Glossary - MYfintec Glossary - MYfintec MYfintec

Glossary

 

Asset The underlying instrument used to determine a contract. Assets typically consist of currency pairs, commodities, stocks, or indices.
Asset class This is a specific group of investments, e.g. stocks, forex, commodities and indices.
At the Money The instance wherein the target price of an option is identical to the price of the underlying asset.
Bear This is a trader who anticipates that market prices will fall.
Bear Spread This is a contracts options strategy in searching for optimal benefits when the underlying asset falls.
Contracts Option The assets traded on a yes (call) or no (put) prediction basis under a fixed pay-out offering for accurate market directional movements within a specified time frame.
Bond A debt investment in which an investor loans money usually to a government or corporation.
Breakeven price This is the value that price has to achieve in order that the trader can start to realize a profit.
Bull This is a trader who anticipates that market prices will rise.
Bull Spread  The amount an asset must be sold to cover initial cost of acquiring.
Butterfly Spread A limited profit and risk contracts option strategy that is a combination of both bull and bear spreads. The butterfly spread is centered on 3 striking prices and can be constructed using calls or puts.
High option An option that will generate a pre-determined profit if the price of its underlying asset is higher at its expiry time than its opening.
Commodities This asset type comprises of goods and services that meet human needs and wants such as energy, food and metals.
Correlation A statistical measure indicating the degree of movement of two different currency pairs are related.
Credit Default Swap A swap contract involves buyers performing a series of premium payments to the seller in exchange for a refund should the asset go into default.
Currencies  Are forms of paper money used as an exchange between buyers and sellers.
Currency Option Presents a trader with the right (but not obligation) to buy or sell a predetermined quantity of a particular currency at a specified exchange rate.
Currency Trading The buying and selling global currencies. Currency trading is used by banks and financial institutions to support international trade. Individual investors can also speculate on currency trading using Forex.
Current Price The last reported real-time price of the underlying asset unless otherwise specified.
Digital Option Another term popularly used to describe Contracts Options.
Euro The authorized currency of the Eurozone and is the world’s second largest reserve currency.
Exotic Options A type of option that was reserved exclusively for select traders before being simplified and made openly available to the public in the form of Contracts Options.
Expiry Level/Price The value of the underlying asset when the option expires.
Expiry Price The real-time price of the contracts options underlying asset quoted at the nominated time of expiry. The value is used to determine if the contracts option expired in-the-money or out-of-the-money.
Expiry Time The predetermined time and date when the option expires and cannot be traded further.
Financial Transactions: These are events when contracts concerning buyers and sellers are executed in order to exchange assets for payment regularly resulting in a change in the financial position of the parties involved.
Forex Option These contracts options utilize underlying assets based on currency pairs traded on Forex, e.g. GBP/USD and EUR/USD.
Forex Forex is the most liquid and chief financial market in the world used to exchange and trade currencies by large fiscal institutions, businesses, governments, banks, currency speculators, other institutions and individuals.
Fundamental Analysis A major type of analysis used to predict market movements and prices when trading by examining economic factors including geopolitical events.
Futures This option has a static payoff. Often referred to as the ‘all or nothing’ option or ‘one touch option.
Hedging A strategy employed to maximize risk management. Typically this involves taking equal yet opposite positions in two diverse markets.
In the Money The instance wherein the price of the underlying asset reaches a level that becomes profitable.
Indices Are collections of stocks assembled according to a certain criteria.
Interest rates A figure that denotes the cost of borrowing money, generally outlined as a percentage.
Intrinsic value The gap between the opening and the current price of the underlying asset.
Investment Amount The amount of capital used to purchase a contracts options contract, also known as The Stake.
Investment The amount of equity outlaid with the intent to make profit.
Liquidity Also referred to as marketability, liquidity is the capacity to convert cash quickly.
Long Purchasing an asset with the anticipation it will increase in value.
Market Price The quoted current value of the underlying asset.
Mid-Market The real market worth of an asset. The price is determined by the average of the bid and ask price.
NASDAQ National Association of Securities Automated Quotations is the biggest electronic screen-based equity securities trading market in the USA and fourth in the world. There is no physical exchange involved, thus often referred to as an ‘over the counter’ market.
Out of the Money The instance wherein the price of the underlying asset reaches a level that becomes loss-making.
Payout The level of profit earned when a contracts options contract expires In the Money. This is typically represented in percentage form.
Pip The fourth figure after the decimal point in a number. A pip is the smallest tradable unit of currency pairs.
Low option The option to sell an asset at a predetermined amount within a predetermined timeframe.
Quotation The highest price an investor is prepared to pay for assets and the lowest price an investor is prepared to accept.
Rate of return The profit or loss of an investment over a designated time which is usually shown as a percentage.
Return The specific amount returned to a client following the expiry of a contracts options contract In the Money.
Reuters Reuters Group Limited is a UK-based Canadian company that delivers information about the international financial markets to the financial industry, media and corporate markets. Reuters’s objective is to provide data, news, graphics and trading products.
Share Price The price of specific share or stock.
Shares A company listed on the Stock Market can divide its worth into units of equal value which are termed shares. They can then be marketed for sale in order to raise cash. As individual who purchased shares in a company is titled a shareholder and becomes one of the owners of that company.
Short This word describes when a investor sells an asset.
Short Straddle An unbiased contracts options strategy involving selling and simultaneously buying the same underlying asset.
Spread The variance between the Ask and Bid amounts of an underlying asset.
Stock Exchange The location where shares are sold and bought.
Stock Market Analyst An expert who is capable to skillfully consider the worth of company listed on the Stock Exchange.
Stock Option A stock option can be sold by one party, it provides the buyer the right, but not the obligation, to buy or sell a stock at a predetermined price within a specific timeframe or date.
Stocks The initial capital invested in the business or company by its founders.
Strike Price The value at which the contracts options contract for the underlying asset is sold, also determining if the trade has been profitable (In the Money).
Strip Strategy An unlimited return and risk contracts options strategy that is used when investors consider that price of the underlying asset is probable to decline as opposed to increase as a result of increasing instability.
Swap This term describes an exchange of pre-determined payouts during a timeframe.
Target Price The value that the underlying asset must reach for the trade to become profitable (In the Money).
Technical Analysis The use of technical research on historical trading data to predict future market movements and prices.
Time of Expiration Another term popularly used to describe the Expiry Time.
Trading hours Individual assets have specific trading hours, days and holidays.
Yield Represented as a percentage, a yield indicates the annual return on an investment.