Understanding trading terminologies that could bring you closer to being on a pro level.
Free float helps you select the best stocks to trade based on the market conditions and your risk profile. Learn more now about Free Float with AvaTrade.
The petrodollar has assisted the USD in dominating the global economy. Learn more with AvaTrade about the petrodollar system and its impact on the markets.
HODLing is a long-term investment strategy in the financial markets. Learn more about how to HODL and which assets to HODL. Access AvaTrade now.
Gamma squeezes have been a more common occurrence in recent months. They present lucrative opportunities for modern investors. Learn more today!
Hedging is an effective strategy to reduce and control investment risks. Visit the AvaTrade education centre to learn more about hedging today!
The Sharpe ratio helps investors to assess the performance of a portfolio by taking into account the risks absorbed by the investor. Learn how to use it here!
A gearing ratio is a financial ratio that measures a company's financial leverage or risk level and is used in investment risk assessment. Learn more here!
A meme stock refers to shares of a company that has viral online and garnered massive attention from retail investors. Learn more about them here!
Contango refers to a situation where the futures price of an underlying asset is higher than its current spot price. ➤ Read more.
Volatility in finance is defined as the rate and range at which the price of an asset changes during a certain time frame. ➤ Read more.
Learn about carry trading ⭐ Utilize this powerful trading strategy to take advantage of interest rate differential when trading Forex.
Liquidity refers to the extent to which an asset can be bought or sold quickly without having a ⭐ Significant effect ⭐ on its price.
Learn about different types of arbitrage in financial markets - Currency, statistical & triangular arbitrage. ⭐ How to use it for profit?
Slippage is the difference between a trade’s expected price and the actual price at which the trade is executed. ➤ Read more.
Learn about currency pegging (fixed exchange rate) ⭐ Why countries do it? ⭐ How it creates arbitrage opportunities in Forex trading?
What are stock market crashes? ⭐ Why do they happen? ⭐ How long do they last? ⭐ What are the consequences of a stock market crash.
A drawdown refers to how much an account has fallen from its peak to its trough in terms of capital or investment amount.
A swap is a rollover interest that you earn or pay for holding your positions overnight, depending on the interest rates of the currencies.
Market cycles dictate the trend direction in financial markets ⭐ Find out what drives the markets ⭐ How you can use it ?
DeFi is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks.
Read about the different types of assets price correlation (Positive / Negative / Uncorrelated) ⭐ Learn correlation trading strategies !
The various Greek letters are used in the options market to describe parameters of risk when taking an options position. ⭐ Read our guide!
Strike prices are used in derivatives (mainly options) trading. ⭐ Derivatives are financial products whose value is based (derived) on the ...
Scalping is a day trading strategy that involves opening and closing trades within a short period of time. ⭐ Read more for tips.
OTM describe an option contract that only contains extrinsic value. ⭐ These options will have a delta of less than 50.0.
ITM indicates that an option has value in a strike price that is favorable in comparison to the prevailing market price of the underlying asset.
In finance, intrinsic value of an asset usually refers to a value calculated value of all expected future cash. ⭐ Read more.
Call option means that the strike price is at least $10 less than the underlying asset, or $10 higher for a put option. ⭐ Read more.
At the money (ATM), is used to describe the relationship between an option's strike price and the underlying security's price.
Dividends are a distribution of earnings or profits to shareholders in one of many possible forms. Learn how they affect share prices from our article!
A block trade is the purchase or sale of a large number of securities at an arranged price between two parties. Join Avatrade today!
Treynor ratio, also knows as the reward-to-volatility ratio, compares the appeal of different portfolios on a risk-adjusted basis. Learn how to use it now!
Learn about the different types of price weighting ⭐ Gain an insight into how different cultures measure success and importance.
Stock market indexes provides a glimpse into a country’s economy by looking at how its major corporations are faring ➤ For beginners.
We pay a premium to keep a position open overnight. ⭐ But what happens when the formula involves a negative exchange rate?
Forex trading or overall investing activity requires constant learning and practice. Sometimes, understanding forex and general trading terminologies can seem confusing and overwhelming, but you should not feel intimidated.
It is important to understand all the relevant key terms, as this will only help you to become a better trader. It can help you to gain further knowledge from more professional sites as well as participate in interesting trader-centric forums.
Reading, learning, viewing and using forex terms continually will make you more comfortable with trading lingo over time. There are basic and advanced forex glossaries.
Basic terminologies will help you get acquainted in the market, whereas more advanced terminologies can even help you to understand sophisticated strategies. To set you off, here are some of the basic terms you should understand:
Above you can see the list of articles about the terms that require more than a couple of lines to explain. Read On!
Open a Demo account to practice what you’ve learned or a Real account to start trading today!