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.
Spread Betting is a type of financial speculation which allows you to take a position on the future direction of the price of a security, such as stocks, commodities or currencies. You can choose to speculate whether an asset will go up or down in value, without having to buy or sell it. Spread Betting enables you to take a view on the markets and gain access to the financial markets with limited capital outlay.
How does a spread bet work?
A spread bet is placed by betting on whether the asset's price will rise or fall. The investor can set their own stake size, which means they can take more or less risk according to their preferences. Spread bets are flexible and convenient, allowing you to benefit from even the slightest market movements.
What does a negative spread mean?
A negative spread in trading refers to a situation where the ask price for a security is lower than the bid price. This means that a trader could potentially sell a security for a higher price than they would have to pay to buy it. This is an unusual situation that can occur due to a temporary market anomaly or a technical error. Negative spreads are rare and they tend to be corrected quickly, as they represent an opportunity for arbitrage. Traders should be cautious when dealing with negative spreads and should consult with their broker or trading platform to understand the cause of the negative spread and its potential impact on their trade.
The term Spreads in trading is defined as the gap between the highest price to be paid for any given asset, to the lowest price the current asset holder is willing to sell at. Different markets and assets generate different spreads. For example, the Forex market, where both buyers and sellers are very active with this “gap” or spread will be small.
In trading, a spread is one of the key costs of online trading. Generally, the tighter the spread, the better value traders get from their trades. Also, spreads are implied costs, where it is presented to traders in subsequent trades, as the assets traders buy on leverage must increase above the level of the Spread, rather than the above the initial price, for traders to make profit.
What is the importance of a Spread?
The Spread is important, even a crucial piece of information to be aware of when analysing trading costs. An instrument’s spread is a variable number that directly affects the value of the trade. Several factors influence the spread in trading:
• Liquidity. How easily an asset can be bought or sold.
• Volume. Quantity of any given asset that is traded daily.
• Volatility. How much the market price changes in a given period.
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.
Short selling is a trading strategy where an investor borrows shares of a stock or security they believe will decrease in value, and then sells it on the market. If the price of the stock or security falls as expected, the investor can then buy the shares back at the lower price, return the borrowed shares, and keep the difference as profit. Short selling is considered a high-risk strategy because theoretically there is no limit to how high the price of a stock can go, so the potential loss is theoretically infinite.
What is the benefit of short selling?
The benefit of short selling is that it allows investors to benefit from a decline in the value of a security. While traditional investors can only benefit when the prices of the assets they hold increase, short sellers can do well when the prices decrease as well. This allows investors to potentially profit in both rising and falling markets. Additionally, short selling can also be used as a hedging tool, to offset the risk of long positions in a portfolio.
Is Short Selling a good idea?
Short selling can be a good idea for some investors, but it is considered a high-risk strategy and is not suitable for all investors. It requires a great deal of knowledge and experience to correctly identify the securities that are likely to decrease in value and to correctly time the trade. Additionally,because the potential losses from short selling can be theoretically infinite as explained above it is important for investors to fully understand the risks and potential rewards associated with short selling before engaging in this strategy.
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.
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.
Delisting is the removal of a security from a stock exchange. This can happen voluntarily by the company, or involuntarily by the exchange if the security no longer meets certain listing criteria. When a security is delisted, it cannot be traded on the exchange, although investors may still hold it as an unlisted investment.
What happens when stock is delisted?
A company can undergo voluntary or compulsory delisting.
• In voluntary delisting, a company removes its own securities / shares from a stock exchange.
• In compulsory (or involuntary) delisting, the securities of a company are removed by regulatory functions, usually for not complying with Listing Agreement.
Can I sell delisted shares?
Delisted stocks often continue to trade over-the-counter. Shareholders can still trade the stock, though it is likely that the market will be less liquid.
Will I get my money back if a stock is delisted?
It depends on the type of delisting. Generally, investors receive their initial investment if a stock is voluntarily delisted. However, in cases of involuntary delisting, investors may not be entitled to any reimbursement.
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.
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 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.
