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what is the capital gains tax cgt ? | capital gains tax or cgt is the tax levied by the government on the profits made from financial asset sales cgt regulations and levels vary from country to country | |
what is the cash drag ? | cash drag is a term associated with exchange trade funds etfs referring to the delay between when an etf receives a dividend and when it uses the proceeds | |
what is the cash flow ? | 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 | |
what is the chargeable gain ? | chargeable gain refers to a profitable change in the price of an asset measured between the time when the assets were purchased and the time when they are sold when applied to the financial markets most profits whether they are a result of going long or going short are subject to capital gains tax cgt | |
what is the chartist ? | 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 | |
what is the closing price ? | a closing price is the last level at which an asset was traded before the market closed on any given day closing prices are often used as a marker when looking at movements over a longer term they can be compared to previous closing prices or the opening price to measure an asset s movement over a single day | |
what is the commission ? | commission is the charge levied by an investment broker for making trades on a trader s behalf | |
what is the commodity ? | a commodity is a basic physical asset often used as a raw material in the production of goods or services | |
what is the compound interest ? | compound interest is a means of calculating the potential return from an investment that takes the cumulative effect of interest into account | |
what is the contango and backwardation ? | contango and backwardation are two terms used to describe different conditions in the futures commodity market they refer to whether the price of a commodity futures contract known as the futures price is trading above or below the price quoted for the physical commodity known as the spot price | |
what is the contracts for difference ? | contracts for difference or cfds are a type of financial derivative used in cfd trading they can be used to trade a variety of financial markets like shares forex commodities indices or bonds | |
what is the bond convexity ? | 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 | |
what is the cost of carry ? | cost of carry is the amount of additional money you might have to spend in order to maintain a position this can come in the form of overnight funding charges interest payments on margin accounts and forex transactions or the costs of storing any commodities on the delivery of a futures contract | |
what is the covered call ? | a covered call is a call option trading strategy it involves holding an existing long position on a tradeable asset and writing selling a call option against the same asset with the aim of increasing the overall profit that a trader will receive | |
what is the cpi ? | cpi stands for consumer price index an average of several consumer goods and services that are used to give an indication of inflation | |
what is the credit default swap cds ? | a credit default swap cds is a financial agreement that enables a lender to swap their exposure to risk to another party for a premium the cds seller takes on the credit risk of the lender and they will compensate the lender if a borrower defaults on their loan | |
what is the credit rating ? | a credit rating estimates the ability of a borrower to meet their financial commitments based on previous performance | |
what is the crest ? | crest certificates registry for electronic share transfer is the electronic system for holding financial securities they settle transactions in the uk and also handle irish stocks crest allows share and bondholders to store assets in electronic form instead of holding paper certificates and it also offers same day clearing for securities transactions | |
what is the crest depository interest cdi ? | a crest depository interest cdi is a uk financial security that represents a stock traded on a stock exchange outside the uk cdis are issued by crest and one cdi is the equivalent of one share of an eligible foreign stock | |
what is the crystallisation ? | crystallisation means selling an asset in order to realise capital gains or losses when an investor buys an asset any increase or decrease in the market price will not automatically translate to profit or loss this is only realised after the position has been closed | |
what is the currency appreciation ? | 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 | |
what is the currency depreciation ? | 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 | |
what is the currency future ? | a currency future is a contract that details the price at which a currency could be bought or sold and sets a specific date for the exchange | |
what is the currency option ? | a currency option is a type of options contract that gives the holder the right but not the obligation to buy or sell a currency pair at a given price before a set time of expiry to get this right the holder of the option pays a premium to the seller known as the option s writer | |
what is the current ratio ? | the current ratio is a measure used to establish a company s ability to sell its tangible assets to pay off its short term debt companies normally have a limited time to settle short term debt so the current ratio is useful in establishing the liquidity position of a business | |
what is the day order ? | a day order is a type of order or instruction from a trader to their broker to buy or sell a certain asset | |
what is the day trading ? | day trading is a strategy of short term investment that involves closing out all trades before the market closes | |
what is the debenture ? | in the uk a debenture is an instrument used by a lender such as a bank when providing capital to companies and individuals it enables the lender to secure loan repayments against the borrower s assets even if they default on the payment | |
