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.
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.
The commission is the charge levied by an investment broker for making trades on a trader’s behalf.
An asset’s closing price is the last level at which it was traded on any given day. This price is often determined by an auction.
A chartist is a trader who relies predominantly on charts to help them understand a financial instrument’s historical price movements, in order to better predict and to speculate on its future performance. They are also commonly known as technical analysts or technical traders.
Cash flow is the amount of money coming into and going out of a company’s accounts, as reported in earnings announcements. It can refer to a single project or the entire business.
Bond trading is one way of making a profit from fluctuations in the value of corporate or government bonds. Many view it as an essential part of a diversified trading portfolio, alongside stocks and cash.
When the market is on a sustained downward trajectory, with little optimism from traders to bring about a rally, it is referred to as a bear market.
A base rate is the interest rate that a central bank – such as the Bank of England or Federal Reserve – will charge commercial banks for loans. The base rate is also known as the bank rate or the base interest rate.
At the money (ATM) is a term used to describe an options contract with a strike price that is identical to the underlying market price. At the money, options see a lot of trading activity, because they are so close to becoming profitable.
An asset is an economic resource that can be owned or controlled to return a profit or a future benefit. In financial trading, the term asset relates to what is being exchanged on markets, such as stocks, bonds, currencies or commodities.
An asset class is a category of financial instruments - these can be physical assets or financial assets. The instruments are grouped into asset classes based on whether they show similar characteristics, behave in the same way on the market, or are governed by the same laws and regulations.
The ask refers to the price at which you can buy an asset or security from a seller. It can be variously referred to as ask, the ask, or asking price.
