The FYLU library
Trading glossary
Precise definitions, practical examples, and the limits behind familiar market language.
Quote (price)
A quote states a price at which an instrument may be bought or sold, usually showing a bid and an ask.
Read articleGlossaryS&P 500 Index
The S&P 500 measures the performance of 500 leading large companies in the United States.
Read articleGlossaryUnderlying asset
An underlying asset is the reference on which a derivative's value or contractual payoff depends.
Read articleGlossaryVolatility
Volatility describes how much an asset's price or returns fluctuate over a period.
Read articleGlossaryContract for difference (CFD)
A contract for difference is a derivative agreement that settles the change in an underlying reference price between opening and closing a position.
Read articleGlossaryExposure
Exposure is the extent to which an investment or portfolio is affected by a particular asset, market, currency, or risk factor.
Read articleGlossaryLong position
A long position generally benefits when the price of the held asset or referenced instrument rises.
Read articleGlossaryOver-the-counter (OTC)
Over-the-counter trading takes place through dealers or counterparties rather than a centralized exchange order book.
Read articleGlossaryMaintenance margin
Maintenance margin is the minimum equity required to keep a margined position or account open under applicable rules.
Read articleGlossaryBid
The bid is a price a buyer is willing to pay for an instrument.
Read articleGlossaryPending order
A pending order is an instruction that has not yet been fully executed and is waiting for its conditions or processing steps to be satisfied.
Read articleGlossaryCommodities
Commodities are basic goods used in production or consumption, such as energy products, metals, and agricultural crops.
Read articleGlossaryDay order
A day order is valid for the trading session specified when it is submitted and generally expires if unfilled by that session's end.
Read articleGlossaryGood-till-date (GTD) order
A good-till-date order stays eligible for execution until a specified expiry date or time, unless filled or canceled sooner.
Read articleGlossaryDow Jones Industrial Average
The Dow Jones Industrial Average tracks 30 established US companies and is commonly called the Dow.
Read articleGlossaryDAX Index
The DAX follows 40 large companies listed on the regulated market of the Frankfurt Stock Exchange that meet its eligibility rules.
Read articleGlossaryCollateral
Collateral is an asset pledged to support an obligation, such as a loan or derivative exposure.
Read articleGlossaryOrder book
An order book records buying and selling interest submitted to a trading venue, commonly organized by price and quantity.
Read articleGlossaryOrder
An order is an instruction to buy or sell an instrument according to specified terms.
Read articleGlossaryShort position
A short position generally benefits from a fall in the referenced price and loses when that price rises.
Read articleGlossaryHedging
Hedging means taking an offsetting position to reduce a particular exposure, such as changes in exchange rates, interest rates, or commodity prices.
Read articleGlossaryIlliquidity
Illiquidity is difficulty buying or selling an asset promptly at a reasonable price without moving the market substantially.
Read articleGlossaryDiversification
Diversification spreads investment across holdings whose risks are not identical, reducing dependence on any one outcome.
Read articleGlossaryRisk
Investment risk is the possibility that actual outcomes differ from expectations, including losing capital or failing to meet a financial goal.
Read articleGlossaryRisk diversification
Risk diversification focuses on spreading the sources of potential loss, rather than merely increasing the number of holdings.
Read articleGlossaryRisk management
Risk management is the ongoing process of identifying exposures, setting limits, preparing responses, and reviewing outcomes.
Read articleGlossaryLeverage
Leverage increases economic exposure relative to the capital committed, through borrowing or derivative contracts.
Read articleGlossaryOvernight position
An overnight position remains open beyond a trading session's close or a provider's daily cutoff.
Read articleGlossaryOvernight financing
Overnight financing is a charge or credit associated with carrying certain leveraged positions beyond a daily cutoff.
Read articleGlossaryCorporate action
A corporate action is an event initiated by a company that changes shareholders' securities, rights, or cash entitlements.
Read articleGlossaryEquity
Equity represents a residual ownership interest after relevant liabilities are deducted from asset value.
Read articleGlossaryTicker symbol
A ticker symbol is a short code used to identify a traded security on a particular market or data system.
Read articleGlossaryStock market
The stock market is the network of venues and participants through which company shares are issued and traded.
