Trading Glossary
Your comprehensive guide to trading terminology and financial jargon.
Ask Price
The price at which a seller is willing to sell a security or asset. It is also known as the offer price.
Bid Price
The price a buyer is willing to pay for a security or asset.
Collateral
Assets pledged as security for a loan or other obligation. In margin trading, the securities or cash you deposit with a broker.
Exchange
A marketplace where securities, commodities, derivatives, and other financial instruments are traded.
Equity
The value of an ownership interest in property, including shareholders' equity in a business. In the context of margin trading, it refers to the value of securities in a margin account minus what has been borrowed from the brokerage.
Leverage
The use of borrowed capital (debt) to increase the potential return of an investment. In forex trading, leverage allows traders to control large positions with a relatively small amount of capital.
Margin
The amount of funds that must be deposited with a broker or exchange when borrowing to purchase financial instruments. It is the difference between the total value of the investment and the loan amount.
Portfolio
A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, as well as their fund counterparts.
Position
The amount of a security, asset, or property that is owned (or sold short) by an individual or entity.
Slippage
The difference between the expected price of a trade and the price at which the trade is executed.
Spread
The difference between the bid and ask prices of an asset. It represents the profit that market makers or brokers receive for facilitating trades.