Glossary

Learn essential terms with the help of our alphabetically
ordered introduction to the world of CFDs and FX

a
Amount for Withdrawal

When you wish to withdraw funds from your BeCFD account, you are required to make a minimum withdraw in the amount of $100 in a case of a wire transfer and $50 for all other payment methods

Ask

The price at which a security, commodity or currency is offered for sale on the market. Also known as the offer. The ask price is one parameter that is used when calculating the spread and the expiry level of an asset.

Ask Price

The price for which the market maker will sell the base currency.

Asset/Underlying Asset

Any good that has an underlying exchange value.

Asset Sub-categories

Forex - currency pairs, such as GBP/USD, EUR/USD, USD/CHF, etc.
Stocks - such as Intel, Twitter, Coca-Cola, etc.
Commodities - such as oil, gold, coffee, etc.
Indices - such as S&P500, DAX30, DJIA, etc.

At-the-Money (ATM)

An option whose exercise or strike price is equal to the current market price of the underlying asset.

Available Margin

The actual funds which are available for trading in the account (not associated with any open position).

b
Balance

The total amount of funds available in your trading account, excluding P&L (profits and losses) of presently open positions.

Bid Price

The price for which the market maker will buy the base currency.

c
Current Price

The current market price for an underlying asset. Once the position has been opened, the current price becomes the strike price. Current prices of assets are determined objectively by real-time data providers.

e
Entry Rate/Strike Price

The price at which a specific derivative contract can be exercised.

Equity

The existing balance in your trading account, including P&L (profit and loss) of all open positions.

Expiry time

The precise time at which the position closes. The expiry time is an extremely important and decisive factor in the outcome of the binary position. It is absolutely vital for a trader to understand and plan the timeframes with which they are planning to trade.

Exposure Coverage

The Net Exposure (%) covered by your equity.

f
Fundamental Analysis

A method of evaluating the performance of a financial asset in an attempt to measure its intrinsic value, by examining related economic, financial, and other qualitative and quantitative factors. The goal of fundamental analysis is to research and examine factors that can influence the market price of the asset. These factors are varied and include overall companys performance, revenue, expense, liabilities, industrial environment conditions etc.

g
GTC (Good-Till-Cancelled) Order

A type of limit order that is active until it is fulfilled or cancelled. As opposed to a day order, a GTC order can remain active for an indefinite number of trading sessions.

Generally speaking, GTC orders are usually pre-set to expire 30-90 days after the position has been opened.

i
If Done Order

An "If Done Order" consists of two separate orders: a primary order, that will be executed as soon as market conditions allow it, and a secondary order that will be activated only if the first order is executed.

l
Leverage

The ability to hold an investment position of greater value than your equity. Leverage is usually represented in ratios. BeCFD offers a leverage ratio that ranges from 25:1 to 200:1 (times the invested amount).

Limit Order

Commonly used to enter a market and to take profit at predefined levels. Limit order enables you to predetermine the price at which you wish to buy or sell an underlying asset. A limit order is highly useful in volatile markets, where every second may result in major price drops or climbs.

m
Maintenance Margin

The minimum account value an investor is required to maintain to continue holding one or more futures contracts. In order to keep your open positions active, kindly ensure that your equity exceeds the maintenance margin level. Otherwise, the position will automatically close.

Margin Call

A situation where your equity falls below the required "Maintenance Margin". When that happens, you are subjected to a margin call to remedy the situation. In order to avoid having your positions closed for you, it is better to either close or reduce open positions or send additional funds to cover your positions.

Margin Usage

A term used to describe the percentage of the entire equity that you are currently using in your open positions. It is extremely vital to prearrange your margin usage before you plan your trading strategies.

Market Maker

An institution or individual that quotes bid and ask prices for specific stocks or other marketable securities that it holds in inventory and is prepared and able to buy or sell those securities at any time on its own account.

n
Net Exposure

Refers to the sum of the nominal value of your account positions converted into the base currency of your account. In Forex trading, it describes the total value of all your forex positions converted to the base currency of your account.

o
Open P&L

Displays the total unrealized profit and loss figures for the open positions in your trading account.

Order Execution

The completion of a buy or sell order for a financial asset. The execution of an order happens when it is completely filled, rather than when it is placed by the investor. The broker's role is to decide what's the best way to execute the position and where to direct it.

p
PIP

A PIP (Point in Percentage) is the smallest price movement that a given exchange rate makes based on changing market conditions. For instance, in major currency pairs, a PIP would represent the fourth decimal place: 0.0001.

Position

Any form of investment in a currency pair, stock, commodity or index. A position can be either flat, long or short, profitable or unprofitable, depending on market movements.

r
Rollover

A situation where a position is held after the market closes. Consequently, it "rolls over" to the next value date, what causes it to acquire a swap charge or credit. Rollover/swap rates are calculated in points and are automatically converted into the account's currency.

s
Spread

Traditionally represented in pips, it is the price difference between where a trader may purchase or sell an underlying asset. Spreads are based off the "Buy" and "Sell" prices of underlying assets and they tend to be variable.

t
Technical Analysis

An analysis method (methodology) used for evaluating an underlying financial asset by examining the statistical data related to its historic performance. It is meant to help make buying and selling decisions using market statistics and it primarily involves the studying of charts and graphs for the purpose of detecting possible patterns that may be indicators of future market performance.

Trading Hours

The period between the starting time and ending time of each and every market and asset when a trade can be performed.

Trend

Relates to the general movement or direction of a market or of the price of an asset. Trends may vary in length from short, to intermediate, to long term. Recognizing a certain trend enables traders to make informed assumptions based on the possibility of the future direction of market prices.

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