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.
What is a margin in finance?
A margin in finance is the amount of money an investor borrows to purchase or trade securities. It is the difference between the total value of the borrowed funds and the market value of the collateral provided as security for the loan. Margin trading allows investors to buy more securities than they would otherwise be able to purchase with just their own capital.
What is margin vs profit?
Margin and profit are related but different concepts in finance and trading.
Margin refers to the amount of money or collateral that is required to open a leveraged position, such as a margin account, which allows traders to buy securities by borrowing money from a broker. Profit, on the other hand, refers to the amount of money that is gained from a trade or investment, after all costs and expenses have been subtracted. Profit is the result of a successful trade, which is the difference between the buying and selling price.
How do I calculate margin?
There are a few different ways to calculate margin, depending on the context and the type of trade or investment.
One of the most common ways to calculate margin is to use the following formula:
Margin = (Value of Trade / Leverage) x 100%
Margin trading refers to the practice of borrowing money from a broker to purchase securities. It allows traders to buy more securities than they could afford to buy with cash alone, by leveraging the securities they already own as collateral. This increases the potential returns but also increases the potential risks, as the trader is responsible for paying interest on the borrowed money and must also cover any losses. Margin trading is considered to be a high-risk strategy and is only suitable for experienced traders with a good understanding of the risks involved.
How much money do you need for margin?
The amount of money required for margin trading depends on the minimum deposit requirement set by the broker. For markets.com this is 100 of your local currency, with the exception of South Africa where it is 1000 rand.
What level of margin is safe?
The level of margin that is considered safe depends on the trader's risk tolerance and investment goals. A lower margin level is generally considered to be safer, as it reduces the potential for large losses
A margin call is a demand from a broker to a trader that additional funds must be added to the trader’s account in order to maintain their current positions.
What would trigger a margin call?
A margin call occurs when an investor using margin (borrowed money) to trade in securities or other financial instruments, does not have enough money or equity in their account to meet the minimum margin requirement set by their broker. This can happen when the value of the securities in the account falls below a certain level, resulting in a negative balance in the margin account. A margin call can be a warning sign that the investor is taking on too much risk, and it can be a good opportunity to re-evaluate their investment strategy.
What happens if you get a margin call?
When a margin call happens, the broker will contact the investor and ask them to deposit additional funds into their account or sell some of their profiting securities to bring the account equity back above the minimum margin requirement. If the investor is unable to meet the margin call, the broker may take action to liquidate the investor's securities in order to bring the account back to a positive balance.
Do you lose money on a margin call?
A margin call itself does not necessarily mean that you will lose money, but it does indicate that you are at risk of losing money if you do not take action to meet the call. When a margin call occurs, it is a warning that your account balance has dropped below the minimum margin requirement set by your broker, and if you do not take action to bring it back above that level, your broker may take action to liquidate your securities in order to bring the account back to a positive balance.
Maintenance Margin, or “variation margin,” is considered as the minimum amount of equity (i.e., funds) which needs to be maintained in a trader’s margin account before a margin call is issued as due to the account value being below a minimum threshold and not being able to support open margin trade positions. Margin accounts are what leveraged trades use to trade, where they can purchase securities such as stocks, bonds, or options with funds borrowed from the brokerage.
How do you avoid maintenance margin?
To avoid maintenance margin issues, traders should monitor their account closely and adjust their leverage if needed. If your maintenance margin is not maintained it will result in a margin call, which may indicate that the trader should reconsider the risk exposure of their portfolio.
Why are maintenance margins important?
Maintenance margins are important to protect against losses due to fluctuations in the market. They ensure that traders maintain adequate capital reserves and can cover any potential losses.
The US Dollar Index, introduced in 1973, allows you to take a position on the overall strength of USD as measured by its performance against a basket of currencies. When it was launched the index had a base level of 100; it reached an all-time high of 164.72 in February 1985, and struck a low of 70.698 in March 2008.
Unlike the trade-weighted index of the US Dollar produced by the US Federal Reserve, the composition of the USDX has remained unaltered since its inception, save for one change: in January 1999 the euro was created, so many individual European currencies were removed from the index and replaced by the euro. Despite this change, the euro still has the same weighting in the index (57.6%) as all the currencies that it replaced combined.
After the euro, the Japanese yen is the second-largest proponent in the dollar index, with a weighting of 13.6%. The British pound with 11.9%, and the Canadian dollar, with 9.1%, are the next two largest components.
Cardano differs from other cryptos by taking a research-led, collaborative approach to cryptos. Traders of its ADA currency help operate the network and can vote on software changes. Cardano is priced in USD and the instrument allows you to trade the ADA/USD spot rate.
Amortization is the process of charging the cost of an asset to expense over a specific timeframe. Amortization also defines the practice of spreading the repayment of a loan. This shifts the asset from the balance sheet to the income statement.
Amortization reflects the consumption of an intangible asset over what is considered a useful timeframe. It is used for the gradual write-down of the cost of those intangible assets that have a specific useful life. It is common to charge interest which is calculated based on the duration and other variables.
Amortization should not be confused with Depreciation. The difference between them is that amortization is about charging “Intangible Assets” to expense over time. While depreciation is about charging “Tangible Assets” to expense over time.
How to calculate amortization?
As we do not provide economic or trading advice we can only include here what is considered to be a generally agreed upon explanation. As stated, generally an Amortization can be calculated by using a straight-line formula such as: (book value - residual value) / useful life.
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.
Automated trading is also referred to as Algo Trading (Algorithmic is abbreviated to Algo) – is the use of algorithms for executing orders utilizing automated and pre-programmed trading instructions via advanced mathematical tools. Trading variables such as price, timing and volume are factors in Algo trading.
How does algo trading work?
Algo trading works by capitalizing on fast decision-making processes as human intervention is minimized. As such, Algo Trading enables automated trading systems to take advantage of opportunities arising in the market even before human traders can even spot them. It uses processes- and rules-based algorithms to employ strategies for executing trades. Algo trading is mostly used by large institutional investors and traders
The WisdomTree Emerging Markets High Dividend ETF (DEM) tracks the WisdomTree Emerging Markets Dividend Index. The index is a fundamentally weighted index that is comprised of the highest dividend-yielding common stocks selected from the WisdomTree Emerging Markets Dividend Index. This provides it with some downside protection from market volatility.
DEM is an equity fund, and has a mix of market sectors. It includes stocks from key emerging markets such as Russia and China, with assets including China Contruction Bank, China Mobile and Norilsk Nickel.
Earnings Per Share (EPS) is a financial metric that measures the amount of profit a company makes for each outstanding share of its common stock. It's calculated by dividing net income by the number of shares outstanding. Investors use EPS to measure how profitable a company is and to compare different companies in the same sector.
What is a good earnings per share? Is it better to have a high or low earnings per share?
There is no definitive answer to what constitutes a "good" earnings per share (EPS) as it can vary depending on the industry, the size of the company, and the expectations of the market. Generally, a higher EPS is considered better, as it indicates that a company is generating more profit per share of stock.
What is earnings per share vs dividend?
A dividend is a payment made by a company to its shareholders out of its profits or reserves. Whereas EPS is an indicator of a company's profitability.
Working orders, also known as pending orders, include Stop orders and Limit orders. Essentially, they’re instructions for a broker to perform a trade when an asset hits a certain price. These orders inform brokers that traders wish to make that trade only if something happens to the asset price.
What is the best order type when buying stock?
The best order type depends on the individual's specific needs and market conditions. It's important to understand the trade-off between speed and price certainty when choosing an order type. Market orders provide immediate execution but at the current market price, while limit orders offer price certainty but may not be executed if the desired price is not reached.
What is an open work order?
An open work order in trading is an outstanding order to buy or sell a security that has not yet been executed. It remains open until it is either filled or cancelled by the trader.
A market order is a type of stock order that allows an investor to purchase or sell securities at the current market price. It is one of the most common types of orders and it is executed as soon as it is placed, meaning the investor will get whatever price is currently available on the exchange.
Is it good to use market order?
A market order is an order to buy or sell a security at the best available current price. This type of order may provide an advantage over other types of orders by executing quickly, but it could also mean that the trade may not be filled at the desired price.
Why would you use a market order?
A market order is typically used when an investor wants to execute a trade quickly, and is willing to accept the current market price. This type of order is often used when an investor wants to take advantage of a price change or when they want to enter or exit a position quickly.
How long does a market order take?
A Market order is generally the fastest order to execute as it simply takes the current market price. You can expect a market order to be executed usually within seconds or minutes of being placed, as long as there is sufficient liquidity in the market.
Market Makers are financial institutions or investors that provide liquidity to the markets by placing buy and sell orders at specific prices. They are incentivized to do this in order to make profits from the bid-ask spread.
What is the difference between dealer and market maker?
A dealer and a market maker are both intermediaries in the securities market that provide liquidity and help facilitate trades. However, they have some key differences. A dealer is a person or entity that buys and sells securities for their own account and risk. They hold inventory of securities and make a profit by buying at a lower price and selling at a higher price.A market maker is a firm or individual that provides liquidity to the market by continuously buying and selling a security at publicly quoted prices. They are also called liquidity providers, and they make money by charging a bid-ask spread, the difference between the prices they are willing to buy and sell a security. They do not hold inventory of securities like dealers do.
