Dictionary

Account

The holding of a customer’s financial assets by an organization or company on behalf of the customer.

After the Bell

A phrase that refers to financial news, data, earnings reports, etc. that are released after the stock market has closed for the day.

Analysis Paralysis

A psychological state that occurs when an individual becomes so obsessed with examining data that he or she cannot make a decision. This is a common phenomenon among investors.

Anchoring

Using irrelevant information to estimate or evaluate unknown information.

Asset

An item or resource with economic value.

AUD (Australian Dollar)

The abbreviation for the Australian dollar, the official currency of the Commonwealth of Australia.

Barrier to entry

Barriers that are set in place which intrude upon a person’s ability to enter the market, such as high taxes, governmental issues, or high start up costs.

Bearish (Bear) Market

Declining values in the trade market, which produce a negative projection for the future of an asset.

Binary Options Trading

Binary options or Fixed Option Returns (FRO) offer investors a simplified method to trade assets online in order to yield high profits fast. Investors simply select asset pairs or individual assets and predict whether the assets will increase (call) or decrease (put) during a fixed time frame ranging from 30-seconds to one-year.

Bonds

Certificates that collect interest, much like loans. Investors provide corporations, government agencies, and other large entities with the option to take out bonds with fixed interest rates.

Bullish (Bull) Market

A market trend during which assets incline and foster optimistic projections.

CAD (Canadian Dollar)

The currency abbreviation for the Canadian dollar, the official currency of Canada.

Call Option

A trader estimates that an asset will increase its value and gains the right to purchase the option for a mutually agreeable price by the expiration date.

Central Bank

A central bank manages a country’s money and interest rates.

CHF (Swiss Franc)

The currency abbreviation for the Swiss Franc, the official currency of Switzerland and Liechtenstein.

CNY (Chinese Yuan/Renminbi)

The currency abbreviation for the Chinese yuan (renminbi), the official currency of the People’s Republic of China.

Commodities

Precious natural resources with monetary value, such as agricultural goods, energy resources, and metals (e.g., gold, oil, wheat).

Consolidation

In technical analysis, consolidation refers to an indecisive period in the market when an asset hovers between the barriers of inclination and declination.

Core Retail Sales

The monthly report that quotes industry retail sales figures.

Currencies

Circulating money such as USD, AUD, GBP.

Currency Pairs

The value of a currency is contingent upon on another currency. The base currency is listed first and its competitor is listed second (e.g., USD/GBP 1.334 signifies that 1 USD is equal to 1.334 GBP).

Current Assets

Assets that can be purchased, sold, consumed, or distributed, such as currency or retail items. For this reason, current assets can only be calculated based on current balance or owner possession.

Demand

In economics, demand refers to a consumer’s willingness to buy a particular good or service at a given price.

Derivatives

Asset value that is derived from a competitor. Derivatives are generally contracts that hedge financial risks by fixing exchange rates.

Divestment

Selling assets due to social pressure, issues, government policy, or corporate strategies. A divestment is usually a social statement that one does not want to be associated with a company, individual, or asset.

Efficient Market Hypothesis (EMH)

The theory that existing share prices reflect and incorporate all relevant information, rendering it impossible to “beat the market”.

Equities

Assets that are owned by individuals.

EUR (Euro)

The currency abbreviation for the Euro, the official currency for more than half of the European Union.

Expiration Rate

The value of the underlying asset at the expiration time is termed the expiration rate. This determines if the option expires in the money or out of the money.

Expiration Time

The expiration time is the time and date that an asset expires.

Financial Market

A real-time or virtual market where assets can be bought and sold.

Financial Securities

Proof of asset ownership.

Fiscal Policy

The government’s decisions regarding taxes and government spending that is based on the economic situation.

Fixed assets

A holder can obtain value for a specific asset, such as real estate, for a long period.

Foreign Exchange Market

The financial market in which currencies are traded.

FOREX Option

Forex allows investors to predict the outcome of a competing currency pair by a set expiry time.

Fundamental Analysis

A method of measuring a business or security’s intrinsic value by conducting an in-depth investigation of various qualitative, quantitative, financial, and economic factors.

Futures

A contract that permits traders to fix the asset rate for a date in the future in order to lock in the price regardless of inflation or deflation. Hedging and futures are usually synonymous.

Game Theory

Game theory is a model that examines the relationships between participants in a given model in order to predict their optimal decisions.

Gap Analysis

An analysis in which a company compares its true performance to its expected performance.

GBP (British Pound)

The currency abbreviation for the British pound sterling, the official currency for the United Kingdom, as well as various British territories overseas.

Hawk

An advisor or policymaker who generally favors high interest rates in order to keep inflation in check.

Hedging

Reducing price fluctuation risk through investment decisions. Hedging and futures are usually synonymous.

HKD (Hong Kong Dollar)

The currency abbreviation for the Hong Kong dollar, the official currency of Hong Kong.

In the money

A position that expires in accordance with a trader’s prediction, yielding a profit.

Indices

A list of statistical measurements that represents market changes, such as economic growth or descent. The Nasdaq, Dow Jones, and Nikkei are examples of indices.

INR (Indian Rupee)

The currency abbreviation for the Indian rupee, the official currency of India.

Investment

Purchasing an asset with the goal of gaining a profit as the asset increases in value.