Read articleGlossaryStock index
A stock index summarizes the performance of a defined group of shares using a stated calculation method.
Read articleGlossaryDividend
A dividend is a distribution made by a company to eligible shareholders, commonly in cash but sometimes in additional shares or other assets.
Read articleGlossaryKey currencies
Key currencies are currencies widely used in international payments, financing, reserves, or foreign exchange trading.
Read articleGlossaryInternational Securities Identification Number (ISIN)
An ISIN is a 12-character identifier assigned to a financial instrument under the ISO 6166 standard.
Read articleGlossarySlippage
Slippage is the difference between an expected or referenced execution price and the price actually obtained.
Read articleGlossaryCurrency
A currency is a monetary unit used to express prices and settle payments within an economy or monetary area.
Read articleGlossaryCurrency pair
A currency pair expresses the price of one currency in units of another.
Read articleGlossaryCurrency risk
Currency risk is the possibility that exchange-rate movements change an investment's value, income, or payment cost when measured in another currency.
Read articleGlossaryActive order
An active order is an accepted instruction that remains eligible for execution under its current conditions and session rules.
Read articleGlossaryFundamental analysis
Fundamental analysis studies the economic and financial factors that may influence an asset's value.
Read articleGlossaryBasis point
A basis point is one hundredth of a percentage point, equal to 0.01%.
Read articleGlossaryTechnical analysis
Technical analysis examines historical market data, especially prices and trading volume, to describe trends, momentum, and possible decision points.
Read articleGlossaryBid-ask spread
The bid-ask spread is the gap between the highest buying price and the lowest selling price available for an instrument.
Read articleGlossaryMergers and acquisitions (M&A)
Mergers and acquisitions are transactions that combine businesses or transfer control of one business to another.
Read articleGlossaryRegulated market
A regulated market operates under a legal authorization and oversight framework covering matters such as admission, trading rules, and market conduct.
Read articleGlossaryTransaction
A transaction is an agreed exchange of an asset, financial instrument, or payment between parties.
Read articleGlossaryExchange
An exchange is an organized marketplace that brings together buying and selling interest under published rules.
Read articleGlossaryFinancial instrument
A financial instrument is a contract or claim that creates financial rights and obligations, such as a share, bond, fund unit, or derivative.
Read articleGlossaryFTSE 100 Index
The FTSE 100 is an index of 100 large eligible companies listed on the London Stock Exchange.
Read articleGlossaryFinancial market
A financial market connects participants seeking capital, investment opportunities, liquidity, or risk transfer.
Read articleGlossaryDue diligence
Due diligence is a structured investigation used to assess a proposed investment, transaction, or service provider.
Read articleGlossaryBroker
A broker acts as an intermediary in transactions, receiving or executing instructions for clients.
Read articleGlossaryCandlestick chart
A candlestick chart displays each period's opening, highest, lowest, and closing prices.
Read articleGlossaryImmediate-or-cancel (IOC) order
An immediate-or-cancel order attempts to execute as soon as it reaches the market and cancels any quantity that cannot be filled immediately.
Read articleGlossaryInterest rate
An interest rate expresses the price of borrowing or the compensation for lending over a stated period, usually quoted annually.
Read articleGlossaryLiquidity
Liquidity is the ability to transact in an asset promptly, in a desired size, with limited cost and price impact.
Read articleGlossaryLondon Stock Exchange Group (LSEG)
London Stock Exchange Group, known as LSEG, is a financial markets infrastructure and data business.
Read articleGlossaryNasdaq-100 Index
The Nasdaq-100 tracks 100 of the largest eligible non-financial companies listed on the Nasdaq Stock Market.
Read articleGlossaryNasdaq
Nasdaq can refer to the financial technology and exchange group or, more specifically, the Nasdaq Stock Market where securities are listed and traded.
Read articleGlossaryNew York Stock Exchange (NYSE)
The New York Stock Exchange is a US securities exchange where eligible companies list shares and market participants trade under exchange rules.
Read articleGlossaryEURO STOXX 50 Index
The EURO STOXX 50 tracks 50 major blue-chip companies from the eurozone under the provider's selection and weighting rules.
Read articleGlossaryBias
Bias is a systematic tendency in judgment that can distort how investment information is selected or interpreted.
