Take a look at our list of the financial terms associated with trading and the markets. From beginners starting their trading journey to experts with decades of experience, all traders need to clearly understand a huge number of terms.
The Opening Price is the price at which a security first trades upon the opening of an exchange on a trading day. It is important to note that it may not identical to the previous day’s closing price. Also, for new stock offerings (IPO etc), Opening Price refers to the initial share price at the beginning of trade of the first day. Yet there are some cases when an opening price will also be the share price which was established by the first trade of the day, instead of being based on a price that was already in place when at the beginning of trade of that day at that specific exchange.
How is opening price calculated?
The opening price is can be calculated by taking the first trade price executed in that trading session. In case of stock trading it is the price of the first trade executed on the exchange when the market opens. Opening price is usually used to calculate the performance of the stock or any other asset for the day.
What is the difference between opening price and closing price?
The opening price is the price of an asset at the start of a trading session, while the closing price is the price of an asset at the end of a trading session.
Who sets the opening price of a stock?
The opening price of a stock is typically set by the stock exchange or market maker responsible for trading that stock.
The closing price is the final price at which a security is traded during a trading session. It is used to determine the settlement price for trades and the value of securities at the end of the trading day.
Why is closing price important?
The closing price is important for several key reasons. Market players such as traders, investors, banks and financial institutions as well as regulators use the closing price as a reference point for determining a stock’s performance over time (which can range from a as little as seconds or minutes prior or past the closing price to durations such as a week, through a month and over the course of a year).
What is 'after-hours' trading?
After hours trading refers to the buying and selling of securities outside of the regular trading hours of the major stock exchanges, typically 4:00 PM to 8:00 PM Eastern Standard Time. This can include both electronic trading and trading by phone. It is usually less liquid than regular trading hours and prices may be more volatile.
Can you sell at closing price?
Yes, you can sell a security at the closing price. The closing price is the final price at which a security is traded during a trading session, and can be used as a reference point for determining the settlement price for trades. If you sell a security at the closing price, you will receive the price of the security at the end of the trading day.
A quoted price is the most recent price at which an asset was traded at. Global and local events, either of a financial nature or completely unrelated to finances continually affect the quoted prices of assets such as stocks, bonds, commodities, and derivatives changes continually throughout a trading. Additionally, It is often the price point where buyers and sellers agree on, the most up-to-date agreement between buyers and sellers, or the bid and ask prices. It is also where supply meets demand.
Is a quoted price legally binding?
In most cases, when trading in an exchange, the quoted price is binding and the trade is executed at the quoted price, with the exchange acting as a counterparty to the trade. However, when trading OTC (over-the-counter), the quoted price is not necessarily binding as the parties have more flexibility in negotiating the final price, and the counterparty risk is higher.
A spot price is the current market value of an asset or security. It's the amount you would pay to buy or sell it at that exact moment in time. Spot prices are constantly changing, as they depend on supply and demand forces in the marketplace. Spot prices provide important insights into market trends and can be used by traders to make investment decisions.
Why is it called a spot price?
It is called a "spot" price because it refers to the price at which an asset can be bought or sold "on the spot" or immediately.
How is spot price calculated?
The spot price of a commodity, security, or currency is typically determined by supply and demand factors in the market. The price is influenced by a variety of factors such as production costs, political and economic conditions, and speculation.
Working orders, also known as pending orders, include Stop orders and Limit orders. Essentially, they’re instructions for a broker to perform a trade when an asset hits a certain price. These orders inform brokers that traders wish to make that trade only if something happens to the asset price.
What is the best order type when buying stock?
The best order type depends on the individual's specific needs and market conditions. It's important to understand the trade-off between speed and price certainty when choosing an order type. Market orders provide immediate execution but at the current market price, while limit orders offer price certainty but may not be executed if the desired price is not reached.
What is an open work order?
An open work order in trading is an outstanding order to buy or sell a security that has not yet been executed. It remains open until it is either filled or cancelled by the trader.
