumers. This includes taking action to address any conduct that falls below the standards the FCA expects and working to ensure that firms compete in ways that are fair, transparent and not detrimental to consumers.
Just like many of the other cryptocurrencies, Litecoin was created to improve on some of the perceived failings of Bitcoin - primarily a higher number of tokens and a much faster processing speeds.
Litecoin (LTC) is priced in USD per coin and reached a peak of $341 in December 2017. It was launched in April 2013 by Charlie Lee, a former Google software engineer.
Lee was central to a change in attitude about Bitcoin, helping it gain approval from big names. He wanted to position Litecoin as silver to Bitcoin's gold, and knew that the success of all cryptocurrencies would be tied to stalwart Bitcoin.
Litecoin uses blockchain in a similar way to Bitcoin, but has very low transaction fees and has adopted ‘Segregated Witess (SegWit) - a process by which the size of blocks in a blockchain is reduced by removing data.
A long position is a market position where the investor has purchased a security such as a stock, commodity, or currency in expectation of it increasing in value. The holder of the position will benefit if the asset increases in value. A long position may also refer to an investor buying an option, where they will be able to purchase an underlying security at a specific price on or before the expiration date.
What is riskier a long or a short position?
A short position is considered riskier than a long position because the potential loss is theoretically unlimited, while the potential profit is limited to the amount of depreciation in the value of the security. When an investor short sells a stock, they borrow shares from someone else and sell them, with the hope that the price will drop so they can buy the shares back at a lower price and return them to the lender, pocketing the difference. In case the price of the stock rises instead, the loss for the short seller is theoretically unlimited as there is no limit to how high the stock price can go.
When should I buy a long position?
When an investor believes that the market will rise, they could consider purchasing a long position.
How can I protect my long position?
Protecting a long position often involves setting up a stop-loss order, which automatically sells the asset at a predetermined price. This ensures that any sharp market drops don't result in excessive losses for the investor.
Lithium and Battery Tech ETF (LIT) tracks a market-cap weighted index of global lithium miners and battery producers. The asset invests in the full cycle of lithium, from mining to refining and battery production.
For this reason, it doesn't offer the exposure of other assets to metals and mining sectors, instead is an investment for niche lithium exposure. Holdings in the ETF include Tesla, Albemarle corp, Panasonic, Samsung SDI and Enersys.
Platinum is one of the world's rarest metals, and mines are concentrates in just a handful of countries around the world.
Platinum is priced in USD per troy ounce. It saw a high of $2253 in March 2008, and a record low of $97.70 in January 1970.
Most of the world's platinum is produced in South Africa, which accounts for 80% of supply. Russia is a distant second with 11% and North America produces 6%.
Platinum is an important metal due to its ability to catalyse reactions and its strong resistance to corrosion. This makes it irreplaceable in a broad range of industrial and laboratory reactions, especially the catalytic converter which is the most widely used application of platinum.
The metal is also highly sought-after for jewellery, which is the second largest area of demand,
The concentration of platinum in South Africa (an often-volatile emerging market), combined with the importance of platinum as an industrial material, has led to instability in price.
What is a Position in trading?
A position in trading refers to the amount of a security or financial instrument that is held by an investor or trader. It can be a long position, where the trader has bought the security and expects its price to rise, or a short position, where the trader has sold the security and expects its price to fall. The size of the position is typically measured in units of the security or financial instrument, such as shares or contracts. The trader or investor can then make a profit or loss based on the movement of the price of that security or instrument. In addition, an open position is one that has been entered into but not yet closed or settled, and a closed position is one that has been settled or offset by an opposing trade.
The Proshares Bitcoin Strategy ETF (Bitcoin ETF) offers managed exposure to bitcoin futures contracts. The Fund does not invest directly in bitcoin and may also invest in other instruments. It’s one of the first of its kind and marks a new way to get exposure to cryptocurrency price movements.
An open position in trading refers to a trade that has been entered into but not yet closed or settled. The position remains open until the trader decides to close it by executing an opposing order or if the order reaches its expiration. It can refer to a long or short position in a security or financial instrument.
When should you close your position?
A trader should close their position in trading when their predetermined criteria for exiting the trade have been met, such as reaching a certain profit level or stop-loss point. It could also be closed because the trade no longer aligns with their overall strategy or market conditions have changed.
Technical analysis is a type of financial analysis that looks at historical price movements and trading volumes to predict future price movements in the market. It involves studying trends, chart patterns, momentum indicators, and other factors to make informed decisions about trading. Technical analysis can help traders and investors gain insight into market sentiment, timing their trades for optimal returns.
Why is technical analysis important?