Do market makers manipulate price?
Market makers are allowed to buy and sell securities at their own discretion, and they may adjust the prices they are willing to buy and sell a security in order to make a profit. However, they are also subject to regulatory oversight, and they must act in a fair and transparent manner. They are not allowed to manipulate prices, and any illegal activities such as insider trading, wash trading or any other form of market manipulation are strictly prohibited.
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.
Trading alerts are notifications or signals that are sent to traders to inform them of potential trading opportunities or market conditions that may affect their trades. These alerts can be generated by software programs, financial analysts, or other sources, and can be delivered via email, text message, or other forms of communication. They are typically used by traders to help them make more informed trading decisions and stay up-to-date on market conditions.
How do I set up trade alerts?
To set up trade alerts, you will need to use a trading platform or software that offers the alert feature. You can set up trading alerts easily on markets.com.
Can I set an alert for a stock price?
A stock price alert is just one of the types of trade alerts you can set up through markets.com.
A bearish market is a condition in the stock market where prices are on a downward trend, characterized by widespread pessimism and investor fear. This often results in a decline in the value of securities, leading to a decline in the overall market.
How long do bear markets last?
The duration of a bear market can vary and can last anywhere from a few months to several years. It depends on a number of factors, including the underlying cause of the market downturn, the state of the overall economy, and government or central bank interventions.
How do you know if a market is bearish?
A market is considered bearish if there is a persistent downward trend in the prices of securities, typically accompanied by increased selling pressure and declining market indices such as the S&P 500. This can be indicated by technical analysis, such as chart patterns showing lower highs and lower lows, or by broader economic indicators such as declining gross domestic product (GDP) and rising unemployment.
What is the longest bear market in history?
The longest bear market in history is the Great Depression, which lasted from 1929 to 1939. During this time, the stock market experienced a severe decline, with the Dow Jones Industrial Average losing 89% of its value. The Great Depression was a global economic downturn that had far-reaching impacts and was marked by high levels of unemployment, homelessness, and economic hardship.
Trading charts are used to display historical price data for a security or financial instrument. They typically include a time frame on the x-axis, and the price of the security or instrument on the y-axis. Candlestick charts, bar charts and line charts are the most common types of charts used in trading. Candlestick charts are the most popular and provide a visual representation of the opening price, closing price, highest and lowest price of the security in a given period of time. It also shows the direction of the price movement, whether it went up or down. Traders use different technical analysis tools like trendlines, moving averages, and indicators to interpret the charts and make trading decisions. There is a great deal of nuance in reading charts and doing it correctly will require experience and an understanding of how your chart of choice is presenting information to you.
How do you predict if a stock will go up or down?
Traders use different technical analysis tools and techniques to predict if a stock will go up or down using trading charts. These include:
Trendlines: By connecting price highs or lows over a period of time, traders can identify the direction of the trend and predict future price movements.
Moving averages: By plotting the average price over a period of time, traders can identify trends and potential buying or selling opportunities.
Indicators: Technical indicators, such as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD), are mathematical calculations that are plotted on charts to help traders identify trends, momentum and potential buy or sell signals.
Chart patterns: Traders also use chart patterns such as head and shoulders, double bottoms, and triangles to identify potential reversal points in the market and make predictions about future price movements.
It's important to note that technical analysis is not an exact science and it's not a guarantee of future results. Traders should always use technical analysis in conjunction with fundamental analysis, which looks at a company's financial and economic conditions, to make informed trading decisions.
How do you know if a chart is bullish?
A chart is considered bullish if it is showing an upward trend or pattern, indicating that the price of a security or financial instrument is likely to rise. Bullish chart patterns include upward trending lines, ascending triangles, and bullish candlestick patterns such as the hammer or the bullish engulfing pattern. Traders often consider a stock to be bullish when it's trading above the moving average, especially when the moving average is trending upward.
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.
Chainlink (LINK) connects contracts smartly by linking them with real world events, data, and payments. Using the LINK cryptocurrency, Chainlink is tradeable on our platform via the LINK/USD instrument.
Yearn.finance (YFI) is another Ethereum-led yield aggregator using the YFI token. Cryptos deposited on Yearn are leant out at the highest lending rate possible across a number of other platforms. Holders of YFI can participate in the protocol's governance and earn a percentage of the fees generated on the various Yearn Finance products through staking. Yearn is available on our platform via the YFI/USD symbol and is priced in USD.
Heating Oil is a low-viscosity petroleum product derived from crude oil. Around 25% of the yield of crude oil is devoted to heating oil, the second most after gasoline products. As a result, prices often closely follow those of WTI crude.
It is priced in USD per gallon, and has a historic high of $3.32 in April 2011. The record low was $0.87 in January 2016.
Heating oil is used as a fuel for furnaces and boilers to heat homes and businesses. It is especially popular in the British Isles and the North-eastern US. As a result, demand fluctuates seasonally, peaking in the colder months between October and March.
Price is, as a result, also affected by cold weather. Other factors affecting price include the price of alternative heating options, energy efficiency and insulation, refining costs and government regulations.
Heating Oil futures allow you to speculate on, or hedge against, changes in the price of Heating Oil. Futures rollover on the third Friday of every month.
The IBEX 35, or Spain 35, is the benchmark index for the Spanish stock market and tracks the performance of the top 35 most-traded and most-liquid companies on the Bolsa de Madrid (Madrid Stock Exchange).
The index is market capitalisation-weighted and free float-adjusted. It was launched on 14th January 1992 but has a base date of 30th December 2010 and a base level of 1,000. Selection is based upon liquidity, but there is a maximum weighting limit of 40%.
Financial & Real Estate Services is the most-represented sector in the index, accounting for around 34% of the weighting. The next-largest sector is Oil & Energy, with just over 20%, followed by Technology & Telecommunications with just over 15%. Consumer Goods, Basic Materials, Industry & Construction, and Consumer Services complete the list of sectors covered in descending order of weighting.
Spain 35 futures allow you to speculate on, or hedge against, changes in the price of major stocks on the Bolsa de Madrid. Contracts rollover on the second Friday of every month.
The DAX, also known as the Germany 40, is a blue-chip index of the top 30 stocks trading on the Frankfurt Stock Exchange. The DAX boasts extreme liquidity and is one of the most-traded index derivatives across the globe.
The index has a base value of 1,000, with a base date of 31st December 1987. As of 18th June 1999, the DAX indices price has been calculated using equity prices from the Frankfurt XETRA all-electronic trading system. DAX is best-known barometer of the domestic stock exchange, representing around 80% of the total market.
Pharma & Healthcare is the biggest sector in the DAX, accounting for 14.2% of the index. Automobiles are next, with 13.9% of the total weighting, followed by Chemicals with 12.7%.
The DAX is one of only a few of the major country stock indices to factor in dividend yields.
DAX index futures allow you to speculate on, or hedge against, changes in the price of major German stocks. Futures rollover on the second Friday of March, June, September, and December.
Risk management in trading is a strategy for mitigating losses. It involves understanding and analyzing risks, taking preventive steps to protect against potential losses, and having plans in place to address unanticipated situations. Good risk management practices help traders limit their downside and stay ahead of market volatility.
How do you manage risk in trading?
Traders can practise risk management in lots of different ways. It can be done by using strategies like position sizing, stop-loss orders, diversifying investments, and hedging. Through careful planning, you can set limits on your potential losses, identify potential opportunities and adjust your strategy accordingly. With disciplined risk management, you can protect your capital while you trade.
Day trading is the practice of buying and selling financial securities, such as stocks or futures, with the aim of making short-term profits within a single day's trading session. It requires a good understanding of markets and an ability to take advantage of opportunities in the right timing. Professional day traders are typically very experienced and have a deep understanding of the markets, products, strategies, and the risks.
How does day trading work?
Day Trading works in the same way any other trading process, yet at times the intervals between positions are short to very short. Day traders buy and sell batches of various assets within the same day, or even within very short periods within that day. It can be said that the process is based on exploiting the inevitable up-and-down price movements which occur during a trading session.
How do I start day trading?
To start day trading, you need to have an account with a broker like markets.com, basic knowledge of the stock market and financial markets, and the ability to access the markets online or via an app. You should also educate yourself on risk management strategies, study different investment styles, and use technical analysis when deciding what stocks to buy and sell. Finally, make sure to set realistic goals and keep records of your trades.
A CFD is a derivative financial instrument based on the price movements of an underlying asset. CFDs enable traders to trade shares, Forex, indices, bonds, or commodities without actually owning the assets being traded.
A CFD (Contract for Difference) is made between two parties, typically described as "buyer" and "seller", stating that the buyer will pay the seller the difference between the current value of an asset and its value when the contract was initially made. If the closing trade price is higher than the opening price, then the seller (the broker) will pay the buyer (the trader) the difference, and that will be the buyer’s profit. The opposite is also true. That is, if the current asset price is lower at the exit price than the value at the contract’s opening, then the seller, rather than the buyer, will benefit from the difference.
What is the difference between CFD trading and share trading?