An open position in trading refers to a trade that has been entered into but not yet closed or settled. The position remains open until the trader decides to close it by executing an opposing order or if the order reaches its expiration. It can refer to a long or short position in a security or financial instrument.
When should you close your position?
A trader should close their position in trading when their predetermined criteria for exiting the trade have been met, such as reaching a certain profit level or stop-loss point. It could also be closed because the trade no longer aligns with their overall strategy or market conditions have changed.
Online brokers are digital trading platforms that allow users to trade stocks, options, ETFs and other financial products online. They offer convenience and competitive pricing, making them popular among individual investors and traders.
What are the three types of brokers?
Trading brokers come in three main varieties: full-service, discount, and online. Full-service brokers offer a variety of services such as research, advice, and account management. Discount brokers are low-cost and may only offer basic services. Online brokers provide customers access to the markets with limited assistance.
Are online brokers safe?
Online brokers are generally safe when used correctly. It is important to use trusted and reliable providers, keep your account secure, and be mindful of any potential risks when trading online. For example, markets.com is fully regulated and controlled for maximum security and safety while you trade.
Consumer Price Index or CPI is a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services. Indexes are available for the U.S. and various geographic areas. It is considered as one of the most popular measures of inflation and deflation. CPI is also used to estimate the purchasing power of a country’s currency.
How is CPI Calculated?
CPI is calculated by considering Key contributors, including retail and services businesses as well as the U.S. rental housing market (housing accounts for approx. 30% of the CPI). There are several CPI variations:
• CPI-U index reviews the spending habits of urban consumers in the U.S.A. This constitutes for approx. 88% of the U.S population.
• CPI-W index for calculates changes in the costs of benefits paid to “urban wage earners and clerical workers,” which is used to calculate changes in the costs of benefits paid via Social Security.
• CPI ex-food and energy – is highly volatile and thus is excluded from the overall CPI.
Futures contracts for Orange juice (ORA) are based upon frozen concentrated orange juice (FCOJ).
Brazil is by far the world's largest producer of oranges, harvesting 20 million metric tonnes per year. China is in second spot, but still far behind, with an annual yield of 7 million, followed by the EU (6.5 million), the US (4.8 million), and Mexico (4.6 million).
Factors that can affect the supply - and therefore the price - of orange juice include weather, crop disease, and the strength of the US dollar. For instance, orange juice futures often increase in price when hurricanes travel towards Florida, a key growing region. Consumer demand often plays a role as well; orange juice is a popular breakfast staple, but a move away from drinks with high sugar content has seen demand decline in recent years.
The European Central Bank (ECB) is the central bank for the European Union's member states that have adopted the euro. The ECB is responsible for the management of the euro and for implementing monetary policy in the eurozone. It is independent of national governments and has the primary objective of maintaining price stability in the eurozone.
Who controls the European Central Bank?
As stated above, the European Central Bank (ECB) is independent from national governments and political influences. It is governed by the Governing Council, which is composed of the six members of the Executive Board and the governors of the national central banks of the 19 European Union (EU) member states that have adopted the euro as their currency. The President of the ECB, currently Christine Lagarde, is appointed by the European Council
Earnings Per Share (EPS) is a financial metric that measures the amount of profit a company makes for each outstanding share of its common stock. It's calculated by dividing net income by the number of shares outstanding. Investors use EPS to measure how profitable a company is and to compare different companies in the same sector.
What is a good earnings per share? Is it better to have a high or low earnings per share?
There is no definitive answer to what constitutes a "good" earnings per share (EPS) as it can vary depending on the industry, the size of the company, and the expectations of the market. Generally, a higher EPS is considered better, as it indicates that a company is generating more profit per share of stock.
What is earnings per share vs dividend?
A dividend is a payment made by a company to its shareholders out of its profits or reserves. Whereas EPS is an indicator of a company's profitability.
