Long position
A position that appreciates in value if market price increases. When the base currency in the pair is bought, the position is said to be long. This position is taken with the expectation that the market will rise.
Bid price?
The price at which the market is prepared to buy a product. Prices are quoted two-way as Bid/Ask. In FX trading, the Bid represents the price at which a trader can sell the base currency, shown to the left in a currency pair. For example, in the quote USD/CHF 1.4527/32, the base currency is USD, and the Bid price is 1.4527, meaning you can sell one US Dollar for 1.4527 Swiss francs. In CFD trading, the Bid also represents the price at which a trader can sell the product. For example, in the quote for UK OIL 111.13/111.16, the Bid price is £111.13 for one unit of the underlying market.*
Buy
Taking a long position on a product.
CFDs
A Contract for Difference (or CFD) is a type of derivative that gives exposure to the change in value of an underlying asset (such as an index or equity). It allows traders to leverage their capital (by trading notional amounts far higher than the money in their account) and provides all the benefits of trading securities, without actually owning the product. In practical terms, if you buy a CFD at $10 then sell it at $11, you will receive the $1 difference. Conversely, if you went short on the trade and sold at $10 before buying back at $11, you would pay the $1 difference.
Closing price
The price at which a product was traded to close a position. It can also refer to the price of the last transaction in a day trading session.
Bid / Ask spread
The difference between the bid and the ask (offer) price.
Margin Call
A request from a broker or dealer for additional funds or other collateral on a position that has moved against the customer.
Market Order
A request from a broker or dealer for additional funds or other collateral on a position that has moved against the customer.
Orders
An instruction to execute a trade.
Pips
The smallest unit of price for any foreign currency, pips refer to digits added to or subtracted from the fourth decimal place, i.e. 0.0001.
Profit
The difference between the cost price and the sale price, when the sale price is higher than the cost price.
Purchasing Managers Index (PMI)
An economic indicator which indicates the performance of manufacturing companies within a country.
Short position
An investment position that benefits from a decline in market price. When the base currency in the pair is sold, the position is said to be short.
Stock Index
The combined price of a group of stocks – expressed against a base number – to allow assessment of how the group of companies is performing relative to the past.