While both “regular stock trading” and CFD Share trading are executed via trading platforms and applications, there are key differences between them. As indicated above, the main difference between stock share and CFD trading is that when you trade a CFD you are speculating on an asset’s price without actually owning the underlying asset. While regular stock trading requires the parties to have ownership of the underlying stocks.
In the financial and trading domains, the Grey Market enables traders to take positions on a company’s potential via yet-to-be-released Initial Public Offering (IPO). Asset and share prices in this market are more of a prediction of what the company’s total market capitalization will be at the end of its first trading day than any official or sanctioned price.
How do grey markets make money?
Grey markets make money by providing liquidity for new IPOs by allowing buyers and sellers to trade in newly issued stocks without the issuer's consent. This provides the issuer with a way to gain quick access to capital without relying on banks or other traditional sources of funding.
How do I get into grey market?
A grey market also refers to public companies and securities that are not listed, traded, or quoted in a U.S. stock exchange. Grey market securities have no market makers quoting the stock. Also, since they are not traded or quoted on an exchange or interdealer quotation system, investors' bids and offers are not collected in a central spot, so market transparency is diminished, and effective execution of orders is difficult.
Financial instruments are a way to place money into financial markets, they can take many forms such as stocks, bonds, derivatives, currencies, commodities, etc. They are used by investors, companies and governments as a means of raising capital, hedging risk, and/or generating additional income. They represent a claim on some type of underlying asset or cash flow. They can be traded on financial markets and their value can fluctuate with market conditions.
What are the 5 financial instruments?
The five main types of financial instruments are: money market instruments, debt securities, equity securities, derivatives, and foreign exchange instruments. There are many more subsets of financial instrument but all of them will fall into one of these 5 broad categories.
1. Money market instruments (also known as Cash Instruments). These are financial instruments where their values are influenced by the condition of the markets (the value given to any given cash currency at any specific point in time).
2. Debt securities – Which are negotiable financial instruments. Debt securities provide their owners with regular payments of interest and guaranteed repayment of principal.
3. Equity securities - Equity securities are another form of financial instruments and represent the ownership of shares of stock.
4. Derivative instruments – These are instruments which are linked to a specific financial instrument or indicator or commodity, and through which specific financial speculative actions can be traded in financial markets in their own right.
5. Foreign Exchange Instruments - Which are represented on the foreign market and mainly consist of currency agreements and derivatives.
Is cash a financial instrument?
Yes, cash is the most basic form of financial instrument. It is widely accepted and can be used to purchase goods and services as well as other investments. Cash is an essential part of most financial transactions, allowing people to pay for their purchases with ease.
Hedging, or to hedge, in the trading domain is defined as traders reducing their exposure to risk. Hedging is done by taking an offsetting position in an asset or investment that reduces the price risk of an existing position.
Why is it called hedging?
"Hedge your bets" is a term which originated in the 1600s and means to decrease or limit one's risk. The origin of the phrase is thought to be derived from the action of literally fencing off an area with hedges
How does hedging work?
Hedging involves taking offsetting positions in different markets, such as futures contracts or derivatives to diversify risk if one instrument falls.
Arbitrage is trading that makes use of small differences in price between identical assets in two or more markets. An asset will most likely be sold in different markets, forms or via a different financial products.
Arbitrage is one alternative trading strategy that can prove exceptionally profitable when leveraged by sophisticated traders. It also carries risks which need to be considered prior and during an arbitrage.
Arbitrage as a trading strategy is when an asset is simultaneously bought and sold in different markets, thus taking advantage of a price difference, and generating a potential profit. Arbitrage is commonly leveraged by hedge funds and other sophisticated investors.
What is an example of arbitrage?
Without going into actual trading advice, here are several examples of Arbitrage in Trading:
• Exchange rates
• Offshore operations
• Cryptocurrency
And perhaps the most obvious and common form of arbitrage which is acting as a go between or affiliate, earning commission on price differences between the seller and the buyer.
Types of arbitrage traders use:
• Pure arbitrage - Traders simultaneously buying and selling assets in different markets to take advantage of a price differences.
• Merger arbitrage – When two publicly traded companies merge. If the target is a publicly traded company, the acquiring company must purchase its outstanding shares Convertible arbitrage.
• Convertible Arbitrage. It is related to convertible bonds, also called convertible notes or convertible debt.
Stock trading is the practice of buying and selling stocks, or shares of ownership in a publicly-traded company, with the goal of making a profit through price appreciation or by receiving income in the form of dividends. Stock traders buy and sell shares in the stock market using a brokerage account, and they use a variety of strategies and techniques to determine when to enter and exit trades. Stock trading is a popular form of investment, but it also comes with risks and profits are in no way guaranteed. You should acquire a good understanding of the market and individual stocks before making trading decisions.
How are Stocks Different from Other Securities?
Stocks, also known as equities, represent ownership in a corporation, while other securities represent claims on an underlying asset. Other types of securities include bonds (debt securities), options, and derivatives.
How Do I Start Trading Stocks?
You can trade stocks using a stock exchange. Platforms like markets.com offer CFDs on stocks and other securities so you can start assembling and get trading outcomes of your own!
Index Trading is a type of trading that involves trading a specific financial index such as the S&P 500. It is considered to be a passive investment strategy, where the investor seeks to match their performance with the broader market, instead of attempting to beat it.
What is an index?
An index is a measure of a portion of the stock market that reflects changes in the value of a basket of stocks within it. This can provide an overall snapshot of how a specific market is performing. For example, the US Tech 100 gives a broad overview of the US tech market performance at any given time.
What are indexes used for in finance?
Indexes are used in finance to measure the performance of portfolios and to benchmark the performance of investments against a predetermined set of criteria. They also help investors assess and analyze market trends, risks, and opportunities.
What are different types of index in stock market?
There are different types of indices in the stock market. Some indices used in Index trading are often used as benchmarks to evaluate performance in financial markets. Some of the most important indices in the U.S. markets are the Dow Jones Industrial Average and the S&P 500.
Trailing Stop Orders are a type of stock order that lets investors adjust the stop price as a security rises or falls. This order works by continuously monitoring the price of a security and dynamically adjusts the stop price with every tick. The advantage of this type of order is that it allows investors to limit their losses, while locking in profits, without having to manually modify the stop-loss point.
Are Trailing Stop Orders good?
Trailing Stop Orders can be a good way to protect profits in your trading. They allow you to set an automated stop-loss that trails the price of a stock, adjusting up as it rises, while allowing you to lock in some gains if the stock begins to fall. This is especially useful when dealing with volatile stocks, giving you more control over your position.
What is a disadvantage of a trailing stop loss?
Trailing stop losses can help minimize risk when trading, however they also limit potential gains. The stop price adjusts based on market conditions, so as the price increases, the stop loss will move up. If the stock drops significantly and your trailing stop loss is too close, it may be triggered before you have a chance to react.
Which is better stop limit or trailing stop?
It depends entirely on the trader. A stop limit will sell at the specified price, while a trailing stop will track price changes and sell when the specified amount is exceeded. Different traders may have different needs and objectives, so which type of order is best will vary. Consider your goals before deciding which option is right for you.
A bullish market is a financial market condition where prices are rising or are expected to rise, characterized by optimism and investor confidence. It is the opposite of a bearish market, where prices are falling or expected to fall.
How long do bull markets last?
Bull markets can last anywhere from a few months to several years. The average bull market lasts about 3 years. However, the length of a bull market can vary greatly depending on various economic, political, and market factors.
How do you know if a market is bullish?
A market is considered bullish if stock prices are rising and investors are optimistic about future market performance. This is typically indicated by a sustained increase in market indexes such as the S&P 500 and the Dow Jones Industrial Average over a period of time. Additionally, high trading volume and strong investor confidence can also be indicators of a bullish market.
What is the longest bull market in history?
The longest bull market in history was the 1990-2000 bull market, which lasted for 113 months.
Financial Markets define any place (physical or virtual) or system which provides buyers and sellers with the means to trade financial instruments of any kind.
What are the types of financial markets?
Types of financial markets include stock markets, bond markets, foreign exchange markets, commodity markets, money markets, derivatives markets, and options markets.
What is the main function of financial markets?
The main function of financial markets is to facilitate the interaction between those who need capital with those who have capital to invest. In addition to raising capital, financial markets allow participants to transfer risk (generally through derivatives) and promote commerce. The term "market" can also be used for exchanges, or organizations which enable trade in financial securities.
Within the financial sector, the term "financial markets" is often used to refer just to the markets that are used to raise finances. For long term finance, they are usually called the capital markets; for short term finance, they are usually called money markets. The money market deals in short-term loans, generally for a period of a year or less.
A Guaranteed stop order provides traders with a form of protection for their positions. They can have a guaranteed exit at the exact price they specify. This can be used regardless of market volatility. This is different from “standard” stop-loss orders, which may be filled at worse price levels than were requested due to “slippage”. A guaranteed stop loss order (GSLOs) will incur a fee / premium which will only be charged if it was triggered.
How does guaranteed stop work?
A guaranteed stop loss works in the same way as a standard one does, via instructions provided to the broker to close a position at a specific level, thereby reducing the risk should the market move against the trader.
Should I use guaranteed stop-loss?
