Lingo topic · 54 terms
Brokers and platforms
Who you trade through, how they get paid, and the software you click.
A
- Account Statement ReportThe record your broker sends showing every trade, fee, deposit, withdrawal and your balance over a period.
- Agency ModelA broker setup where your orders are passed on to outside liquidity providers, so the broker earns fees rather than betting against you.
- Anti-Money LaunderingRules that force financial firms to spot and report money from crime, which is why brokers ask for ID and proof of funds.
- Application Programming InterfaceA doorway that lets one piece of software talk to another, such as your trading bot talking to your broker.
- Asymmetric SlippageWhen a broker passes price moves that hurt you through to your fill, but keeps the moves that would have helped you.
- Autorité des marchés financiersFrance's financial markets regulator, known as the AMF. (Quebec in Canada also has a regulator with the same name.)
B
- BrokerThe company that gives you access to the market, holds your money, and executes your trades.
- Broker-DealerA firm that both executes trades for clients (broker) and trades for its own account (dealer).
- Bucket ShopA dodgy firm that takes customer orders but never sends them to a real market, effectively betting against its own clients.
C
- Cleared FundsMoney that has fully arrived in an account and is available to use, rather than still in transit.
- ClientA customer of a broker or bank. In retail trading, that is you.
- CommissionA fee a broker charges for handling your trade, usually a fixed amount per lot or a percentage of the trade's size.
- Commodity Futures Trading CommissionThe US government agency that regulates futures, options on futures, swaps and retail forex.
- Contract for DifferenceA contract with your broker to exchange the difference in an asset's price between when you open and close, without owning the asset.
- cTraderA trading platform offered by many forex and CFD brokers, known for depth-of-market views and its own automated trading tools.
D
- Deal TicketThe record, or order window, that holds a trade's details: instrument, direction, size, price and time.
- DealerA firm or person who trades from their own account, quoting prices and taking the other side of customers' trades.
- Demo accountA practice trading account funded with pretend money, so you can learn the platform and test ideas without risking real cash.
- Direct Market AccessA setup where your orders go straight into a market's order book, letting you see and trade on live prices yourself.
- Discretionary AccountAn account where you give a professional permission to make trades for you without asking each time.
E
F
- Fill RatioThe share of orders that actually get executed, out of all the orders sent.
- Financial Conduct AuthorityThe UK's financial regulator, which authorises and supervises brokers and other financial firms.
- First In, First OutA rule, required for US retail forex accounts, that the oldest open position in a pair must be closed first.
- Futures Commission MerchantA US firm registered to take orders and hold customer money for futures trading.
H
I
K
L
M
- Mark-to-MarketValuing a position at today's market price instead of the price you paid, so your account shows what it is really worth right now.
- Market MakerA firm that always stands ready to both buy and sell, earning the spread in return for being there.
- Markets in Financial Instruments DirectiveThe European Union's rulebook for investment firms and trading venues, beefed up as MiFID II in 2018.
- MetaTrader 4The veteran trading platform that most retail forex brokers have offered for nearly two decades.
- MetaTrader 5MetaQuotes' newer trading platform, built to handle forex plus stocks, futures and more.
N
P
R
- Retail AggregatorAn online broker that pulls in prices from big dealers and bundles lots of small retail trades together.
- Retail Foreign Exchange DealerA US regulatory category for firms that take the other side of retail customers' forex trades.
- Riskless PrincipalA trade where a dealer buys from one party and instantly sells to another, so it never holds the risk itself.
- Round TripA complete trade: opening a position and then closing it.
S
- SlippageThe difference between the price you expected and the price your order was actually filled at.
- Social TradingPlatforms where traders share their trades publicly and others can follow or automatically copy them.
- SpreadThe gap between the bid and ask price. It is the cost of getting in and out of a trade, paid the moment you open one.
- Spread BettingA UK and Ireland-style product where you bet an amount per point that a market will rise or fall, without owning anything.
- Squawk BoxA live audio news feed where announcers read out market-moving headlines and rumours as they happen.
- SwapThe interest paid or charged for holding a forex position open overnight, based on the interest-rate gap between the two currencies.
- SweepingConverting profits and losses earned in other currencies back into one base currency, such as US dollars, at the end of each day.
T
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