Trading trends refer to the overall direction of a security or market, often revealed through chart patterns or indicators. Traders use these trends to identify potential entry and exit points, as well as possible trading opportunities. Analyzing the financial markets in order to identify trends is an essential skill for successful traders. With knowledge of historical trends, investors can spot emerging ones and plan accordingly.
How do you identify a trend in trading?
Analyzing past market movements, changes in asset prices and economic data can be used to identify short-term and long-term trends. Using technical indicators such as moving averages, MACD, and stochastics can also help you spot potential trading opportunities and take advantage of prevailing market trends.
What are the 3 types of trends?
When analyzing the stock market, there are three primary trends that can be observed: short-term, intermediate-term, and long-term. Short-term trends generally last within one to three weeks, intermediate-term trends can range from one to four months, and long-term trends last more than a year. Being able to identify these different trend patterns will help investors maximize their potential returns.
Moving Average Convergence/Divergence, also known as MACD , is an analytical trading indicator. Its function is to show changes in the strength, direction, momentum, and duration of a trend in a share’s price. The MACD indicator is comprised of three time series charts based on historical price data. For example, closing price.
How can you tell if MACD is bullish?
If the MACD line (the blue line) is above the signal line (the red line), it is considered to be bullish and suggests that the security's price is likely to rise. This is because the MACD line is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA, and when the 12-day EMA is above the 26-day EMA, it indicates that short-term momentum is bullish and the stock is likely to rise.
Is MACD a good indicator?
MACD is a widely used technical indicator that can be a useful tool for identifying trends and potential buy or sell signals in the market. However, like any indicator, it has its limitations and should be used in conjunction with other technical analysis tools and fundamental analysis to make informed trading decisions.
Which is better MACD or RSI?
Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) are popular technical indicators used in trading. They are both useful tools for identifying trends and potential buy or sell signals, but they are based on different calculations and are used for different purposes.
The MACD is a momentum indicator that is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. It is used to identify bullish or bearish trends and potential changes in momentum.
The RSI, on the other hand, is a momentum oscillator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset.
Both indicators can be useful, but they can also give different signals, so once again, it's important to use them in conjunction with other indicators and analysis techniques to make informed trading decisions.
The closing price is the final price at which a security is traded during a trading session. It is used to determine the settlement price for trades and the value of securities at the end of the trading day.
Why is closing price important?
The closing price is important for several key reasons. Market players such as traders, investors, banks and financial institutions as well as regulators use the closing price as a reference point for determining a stock’s performance over time (which can range from a as little as seconds or minutes prior or past the closing price to durations such as a week, through a month and over the course of a year).
What is 'after-hours' trading?
After hours trading refers to the buying and selling of securities outside of the regular trading hours of the major stock exchanges, typically 4:00 PM to 8:00 PM Eastern Standard Time. This can include both electronic trading and trading by phone. It is usually less liquid than regular trading hours and prices may be more volatile.
Can you sell at closing price?
Yes, you can sell a security at the closing price. The closing price is the final price at which a security is traded during a trading session, and can be used as a reference point for determining the settlement price for trades. If you sell a security at the closing price, you will receive the price of the security at the end of the trading day.
Consumer Price Index or CPI is a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services. Indexes are available for the U.S. and various geographic areas. It is considered as one of the most popular measures of inflation and deflation. CPI is also used to estimate the purchasing power of a country’s currency.
How is CPI Calculated?
CPI is calculated by considering Key contributors, including retail and services businesses as well as the U.S. rental housing market (housing accounts for approx. 30% of the CPI). There are several CPI variations:
• CPI-U index reviews the spending habits of urban consumers in the U.S.A. This constitutes for approx. 88% of the U.S population.
• CPI-W index for calculates changes in the costs of benefits paid to “urban wage earners and clerical workers,” which is used to calculate changes in the costs of benefits paid via Social Security.
• CPI ex-food and energy – is highly volatile and thus is excluded from the overall CPI.
The European Central Bank (ECB) is the central bank for the European Union's member states that have adopted the euro. The ECB is responsible for the management of the euro and for implementing monetary policy in the eurozone. It is independent of national governments and has the primary objective of maintaining price stability in the eurozone.