Guaranteed stop-loss automatically exits you from the market at a certain predetermined price level in order to limit potential losses if the market goes against you. As such, especially for less experienced traders, it is a recommended strategy to mitigate losses.
West Texas Intermediate or WTI is a benchmark type of oil that is central to commodities trading. These benchmarks indicate quality and also the source of the oil. The three dominant benchmarks for oil are WTI, Brent Crude and Dubai/Oman. These are similar indicators as Scottish and Norwegian might be for smoked salmon, for example.
What is the difference between West Texas Intermediate and Brent crude?
The different benchmarks for oil come from different regions and have different chemical compositions. They have what are called 'quality spreads' and 'location spreads' which affect price differences.
What is West Texas Intermediate Used For?
West Texas Intermediate is a high-quality oil that is easily refined. The price of WTI is often reported on in news reports on the oil industry and oil commodities, together with Brent Crude Oil which originates from the North Sea. Oil futures contracts on the New York Mercantile Exchange (NYMEX) use West Texas Intermediate as an underlying commodity.
A Purchasing Managers' Index (PMI) is a leading indicator that measures the health of the manufacturing sector and the broader economy. It is based on a survey of purchasing managers, who are asked to rate the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventories.
How is PMI related to inflation?
PMI can be related to inflation because it is an indicator of economic activity and growth. When purchasing managers report increased activity, it can indicate an increase in demand for goods and services, which can lead to higher prices (inflation). On the other hand, when purchasing managers report a decrease in activity, it can indicate a decrease in demand, which can lead to lower prices (deflation). A high PMI reading can indicate that the manufacturing sector is expanding, which can lead to higher prices and inflation, while a low PMI reading can indicate that the manufacturing sector is contracting, which can lead to lower prices and deflation. Additionally, when prices of raw materials and other inputs rise, the PMI will decrease as the purchasing managers will be paying more for the raw materials used in production, and this can lead to inflation as well.
Is PMI a good indicator?
PMI is considered a good indicator of economic activity and growth, particularly in the manufacturing sector. It is widely used by economists and financial analysts to predict future trends and is considered a leading indicator of economic activity. The survey data used to calculate PMI is based on input from purchasing managers, who are typically considered to be well-informed about the state of the economy. Additionally, the PMI is released on a monthly basis, providing a timely view of the manufacturing sector and the broader economy. However, it is important to note that PMI is not perfect and should be used in conjunction with other economic indicators to get a comprehensive understanding of the economy.
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.
NUGT, also known as the Direxion Daily Gold Miners Index Bull 3x Shares, aims to deliver three times the daily return of the NYSE Arca Gold Miners Index. This is a leveraged fund. It is designed for intraday trades and it is not recommended for periods of greater than one day.
The NYSE Arca Gold Miners Index is a market-cap weighted index of public companies with global operations in developed and emerging markets. The companies in the index are primarily involved in gold mining, with some also involved in silver mining. Top holdings include Newmont Mining, Barrick Gold, Franco Nevada and Newcrest Mining. Canadian companies represent 52.14% of the asset.
In trading, rollover refers to the process of extending the settlement date of a trade by rolling it forward to the next available delivery date. This is typically done for futures contracts and currency trades. Rollover allows traders to maintain an open position beyond the initial settlement date without having to close and re-open the trade.
What are rollover and swap?
When rolling over a trade, a trader may also be required to pay or receive the difference in the interest rate between the two currencies involved in the trade. This is known as "swap" or "overnight financing". Rollover is typically done when traders expect market conditions to remain favorable for their position, allowing them to capture more potential profit.
Trading trends refer to the overall direction of a security or market, often revealed through chart patterns or indicators. Traders use these trends to identify potential entry and exit points, as well as possible trading opportunities. Analyzing the financial markets in order to identify trends is an essential skill for successful traders. With knowledge of historical trends, investors can spot emerging ones and plan accordingly.
How do you identify a trend in trading?
Analyzing past market movements, changes in asset prices and economic data can be used to identify short-term and long-term trends. Using technical indicators such as moving averages, MACD, and stochastics can also help you spot potential trading opportunities and take advantage of prevailing market trends.
What are the 3 types of trends?
When analyzing the stock market, there are three primary trends that can be observed: short-term, intermediate-term, and long-term. Short-term trends generally last within one to three weeks, intermediate-term trends can range from one to four months, and long-term trends last more than a year. Being able to identify these different trend patterns will help investors maximize their potential returns.
In trading, “Volume of Trade” (Volume) refers to the total quantity of shares or contracts traded for a specific security, share or even to the market as a whole. Volume of trade can be measured through any type of asset traded during a specific duration, usually a trading day.
How is trade volume calculated?
Trade volume is calculated by adding together the number of shares or contracts traded during a specified time period.
What is a good volume to trade?
A good trade volume for a security varies and can depend on factors such as the type of security, market conditions, and overall liquidity. Generally, higher trade volume indicates greater liquidity, which can make it easier to buy and sell the security.
What does it mean when trade volume is high?
High trade volume means there is a high number of shares or contracts being bought and sold in a security or market, indicating high levels of interest and liquidity.
An interest rate is the percentage of a loan or deposit that a lender charges a borrower for the use of their money, or the percentage paid on a deposit account. It is used as a way to compensate the lender for the opportunity cost of not using their money elsewhere. The interest rate can be fixed or variable, and it is typically expressed as an annual percentage. The interest rate is used to calculate the amount of interest due on a loan or deposit over a certain period of time.
What are the 3 types of interest?
The three main types of interest are:
Simple interest: Interest calculated only on the original principal amount of a loan or deposit.
Compound interest: Interest calculated not only on the original principal but also on accumulated interest from previous periods.
Nominal interest: Interest rate stated on a loan or deposit, does not take into account the effect of compounding.
However, there are a few other types of interest as well.
How do I calculate interest rate?
Interest rate is calculated as the cost of debt for the borrower and the rate of return for the lender. This makes the total sum to be repaid to be more than the borrowed amount since lenders require compensation for the loss of use of the money during the loan period. Although many make use of the various online “interest calculators”.
An Order in trading is a request sent by a trader to a broker or trading platform to make a trade on a financial instrument such as shares, Crypto, CFDs, currency pairs and assets. This can be done on a trading venue such as a stock market, bond market, commodity market, financial derivative market, or cryptocurrency exchange
What are the most common types of orders?
Common types of orders are:
• Market Orders. A market order is given by traders and investors as an order to immediately buy or sell an asset, security, or share. Such an order guarantees that the order will be executed, yet the actual execution price is not guaranteed.
• Limit Orders. A limit order is an order to buy or sell an asset such as a security at a specific price or better than that price. Traders wishing to define a maximum price for either buying or selling an asset can use limit orders.
• Stop Orders. Stop orders instruct brokers to execute a trade when the asset’s price reaches a certain level.
Moving Average Convergence/Divergence, also known as MACD , is an analytical trading indicator. Its function is to show changes in the strength, direction, momentum, and duration of a trend in a share’s price. The MACD indicator is comprised of three time series charts based on historical price data. For example, closing price.
How can you tell if MACD is bullish?
If the MACD line (the blue line) is above the signal line (the red line), it is considered to be bullish and suggests that the security's price is likely to rise. This is because the MACD line is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA, and when the 12-day EMA is above the 26-day EMA, it indicates that short-term momentum is bullish and the stock is likely to rise.
Is MACD a good indicator?
MACD is a widely used technical indicator that can be a useful tool for identifying trends and potential buy or sell signals in the market. However, like any indicator, it has its limitations and should be used in conjunction with other technical analysis tools and fundamental analysis to make informed trading decisions.
Which is better MACD or RSI?
Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) are popular technical indicators used in trading. They are both useful tools for identifying trends and potential buy or sell signals, but they are based on different calculations and are used for different purposes.
The MACD is a momentum indicator that is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. It is used to identify bullish or bearish trends and potential changes in momentum.
The RSI, on the other hand, is a momentum oscillator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset.
Both indicators can be useful, but they can also give different signals, so once again, it's important to use them in conjunction with other indicators and analysis techniques to make informed trading decisions.
In trading, resistance level is a price point at which the price of a security or financial instrument tends to encounter selling pressure, making it difficult for the price to rise above that level. The resistance level is seen as a ceiling, as the price has a hard time going above it. Traders use resistance levels to identify areas where they expect the price to stall or reverse direction. This can be determined by observing the historical price movement of a security or financial instrument, looking for areas where the price has consistently failed to break above. Resistance levels are also used in combination with support levels to identify potential price ranges and trade entry or exit points.
What happens when a stock hits resistance?
If a stock hits a resistance level it can cause the stock to stall, move sideways, or even reverse direction. At resistance level traders that have taken a long position might decide to take profits, while traders that have not yet taken a position might decide to wait for a break above the resistance before buying.
When a stock hits resistance, traders will typically observe the stock's behavior at that level to determine if the resistance level is likely to hold or if the stock is likely to break through it. If the stock breaks through resistance, it can be considered a bullish sign, indicating that the stock is likely to continue to rise. On the other hand, if the stock fails to break through resistance, it can be considered a bearish sign, indicating that the stock is likely to stall or reverse direction.
