A dividend is the portion of the profit that a company chooses to return to its shareholders, usually expressed as a percentage.
Depreciation is the term given to the decline in an asset’s value, either due to market conditions or other factors like wear and tear. It is the opposite of appreciation.
A derivative’s delta is defined as its price movement in relation to the change in the price of its underlying asset. It can also sometimes be referred to as a hedge ratio and is most often used when dealing with options.
The debt ratio is an indication of how much debt a company is holding when compared to the value of its assets. It can also be applied to individuals: in which case it is the cost accrued by their debt compared to total income each year.
Day trading is a strategy of short-term investment that involves closing out all trades before the market closes.
21.04 - Oil: Crude oil prices tumbled
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Custodian has a particular significance in relation to IG's platform. Here, we define custodian in general investing and explain what it means to you when trading with IG.
A currency peg is a governmental policy of fixing the exchange rate of its currency to that of another currency, or occasionally to the gold price. It can sometimes also be referred to as a fixed exchange rate or pegging.
A currency future is a contract that details the price at which currency could be bought or sold and sets a specific date for the exchange.
Currency depreciation is the decline of a currency’s value relative to another currency. It specifically refers to currencies in a floating exchange rate – a system in which a currency’s value is set by the forex market, based on supply and demand.
Currency appreciation is when one currency in a forex pair increases in value relative to the other currency in the pair. Forex traders often talk about one currency ‘strengthening’ in relation to another, meaning that it would cost more to buy, or that it can buy more of another currency when sold.
Crystallization is the term used when a trader or business closes a position and then reopens an identical position immediately.
CPI stands for the consumer price index, an average of several consumer goods and services that are used to give an indication of inflation.
A covered call is when a trader sells (or writes) call options in an asset that they currently have a long position on. They are also known as buy-writes.
The cost of maintaining an investment position is often referred to as the cost of carry or carrying charge. It can come in many forms, including interest on margins or the loans used to make the trade, or the cost of storage and insurance associated with holding a commodity.
Bond convexity is a measure of the relationship between a bond’s price and interest rates. It is used to assess the impact that a rise or fall in interest rates can have on a bond’s price – which highlights a bond holder’s exposure to risk.
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Contracts for difference (CFDs) are a type of financial derivative used in CFD trading, which works as an agreement to exchange the difference in the price of an asset from when the position is opened to when it is closed. CFDs can be used to speculate on the future price of a variety of markets, including shares, forex, commodities, indices, bonds, and others.
An industry’s concentration ratio is the size of a certain number of firms in an industry compared to its total size. It is used to calculate one or more firms’ dominance of their sector.
A commodity is a basic physical asset, often used as a raw material in the production of goods or services.