J-Curve Effect

A graph where the curve initially falls and then rises higher than the starting point, forming a J shape. In economics, a J-curve occurs when a policy or investment begins with a loss, followed by a significant gain.

January Barometer

The theory that the S&P 500’s movement during the month of January sets the tone for the stock market for the year.

January Effect

A tendency for stock prices to rise during the month of January, which is generally attributed to an increase in buying.

JPY (Japanese Yen)

The currency abbreviation for the Japanese yen, the official currency of Japan.

Key Performance Indicators (KPI)

Quantifiable metrics that a company uses to gauge its performance over time.

Keynesian Economics

The economic theory, developed by British economist John Maynard Keynes, that states that optimal economic performance can be achieved by influencing aggregate demand through governmental economic intervention policies and activist stabilization.

KRW (South Korean Won)

The currency abbreviation for the South Korean Won, the official currency of South Korea.

Ladder Option

A trading tool that allows a trader to make multiple predictions on a particular asset and expiry time, allowing for an extended chance of success.

Leading Index

The leading index calculates economic growth by unemployment rates, housing, and other signs of economic stability.

Long Term Option

A high/low option that does not expire on the same day it began. A long term option can expire anywhere from 24 hours after the strike time up to one year later.

Macroeconomics

A branch of economics that focuses on the aggregate economy as a whole, examining inflation, rate of growth, national income, changes in unemployment, gross domestic product, and price levels.

Market

A medium where securities are traded, which may take place in person or online.

Microeconomics

A branch of economics that analyzes individual consumers and market behavior in an attempt to understand the decision making process of consumers. It is primarily focused on the interaction between buyers and sellers.

Monetary Policy

The central bank determines the size and growth rate of the country’s money supply.

Noise

Any stock market activity that is not reflective of overall market sentiment.

Nonfarm Payroll (NFP)

A monthly research report issued by the U.S. Bureau of Labor Statistics which statistically represents the amount of employed U.S. workers in most industries with the exception of farmers, non-profit employees who offer services to individuals, people employed in private households, and general government workers. The NFP also documents the average work week and the average weekly earnings of non-farm workers.

NZD (New Zealand Dollar)

The currency abbreviation for the New Zealand dollar, the official currency of New Zealand.

October Effect

The theory that stocks have a tendency to decline during October. Many consider this effect to be the result of a psychological self-fulfilling prophecy.

One Touch Option

An option that allows a trader to set a goal rate, which results in a payout if the price of the underlying asset reaches or surpasses a predetermined barrier before the time of expiry.

Out of the Money

A position that does not expire in accordance with its trader’s prediction.

Pairs Option

Pairs allows traders to predict the outcome of two competing assets from the same class (currencies, indices, stocks, or commodities).

Pip

The smallest possible price movement that a given asset can make based on market convention.

Put Option

A trader estimates that an asset will decrease in value and gains the right to purchase or sell the option for a mutually agreeable price by the expiration date.

Qualitative Analysis

A method of analyzing securities that relies on subjective judgement based on information that cannot be numerically quantified, such as strength of research and development, management expertise, brand strength, and industry cycles.

Quantitative Analysis

A method of analyzing securities that relies on complex mathematical and statistical modeling, measurement, and research.

Quantitative Easing

A monetary policy in which a central bank purchases securities from the market in order to increase the money supply and lower interest rates.

Quarterly Earnings Report

A report that a company publishes every fiscal quarter to report its performance. This report includes earnings per share, net income, net sales, etc.

Resistance

As an asset attempts to reach increase its value beyond a specific range, it is met with opposition or resistance.

Retracement

Reversal in the direction that asset values are moving.

RUB (Russian Ruble)

The currency abbreviation for the Russian Ruble, the official currency of Russia.

Sixty-Second Option

A quick high/low option, which has an expiry time of 30, 60, or 120 seconds.

Stocks

A share in a stock is essentially partial ownership of a corporation or business.

Strike Price

The price of an option at the moment a trade is made, against which the trader predicts the movement of an underlying asset.

Supply

In economics, supply refers to the total amount of a good or service that is available for consumers to purchase at a given time.

Support

As an asset declines it is not able to fall below a specific line, known as the support.

Technical Analysis

A method of analyzing the financial market that relies on statistics generated by past market activity.

Top-Down Analysis

A method of financial analysis in which a trader examines the “big picture” first, then zeroes in on the details.

Trade Balance

The difference in a country’s export vs. import values.

Trend

The general direction of a market or a particular asset’s price.

Underlying Asset

An underlying asset is the financial instrument upon which an option’s price is based.

USD (US Dollar)

The currency abbreviation for the U.S. dollar, the official currency of the United States of America.

Value

The worth of a good, service, or asset.

Volatility

Market uncertainty, which is statistically measured. High values indicate riskier market trends.

Wall Street

A street in lower Manhattan that is home to much of the U.S. financial industry. Wall Street is also the colloquial term for the collective U.S. financial markets.

Wire Transfer

An electronic transfer of funds between bank accounts.

Xenocurrency

A currency that trades in foreign markets.

Yield

The amount of money earned on an investment.

Yo-Yo

A colloquial term referring to a very volatile market.

ZAR (South African Rand)

The currency abbreviation for the South African Rand, the official currency of South Africa.

Zig Zag Indicator

An indicator that predicts when the momentum of a given security is reversing.

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