Glossary › Markets

Trading glossary

Markets words

122 words, each explained first as you would tell a ten-year-old.

1. 24/7 marketA market that never closes: it is open every hour of every day, even at weekends, like crypto.
2. after-hoursTrading that happens after the main market day ends, when fewer people are buying and selling.
3. Asian sessionThe part of the currency-trading day when markets in Asia, such as Tokyo, are open. It is often calmer than later in the day.
4. askThe price a seller wants. If you want to buy right now, you usually pay this price.
5. base currencyThe first money named in a price like EUR/USD. The number tells you how much of the second money buys one of it.
6. bidThe price a buyer is offering. If you want to sell right now, you usually get this price.
7. bid-ask spreadThe small difference between the price to buy and the price to sell. You pay it every time you trade, like a tiny fee.
8. BitcoinThe first and best-known kind of digital money, bought and sold all day, every day.
9. BSEOne of India's two big marketplaces for shares, where people buy and sell shares of Indian companies.
10. business incomeIn India, money from frequent trading can be taxed like money earned from running a shop, not like a normal investment gain.
11. capital gainsThe profit you make when you sell something for more than you paid for it. Many countries tax it.
12. cash marketThe part of the market where you buy real shares and own them, even just one share.
13. cash settlementWhen a deal ends by paying the money difference instead of handing over the actual thing.
14. CFTCThe US government group that watches over markets for deals to buy or sell things later, to keep them fair.
15. circuit breakerAn automatic pause button: if prices fall too fast, trading stops for a while so people can calm down.
16. clearing houseThe middleman that stands between every buyer and seller and makes sure each side gets paid.
17. commissionA fee the broker charges each time you buy or sell.
18. commodityA raw material people use every day, like oil, gold or wheat, that is bought and sold in markets.
19. contract sizeHow much of something one trading contract covers, like 100 ounces of gold in one deal.
20. contract valueHow much money one whole contract is worth: its price multiplied by the amount it covers.
21. core trading sessionThe main part of the trading day, when most people are trading and prices are busiest.
22. cryptocurrencyDigital money that lives on computer networks instead of in a bank, like bitcoin. It can be traded at any hour of any day.
23. currencyThe money a country uses, like the rupee, dollar, euro or yen.
24. currency pairTwo kinds of money priced against each other, like euros in dollars. The number shows how much of the second buys one of the first.
25. custodyWho looks after your shares or coins for you, like a safe that keeps your things.
26. daily price limitA limit on how far a share's price may move in one day. When it hits the limit, it cannot go further until tomorrow.
27. daylight saving timeWhen some countries move their clocks forward in summer, which changes what time their markets open for people elsewhere.
28. delivery monthThe month when a buy-it-later deal is due to finish, which is part of the deal's name.
29. demat accountAn online account in India that holds your shares safely, like a bank account holds money.
30. depositoryA central place that keeps the record of who owns which shares, so shares can be held safely without paper.
31. depository participantThe bank or trading company in India that opens your share account and connects it to the central record keeper.
32. derivativesTrading contracts whose price comes from something else, like a share or gold, instead of owning the thing itself.
33. E-miniA popular contract that follows a big group of US shares. Each point it moves is worth a fixed amount of money.
34. ETFA fund you can buy and sell like one share, but that holds a whole basket of many things inside it.
35. EUR/USDThe price of one euro in US dollars, the best-known pair in the world's currency market.
36. exchangeA marketplace where buyers and sellers meet to trade shares or contracts under set rules.
37. expiryThe date when a trading contract ends and must be paid up.
38. extended hoursExtra trading times before the main market day starts and after it ends, when fewer people trade.
39. F&OIndia's name for trading contracts that come in fixed-size bundles instead of single shares.
40. FINRAA US group that watches over the companies that handle people's trades, to keep them honest.
41. forexThe world market where people swap one country's money for another's, open all day on weekdays.
42. fractional shareA small piece of one share, so you can own part of an expensive share without buying a whole one.
43. FSAJapan's main government group that watches over its money markets to keep them fair and safe.
44. funding rateA small fee that crypto traders using borrowed money may pay or receive regularly for keeping their trade open.
45. futures contractA promise made today to buy or sell something later, at a price agreed now.
46. guaranteed returnsA promise that you cannot lose and will surely make money. In trading, that promise is a big warning sign of a trick.
47. holding periodHow long you keep something before you sell it.
48. indexOne number that tracks a whole group of shares, like a school's average test score for the market.
49. index fundA fund that buys every share on a well-known list of shares, so you own a small piece of the whole group at once.
50. JPXThe company group that runs Japan's main marketplaces for shares.
51. leverage capA limit on how much borrowed money you are allowed to use, set by the market's rule keepers or by your own rules.
52. limit orderAn order that says 'buy or sell only at this price or better', so you never pay more than you chose.
53. liquidityHow easy it is to buy or sell quickly without moving the price much, because lots of people are trading.
54. long-term gainProfit from selling something you kept for a long time, which is often taxed less than quick profits.
55. lotA fixed bundle size that some markets make you trade in, instead of any amount you like.
56. lunch breakThe midday pause when the Tokyo market stops trading for an hour.
57. market orderAn order that says 'buy or sell right now at whatever price is available'.
58. micro lotA small trading bundle of 1,000 units of a currency, good for trading with small amounts.
59. mini lotA middle-sized trading bundle of 10,000 units of a currency.
60. New York sessionThe part of the currency-trading day when New York's markets are open. It overlaps with London's, the busiest time of all.
