Lingo topic · 59 terms
Market basics
How a market works: who's in it, when it's open, and what moves price.
A
- All-Time HighThe highest price something has ever traded at.
- AnalystSomeone paid to study markets, economies or companies and publish views on where prices might go.
- AppreciationWhen a currency or asset gains value, so each unit buys more than it did before.
- AskThe price at which the market will sell to you, so it is the price you pay when you buy.
- AssetAnything with value that can be owned or traded: cash, currencies, shares, bonds, gold, property or coins.
B
- Bank RunWhen many depositors rush to pull their money out of a bank at once because they fear it will fail.
- BearA trader who expects prices to fall and may sell or go short to profit from it.
- Bear MarketA long, deep fall in prices. For stock indexes, a drop of 20% or more from a recent high is the common rule of thumb.
- BearishExpecting a price to fall. A bearish market, candle or trader leans toward lower prices.
- BidThe price at which the market will buy from you, so it is the price you get when you sell.
- Boris SchlossbergA long-time forex analyst, author and commentator, known for co-founding BK Asset Management with Kathy Lien.
- Bretton Woods AgreementThe 1944 deal that tied major currencies to the US dollar, and the dollar to gold, until it fell apart in the early 1970s.
- BullA trader who expects prices to rise and buys to profit from it.
- Bull MarketA long stretch of rising prices and optimism. For stock indexes, a rise of 20% or more from a low is the usual rule of thumb.
- BullishExpecting a price to rise. A bullish market, candle or trader leans toward higher prices.
- Buying PressureWhen eager buyers outnumber sellers, pushing price up as they accept higher and higher prices.
C
- Capital Gains TaxA tax on the profit you make when you sell an asset for more than you paid.
- Cash MarketA market where things are bought and sold for immediate delivery and payment, rather than at a future date.
- Clearing PriceThe price at which the amount buyers want equals the amount sellers want to sell.
- ContractAn agreement between two parties to trade something on set terms. In markets, also the standard unit of a futures or options trade.
- CounterpartyThe other side of your trade: whoever is selling when you buy, or buying when you sell.
D
- DepreciationWhen a currency loses value against others because of market forces, so each unit buys less.
- DipA short-lived drop in price, usually within a broader rise.
- DowntickA trade or quote at a lower price than the one before it.
- DumpTo sell heavily and quickly, often driving the price sharply down.
E
- Efficient Market HypothesisThe theory that market prices already reflect all available information, so consistently beating the market is extremely hard.
- ExchangeA marketplace where buyers and sellers trade assets under common rules, such as a stock exchange or a crypto exchange.
- Exchange rateThe price of one currency in terms of another: how much of the quote currency one unit of the base currency costs.
F
- Federal Deposit Insurance CorporationThe US agency that insures bank deposits, currently up to $250,000 per depositor, per bank, per ownership category.
- Financial InstrumentAny tradable contract or asset with monetary value, such as a currency pair, share, bond or option.
- FlatHaving no open positions. Also describes a market that is barely moving.
- Floating Exchange RateAn exchange rate set by supply and demand in the market, without a government target.
- ForexThe global market where currencies are traded against each other, open 24 hours a day, five days a week.
- Forex Spot RateThe current exchange rate for swapping currencies now, with standard settlement in two business days for most pairs.
I
K
L
M
O
P
R
S
- Santa Claus RallyThe tendency for US stocks to rise in the last few trading days of December and the first days of January.
- Sell-OffA sharp, fast drop in price as lots of people sell at once.
- Selling PressureWhen sellers outnumber or outmuscle buyers, pushing the price down.
- ShortSelling something because you expect its price to fall, aiming to buy it back cheaper later.
- Short SqueezeA rapid price spike as traders who bet on a fall are forced to buy back, and their buying pushes the price even higher.
- SpeculatingBuying or selling something to profit from a price change, rather than because you need or want the thing itself.
- SpotTrading for immediate delivery at today's price, as opposed to a price agreed for a future date.
- Supply and DemandThe basic force behind every price: how much people want to sell versus how much they want to buy.
T
- TradFiCrypto-world shorthand for traditional finance: banks, brokers, stock exchanges and the rest of the established system.
- Trading HeavyTrader talk for a market that feels like it wants to fall, because every attempt to rally gets sold.
- TransparencyHow openly information is shared, about prices, costs, decisions or a firm's finances.
- TurnoverThe total value of trading in a market over a period of time.
U
V
W
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