what is the delta ? | delta is a measure used in options trading to assess how the price of an options contract changes as the price of the underlying asset moves it can also sometimes be referred to as a hedge ratio | |
what is the delta one ? | a delta one product is a derivative which has or is close to having a one to one relationship with an underlying asset in terms of price movements in other words when there s a change in the underlying product s value you would expect to see the derivative price move in the same direction and with a similar magnitude | |
what is the derivative ? | derivatives are financial products that derive their value from the price of an underlying asset derivatives are often used by traders as a device to speculate on the future price movements of an asset whether that be up or down without having to buy the asset itself | |
what is the designated investment exchange ? | a designated investment exchange is nominated by the issuer of a security as the exchange on which their security will be traded they operate outside the uk but work similarly to uk exchanges | |
what is the developed ? | a developed or an advanced market in investing terms is a country that is most developed in terms of its economy and financial markets | |
what is the dfb ? | dfb is the abbreviation of daily funded bet a term used in spread betting to describe a position that remains open until you decide to close it for each day that your bet remains open an interest adjustment is made to your account to reflect the cost of funding your position hence the term daily funded bet | |
what is the digital option ? | a digital option also known as a digital 100 enables a trader to make a prediction about whether a statement about a given market is true or false if a trader is correct in their prediction they will make a profit if they are wrong they will incur a loss | |
what is the dividend ? | a dividend is the portion of profit that a company chooses to return to its shareholders usually expressed as a percentage | |
what is the dividend reinvestment ? | dividend reinvestment means reinvesting dividend payments from stocks you hold back into your stock or investment portfolio rather than spending them this may involve taking the dividend paid by each individual stock and using it to buy more shares of the same stock or may involve buying other stocks or assets as part of a portfolio to help spread the risk by reinvesting dividends an investor could benefit from increased value growth from his or her increased stock holdings as well as increased dividend income from subsequent dividend payments | |
what is the dividend withholding ? | dividend withholding tax is the tax a company must take off a dividend before the payment is made to the shareholder this is then passed onto the government in which the share is domiciled | |
what is the drawdown ? | a drawdown can be one of two things it can either be the decline in an asset price or a portfolio value over a specific period from peak to trough or high to low or the proportion of a pension that a retiree withdraws each year | |
what is the earnings per share eps ? | earnings per share eps is an important metric in a company s earnings figures it is calculated by dividing the total amount of profit generated in a period by the number of shares that the company has listed on the stock market | |
what is the ebitda ? | ebitda is a way of evaluating a company s performance without factoring in financial decisions or the tax environment the literal meaning of ebitda is earnings before interest taxes depreciation and amortisation | |
what is the ebitdar ? | ebitdar is the abbreviation of earnings before interest taxes depreciation amortisation and restructuring or rent costs it is used to analyse a company s financial performance and profit potential where the company is undergoing a restructure or if its rent expenses are higher than average | |
what is the ecb ? | ecb stands for the european central bank which is the organisation responsible for the monetary policy in the eurozone | |
what is the emerging ? | emerging markets are economies that show some of the traits of developed economies but aren t quite at the same level yet | |
what is the equity ? | in trading equity can mean several different things however it usually comes down to the ownership of an asset without any debt involved | |
what is the equity options ? | equity options are a form of derivative used exclusively to trade shares as the underlying asset | |
what is the etc ? | etc stands for exchange traded commodity it is a type of exchange traded product etp like exchange traded funds etfs or exchange traded notes etns | |
what is the etp ? | exchange traded products or etps are a variety of financial instruments that are traded throughout the day on national exchanges | |
what is the euro short term rate estr ? | the euro short term rate estr is an interest rate benchmark that reflects the overnight borrowing costs of banks within the eurozone the rate is calculated and published by the european central bank ecb | |
what is the euroclear ? | euroclear is a major clearing house handling post trade processing for equity bond etf and mutual fund transactions | |
what is the companies ? | companies particularly those listed on stock markets will often pay dividends to their shareholders it s a reward to the shareholders for lending the company money by buying its shares and the fact the company can afford to pay some of its profits to its shareholders is a sign that it s in good financial health and confident about its own future the steady income provided by dividends can persuade an investor to buy a stock | |
what is the exchange ? | an exchange is an open organised marketplace for commodities stocks securities derivatives and other financial instruments the terms exchange and market are often used interchangeably as they both describe an environment in which listed products can be traded | |
what is the ex dividend ? | companies particularly those listed on stock markets will often pay dividends to their shareholders it s a reward to the shareholders for lending the company money by buying its shares and the fact the company can afford to pay some of its profits to its shareholders is a sign that it s in good financial health and confident about its own future the steady income provided by dividends can persuade an investor to buy a stock | |