The US Dollar Index, introduced in 1973, allows you to take a position on the overall strength of USD as measured by its performance against a basket of currencies. When it was launched the index had a base level of 100; it reached an all-time high of 164.72 in February 1985, and struck a low of 70.698 in March 2008.
Unlike the trade-weighted index of the US Dollar produced by the US Federal Reserve, the composition of the USDX has remained unaltered since its inception, save for one change: in January 1999 the euro was created, so many individual European currencies were removed from the index and replaced by the euro. Despite this change, the euro still has the same weighting in the index (57.6%) as all the currencies that it replaced combined.
After the euro, the Japanese yen is the second-largest proponent in the dollar index, with a weighting of 13.6%. The British pound with 11.9%, and the Canadian dollar, with 9.1%, are the next two largest components.
Cardano differs from other cryptos by taking a research-led, collaborative approach to cryptos. Traders of its ADA currency help operate the network and can vote on software changes. Cardano is priced in USD and the instrument allows you to trade the ADA/USD spot rate.
Amortization is the process of charging the cost of an asset to expense over a specific timeframe. Amortization also defines the practice of spreading the repayment of a loan. This shifts the asset from the balance sheet to the income statement.
Amortization reflects the consumption of an intangible asset over what is considered a useful timeframe. It is used for the gradual write-down of the cost of those intangible assets that have a specific useful life. It is common to charge interest which is calculated based on the duration and other variables.
Amortization should not be confused with Depreciation. The difference between them is that amortization is about charging “Intangible Assets” to expense over time. While depreciation is about charging “Tangible Assets” to expense over time.
How to calculate amortization?
As we do not provide economic or trading advice we can only include here what is considered to be a generally agreed upon explanation. As stated, generally an Amortization can be calculated by using a straight-line formula such as: (book value - residual value) / useful life.
Automated trading is also referred to as Algo Trading (Algorithmic is abbreviated to Algo) – is the use of algorithms for executing orders utilizing automated and pre-programmed trading instructions via advanced mathematical tools. Trading variables such as price, timing and volume are factors in Algo trading.
How does algo trading work?
Algo trading works by capitalizing on fast decision-making processes as human intervention is minimized. As such, Algo Trading enables automated trading systems to take advantage of opportunities arising in the market even before human traders can even spot them. It uses processes- and rules-based algorithms to employ strategies for executing trades. Algo trading is mostly used by large institutional investors and traders
A bearish market is a condition in the stock market where prices are on a downward trend, characterized by widespread pessimism and investor fear. This often results in a decline in the value of securities, leading to a decline in the overall market.
How long do bear markets last?
The duration of a bear market can vary and can last anywhere from a few months to several years. It depends on a number of factors, including the underlying cause of the market downturn, the state of the overall economy, and government or central bank interventions.
How do you know if a market is bearish?
A market is considered bearish if there is a persistent downward trend in the prices of securities, typically accompanied by increased selling pressure and declining market indices such as the S&P 500. This can be indicated by technical analysis, such as chart patterns showing lower highs and lower lows, or by broader economic indicators such as declining gross domestic product (GDP) and rising unemployment.
What is the longest bear market in history?
The longest bear market in history is the Great Depression, which lasted from 1929 to 1939. During this time, the stock market experienced a severe decline, with the Dow Jones Industrial Average losing 89% of its value. The Great Depression was a global economic downturn that had far-reaching impacts and was marked by high levels of unemployment, homelessness, and economic hardship.
Chainlink (LINK) connects contracts smartly by linking them with real world events, data, and payments. Using the LINK cryptocurrency, Chainlink is tradeable on our platform via the LINK/USD instrument.
Day trading is the practice of buying and selling financial securities, such as stocks or futures, with the aim of making short-term profits within a single day's trading session. It requires a good understanding of markets and an ability to take advantage of opportunities in the right timing. Professional day traders are typically very experienced and have a deep understanding of the markets, products, strategies, and the risks.
How does day trading work?
Day Trading works in the same way any other trading process, yet at times the intervals between positions are short to very short. Day traders buy and sell batches of various assets within the same day, or even within very short periods within that day. It can be said that the process is based on exploiting the inevitable up-and-down price movements which occur during a trading session.
How do I start day trading?
To start day trading, you need to have an account with a broker like markets.com, basic knowledge of the stock market and financial markets, and the ability to access the markets online or via an app. You should also educate yourself on risk management strategies, study different investment styles, and use technical analysis when deciding what stocks to buy and sell. Finally, make sure to set realistic goals and keep records of your trades.
A CFD is a derivative financial instrument based on the price movements of an underlying asset. CFDs enable traders to trade shares, Forex, indices, bonds, or commodities without actually owning the assets being traded.
A CFD (Contract for Difference) is made between two parties, typically described as "buyer" and "seller", stating that the buyer will pay the seller the difference between the current value of an asset and its value when the contract was initially made. If the closing trade price is higher than the opening price, then the seller (the broker) will pay the buyer (the trader) the difference, and that will be the buyer’s profit. The opposite is also true. That is, if the current asset price is lower at the exit price than the value at the contract’s opening, then the seller, rather than the buyer, will benefit from the difference.
What is the difference between CFD trading and share trading?
While both “regular stock trading” and CFD Share trading are executed via trading platforms and applications, there are key differences between them. As indicated above, the main difference between stock share and CFD trading is that when you trade a CFD you are speculating on an asset’s price without actually owning the underlying asset. While regular stock trading requires the parties to have ownership of the underlying stocks.
Arbitrage is trading that makes use of small differences in price between identical assets in two or more markets. An asset will most likely be sold in different markets, forms or via a different financial products.
Arbitrage is one alternative trading strategy that can prove exceptionally profitable when leveraged by sophisticated traders. It also carries risks which need to be considered prior and during an arbitrage.
Arbitrage as a trading strategy is when an asset is simultaneously bought and sold in different markets, thus taking advantage of a price difference, and generating a potential profit. Arbitrage is commonly leveraged by hedge funds and other sophisticated investors.
What is an example of arbitrage?
Without going into actual trading advice, here are several examples of Arbitrage in Trading:
• Exchange rates
• Offshore operations
• Cryptocurrency
And perhaps the most obvious and common form of arbitrage which is acting as a go between or affiliate, earning commission on price differences between the seller and the buyer.
Types of arbitrage traders use:
• Pure arbitrage - Traders simultaneously buying and selling assets in different markets to take advantage of a price differences.
• Merger arbitrage – When two publicly traded companies merge. If the target is a publicly traded company, the acquiring company must purchase its outstanding shares Convertible arbitrage.
• Convertible Arbitrage. It is related to convertible bonds, also called convertible notes or convertible debt.
A bullish market is a financial market condition where prices are rising or are expected to rise, characterized by optimism and investor confidence. It is the opposite of a bearish market, where prices are falling or expected to fall.
How long do bull markets last?
Bull markets can last anywhere from a few months to several years. The average bull market lasts about 3 years. However, the length of a bull market can vary greatly depending on various economic, political, and market factors.
How do you know if a market is bullish?
A market is considered bullish if stock prices are rising and investors are optimistic about future market performance. This is typically indicated by a sustained increase in market indexes such as the S&P 500 and the Dow Jones Industrial Average over a period of time. Additionally, high trading volume and strong investor confidence can also be indicators of a bullish market.
What is the longest bull market in history?
The longest bull market in history was the 1990-2000 bull market, which lasted for 113 months.
Earnings Per Share (EPS) is a financial metric that measures the amount of profit a company makes for each outstanding share of its common stock. It's calculated by dividing net income by the number of shares outstanding. Investors use EPS to measure how profitable a company is and to compare different companies in the same sector.
What is a good earnings per share? Is it better to have a high or low earnings per share?
There is no definitive answer to what constitutes a "good" earnings per share (EPS) as it can vary depending on the industry, the size of the company, and the expectations of the market. Generally, a higher EPS is considered better, as it indicates that a company is generating more profit per share of stock.
What is earnings per share vs dividend?
A dividend is a payment made by a company to its shareholders out of its profits or reserves. Whereas EPS is an indicator of a company's profitability.
Heating Oil is a low-viscosity petroleum product derived from crude oil. Around 25% of the yield of crude oil is devoted to heating oil, the second most after gasoline products. As a result, prices often closely follow those of WTI crude.
It is priced in USD per gallon, and has a historic high of $3.32 in April 2011. The record low was $0.87 in January 2016.
Heating oil is used as a fuel for furnaces and boilers to heat homes and businesses. It is especially popular in the British Isles and the North-eastern US. As a result, demand fluctuates seasonally, peaking in the colder months between October and March.
Price is, as a result, also affected by cold weather. Other factors affecting price include the price of alternative heating options, energy efficiency and insulation, refining costs and government regulations.
Heating Oil futures allow you to speculate on, or hedge against, changes in the price of Heating Oil. Futures rollover on the third Friday of every month.
The DAX, also known as the Germany 40, is a blue-chip index of the top 30 stocks trading on the Frankfurt Stock Exchange. The DAX boasts extreme liquidity and is one of the most-traded index derivatives across the globe.