Delisting is the removal of a security from a stock exchange. This can happen voluntarily by the company, or involuntarily by the exchange if the security no longer meets certain listing criteria. When a security is delisted, it cannot be traded on the exchange, although investors may still hold it as an unlisted investment.
What happens when stock is delisted?
A company can undergo voluntary or compulsory delisting.
• In voluntary delisting, a company removes its own securities / shares from a stock exchange.
• In compulsory (or involuntary) delisting, the securities of a company are removed by regulatory functions, usually for not complying with Listing Agreement.
Can I sell delisted shares?
Delisted stocks often continue to trade over-the-counter. Shareholders can still trade the stock, though it is likely that the market will be less liquid.
Will I get my money back if a stock is delisted?
It depends on the type of delisting. Generally, investors receive their initial investment if a stock is voluntarily delisted. However, in cases of involuntary delisting, investors may not be entitled to any reimbursement.
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 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.
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.
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.
Spread Betting is a type of financial speculation which allows you to take a position on the future direction of the price of a security, such as stocks, commodities or currencies. You can choose to speculate whether an asset will go up or down in value, without having to buy or sell it. Spread Betting enables you to take a view on the markets and gain access to the financial markets with limited capital outlay.
How does a spread bet work?
A spread bet is placed by betting on whether the asset's price will rise or fall. The investor can set their own stake size, which means they can take more or less risk according to their preferences. Spread bets are flexible and convenient, allowing you to benefit from even the slightest market movements.
What does a negative spread mean?
A negative spread in trading refers to a situation where the ask price for a security is lower than the bid price. This means that a trader could potentially sell a security for a higher price than they would have to pay to buy it. This is an unusual situation that can occur due to a temporary market anomaly or a technical error. Negative spreads are rare and they tend to be corrected quickly, as they represent an opportunity for arbitrage. Traders should be cautious when dealing with negative spreads and should consult with their broker or trading platform to understand the cause of the negative spread and its potential impact on their trade.
The term Spreads in trading is defined as the gap between the highest price to be paid for any given asset, to the lowest price the current asset holder is willing to sell at. Different markets and assets generate different spreads. For example, the Forex market, where both buyers and sellers are very active with this “gap” or spread will be small.
In trading, a spread is one of the key costs of online trading. Generally, the tighter the spread, the better value traders get from their trades. Also, spreads are implied costs, where it is presented to traders in subsequent trades, as the assets traders buy on leverage must increase above the level of the Spread, rather than the above the initial price, for traders to make profit.
What is the importance of a Spread?
The Spread is important, even a crucial piece of information to be aware of when analysing trading costs. An instrument’s spread is a variable number that directly affects the value of the trade. Several factors influence the spread in trading:
• Liquidity. How easily an asset can be bought or sold.
• Volume. Quantity of any given asset that is traded daily.
• Volatility. How much the market price changes in a given period.
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.
Short selling is a trading strategy where an investor borrows shares of a stock or security they believe will decrease in value, and then sells it on the market. If the price of the stock or security falls as expected, the investor can then buy the shares back at the lower price, return the borrowed shares, and keep the difference as profit. Short selling is considered a high-risk strategy because theoretically there is no limit to how high the price of a stock can go, so the potential loss is theoretically infinite.
What is the benefit of short selling?
The benefit of short selling is that it allows investors to benefit from a decline in the value of a security. While traditional investors can only benefit when the prices of the assets they hold increase, short sellers can do well when the prices decrease as well. This allows investors to potentially profit in both rising and falling markets. Additionally, short selling can also be used as a hedging tool, to offset the risk of long positions in a portfolio.
Is Short Selling a good idea?
Short selling can be a good idea for some investors, but it is considered a high-risk strategy and is not suitable for all investors. It requires a great deal of knowledge and experience to correctly identify the securities that are likely to decrease in value and to correctly time the trade. Additionally,because the potential losses from short selling can be theoretically infinite as explained above it is important for investors to fully understand the risks and potential rewards associated with short selling before engaging in this strategy.
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.
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