what is the edsp ? | edsp stands for exchange delivery settlement price and refers to the price at which exchange traded derivative contracts are settled stock exchanges use edsp to calculate the amount that each party to an options or futures contract owes at the time of that contract s expiry | |
what is the execution ? | in trading execution is the completion of a buy or sell order from a trader it is carried out by a broker | |
what is the execution only ? | execution only is a level of service offered by a broker that does not involve any personal investment advice and gives you complete control over how you trade the markets it can provide a cheaper way for investors to trade on financial markets than advisory services | |
what is the expiry date ? | the point when a trading position automatically closes is known as the expiry date or expiration date | |
what is the exposure ? | in trading exposure is a general term that can mean three things the total market value of your trades at open the total amount of possible risk at any given point or the portion of a fund invested in a particular market or asset | |
what is the fair value ? | fair value has two meanings to investors generally it is used to mean the value attributed to a stock by an individual investor or broker but in futures trading it can refer to the predicted price of a market which is reflected in the cost to open a position | |
what is the fca ? | the financial conduct authority fca is the organisation responsible for the regulation and oversight of the financial markets and financial service firms in the uk | |
what is the federal reserve ? | the federal reserve bank or the fed for short is the central bank in charge of monetary and financial stability in the united states it is part of a wider system known as the federal reserve system with 12 regional central banks located in major cities across the us | |
what is the fiat currency ? | a fiat currency is a national currency that is not pegged to the price of a commodity such as gold or silver the value of fiat money is largely based on the public s faith in the currency s issuer which is normally that country s government or central bank | |
what is the fibonacci retracement ? | a fibonacci retracement is a key technical analysis tool that uses percentages and horizontal lines drawn onto price charts to identify possible areas of support and resistance identifying these areas is useful to traders since it can help them decide when to open and close a position or when to apply stops and limits to their trades | |
what is the fill ? | fill is the term used to refer to the satisfying of an order to trade a financial asset it is the basic act of any market transaction when an order has been completed it is often referred to as filled or as the order having been executed however it is worth noting that there is no guarantee that every trade will become filled | |
what is the financial instrument ? | a financial instrument is a monetary contract between two parties which can be traded and settled the contract represents an asset to one party the buyer and a financial liability to the other party the seller | |
what is the market ? | market can have several meanings within investments generally it is defined as a medium through which assets are traded with their value determined by supply and demand | |
what is the fixed cost ? | a fixed cost is a business expense which does not vary with production volumes fixed costs often include rent contractual agreements or licences that are needed for the business to operate which do not change in price if production increases or decreases instead they are bound for the length of the contract or payment schedule | |
what is the flexible isa ? | flexible individual savings accounts isas allow holders to withdraw money and then replace it within the same tax year without it counting towards that year s isa allowance | |
what is the floating exchange ? | a floating exchange rate refers to a currency where the price is determined by supply and demand factors relative to other currencies a floating exchange rate is different to a fixed or pegged exchange rate which is entirely determined by the government of the currency in question | |
what is the fomc ? | fomc stands for the federal open market committee which is the branch of the federal reserve responsible for reviewing and overseeing open market operations in the us through intervening in open market operations buying or selling government securities the fomc can indirectly change the federal funds rate | |
what is the force open ? | the force open function on the trading platform allows you to enter a new bet in the opposite direction to an existing bet on the same market | |
what is the forex ? | forex is how market participants convert one currency to another it can variously be referred to as foreign exchange fx or currencies | |
what is the forward contract ? | a forward contract is a contract that has a defined date of expiry the contract can vary between different instances making it a non standardised entity that can be customised according to the asset being traded expiry date and amount being traded | |
what is the fractional share ? | a fractional share is a portion of one full share you normally can t buy fractional shares but you may end up with them as a result of stock splits or dividend reinvestment plans however brokers can batch fractional shares together to create whole shares which can then be bought or sold | |
what is the french pea ? | a french pea refers to a plan d epargne en actions which is a tax efficient investment wrapper for residents of france it allows french investors to buy and sell european securities with preferential conditions in english a pea would be defined as a stock savings plan similar to a stocks and shares isa | |
what is the ftse ? | ftse stands for the financial times stock exchange the ftse indexes are owned by ftse russell part of the london stock exchange group the best known indexes are the ftse 100 made up of the largest 100 companies trading on the london stock exchange and the ftse 250 made up of the next largest 250 companies on the exchange | |
