Hello, traders community 👋
Let’s check if you are a professional trader or a new one? There is a list of common trading terms with their definitions:
1.
Arbitrage. The simultaneous purchase and sale of an asset in order to profit from a difference in price.
2.
Ask. A motion to sell, indicating a willingness to sell a futures contract at a given price.
3.
Broker. An individual or firm that arranges transactions between a buyer and a seller, and gets commissions when the deal is executed.
4.
Bid. A motion to buy a futures contract at a given price.
5.
Bear Market. A market in which prices are declining.
6.
Bull Market. A market in which prices are rising.
7.
Daily Trading Limit. The maximum price range set by the exchange each day for a contract.
8.
Futures. All contracts covering the purchase and sale of financial instruments or physical commodities for future delivery on a commodity futures exchange.
9.
Hedge. The purchase or sale of a futures contract as a temporary substitute for a cash market transaction to be made at a later date. Usually, it involves opposite positions in the cash market and futures market at the same time.
10.
Limit Order. An order given for an options or futures trade specifying a certain maximum (or minimum) price, beyond which the order (buy or sell) is not to be executed. This is an Order Type in LindConnect for some contracts.
11.
Long. One who has bought a futures contract to establish a market position;
12.
Offset. Taking a second futures or options position opposite to the initial or opening position. This means selling, if one has bought, or buying, if one has sold, a futures or option on a futures contract.
13.
Short. The selling side of an open futures contract; a trader whose net position in the futures market shows an excess of open sales over open purchases.
14.
Spreading. The simultaneous buying and selling of two related markets in the expectation that a profit will be made when the position is offset.
15.
Stop Order (Stop Loss). Can be used to initiate a new position as well as offset an existing position. It's an order to buy or sell when the market reaches a specified point.
How many words do you know? Write a number in the comments.
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