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A comprehensive, alphabetized list of trade-related terms and definitions. A An index made up of the weighted share prices of about 500 of the largest Australian companies. It’s the predominant measure of the overall performance of the Australian share market. The Johannesburg All Share Index, consisting of the top 40 shares on the Johannesburg Stock Exchange by market capitalization. The purchase of securities on one market for immediate resale on another market in order to profit from a price discrepancy. The price at which GT247 is selling a product. Also referred to as the ‘offer’. A summary of the international transactions of a country over a period of time. Includes commodity and service transactions and gold movements. A chart that graphs the high, low, and settlement prices for a specific trading session over a given period of time. The difference between the current cash price and the futures price of the same underlying asset. Unless otherwise specified, the price of the nearby futures contract month is generally used to calculate the basis. When used to describe an interest rate, a basis point is one hundredth of one percent (= 0.01%) In most commodities and financial instruments, this refers to selling the nearby contract month, and buying the deferred contract, to profit from a change in the price relationship. The price at which GT247 is prepared to buy a product. Dealer phrase referring to the first few digits of an exchange rate. These digits rarely change in normal market fluctuations, and are therefore omitted in dealer quotes, especially in times of high market activity. For example, the USD/yen rate might be 107.30/107.35, but would be quoted verbally without the first three digits, i.e. ‘30/35’. A financial instrument that usually pays out a fixed coupon over a number of years as well as a principal repayment at the end of its life. A company (or individual) that executes futures and options orders on behalf of financial and commercial institutions and/or the general public. Someone who thinks market prices will rise. A period of rising market prices. In most commodities and financial instruments, the term refers to buying the nearby month, and selling the deferred month, to profit from a change in the price relationship. A benchmark index based on a selection of 40 stocks of the Premier Marché and structured to reflect the full range of equities traded on the Paris Bourse monthly settlement. An option giving the right to buy the underlying asset. An order that deletes a client’s previous order. For physical commodities such as grains and metals, the cost of storage space, insurance, and finance. In interest rate futures markets, it refers to the differential between the yield on a cash instrument and the cost of funds necessary to buy the instrument. Also referred to as cost of carry or carry. An actual physical commodity someone is buying or selling, e.g. soybeans, corn, gold, silver, Treasury bonds, etc. Also referred to as actuals. A sales agreement for either immediate or future delivery of the actual product. Transactions generally involving index-based futures contracts that are settled in cash, based on the actual value of the index on the last trading day. The use of charts to analyze market behaviour and anticipate future price movements. Those who use charting as a trading method plot such factors as high, low, and settlement prices; average price movements; volume; and open interest. Two basic price charts are bar charts and point-and-figure charts. See Technical Analysis for more information. The process by which a clearinghouse maintains records of all trades and settles margin flow on a daily market-to-market basis for its clearing member. An agency or separate corporation of a futures exchange responsible for settling trading accounts, clearing trades, collecting and maintaining margin monies, regulating delivery, and reporting trading data. Clearinghouses act as third parties to all futures and options contracts –acting as a buyer to every clearing member seller and a seller to every clearing member buyer. A member of an exchange clearinghouse. Memberships in clearing organizations are usually held by companies. Clearing members are responsible for the financial commitments of customers who clear through their firm. The date at which futures contracts expire. The Chicago Mercantile Exchange – an international market-place enabling institutions and businesses to manage their financial risk and allocate their assets. Futures and options contracts traded on the CME's two floors include currencies, interest rates, stock indexes and agricultural commodities. The fee that a broker charges for a transaction when selling a financial instrument to a client. An article of commerce or a product that can be used for commerce. In a narrow sense, products traded on an authorized commodity exchange. Types of commodities include agricultural products, metals, petroleum, foreign currencies, financial instruments and index, to name a few. A CFD is a margin-traded instrument that allows clients to receive all the benefits of owning a market product without physically owning the product. It is a method of investing that pays the investor the difference between the purchase price of the asset and the selling or settlement price. The interest payment made on a bond. Consumer Price Index. A basket of goods whose change in price is used to measure the inflation rate of a country. The new Consumer Price Index, used in a country to measure the inflation rate. CPIX strips out the effect of interest rates in measuring inflation. The ratio of the coupon to the current market price of the debt instrument. Speculators who take positions in futures or options contracts and liquidate them prior to the close of the same trading day. The more distant month(s) in which futures trading is taking place, as distinguished from the nearby (delivery) month. A specific month in which delivery may take place under the terms of a futures contract. Also referred to as a contract month. An instrument whose price depends on, or is derived from, the price of an underlying asset. A cash payment made to the owner of an equity. The bid/offer spread that traders quote to the market upon a price enquiry. The Dow Jones Industrial Average is a U.S. stock index based on the stock prices of 30 large and actively traded U.S. companies. The application of statistical and mathematical methods in the field of economics to test and quantify economic theories and solutions to economic problems. A financial instrument that gives the holder a claim of