American Style Option: A type of option that can be exercised at any time prior to expiration. It is part of the wider category of Options called “Vanilla Options”

Ask Price: It’s the price a seller asks when he wants to sell an option or stock.

Bearish: A commonly used term in the financial market describing the opinion that an asset (or a certain market) will decline in price. Also used for describing investor sentiment, referring to downward movement.

Bid Price: The price a buyer is willing to pay for a certain asset

Broker (or Brokerage firm): A financial institution that facilitates the buying and selling of financial instruments in the financial market

Bullish: A commonly used term in the financial market describing the opinion that an asset (or a certain market) will rise in price. Also used for describing investor sentiment, referring to upward movement.

Cable: Trader slang referring to the GBP/USD exchange rate

CBOE: Chicago Board Options Exchange

CBOT: Chicago Board Of Trade

Central Bank: A monetary authority, financial institution that manages a country’s monetary supply and interest rates. It also oversees the entire commercial banking system of the respective country.

Chart: Graphic representation of a certain asset’s price movement.

CME: Chicago Mercantile Exchange

COMEX: Commodity Exchange, Inc. A division of NYMEX.

Commodity: A generic term used for any marketable good produced to satisfy certain needs and can be traded through exchanges.

Cover: An action taken for lowering the risk exposure, usually by closing an existing position or opening a counter position.

Crude Oil: A liquid fossil fuel extracted through drilling and known as one of the most traded commodities.

Current price: The price of an asset reported in real time.

Currency Pair: Two currencies valued against each other constitute a currency pair.

Day trade: A trade that is opened and closed within the same day.

Depreciation: A decrease in the value of a certain asset.

Downtrend: A general decline in the price of an asset, also characterized by lower lows and lower highs.

Economic Indicator: A statistic that reflects economic growth, stability or decline. Widely known Economic Indicators are Gross Domestic Product, Unemployment change, Retail Sales, Home Sales.

Equity: The net assets of an entity. In trading, it means the balance of the trader’s account without counting the funds involved in open trades. EX: if the total account balance is $1,000, but there is an open trade with an invested amount of $100, the equity is $900.

EUREX: European Exchange

European Central Bank (ECB): European Union’s Central Bank (see Central Bank)

European Style Option: A type of option that can be exercised only at the time of expiration. It is part of the wider category of Options called “Vanilla Options”.

Exotic Options: Types of options that use more complex calculation methods than common options.

Federal Reserve (FED): The central banking system of the United States.

FINEX: Financial Instruments Exchange, the New York exchange for currency derivatives.

Forex (Foreign Exchange): A form of exchange for trading international currencies. It is a decentralized market and it involves simultaneously selling a currency and buying the other one in the pair.

FTSE: United Kingdom’s most well known stock index

Hedge (hedge trade): A trade opened with the purpose of limiting another one’s loss or protecting the profits.

HKFE: Hong Kong Futures Exchange

Holder: A trader that has an open position in the market. If a person purchases a Call or Put option, he/she is the “holder” of that position until expiry or any form of early closure.

Index (stock market index): Method of calculating the average value (differently weighted) of the stock price of different companies contained in the index.

Instrument: Different term for “Asset”

LIFFE: London International Financial Futures Exchange

Liquid Market: A market characterized by large trading volumes.

LSE: London Stock Exchange

Margin: The minimum equity needed as collateral to open a position.

Market Quote: A current price (quote) for an asset.

Neutral: It refers to the belief of a trader that an asset price will not move up or down significantly. It can also express a lack of opinion regarding a certain instrument.

NYMEX: New York Mercantile Exchange

NYSE: New York Stock Exchange

Over – The – Counter (trading): Refers to trading done directly between two parties, without the supervision of an exchange. Binary Options were available for OTC trading before 2008.

Resistance: A technical analysis term used for describing a level where rising prices were rejected several times into lower territory. Future prices are likely to respond to those levels.

Share: A single unit of ownership in an organization, mutual fund or company. The total company capital is divided into shares.

Stock: Capital invested into a business. The stock of a company is divided into Shares.

Support: A technical analysis term used for describing a level where falling prices were rejected several times into higher territory. Future prices are likely to respond to those levels.

Technical Analysis: A method of analyzing past data in order to observe price behavior and certain patterns that can be used to predict future price movement. It also refers to conducting analysis with the use of technical indicators such as MACD, RSI, Stochastic, Fibonacci retracement levels, etc.