ADR
American Depository Receipt
After hours dealing or trading
Securities trading after regular trading hours on organized exchanges
AEX
Amsterdam Stock Exchange
Amount to Risk
This is the amount of money debited from your free margin and allocated to opening a position.
Analyst
Employee of a brokerage, bank or fund manager who studies companies and makes buy-and-sell recommendations
Arbitrage
The simultaneous buying and selling of a security at two different prices in two different markets, resulting in profits without risk
Ask
The buying price. The higher price of the two way quote
ASE
Athens Stock Exchange
At Par
At a price equal to the face value of a security
Auction
Many auctions occur in the financial markets; however the most common is the post market auction on the UK 100 INDEX. This occurs from 1630 to 1635 and then the official settlement is declared
Authority to deal
Authorising someone to spread bet on your behalf. For this HY Markets would require your written notification and we would perform an identity check. Same as Power of Attorney
Backwardation
This occurs when the bid price exceeds the offer price for a stock. This is a market distortion usually when stock is suspended or under a share repurchase scheme
Base
A technical analysis tool. A chart pattern depicting the period when the supply and demand of a certain stock are in relative equilibrium, resulting in a narrow trading range. The merging of the support level and resistance level
Base Rate
The rate at which the Bank of England lends to the retail Banks
Basis Point
Basis point is a way of expressing variations in bond yields. One basis point is 0.01 percentage point. Basis points also are used for interest rates
Bear
Someone who believes that prices in the stock market are going to decline. Opposite of a bull
Beta
The measure of an asset's risk in relation to the market
Bid
The quoted price at which a client can sell
Bid-Ask Spread
The difference between what buyers are willing to pay and what sellers are asking for in terms of price
Black Friday
The original Black Friday occurred on September 24, 1869, when prospectors attempted to corner the gold market
Black Monday
Refers to October 19, 1987, when the US 30 INDEX Industrial Average fell 508 points on the heels of sharp drops the previous week. On Monday, October 27, 1997, the Dow dropped 554 points. While the point drop set a new record, the percentage decline was substantially less than in 1987
Black-Scholes option pricing model
A model for pricing call options based on arbitrage arguments. Uses the stock price, the exercise price, the risk-free interest rate, the time to expiration, and the expected standard deviation of the stock return
Blue-Chip Stock
Company renowned for the quality and wide acceptance of its products or services, and for its ability to make money and pay dividends
Bollinger Bands
Plus or minus two standard deviations where the standard deviations are calculated historically in a moving window estimation. Hence, the bands will widen if the most recent data is more volatile. If the prices break out of the band, this is considered a significant move
Bond
Bonds are debt and are issued for a certain period of time
BSE
Brussels Stock Exchange
Bull
Someone who believes that prices in the stock market are going to rise. Opposite of a bear
Buy
Same as taking a long position
Buy Order
An instruction to buy at a different price to where the market is currently trading
Cable
Exchange rate between British pound sterling and the U.S. dollar
CAC 40 Index
A stock index of 40 of the 100 largest companies listed on the forward segment of the official list of the Paris Bourse
Call option
An option that gives the holder the right to buy the underlying asset. Opposite of a put.
CBOT
Chicago Board of Trade
CFD
Contract For Difference.
Chartist
Person who analyses markets with the use of charts
Closing Price
The price at which a product was traded to close the open position. Also refers to the price of the last transaction in a days trading session
CME
Chicago Mercantile Exchange
COMEX
Commodity Exchange (part of NYMEX)
Commodity
A commodity is food, metal, or another fixed physical substance that traders buy or sell, usually via futures contracts.
Compliance department
The department of a firm that ensures that the firm complies with the regulation of the FCA.