what is the full replication ? | in investments full replication refers to a type of physically replicated etf that holds equities in all of the constituents of the benchmark it is designed to track | |
what is the fundamental analysis ? | fundamental analysis is a method of evaluating the intrinsic value of an asset and analysing the factors that could influence its price in the future this form of analysis is based on external events and influences as well as financial statements and industry trends | |
what is the funding charges ? | funding charges or interest charges are the fees levied on leveraged positions that are held open overnight | |
what is the futures contracts ? | futures contracts represent an agreement between two parties to trade an asset at a defined price on a specified date in the future they are also often referred to simply as futures | |
what is the gamma ? | gamma is a term used in options trading to represent the rate of change in the option s delta | |
what is the gdp ? | gdp stands for gross domestic product or the total value of the goods and services produced in a country over a specified period it is used as an indicator of the size and health of a country s economy | |
what is the gearing ratio ? | a gearing ratio is a measure used by investors to establish a company s financial leverage in this context leverage is the amount of funds acquired through creditor loans or debt compared to the funds acquired through equity capital | |
what is the gilt ? | a gilt is a uk government bond that s denominated in british pounds they re issued by the debt management office dmo on behalf of hm treasury | |
what is the grey ? | by taking a position on a grey market you re taking a position on a company s potential market cap ahead of its initial public offering ipo the price of a grey market is a prediction of what the company s total market capitalisation will be at the end of its first trading day | |
what is the gross margin ? | gross margin or gross profit margin is a way of measuring the amount of profit a company has left after subtracting the direct costs associated with selling its goods and services it can illustrate if a company is generating revenue despite its outgoings | |
what is the guaranteed stop ? | a guaranteed stop is a form of stop loss that offers an absolute guarantee of executing your trade at the level you specify | |
what is the handle ? | in trading the term handle has two meanings depending on which market you are referring to in most markets it means the whole numbers involved in a quote price without the decimals included in forex it refers to the part of the quote that you see in both the buy and sell price | |
what is the hawks and doves ? | hawks and doves are terms used by analysts and traders to categorise members of central bank committee ahead of their votes on monetary policy | |
what is the hedge ? | a hedge is an investment or trade designed to reduce your existing exposure to risk the process of reducing risk via investments is called hedging | |
what is the heikin ashi ? | heikin ashi is a type of chart pattern used in technical analysis heikin ashi charts are similar to a candlestick charts but the main difference is that a heikin ashi chart uses the daily price averages to show the median price movement of an asset | |
what is the helicopter money ? | helicopter money is the term used for a large sum of new money that is printed and distributed among the public to stimulate the economy during a recession or when interest rates fall to zero it is also referred to as a helicopter drop in reference to a helicopter scattering supplies from the sky | |
what is the high frequency trading or hft ? | high frequency trading or hft is a form of advanced trading platform that processes a high numbers of trades very quickly using powerful computing technology it can be used to either find the best price for a single large order or to find opportunities for profit in the market in real time | |
what is the ichimoku cloud ? | the ichimoku cloud is a technical analysis indicator that defines support and resistance levels gauges momentum and provides trading signals in japanese it is called the ichimoku kinko hyo which roughly means one look equilibrium chart because with just one look traders can receive a range of information | |
what is the in the money itm ? | in the money itm is defined by an option s state of moneyness the underlying asset s status when compared to the price at which it can be bought or sold its strike price specifically in the money means that an option on an underlying asset has gone beyond its strike price giving it an intrinsic value of more than 0 | |
what is the inception date ? | an inception date refers to the date when something officially starts or when something was originally created this could refer to the date when a company is created and formally registers with the likes of companies house for example and begins trading or the date of when a policy such as an insurance policy begins | |
what is the income distribution ? | income distribution is a term used in exchange traded funds etfs for when any income or dividend payments are redistributed to investors in the form of a payment | |
what is the income fund ? | an income fund is a fund that invests using an income investment style typically it will be invested in a diversified portfolio of stocks with relatively high dividend payments or generate returns through interest paying assets like bonds | |
what is the index ? | in trading an index is a grouping of financial assets that are used to give a performance indicator of a particular sector the plural term is indices | |
what is the index providers ? | in trading index providers calculate and distribute stock and other asset class indices one of the important roles of the index provider is to classify and define markets as their indices represent a market or a proportion of a market and provide a benchmark of performance for that market or sector |
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