Who controls the European Central Bank?
As stated above, the European Central Bank (ECB) is independent from national governments and political influences. It is governed by the Governing Council, which is composed of the six members of the Executive Board and the governors of the national central banks of the 19 European Union (EU) member states that have adopted the euro as their currency. The President of the ECB, currently Christine Lagarde, is appointed by the European Council
Earnings Per Share (EPS) is a financial metric that measures the amount of profit a company makes for each outstanding share of its common stock. It's calculated by dividing net income by the number of shares outstanding. Investors use EPS to measure how profitable a company is and to compare different companies in the same sector.
What is a good earnings per share? Is it better to have a high or low earnings per share?
There is no definitive answer to what constitutes a "good" earnings per share (EPS) as it can vary depending on the industry, the size of the company, and the expectations of the market. Generally, a higher EPS is considered better, as it indicates that a company is generating more profit per share of stock.
What is earnings per share vs dividend?
A dividend is a payment made by a company to its shareholders out of its profits or reserves. Whereas EPS is an indicator of a company's profitability.
The Opening Price is the price at which a security first trades upon the opening of an exchange on a trading day. It is important to note that it may not identical to the previous day’s closing price. Also, for new stock offerings (IPO etc), Opening Price refers to the initial share price at the beginning of trade of the first day. Yet there are some cases when an opening price will also be the share price which was established by the first trade of the day, instead of being based on a price that was already in place when at the beginning of trade of that day at that specific exchange.
How is opening price calculated?
The opening price is can be calculated by taking the first trade price executed in that trading session. In case of stock trading it is the price of the first trade executed on the exchange when the market opens. Opening price is usually used to calculate the performance of the stock or any other asset for the day.
What is the difference between opening price and closing price?
The opening price is the price of an asset at the start of a trading session, while the closing price is the price of an asset at the end of a trading session.
Who sets the opening price of a stock?
The opening price of a stock is typically set by the stock exchange or market maker responsible for trading that stock.
An open position in trading refers to a trade that has been entered into but not yet closed or settled. The position remains open until the trader decides to close it by executing an opposing order or if the order reaches its expiration. It can refer to a long or short position in a security or financial instrument.
When should you close your position?
A trader should close their position in trading when their predetermined criteria for exiting the trade have been met, such as reaching a certain profit level or stop-loss point. It could also be closed because the trade no longer aligns with their overall strategy or market conditions have changed.
Online brokers are digital trading platforms that allow users to trade stocks, options, ETFs and other financial products online. They offer convenience and competitive pricing, making them popular among individual investors and traders.
What are the three types of brokers?
Trading brokers come in three main varieties: full-service, discount, and online. Full-service brokers offer a variety of services such as research, advice, and account management. Discount brokers are low-cost and may only offer basic services. Online brokers provide customers access to the markets with limited assistance.
Are online brokers safe?
Online brokers are generally safe when used correctly. It is important to use trusted and reliable providers, keep your account secure, and be mindful of any potential risks when trading online. For example, markets.com is fully regulated and controlled for maximum security and safety while you trade.
Futures contracts for Orange juice (ORA) are based upon frozen concentrated orange juice (FCOJ).
Brazil is by far the world's largest producer of oranges, harvesting 20 million metric tonnes per year. China is in second spot, but still far behind, with an annual yield of 7 million, followed by the EU (6.5 million), the US (4.8 million), and Mexico (4.6 million).
Factors that can affect the supply - and therefore the price - of orange juice include weather, crop disease, and the strength of the US dollar. For instance, orange juice futures often increase in price when hurricanes travel towards Florida, a key growing region. Consumer demand often plays a role as well; orange juice is a popular breakfast staple, but a move away from drinks with high sugar content has seen demand decline in recent years.
Moving Average Convergence/Divergence, also known as MACD , is an analytical trading indicator. Its function is to show changes in the strength, direction, momentum, and duration of a trend in a share’s price. The MACD indicator is comprised of three time series charts based on historical price data. For example, closing price.