Contingent if done order
Instructions you give us to attach a stop loss and/or limit order to your opening order if it is triggered and filled
Contract Note
The confirmation of your trade describing the market, the unit of trading, the action (buy or sell), the price and the expiry date
Cost of Carry
The interest intrinsic in our share futures prices, excluding any dividends payable during the contract period
CPI
Consumer Price Index, used as a measure of inflation
Credit Account
Credit can be allocated to your account providing evidence of funds are submitted to support such an application
Cross Rates
Foreign exchange rate between two currencies other than the US dollar
Currency future
A financial future contract for the delivery of a specified foreign currency
Custodian Bank
The Financial Conduct Authority custody rules require HY Markets to place all client funds into a Custodian Bank
Day Trading
Opening and closing of a position in the same contract in one day
Delist
To remove a stock's listing on an exchange
Deliver
The sale of a futures contract may require the seller to deliver the commodity during the delivery month, if the short position is not offset prior to that time
Delivery Date
Date by which a seller must fulfil the obligations of a forward or futures contract
Delta
The ratio of the change in price of an option to the change in price of the underlying asset
Derivative
A financial contract whose value is based on or derived from, a traditional security (such as a stock or bond), an asset (such as a commodity) or a market index.
Deutsche Borse
Germany's major securities market, including the Frankfurt Stock Exchange
Dividend
Portion of a company's earnings paid to stockholders. Clients who have buy positions in share contracts are not entitled to dividend payments
DJIA
US 30 INDEX Industrial Average. The index that reflects the performance of the top 30 US blue-chip stocks
Double Witching Day
The last trading day before expiry of options and futures on the same underlying asset
ECB
European Central Bank
Economic Indicators
The key statistics of the economy that reveal the direction the economy is heading in
EDSP
Exchange Delivery Settlement Price. Used by many markets to arrive at the Expiry Price
EIA
Energy Information Administration
EUREX
European derivatives exchange formed in 1998
EURONEXT
European securities and derivatives exchange
Euro
European Currency unit introduced on January 1 1999
Eurodollar
Exchange rate between EU member states, whose currency is denominated in Euros, and the U.S. dollar.
ETF
Exchange Traded Funds
Ex-Dividend
Without dividend, that is, the purchase of stock will not receive the most recent declared dividend. Shares paying a dividend generally tend to decline on their ex-dividend date
Expiry Date
Date at which a contract will be expired. Not to be confused with Last Day of Trading
Expiry Price
Price at which contracts are settled if they are left to expiry
Fair Value
Price at which theoretical future contracts should be trading above or below the leading future contract. Fair values for stock indices are determined by differentials in interest rates and dividend payments
Fast Market
Excessively rapid trading in a specific security that causes a delay in its electronic updating
FIFO
First In, First Out. This is how multiple positions are arranged meaning that if more than one position is open in the same contract, the trade that was made second cannot be closed until all of the first one is
Fill
Execution of an opening or closing order
Flat
Indicating neither growth nor decline. Term is often used when a particular market in trading in a tight range
FTSE
Financial Times Stock Exchange
Foreign Exchange (FX or Forex)
Currency of another country
Fundamental Analysis
Examination of a company's financials, assets, management, market niche, and products to determine value
Futures Contract
Trading contract that specifies a future date for delivery of an object
Gamma
The ratio of a change in the option delta to a small change in the price of the asset on which the option is written
Gap
Where the market trades through a level specified by the client in an order. Market gaps are common during times of volatility. Guaranteed orders protect against gapping
Gearing
The use of debt to increase exposure to high risk/reward. Gearing is also known as leverage.
Hedging
This is a term used to describe having the same number of buy positions as sell positions on one product. Market movements cannot affect a hedged position, as any profits or losses from one position will be offset by the other position. Hedging is not available on the HY Markets webtrader.
HKFE
Hong Kong Futures Exchange
IMM
International Monetary Market
Index Futures
A futures contract on an index in the futures market
Indicators
Indices, either positive or negative, which indicate the strength and significant trends in our nation's economy. Inflation, interest rates and employment figures are examples
Inflation
The rate at which the general level of prices for goods and services is rising
Initial Margin Requirement
Amount needed on deposit or credit in order to open a position. Known as “Amount to risk” on HY Markets.
Inside Information
Material information about a company that has not yet been made public. It is illegal for holders of this information to make trades based on it
Interest Rate
Cost for the use of capital expressed as a percentage of the sum of money borrowed.