The index has a base value of 1,000, with a base date of 31st December 1987. As of 18th June 1999, the DAX indices price has been calculated using equity prices from the Frankfurt XETRA all-electronic trading system. DAX is best-known barometer of the domestic stock exchange, representing around 80% of the total market.
Pharma & Healthcare is the biggest sector in the DAX, accounting for 14.2% of the index. Automobiles are next, with 13.9% of the total weighting, followed by Chemicals with 12.7%.
The DAX is one of only a few of the major country stock indices to factor in dividend yields.
DAX index futures allow you to speculate on, or hedge against, changes in the price of major German stocks. Futures rollover on the second Friday of March, June, September, and December.
In the financial and trading domains, the Grey Market enables traders to take positions on a company’s potential via yet-to-be-released Initial Public Offering (IPO). Asset and share prices in this market are more of a prediction of what the company’s total market capitalization will be at the end of its first trading day than any official or sanctioned price.
How do grey markets make money?
Grey markets make money by providing liquidity for new IPOs by allowing buyers and sellers to trade in newly issued stocks without the issuer's consent. This provides the issuer with a way to gain quick access to capital without relying on banks or other traditional sources of funding.
How do I get into grey market?
A grey market also refers to public companies and securities that are not listed, traded, or quoted in a U.S. stock exchange. Grey market securities have no market makers quoting the stock. Also, since they are not traded or quoted on an exchange or interdealer quotation system, investors' bids and offers are not collected in a central spot, so market transparency is diminished, and effective execution of orders is difficult.
Financial instruments are a way to place money into financial markets, they can take many forms such as stocks, bonds, derivatives, currencies, commodities, etc. They are used by investors, companies and governments as a means of raising capital, hedging risk, and/or generating additional income. They represent a claim on some type of underlying asset or cash flow. They can be traded on financial markets and their value can fluctuate with market conditions.
What are the 5 financial instruments?
The five main types of financial instruments are: money market instruments, debt securities, equity securities, derivatives, and foreign exchange instruments. There are many more subsets of financial instrument but all of them will fall into one of these 5 broad categories.
1. Money market instruments (also known as Cash Instruments). These are financial instruments where their values are influenced by the condition of the markets (the value given to any given cash currency at any specific point in time).
2. Debt securities – Which are negotiable financial instruments. Debt securities provide their owners with regular payments of interest and guaranteed repayment of principal.
3. Equity securities - Equity securities are another form of financial instruments and represent the ownership of shares of stock.
4. Derivative instruments – These are instruments which are linked to a specific financial instrument or indicator or commodity, and through which specific financial speculative actions can be traded in financial markets in their own right.
5. Foreign Exchange Instruments - Which are represented on the foreign market and mainly consist of currency agreements and derivatives.
Is cash a financial instrument?
Yes, cash is the most basic form of financial instrument. It is widely accepted and can be used to purchase goods and services as well as other investments. Cash is an essential part of most financial transactions, allowing people to pay for their purchases with ease.
Hedging, or to hedge, in the trading domain is defined as traders reducing their exposure to risk. Hedging is done by taking an offsetting position in an asset or investment that reduces the price risk of an existing position.
Why is it called hedging?
"Hedge your bets" is a term which originated in the 1600s and means to decrease or limit one's risk. The origin of the phrase is thought to be derived from the action of literally fencing off an area with hedges
How does hedging work?
Hedging involves taking offsetting positions in different markets, such as futures contracts or derivatives to diversify risk if one instrument falls.
Financial Markets define any place (physical or virtual) or system which provides buyers and sellers with the means to trade financial instruments of any kind.
What are the types of financial markets?
Types of financial markets include stock markets, bond markets, foreign exchange markets, commodity markets, money markets, derivatives markets, and options markets.
What is the main function of financial markets?
The main function of financial markets is to facilitate the interaction between those who need capital with those who have capital to invest. In addition to raising capital, financial markets allow participants to transfer risk (generally through derivatives) and promote commerce. The term "market" can also be used for exchanges, or organizations which enable trade in financial securities.
Within the financial sector, the term "financial markets" is often used to refer just to the markets that are used to raise finances. For long term finance, they are usually called the capital markets; for short term finance, they are usually called money markets. The money market deals in short-term loans, generally for a period of a year or less.
A Guaranteed stop order provides traders with a form of protection for their positions. They can have a guaranteed exit at the exact price they specify. This can be used regardless of market volatility. This is different from “standard” stop-loss orders, which may be filled at worse price levels than were requested due to “slippage”. A guaranteed stop loss order (GSLOs) will incur a fee / premium which will only be charged if it was triggered.
How does guaranteed stop work?
A guaranteed stop loss works in the same way as a standard one does, via instructions provided to the broker to close a position at a specific level, thereby reducing the risk should the market move against the trader.
Should I use guaranteed stop-loss?
Guaranteed stop-loss automatically exits you from the market at a certain predetermined price level in order to limit potential losses if the market goes against you. As such, especially for less experienced traders, it is a recommended strategy to mitigate losses.
NUGT, also known as the Direxion Daily Gold Miners Index Bull 3x Shares, aims to deliver three times the daily return of the NYSE Arca Gold Miners Index. This is a leveraged fund. It is designed for intraday trades and it is not recommended for periods of greater than one day.
The NYSE Arca Gold Miners Index is a market-cap weighted index of public companies with global operations in developed and emerging markets. The companies in the index are primarily involved in gold mining, with some also involved in silver mining. Top holdings include Newmont Mining, Barrick Gold, Franco Nevada and Newcrest Mining. Canadian companies represent 52.14% of the asset.
Index Trading is a type of trading that involves trading a specific financial index such as the S&P 500. It is considered to be a passive investment strategy, where the investor seeks to match their performance with the broader market, instead of attempting to beat it.
What is an index?
An index is a measure of a portion of the stock market that reflects changes in the value of a basket of stocks within it. This can provide an overall snapshot of how a specific market is performing. For example, the US Tech 100 gives a broad overview of the US tech market performance at any given time.
What are indexes used for in finance?
Indexes are used in finance to measure the performance of portfolios and to benchmark the performance of investments against a predetermined set of criteria. They also help investors assess and analyze market trends, risks, and opportunities.
What are different types of index in stock market?
There are different types of indices in the stock market. Some indices used in Index trading are often used as benchmarks to evaluate performance in financial markets. Some of the most important indices in the U.S. markets are the Dow Jones Industrial Average and the S&P 500.
An interest rate is the percentage of a loan or deposit that a lender charges a borrower for the use of their money, or the percentage paid on a deposit account. It is used as a way to compensate the lender for the opportunity cost of not using their money elsewhere. The interest rate can be fixed or variable, and it is typically expressed as an annual percentage. The interest rate is used to calculate the amount of interest due on a loan or deposit over a certain period of time.
What are the 3 types of interest?
The three main types of interest are:
Simple interest: Interest calculated only on the original principal amount of a loan or deposit.
Compound interest: Interest calculated not only on the original principal but also on accumulated interest from previous periods.
Nominal interest: Interest rate stated on a loan or deposit, does not take into account the effect of compounding.
However, there are a few other types of interest as well.
How do I calculate interest rate?
Interest rate is calculated as the cost of debt for the borrower and the rate of return for the lender. This makes the total sum to be repaid to be more than the borrowed amount since lenders require compensation for the loss of use of the money during the loan period. Although many make use of the various online “interest calculators”.
What is a margin in finance?
A margin in finance is the amount of money an investor borrows to purchase or trade securities. It is the difference between the total value of the borrowed funds and the market value of the collateral provided as security for the loan. Margin trading allows investors to buy more securities than they would otherwise be able to purchase with just their own capital.
What is margin vs profit?
Margin and profit are related but different concepts in finance and trading.
Margin refers to the amount of money or collateral that is required to open a leveraged position, such as a margin account, which allows traders to buy securities by borrowing money from a broker. Profit, on the other hand, refers to the amount of money that is gained from a trade or investment, after all costs and expenses have been subtracted. Profit is the result of a successful trade, which is the difference between the buying and selling price.
How do I calculate margin?
There are a few different ways to calculate margin, depending on the context and the type of trade or investment.
One of the most common ways to calculate margin is to use the following formula:
Margin = (Value of Trade / Leverage) x 100%
Margin trading refers to the practice of borrowing money from a broker to purchase securities. It allows traders to buy more securities than they could afford to buy with cash alone, by leveraging the securities they already own as collateral. This increases the potential returns but also increases the potential risks, as the trader is responsible for paying interest on the borrowed money and must also cover any losses. Margin trading is considered to be a high-risk strategy and is only suitable for experienced traders with a good understanding of the risks involved.
How much money do you need for margin?
The amount of money required for margin trading depends on the minimum deposit requirement set by the broker. For markets.com this is 100 of your local currency, with the exception of South Africa where it is 1000 rand.
What level of margin is safe?
The level of margin that is considered safe depends on the trader's risk tolerance and investment goals. A lower margin level is generally considered to be safer, as it reduces the potential for large losses
A margin call is a demand from a broker to a trader that additional funds must be added to the trader’s account in order to maintain their current positions.
What would trigger a margin call?