ownership over the company, as well as a share of its income-stream. A basket of equities, normally sharing some common feature, e.g. Industrial Index. A price limit order from a client that must trade immediately at the quoted level – if it does not, the order is cancelled. An over-the-counter market where buyers and sellers conduct foreign exchange business by telephone and other means of communication. Also referred to as the foreign exchange market. A contract between two counter-parties where one person agrees to sell a certain amount of a financial instrument or a commodity to another person at a stated price, but for delivery at an agreed future date. The counter-parties cannot close out their positions. This index is designed to represent the performance of the top 100 UK companies. Futures contracts are traded on organized exchanges. The asset which is the subject of the forward contract, the size of the contract, and the delivery date are standardized and specified in the contract terms by the exchange. The counter-parties can close out their positions. A method of anticipating future price movement using supply and demand information. The value of all final goods and services produced by an economy over a particular time period, normally a year. Gross Domestic Product plus the income accruing to domestic residents due to investments abroad, less income earned in domestic markets accruing to foreigners abroad. The highest price of the day for a particular futures contract. The person paying the option premium and who has the right to exercise it. The Johannesburg Industrial Index, consisting of a basket of thirty industrial shares. A bid/offer spread initially given to a client by GT247 to give them a good idea of where the market is trading. The initial amount that must be deposited into a trading or margin account at the time a contract is entered into. Johannesburg Stock Exchange London Inter-Bank Offer Rate: the interest rate that the largest international banks will lend to each other. London International Financial Futures and Options Exchange The maximum price move permitted by the exchange in a single trading session. An order that must be executed at a specified price level. The amount of trading done in a market or on a financial instrument. If a market is said to be liquid then large buy and sell trades will be easily executed. A position involving the purchase of a product. The lowest price of the day for a particular futures contract. When the balance in a client's margin account falls below the maintenance margin level, the client receives a margin call requiring the account to be topped up. The cash balance required from a client in order to trade CFDs. A request for extra margin when the balance in the margin account falls below the maintenance margin level. The net worth of a company, calculated by multiplying the company's current share price by the amount of shares outstanding in that company. An order to buy or sell a futures contract of a given delivery month, to be filled at the best possible price and as soon as possible. The practice of revaluing an instrument to reflect the current values of the relevant market variables. National Association of Securities Dealer Automated Quotations system. An equity index representing 100 of the largest non-financial U.S. and non-U.S. technology companies. The 225 components of the Nikkei Stock Average are among the most actively traded issues on the first section of the Tokyo Stock Exchange. Sizes of trade that do not equal the contract sizes of the underlying market. The price at which GT247 is selling a product. Also referred to as the ‘ask’. Gives the holder the right but not the obligation to purchase or sell a product. A trade in a non-exchange traded product. Profit and loss The principal amount of a bond. The coupon on a bond that makes its price equal to the principal. A market commitment. A buyer of a futures contract is said to have a long position and, conversely, a seller of a futures contract is said to have a short position. An option giving the right to sell the underlying asset. A strong move up in the market. The price span during a given trading session/week/month/year etc. The profit/loss that is made when closing out an open position. The transfer of an open position from one expiry month to a later month. South African Futures Exchange A trader who trades for small, short-term profits during the course of a trading session, and who seldom carries a position overnight. The process of borrowing financial instruments from a third party, normally in order to sell them. The last price paid for a commodity on any trading day. The classic definition of a short sale is the sale of a product that you do not have. Clients can short sell all GT247.com products. A market participant who tries to profit from buying and selling futures and options contracts by anticipating future price movements. Speculators assume market price risk and add liquidity and capital to the futures markets. Widely measured as the standard for measuring large-cap U.S. stock market performance, this popular index includes a representative sample of leading companies in leading industries. The price for immediate delivery. In the case of GT247 products, the spread is the difference between the bid and offer prices. Government tax on the transaction of equities. The maximum loss on a CFD or future that a client is prepared to accept. An order to sell placed with GT247 once a specified loss level has been traded. The level at which an investor wants to close out his or her position in a profit. Anticipating future price movement using historical prices, trading volume, open interest and other trading data to study price patterns. The smallest allowable increment of price movement for a contract. Shows the current and/or recent history of a currency in the format of either a graph or table. Funds deposited by the client into an interest-bearing account for trading purposes. Profit/loss that is made on an open position. Once the position is closed out the profit/loss becomes realized and the relevant bank account is credited/debited. A market in which there are severe price fluctuations. A measurement of the change in price over a given period. It is often expressed as a percentage and computed as the annualized standard deviation of the percentage change in daily price. The person who receives the option premium and has the risk of being exercised against. The rate of return an investor receives if a fixed-income security is held to maturity. A bond which pays no coupon but which will be redeemed at a premium to the issue price. |