Read articleGlossaryCredit rating
A credit rating is an opinion about an issuer's or debt instrument's relative creditworthiness, usually expressed on an agency's scale.
Read articleGlossaryFutures contract
A futures contract is a standardized agreement traded on an exchange to buy or sell a specified underlying at a future date under set terms.
Read articleGlossaryTrend
A trend is the prevailing direction of a price or other market measure over a chosen period.
Read articleGlossaryGood-till-canceled (GTC) order
A good-till-canceled order remains open beyond a single session until it is filled, canceled, or reaches a broker or venue's maximum permitted duration.
Read articleGlossaryArea chart (mountain chart)
An area or mountain chart plots a sequence of values as a line and fills the space beneath it.
Read articleGlossaryMarket
A market is an arrangement through which buyers and sellers exchange goods, services, or financial claims.
Read articleGlossaryMarket risk
Market risk is the possibility of loss from changes in market variables such as share prices, interest rates, exchange rates, or commodity prices.
Read articleGlossaryMarket depth
Market depth describes the buying and selling quantities available across different price levels, beyond the best bid and ask.
Read articleGlossaryMarket data
Market data consists of information about trading and instruments, including quotations, trades, volume, order-book depth, and reference details.
Read articleGlossaryMarket order
A market order instructs an immediate purchase or sale at the best available prices, subject to market operation and order acceptance.
Read articleGlossaryClosing price
The closing price is a market's designated price at the end of a trading session, determined under that venue's rules.
Read articleGlossaryArbitrage
Arbitrage seeks to exploit inconsistent prices for the same asset or economically related claims, typically through offsetting transactions.
Read articleGlossaryBar chart
In financial charting, an OHLC bar chart represents each interval's open, high, low, and close using a vertical bar and short horizontal marks.
Read articleGlossaryPosition
A position is an existing holding or contractual exposure in a financial instrument, expressed by its direction and size.
Read articleGlossaryInvestment strategy
An investment strategy is a coherent approach for selecting, sizing, and managing investments to pursue a stated objective.
Read articleGlossaryInvestor
An investor commits money or other capital to an asset with the expectation of income, appreciation, or another financial benefit over time.
Read articleGlossaryPortfolio
A portfolio is the collection of investments held by an individual, institution, or account.
Read articleGlossaryPortfolio diversification
Portfolio diversification applies risk spreading to the actual combination and weights of investments.
Read articleGlossaryPortfolio management
Portfolio management is the process of constructing, monitoring, and adjusting a group of investments in line with objectives and constraints.
Read articleGlossaryChart
A market chart is a visual arrangement of data, usually showing price or another measure against time.
Read articleGlossaryForeign exchange trading
Foreign exchange trading exchanges exposure between currencies, usually described through a currency pair.
Read articleGlossarySpot
Spot refers to trading for delivery or settlement according to the market's near-term standard convention, rather than a contract scheduled for a distant future date.
Read articleGlossaryLimit order
A limit order sets the worst acceptable execution price: a maximum for a purchase or a minimum for a sale.
Read articleGlossaryCorrelation
Correlation measures how two series tend to move together over a specified sample.
Read articleGlossaryDerivative
A derivative is a contract whose value or payoff depends on an underlying asset, rate, index, or other reference.
Read articleGlossaryAsk price
The ask, also called the offer, is a price at which a seller is willing to sell an instrument.
Read articleGlossarySecurities
Securities are financial instruments representing rights such as ownership, a debt claim, or certain investment interests.
Read articleGlossaryIndex
An index is a calculated measure used to summarize changes in a defined group of observations, such as securities, prices, or economic data.
Read articleGlossaryStop-loss order
A stop-loss order becomes eligible for execution when a specified trigger condition is reached.
Read articleGlossaryCapital
Capital is the financial or productive resources committed to a business or investment activity.
Read articleGlossaryAsset class
An asset class groups investments with broadly similar economic characteristics, such as equities, fixed income, cash, real estate, or commodities.
Read articleGlossaryMarket maker
A market maker provides buying and selling quotations and stands ready to transact under the rules or commitments that apply to its role.
Read articleGlossaryShort selling
Short selling shares generally involves borrowing securities, selling them, and later buying securities to return to the lender.
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