61. Nifty 50A list of 50 big Indian companies whose share prices are combined into one number to show how India's market is doing.
62. Nikkei 225A number made from 225 big Japanese company share prices, used to show how Japan's market is doing.
63. NISAA special Japanese savings account where people living in Japan can invest without paying some taxes.
64. NSEIndia's biggest stock exchange, where people buy and sell shares of Indian companies.
65. NYSEA famous marketplace in New York where people buy and sell company shares.
66. offshore platformA trading app based in another country that ignores your country's rules. It can leave you with no protection.
67. opening gapA jump between yesterday's last price and today's first price, caused by news while the market was shut.
68. order bookThe list of everyone waiting to buy or sell at each price. When it is thin, price can jump a lot.
69. pegWhen a digital coin is designed to always be worth the same as a real money, like one dollar.
70. perpetual futuresA crypto trading contract with no end date, where people pay each other small regular fees to keep the price close to the real coin.
71. physical deliveryWhen a buy-it-later deal ends with the real goods, like barrels of oil, actually being handed over.
72. pipThe tiny standard step used to measure how much a currency price moves.
73. pip valueHow much money one tiny step in a currency price is worth for your trade size.
74. pre-marketTrading that happens before the main market day starts, when fewer people are trading.
75. pre-openA short time before a market opens when orders are collected to help set the first price of the day.
76. quote currencyThe second money named in a currency price. It tells you how much of it you pay for one unit of the first money.
77. RBIIndia's main bank for the whole country. It sets the basic cost of borrowing money and looks after India's currency rules.
78. recovery phraseA secret list of words that can unlock a crypto wallet. Anyone who learns it can take everything inside.
79. registrationBeing officially signed up with a market's rule keeper, so the firm must follow its rules. It still does not promise you will win.
80. regulatorThe official referee of a market, who makes rules to keep trading fair and punishes cheaters.
81. retail traderA person trading with their own money, not a big company or bank.
82. rolloverSwitching from a buy-it-later deal that is about to end to a new one that ends later, to keep your trade going.
83. round tripBuying and then selling the same thing, which is one whole trade. You pay costs on both parts.
84. S&P 500A list of 500 big US companies whose share prices are combined into one number to show how the US market is doing.
85. scamA trick to steal your money, often promising you cannot lose or pushing you to hurry.
86. SEBIIndia's official market referee, which makes the rules for shares and trading in India.
87. SECThe US government group that watches over the share markets to keep them fair.
88. self-custodyKeeping your crypto coins in your own wallet, so only you control them and only you are responsible for them.
89. SensexA number made from the share prices of big Indian companies, used to show how India's market is doing.
90. session closeThe moment a market stops trading for the day, like the bell at the end of a school day.
91. session openThe moment a market starts trading for the day, like the bell at the start of school.
92. session overlapThe time when two big markets are open at once, like London and New York, when trading is busiest.
93. settlementWhen a trade is finished: the shares arrive in your account and the money leaves, a day or two after you trade.
94. shareOne small piece of a company that you can own. Owning a share means you own a tiny part of that business.
95. short-term gainProfit from selling something you kept only a short time, which is often taxed more than long-held profit.
96. spot forexBuying and selling one country's money for another's straight away, around the clock on weekdays.
97. stablecoinA kind of crypto coin built to keep a steady price, usually matching one US dollar.
98. standard lotThe full-size trading bundle for currencies: 100,000 units of a currency.
99. stockA company's shares that people buy and sell in a marketplace.
100. stop orderAn order that waits and then sells or buys at the next available price once a set price is touched.
101. stop-limit orderAn order that waits for a trigger price but refuses to trade worse than a limit, so it might not happen at all.
102. STTA small tax India charges when people buy or sell certain shares and trading contracts.
103. swapA small fee or payment for keeping a borrowed-money currency trade open overnight.
104. T+0A way of finishing a share trade on the same day you make it, offered in India for some shares.
105. T+1Short for 'trade day plus one': the shares and money swap hands one business day after you trade.
106. T+2Short for 'trade day plus two': the shares and money swap hands two business days after you trade.
107. tick sizeThe smallest step a price is allowed to move in a trading contract.
108. tick valueHow much money one smallest price step is worth for one whole trading contract.
109. time zoneA region of the world that uses the same clock time. Markets open at different local times around the world.
110. Tokyo Stock ExchangeJapan's main stock exchange, where shares of Japanese companies are bought and sold.
111. TOPIXA number that tracks many Japanese company share prices together, to show how Japan's market is doing.
112. trading haltWhen a marketplace stops all trading for a while, for example after a very big fall.
113. trading sessionThe hours when a market is open for trading.
114. trading unitThe smallest bundle of shares you can usually buy at once in a market, like 100 shares in Tokyo.
115. transaction taxA small tax charged when you buy or sell, which adds to the cost of every trade.
116. troy ounceThe special unit used to weigh gold and other precious metals.
117. underlyingThe real thing, like a share or gold, that a trading contract is based on and gets its price from.
118. USD/JPYThe price of one US dollar in Japanese yen.
119. UTCOne world clock that everyone can use, so market times from different countries can be compared easily.
120. walletAn app or device that holds your crypto coins, protected by secret words only you should know.
121. weekend gapA jump in price between Friday's last trade and Monday's first, caused by news over the weekend.
122. WTI crude oilA popular kind of US oil whose price is followed around the world.