Technical analysis is a critical component of successful financial and trading strategies. It helps investors understand the past performance of a security, identify current trends and anticipate future price movements. Technical analysis relies on mathematical calculations and charting techniques to evaluate securities, which can be an invaluable tool for traders to optimize returns and manage risk.
Which tool is best for technical analysis?
There are many tools that can be used for technical analysis, and different traders may have different preferences. Some commonly used tools include:
Ultimately, the best tool for technical analysis will depend on the individual trader's preferences and the market conditions they are trading in. it's important to use multiple tools and indicators to validate the signals and make better decisions.
Stock dilution is the decrease in existing shareholders' ownership of a company as a result of the issuance of new shares. It typically occurs when companies raise capital by issuing additional shares, thereby reducing the stake of existing shareholders.
Why do companies dilute stock?
Companies dilute stock to raise capital for future growth and investments, often through the sale of additional shares. This allows companies to raise money without having to take out loans or issue bonds. Diluting stock can help reduce overall debt and create a healthier financial situation for the company.
Is stock dilution a good thing?
It depends. If done properly, diluting stock can help raise funds for business operations and growth. It also encourages investors to purchase shares due to the lower price per share. However, too much dilution can weaken shareholder equity and damage investor confidence.
What does dilution do to stock price?
Dilution decreases a stock's price by decreasing its earnings per share (EPS). This happens when a company issues new shares to the public, increasing the total number of shares outstanding and resulting in lower EPS for existing shareholders. Dilution can also occur through corporate acquisitions, mergers or issuing debt that is converted into equity.
Technology Select Sector SPDR Fund (XLK) tracks US tech companies within the S&P 500. This asset uses the Technology Select Sector Index as its tracking benchmark. As the tech firms in the index are just drawn from the S&P 500, there are some odd inclusions such as financial payment processors and telecoms companies.
The index comprises just 69 holdings from the tech sector, with two accounting for more than a third of the index – Microsoft Corp and Apple Inc. Other holdings include Visa, Intel and Cisco.
The Sprott Silver Investment Trust (PSLV) seeks to provide a secure, convenient, and exchange-traded investment alternative for investors interested in holding physical silver bullion without the inconvenience that is typical of a direct investment in physical silver bullion. The Trust intends to achieve this by investing primarily in long-term holdings of unencumbered, fully allocated, physical silver bullion and does not speculate with regard to short-term changes in silver prices.
IDU, also known as the iShares US Utilities ETF, tracks a broad range of market-cap-weighted US utilities stock. This asset provides exposure to US electricity, gas and water companies and has 51 holdings.
This ETF is an opportunity for traders looking for exposure to the sector, or to US holdings. Stocks included in the portfolio include Nextera Energy Inc, Duke Energy Corp, Dominion Energy Inc and Southern. It is comprised of 56.67% electric utilities, 31.10% multi-utilities, 5.3 gas utilities. Water utilities and independent power producers or energy traders make up the remainder.
Utilities Staples Select Sector SPDR Fund (XLU) tracks US utilities companies within the S&P 500. This asset uses the Utilities Select Sector Index as its tracking benchmark. The fund is concentrated to just a few large firms, as the index comprises just 30 holdings from the utilities sector. This can be a pro or a con depending on your trading strategy.
Top holdings include Nextera Energy Inc, Duke Energy Corp, Dominion Energy Inc and Southern Co.
The CBOE Volatility Index, also known as the VIX Index, is a benchmark index which tracks market expectations of future volatility. Markets consider it a leading indicator of volatility on the US equity market. It is often known colloquially as the “Fear Index”.
The VIX Index is calculated based upon the price of options for the S&P 500, which is considered a barometer of the US stock market. Changes in the price of options reflect upon the demand for hedging or speculating tools and therefore upon market expectations of volatility.
By aggregating the weighted bid/ask prices of put and call options for the S&P 500, the VIX creates a simple, trackable measure of expected volatility over the next 30 days.
The VIX itself is not a tradable product, but it is used as the basis for options and futures. Our VIXX futures allow you to hedge against volatility, speculate on changes in US market conditions, or diversify your indices portfolio.
Futures rollover on the second Friday of every month.
Volatility is the amount of uncertainty or risk associated with the size of changes in a security's value. It is measured by calculating the standard deviation of returns over a given period. High volatility means the price of an asset can change dramatically over a short time period in either direction. Traders often take advantage of volatility by speculating on stocks, options, and other financial instruments.
What causes market volatility?
Market volatility can be caused by a variety of factors including economic data releases, political events, changes in interest rates, and unexpected news or events. It can also be caused by changes in investor sentiment, speculation and market manipulation.
How do you know if a market is volatile?
A market is considered volatile if prices change rapidly, unpredictably, and significantly. This can be measured using volatility indices or by analyzing price movements and fluctuations over time.
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