Trading Glossary
Clear, concise definitions of trading and broker-related terminology. Understand the language of the trading industry.
Terms starting with B
Bid–Ask Price (Trading Definition)
The bid–ask price refers to the two prices quoted for any tradable instrument: the bid (sell price) and the ask (buy price). The difference between them is the ...
Broker Insolvency (Trading Definition)
Broker insolvency occurs when a broker can no longer meet its financial obligations and is unable to continue operating. In such cases, trading may be suspended...
Terms starting with C
CFD (Contract for Difference) (Trading Definition)
A CFD (Contract for Difference) is a leveraged trading product that allows you to speculate on price movements without owning the underlying asset. You agree wi...
Contract Size (Lot Size) (Trading Definition)
Contract size, often called lot size, defines how much of an underlying asset you are trading per unit. It determines how much each point, pip, or price movemen...
Client Fund Segregation (Trading Definition)
Client fund segregation means a broker holds client money separately from its own operating funds. This separation is designed to protect client deposits if the...
Compensation Scheme (Trading Definition)
A compensation scheme is a regulatory safety net that may reimburse clients if a regulated broker fails and cannot return client funds. Coverage limits, eligibi...
Terms starting with E
Terms starting with F
Terms starting with G
Terms starting with L
Leverage (Trading Definition)
Leverage allows you to control a larger trading position with a smaller amount of your own capital. While leverage can increase potential gains, it also increas...
Limit Order (Trading Definition)
A limit order is an instruction to buy or sell at a specific price or better. It prioritises price certainty over execution certainty. While limit orders help c...
Liquidity (Trading Definition)
Liquidity describes how easily an asset can be bought or sold without causing a significant price change. High liquidity generally leads to tighter spreads, fas...
Terms starting with M
Margin (Trading Definition)
Margin is the amount of your own money that a broker requires you to set aside to open and maintain a leveraged trade. It is not a fee, but a risk buffer. If lo...
Margin Call (Trading Definition)
A margin call occurs when losses on leveraged trades reduce your available margin to a level the broker considers unsafe. It is a warning that your account no l...
Market Order (Trading Definition)
A market order is an instruction to buy or sell immediately at the best available price. It prioritises speed of execution over price certainty. While market or...
Market Gap (Trading Definition)
A market gap occurs when the price of an asset jumps from one level to another without trading at prices in between. Gaps typically happen between trading sessi...
Market Maker vs STP (Execution Models) (Trading Definition)
Market maker and STP (Straight-Through Processing) describe two different broker execution models. Market makers may fill orders internally, while STP brokers r...
Terms starting with N
Terms starting with O
Overnight Financing (Swap) (Trading Definition)
Overnight financing, often called a swap, is a daily charge or credit applied to leveraged positions that are held open overnight. It reflects the cost of borro...
Order Execution (Trading Definition)
Order execution is the process by which a broker fills a trade at a given price. It determines how quickly and at what price your order is completed. Poor execu...
Terms starting with P
Position Sizing (Trading Definition)
Position sizing is the process of deciding how large a trade should be relative to your account size. It determines how much money you risk on each trade and ha...
Partial Fills (Trading Definition)
A partial fill occurs when only part of an order is executed at the requested price, with the remainder filled later at different prices or not filled at all. P...
Terms starting with R
Risk–Reward Ratio (Trading Definition)
The risk–reward ratio compares how much you are willing to lose on a trade versus how much you expect to gain if it succeeds. A 1:2 risk–reward ratio means risk...
Regulation (Trading Definition)
Regulation refers to the legal oversight of a broker by a recognised financial authority. A regulated broker must follow specific rules on client protection, ca...
Risk Disclosure (Trading Definition)
A risk disclosure is a formal document that explains the risks of trading, particularly when using leveraged products. It outlines how losses can occur, the lik...
Terms starting with S
Spread (Trading Definition)
The spread is the difference between the price you can buy at and the price you can sell at for the same instrument. It is a core trading cost: the wider the sp...
Stop Loss (Trading Definition)
A stop loss is an order that automatically closes a trade if the market moves against you to a specified price. Its purpose is to limit losses and control risk,...
Slippage (Trading Definition)
Slippage is the difference between the price you expect to trade at and the price your order is actually executed at. It usually occurs during fast markets, low...
Stop-Out Level (Trading Definition)
A stop-out level is the point at which a broker automatically closes open positions to prevent further losses when account equity falls too low. It is a hard ri...
Terms starting with T
Trading Hours (Trading Definition)
Trading hours define when a market is open for trading and when orders can be executed at normal liquidity conditions. Trading outside core market hours often i...
Time-in-Force (Trading Definition)
Time-in-force specifies how long an order remains active before it is executed or cancelled. It determines whether an order stays open until filled, expires at ...
Trailing Stop (Trading Definition)
A trailing stop is a type of stop-loss order that automatically moves in your favour as the market price moves, while staying fixed if the price moves against y...
Take Profit (Trading Definition)
A take-profit order is an instruction to close a trade automatically when a specified favourable price level is reached. Its purpose is to lock in gains without...
Terms starting with V
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