A margin call occurs when an investor using margin (borrowed money) to trade in securities or other financial instruments, does not have enough money or equity in their account to meet the minimum margin requirement set by their broker. This can happen when the value of the securities in the account falls below a certain level, resulting in a negative balance in the margin account. A margin call can be a warning sign that the investor is taking on too much risk, and it can be a good opportunity to re-evaluate their investment strategy.
What happens if you get a margin call?
When a margin call happens, the broker will contact the investor and ask them to deposit additional funds into their account or sell some of their profiting securities to bring the account equity back above the minimum margin requirement. If the investor is unable to meet the margin call, the broker may take action to liquidate the investor's securities in order to bring the account back to a positive balance.
Do you lose money on a margin call?
A margin call itself does not necessarily mean that you will lose money, but it does indicate that you are at risk of losing money if you do not take action to meet the call. When a margin call occurs, it is a warning that your account balance has dropped below the minimum margin requirement set by your broker, and if you do not take action to bring it back above that level, your broker may take action to liquidate your securities in order to bring the account back to a positive balance.
Maintenance Margin, or “variation margin,” is considered as the minimum amount of equity (i.e., funds) which needs to be maintained in a trader’s margin account before a margin call is issued as due to the account value being below a minimum threshold and not being able to support open margin trade positions. Margin accounts are what leveraged trades use to trade, where they can purchase securities such as stocks, bonds, or options with funds borrowed from the brokerage.
How do you avoid maintenance margin?
To avoid maintenance margin issues, traders should monitor their account closely and adjust their leverage if needed. If your maintenance margin is not maintained it will result in a margin call, which may indicate that the trader should reconsider the risk exposure of their portfolio.
Why are maintenance margins important?
Maintenance margins are important to protect against losses due to fluctuations in the market. They ensure that traders maintain adequate capital reserves and can cover any potential losses.
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.
A market order is a type of stock order that allows an investor to purchase or sell securities at the current market price. It is one of the most common types of orders and it is executed as soon as it is placed, meaning the investor will get whatever price is currently available on the exchange.
Is it good to use market order?
A market order is an order to buy or sell a security at the best available current price. This type of order may provide an advantage over other types of orders by executing quickly, but it could also mean that the trade may not be filled at the desired price.
Why would you use a market order?
A market order is typically used when an investor wants to execute a trade quickly, and is willing to accept the current market price. This type of order is often used when an investor wants to take advantage of a price change or when they want to enter or exit a position quickly.
How long does a market order take?
A Market order is generally the fastest order to execute as it simply takes the current market price. You can expect a market order to be executed usually within seconds or minutes of being placed, as long as there is sufficient liquidity in the market.
Market Makers are financial institutions or investors that provide liquidity to the markets by placing buy and sell orders at specific prices. They are incentivized to do this in order to make profits from the bid-ask spread.
What is the difference between dealer and market maker?
A dealer and a market maker are both intermediaries in the securities market that provide liquidity and help facilitate trades. However, they have some key differences. A dealer is a person or entity that buys and sells securities for their own account and risk. They hold inventory of securities and make a profit by buying at a lower price and selling at a higher price.A market maker is a firm or individual that provides liquidity to the market by continuously buying and selling a security at publicly quoted prices. They are also called liquidity providers, and they make money by charging a bid-ask spread, the difference between the prices they are willing to buy and sell a security. They do not hold inventory of securities like dealers do.
Do market makers manipulate price?
Market makers are allowed to buy and sell securities at their own discretion, and they may adjust the prices they are willing to buy and sell a security in order to make a profit. However, they are also subject to regulatory oversight, and they must act in a fair and transparent manner. They are not allowed to manipulate prices, and any illegal activities such as insider trading, wash trading or any other form of market manipulation are strictly prohibited.
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 Purchasing Managers' Index (PMI) is a leading indicator that measures the health of the manufacturing sector and the broader economy. It is based on a survey of purchasing managers, who are asked to rate the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventories.
How is PMI related to inflation?
PMI can be related to inflation because it is an indicator of economic activity and growth. When purchasing managers report increased activity, it can indicate an increase in demand for goods and services, which can lead to higher prices (inflation). On the other hand, when purchasing managers report a decrease in activity, it can indicate a decrease in demand, which can lead to lower prices (deflation). A high PMI reading can indicate that the manufacturing sector is expanding, which can lead to higher prices and inflation, while a low PMI reading can indicate that the manufacturing sector is contracting, which can lead to lower prices and deflation. Additionally, when prices of raw materials and other inputs rise, the PMI will decrease as the purchasing managers will be paying more for the raw materials used in production, and this can lead to inflation as well.
Is PMI a good indicator?
PMI is considered a good indicator of economic activity and growth, particularly in the manufacturing sector. It is widely used by economists and financial analysts to predict future trends and is considered a leading indicator of economic activity. The survey data used to calculate PMI is based on input from purchasing managers, who are typically considered to be well-informed about the state of the economy. Additionally, the PMI is released on a monthly basis, providing a timely view of the manufacturing sector and the broader economy. However, it is important to note that PMI is not perfect and should be used in conjunction with other economic indicators to get a comprehensive understanding of the economy.
An Order in trading is a request sent by a trader to a broker or trading platform to make a trade on a financial instrument such as shares, Crypto, CFDs, currency pairs and assets. This can be done on a trading venue such as a stock market, bond market, commodity market, financial derivative market, or cryptocurrency exchange
What are the most common types of orders?
Common types of orders are:
• Market Orders. A market order is given by traders and investors as an order to immediately buy or sell an asset, security, or share. Such an order guarantees that the order will be executed, yet the actual execution price is not guaranteed.
• Limit Orders. A limit order is an order to buy or sell an asset such as a security at a specific price or better than that price. Traders wishing to define a maximum price for either buying or selling an asset can use limit orders.
• Stop Orders. Stop orders instruct brokers to execute a trade when the asset’s price reaches a certain level.
Moving Average Convergence/Divergence, also known as MACD , is an analytical trading indicator. Its function is to show changes in the strength, direction, momentum, and duration of a trend in a share’s price. The MACD indicator is comprised of three time series charts based on historical price data. For example, closing price.
How can you tell if MACD is bullish?
If the MACD line (the blue line) is above the signal line (the red line), it is considered to be bullish and suggests that the security's price is likely to rise. This is because the MACD line is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA, and when the 12-day EMA is above the 26-day EMA, it indicates that short-term momentum is bullish and the stock is likely to rise.
Is MACD a good indicator?
MACD is a widely used technical indicator that can be a useful tool for identifying trends and potential buy or sell signals in the market. However, like any indicator, it has its limitations and should be used in conjunction with other technical analysis tools and fundamental analysis to make informed trading decisions.
Which is better MACD or RSI?
Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) are popular technical indicators used in trading. They are both useful tools for identifying trends and potential buy or sell signals, but they are based on different calculations and are used for different purposes.
The MACD is a momentum indicator that is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. It is used to identify bullish or bearish trends and potential changes in momentum.
The RSI, on the other hand, is a momentum oscillator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset.
Both indicators can be useful, but they can also give different signals, so once again, it's important to use them in conjunction with other indicators and analysis techniques to make informed trading decisions.
Trading alerts are notifications or signals that are sent to traders to inform them of potential trading opportunities or market conditions that may affect their trades. These alerts can be generated by software programs, financial analysts, or other sources, and can be delivered via email, text message, or other forms of communication. They are typically used by traders to help them make more informed trading decisions and stay up-to-date on market conditions.
How do I set up trade alerts?
To set up trade alerts, you will need to use a trading platform or software that offers the alert feature. You can set up trading alerts easily on markets.com.
Can I set an alert for a stock price?
A stock price alert is just one of the types of trade alerts you can set up through markets.com.
Trading charts are used to display historical price data for a security or financial instrument. They typically include a time frame on the x-axis, and the price of the security or instrument on the y-axis. Candlestick charts, bar charts and line charts are the most common types of charts used in trading. Candlestick charts are the most popular and provide a visual representation of the opening price, closing price, highest and lowest price of the security in a given period of time. It also shows the direction of the price movement, whether it went up or down. Traders use different technical analysis tools like trendlines, moving averages, and indicators to interpret the charts and make trading decisions. There is a great deal of nuance in reading charts and doing it correctly will require experience and an understanding of how your chart of choice is presenting information to you.
How do you predict if a stock will go up or down?
Traders use different technical analysis tools and techniques to predict if a stock will go up or down using trading charts. These include:
Trendlines: By connecting price highs or lows over a period of time, traders can identify the direction of the trend and predict future price movements.
Moving averages: By plotting the average price over a period of time, traders can identify trends and potential buying or selling opportunities.
Indicators: Technical indicators, such as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD), are mathematical calculations that are plotted on charts to help traders identify trends, momentum and potential buy or sell signals.
Chart patterns: Traders also use chart patterns such as head and shoulders, double bottoms, and triangles to identify potential reversal points in the market and make predictions about future price movements.
It's important to note that technical analysis is not an exact science and it's not a guarantee of future results. Traders should always use technical analysis in conjunction with fundamental analysis, which looks at a company's financial and economic conditions, to make informed trading decisions.
How do you know if a chart is bullish?