How can you tell if MACD is bullish?
If the MACD line (the blue line) is above the signal line (the red line), it is considered to be bullish and suggests that the security's price is likely to rise. This is because the MACD line is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA, and when the 12-day EMA is above the 26-day EMA, it indicates that short-term momentum is bullish and the stock is likely to rise.
Is MACD a good indicator?
MACD is a widely used technical indicator that can be a useful tool for identifying trends and potential buy or sell signals in the market. However, like any indicator, it has its limitations and should be used in conjunction with other technical analysis tools and fundamental analysis to make informed trading decisions.
Which is better MACD or RSI?
Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) are popular technical indicators used in trading. They are both useful tools for identifying trends and potential buy or sell signals, but they are based on different calculations and are used for different purposes.
The MACD is a momentum indicator that is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. It is used to identify bullish or bearish trends and potential changes in momentum.
The RSI, on the other hand, is a momentum oscillator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset.
Both indicators can be useful, but they can also give different signals, so once again, it's important to use them in conjunction with other indicators and analysis techniques to make informed trading decisions.
A quoted price is the most recent price at which an asset was traded at. Global and local events, either of a financial nature or completely unrelated to finances continually affect the quoted prices of assets such as stocks, bonds, commodities, and derivatives changes continually throughout a trading. Additionally, It is often the price point where buyers and sellers agree on, the most up-to-date agreement between buyers and sellers, or the bid and ask prices. It is also where supply meets demand.
Is a quoted price legally binding?
In most cases, when trading in an exchange, the quoted price is binding and the trade is executed at the quoted price, with the exchange acting as a counterparty to the trade. However, when trading OTC (over-the-counter), the quoted price is not necessarily binding as the parties have more flexibility in negotiating the final price, and the counterparty risk is higher.
A spot price is the current market value of an asset or security. It's the amount you would pay to buy or sell it at that exact moment in time. Spot prices are constantly changing, as they depend on supply and demand forces in the marketplace. Spot prices provide important insights into market trends and can be used by traders to make investment decisions.
Why is it called a spot price?
It is called a "spot" price because it refers to the price at which an asset can be bought or sold "on the spot" or immediately.
How is spot price calculated?
The spot price of a commodity, security, or currency is typically determined by supply and demand factors in the market. The price is influenced by a variety of factors such as production costs, political and economic conditions, and speculation.
Trading trends refer to the overall direction of a security or market, often revealed through chart patterns or indicators. Traders use these trends to identify potential entry and exit points, as well as possible trading opportunities. Analyzing the financial markets in order to identify trends is an essential skill for successful traders. With knowledge of historical trends, investors can spot emerging ones and plan accordingly.
How do you identify a trend in trading?
Analyzing past market movements, changes in asset prices and economic data can be used to identify short-term and long-term trends. Using technical indicators such as moving averages, MACD, and stochastics can also help you spot potential trading opportunities and take advantage of prevailing market trends.
What are the 3 types of trends?
When analyzing the stock market, there are three primary trends that can be observed: short-term, intermediate-term, and long-term. Short-term trends generally last within one to three weeks, intermediate-term trends can range from one to four months, and long-term trends last more than a year. Being able to identify these different trend patterns will help investors maximize their potential returns.
Working orders, also known as pending orders, include Stop orders and Limit orders. Essentially, they’re instructions for a broker to perform a trade when an asset hits a certain price. These orders inform brokers that traders wish to make that trade only if something happens to the asset price.
What is the best order type when buying stock?
The best order type depends on the individual's specific needs and market conditions. It's important to understand the trade-off between speed and price certainty when choosing an order type. Market orders provide immediate execution but at the current market price, while limit orders offer price certainty but may not be executed if the desired price is not reached.
What is an open work order?
An open work order in trading is an outstanding order to buy or sell a security that has not yet been executed. It remains open until it is either filled or cancelled by the trader.
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