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Borrowed exposure that lets you control a position larger than your deposit, expressed as a ratio such as 10:1. It multiplies gains and losses equally, because profit and loss are calculated on the full exposure rather than on your capital.

The portion of your own capital reserved as collateral to support a leveraged position. It is held, not spent, and released when the position closes. If equity falls below the required margin, the position may be closed automatically.

The difference between the bid and the ask price. It is the cost of entering a trade, paid at the moment of execution and embedded in the price rather than charged separately.

The smallest conventional price increment in currency trading, the fourth decimal place for most pairs, the second for yen pairs. Spreads and moves in FX are commonly quoted in pips.

A contract for difference: an agreement to exchange the change in an instrument's price between opening and closing, without owning the underlying asset. Usually leveraged, and therefore capable of losses that exceed the initial deposit.

An exchange-traded fund: a single listed instrument holding a basket of underlying assets, typically tracking an index. It trades like a share throughout the session and charges an ongoing management fee.

A distribution of company profit to shareholders, usually paid quarterly or annually. Holders of derivative positions do not receive dividends, though a corresponding adjustment is normally applied to the position.

An instruction to execute immediately at the best price currently available. It gives certainty of execution without certainty of price.

An instruction to execute only at a specified price or better. It gives certainty of price without certainty of execution, if the level is never reached, the order does not fill.

Borrowed exposure that lets you control a position larger than your deposit, expressed as a ratio such as 10:1. It multiplies gains and losses equally, because profit and loss are calculated on the full exposure rather than on your capital.

The portion of your own capital reserved as collateral to support a leveraged position. It is held, not spent, and released when the position closes. If equity falls below the required margin, the position may be closed automatically.

The difference between the bid and the ask price. It is the cost of entering a trade, paid at the moment of execution and embedded in the price rather than charged separately.

The smallest conventional price increment in currency trading, the fourth decimal place for most pairs, the second for yen pairs. Spreads and moves in FX are commonly quoted in pips.

A contract for difference: an agreement to exchange the change in an instrument's price between opening and closing, without owning the underlying asset. Usually leveraged, and therefore capable of losses that exceed the initial deposit.

An exchange-traded fund: a single listed instrument holding a basket of underlying assets, typically tracking an index. It trades like a share throughout the session and charges an ongoing management fee.

A distribution of company profit to shareholders, usually paid quarterly or annually. Holders of derivative positions do not receive dividends, though a corresponding adjustment is normally applied to the position.

An instruction to execute immediately at the best price currently available. It gives certainty of execution without certainty of price.

An instruction to execute only at a specified price or better. It gives certainty of price without certainty of execution, if the level is never reached, the order does not fill.

An order that triggers an exit once price reaches a defined level, used to cap a loss. It does not guarantee the exit price: once triggered it becomes a market order, so a gap can fill it materially worse than the stop level.

An order that closes a position automatically once price reaches a defined favourable level, used to realise a gain without monitoring the market.

The financing cost of holding a leveraged position past the daily rollover, derived from the interest differential of the assets involved plus a markup. Charged nightly, occasionally credited rather than debited, and typically applied at triple rate on one weekday to cover the weekend.

The magnitude and frequency of an instrument's price fluctuation over a period. Higher volatility widens the range of possible outcomes in both directions, it describes uncertainty, not direction.

How readily an instrument can be traded in size without materially moving its price. Liquid markets show tight spreads and reliable fills; thin markets show wider spreads and greater slippage.

The bid is the price at which the market will buy from you; the ask is the price at which it will sell to you. The ask is always the higher of the two, and the gap between them is the spread.

Holding a position that profits if the price rises. The conventional direction, and the one where the maximum loss is bounded by the position falling to zero.

Holding a position that profits if the price falls. Because a price can in principle rise without limit, the theoretical loss on a short position is unbounded, which is why risk controls matter more, not less.

The difference between the price expected at order entry and the price actually filled. It occurs when the market moves between the two moments, and is most pronounced around news, at the open, and in thin conditions.

An order that triggers an exit once price reaches a defined level, used to cap a loss. It does not guarantee the exit price: once triggered it becomes a market order, so a gap can fill it materially worse than the stop level.

An order that closes a position automatically once price reaches a defined favourable level, used to realise a gain without monitoring the market.

The financing cost of holding a leveraged position past the daily rollover, derived from the interest differential of the assets involved plus a markup. Charged nightly, occasionally credited rather than debited, and typically applied at triple rate on one weekday to cover the weekend.

The magnitude and frequency of an instrument's price fluctuation over a period. Higher volatility widens the range of possible outcomes in both directions, it describes uncertainty, not direction.

How readily an instrument can be traded in size without materially moving its price. Liquid markets show tight spreads and reliable fills; thin markets show wider spreads and greater slippage.

The bid is the price at which the market will buy from you; the ask is the price at which it will sell to you. The ask is always the higher of the two, and the gap between them is the spread.

Holding a position that profits if the price rises. The conventional direction, and the one where the maximum loss is bounded by the position falling to zero.

Holding a position that profits if the price falls. Because a price can in principle rise without limit, the theoretical loss on a short position is unbounded, which is why risk controls matter more, not less.

The difference between the price expected at order entry and the price actually filled. It occurs when the market moves between the two moments, and is most pronounced around news, at the open, and in thin conditions.