A chart is considered bullish if it is showing an upward trend or pattern, indicating that the price of a security or financial instrument is likely to rise. Bullish chart patterns include upward trending lines, ascending triangles, and bullish candlestick patterns such as the hammer or the bullish engulfing pattern. Traders often consider a stock to be bullish when it's trading above the moving average, especially when the moving average is trending upward.
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.
The IBEX 35, or Spain 35, is the benchmark index for the Spanish stock market and tracks the performance of the top 35 most-traded and most-liquid companies on the Bolsa de Madrid (Madrid Stock Exchange).
The index is market capitalisation-weighted and free float-adjusted. It was launched on 14th January 1992 but has a base date of 30th December 2010 and a base level of 1,000. Selection is based upon liquidity, but there is a maximum weighting limit of 40%.
Financial & Real Estate Services is the most-represented sector in the index, accounting for around 34% of the weighting. The next-largest sector is Oil & Energy, with just over 20%, followed by Technology & Telecommunications with just over 15%. Consumer Goods, Basic Materials, Industry & Construction, and Consumer Services complete the list of sectors covered in descending order of weighting.
Spain 35 futures allow you to speculate on, or hedge against, changes in the price of major stocks on the Bolsa de Madrid. Contracts rollover on the second Friday of every month.
Risk management in trading is a strategy for mitigating losses. It involves understanding and analyzing risks, taking preventive steps to protect against potential losses, and having plans in place to address unanticipated situations. Good risk management practices help traders limit their downside and stay ahead of market volatility.
How do you manage risk in trading?
Traders can practise risk management in lots of different ways. It can be done by using strategies like position sizing, stop-loss orders, diversifying investments, and hedging. Through careful planning, you can set limits on your potential losses, identify potential opportunities and adjust your strategy accordingly. With disciplined risk management, you can protect your capital while you trade.
Stock trading is the practice of buying and selling stocks, or shares of ownership in a publicly-traded company, with the goal of making a profit through price appreciation or by receiving income in the form of dividends. Stock traders buy and sell shares in the stock market using a brokerage account, and they use a variety of strategies and techniques to determine when to enter and exit trades. Stock trading is a popular form of investment, but it also comes with risks and profits are in no way guaranteed. You should acquire a good understanding of the market and individual stocks before making trading decisions.
How are Stocks Different from Other Securities?
Stocks, also known as equities, represent ownership in a corporation, while other securities represent claims on an underlying asset. Other types of securities include bonds (debt securities), options, and derivatives.
How Do I Start Trading Stocks?
You can trade stocks using a stock exchange. Platforms like markets.com offer CFDs on stocks and other securities so you can start assembling and get trading outcomes of your own!
Trailing Stop Orders are a type of stock order that lets investors adjust the stop price as a security rises or falls. This order works by continuously monitoring the price of a security and dynamically adjusts the stop price with every tick. The advantage of this type of order is that it allows investors to limit their losses, while locking in profits, without having to manually modify the stop-loss point.
Are Trailing Stop Orders good?
Trailing Stop Orders can be a good way to protect profits in your trading. They allow you to set an automated stop-loss that trails the price of a stock, adjusting up as it rises, while allowing you to lock in some gains if the stock begins to fall. This is especially useful when dealing with volatile stocks, giving you more control over your position.
What is a disadvantage of a trailing stop loss?
Trailing stop losses can help minimize risk when trading, however they also limit potential gains. The stop price adjusts based on market conditions, so as the price increases, the stop loss will move up. If the stock drops significantly and your trailing stop loss is too close, it may be triggered before you have a chance to react.
Which is better stop limit or trailing stop?
It depends entirely on the trader. A stop limit will sell at the specified price, while a trailing stop will track price changes and sell when the specified amount is exceeded. Different traders may have different needs and objectives, so which type of order is best will vary. Consider your goals before deciding which option is right for you.
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.
In trading, rollover refers to the process of extending the settlement date of a trade by rolling it forward to the next available delivery date. This is typically done for futures contracts and currency trades. Rollover allows traders to maintain an open position beyond the initial settlement date without having to close and re-open the trade.
What are rollover and swap?
When rolling over a trade, a trader may also be required to pay or receive the difference in the interest rate between the two currencies involved in the trade. This is known as "swap" or "overnight financing". Rollover is typically done when traders expect market conditions to remain favorable for their position, allowing them to capture more potential profit.
Trading trends refer to the overall direction of a security or market, often revealed through chart patterns or indicators. Traders use these trends to identify potential entry and exit points, as well as possible trading opportunities. Analyzing the financial markets in order to identify trends is an essential skill for successful traders. With knowledge of historical trends, investors can spot emerging ones and plan accordingly.
How do you identify a trend in trading?
Analyzing past market movements, changes in asset prices and economic data can be used to identify short-term and long-term trends. Using technical indicators such as moving averages, MACD, and stochastics can also help you spot potential trading opportunities and take advantage of prevailing market trends.
What are the 3 types of trends?
When analyzing the stock market, there are three primary trends that can be observed: short-term, intermediate-term, and long-term. Short-term trends generally last within one to three weeks, intermediate-term trends can range from one to four months, and long-term trends last more than a year. Being able to identify these different trend patterns will help investors maximize their potential returns.
In trading, resistance level is a price point at which the price of a security or financial instrument tends to encounter selling pressure, making it difficult for the price to rise above that level. The resistance level is seen as a ceiling, as the price has a hard time going above it. Traders use resistance levels to identify areas where they expect the price to stall or reverse direction. This can be determined by observing the historical price movement of a security or financial instrument, looking for areas where the price has consistently failed to break above. Resistance levels are also used in combination with support levels to identify potential price ranges and trade entry or exit points.
What happens when a stock hits resistance?
If a stock hits a resistance level it can cause the stock to stall, move sideways, or even reverse direction. At resistance level traders that have taken a long position might decide to take profits, while traders that have not yet taken a position might decide to wait for a break above the resistance before buying.
When a stock hits resistance, traders will typically observe the stock's behavior at that level to determine if the resistance level is likely to hold or if the stock is likely to break through it. If the stock breaks through resistance, it can be considered a bullish sign, indicating that the stock is likely to continue to rise. On the other hand, if the stock fails to break through resistance, it can be considered a bearish sign, indicating that the stock is likely to stall or reverse direction.
The WisdomTree Emerging Markets High Dividend ETF (DEM) tracks the WisdomTree Emerging Markets Dividend Index. The index is a fundamentally weighted index that is comprised of the highest dividend-yielding common stocks selected from the WisdomTree Emerging Markets Dividend Index. This provides it with some downside protection from market volatility.
DEM is an equity fund, and has a mix of market sectors. It includes stocks from key emerging markets such as Russia and China, with assets including China Contruction Bank, China Mobile and Norilsk Nickel.
Working orders, also known as pending orders, include Stop orders and Limit orders. Essentially, they’re instructions for a broker to perform a trade when an asset hits a certain price. These orders inform brokers that traders wish to make that trade only if something happens to the asset price.
What is the best order type when buying stock?
The best order type depends on the individual's specific needs and market conditions. It's important to understand the trade-off between speed and price certainty when choosing an order type. Market orders provide immediate execution but at the current market price, while limit orders offer price certainty but may not be executed if the desired price is not reached.
What is an open work order?
An open work order in trading is an outstanding order to buy or sell a security that has not yet been executed. It remains open until it is either filled or cancelled by the trader.
Yearn.finance (YFI) is another Ethereum-led yield aggregator using the YFI token. Cryptos deposited on Yearn are leant out at the highest lending rate possible across a number of other platforms. Holders of YFI can participate in the protocol's governance and earn a percentage of the fees generated on the various Yearn Finance products through staking. Yearn is available on our platform via the YFI/USD symbol and is priced in USD.
West Texas Intermediate or WTI is a benchmark type of oil that is central to commodities trading. These benchmarks indicate quality and also the source of the oil. The three dominant benchmarks for oil are WTI, Brent Crude and Dubai/Oman. These are similar indicators as Scottish and Norwegian might be for smoked salmon, for example.
What is the difference between West Texas Intermediate and Brent crude?
The different benchmarks for oil come from different regions and have different chemical compositions. They have what are called 'quality spreads' and 'location spreads' which affect price differences.
What is West Texas Intermediate Used For?
West Texas Intermediate is a high-quality oil that is easily refined. The price of WTI is often reported on in news reports on the oil industry and oil commodities, together with Brent Crude Oil which originates from the North Sea. Oil futures contracts on the New York Mercantile Exchange (NYMEX) use West Texas Intermediate as an underlying commodity.
In trading, “Volume of Trade” (Volume) refers to the total quantity of shares or contracts traded for a specific security, share or even to the market as a whole. Volume of trade can be measured through any type of asset traded during a specific duration, usually a trading day.
How is trade volume calculated?
Trade volume is calculated by adding together the number of shares or contracts traded during a specified time period.
What is a good volume to trade?
A good trade volume for a security varies and can depend on factors such as the type of security, market conditions, and overall liquidity. Generally, higher trade volume indicates greater liquidity, which can make it easier to buy and sell the security.
What does it mean when trade volume is high?
High trade volume means there is a high number of shares or contracts being bought and sold in a security or market, indicating high levels of interest and liquidity.
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