Interim Report
Financial statement that reflects only a limited period of a company's financial statement, not the entire fiscal year
In-the-money Option
A put option that has a strike price higher than the underlying future price, or a call option with a strike price lower than the underlying futures price.
IPO
Initial Public Offering. Private company's first offer of stock to the public
Intrinsic Value
The value of an option if it were to expire immediately with the underlying stock at its current price
Issued Share Capital
Total amount of shares that have been issued
Lagging Indicators
Economic indicators that follow rather than precede a country's overall pace of economic activity
Last Day of Trading
The last day on which you can open or close a trade in a particular market. Not to be confused with Expiry Date
Leading Indicators
Economic indicators that change before the economy changes
Leverage
Leverage is the realisation that a large return can be obtained from a relatively small outlay with risks attached. Leverage is also known as gearing
Liability
Debt, financial obligation, or potential loss
LIBOR
London Interbank Offered Rate
LIFFE
London International Financial Futures and Options Exchange
Limit order
Minimum selling or maximum buying price as instructed by the client. A limit order is an order to buy or sell a better price to where the market is currently trading
Limit up, limit down
Price change, up or down, a product is allowed to make during one day of trading
Liquidity
A market characterised by the ability to buy and sell with relative ease
LME
London Mercantile Exchange
Long
Opening a buy position in expectation that the market price it will rise
LSE
London Stock Exchange
Margin
The deposit or available credit needed on your account in order to have your positions open.
Market Capitalisation
The number of shares of a company in issue, multiplied by its share price
Market Maker
Dealer who maintains firm bid and offer prices in a market
Market Gap
A term used when the price of a stock rockets or dives in a direction away from its last price range
Market On Open Order
A specific order to open or close a position at the price that a market opens, but is not guaranteed
Market On Close Order
A specific order to open or close a position at the price that a market closes, but is not guaranteed
Market Order
An order to have a position opened or closed when the underlying market trades at the specified price. Market orders are then filled at our quote at the time
MATIF
March Terme International de France (Paris futures market)
MSI
Milan Stock Exchange
US 100 INDEX
National Association of Securities Dealers Automated Quotations
Japan 225 INDEX
Refers to the price-weighted average of 225 stocks of the first section of the Tokyo Stock Exchange
Normal Market Size (NMS)
A system that categorises the size of transactions that are normal for a particular security and forces market makers to deal within these sizes
NYBOT
New York Board of Trade
NYMEX
New York Mercantile Exchange
NYSE
New York Stock Exchange
Offer
The price offered at which someone can buy; also called the ask
One Cancels the Other (OCO)
OCO orders you can leave two separate opening orders in the same market so that if one of them is triggered and filled, the other is cancelled. This leaves you with just the one open position
OPEC
Organisation of Petroleum Exporting Countries
Open position
A long or short position whose value will change with a change in prices
Option
A financial derivative instrument that gives the right to purchase (call) or sell (put) a fixed amount of stock at a specified price and within a certain time limit.
Option writer
Also called the option seller; the party who grants a right to trade a security at a given price in the future
Order
Buy or sell instruction given by a client to a dealer
Order Book
A term used for the SETS system employed in London. Orders to buy and sell are allowed to collect on an order book where they can match and execute against one another
Our Quote
The HY Markets dealing quote. Orders can be left based on our quote, meaning they will not be triggered or filled until the HY Markets buy or sell price hits the specific level.
Out-of-the-money Option
A call option is out of the money if the strike price is greater than the market price of the underlying security. That is, you have the right to purchase a security at a price higher than the market price, which is not valuable. A put option is out of the money if the strike price is lower than the market price of the underlying security.
Overbought
A term used to show a bullish view has been wrongly predicted and that the market will change trends
Oversold
A term used to show a bearish view has been wrongly predicted and that the market will change trends
Par Value
Face value of a security
Portfolio
A collection of investments, real and/or financial
Power of Attorney
Authorising someone to trade on your behalf. For this we would require your written notification and we would perform an identity check. Same as Authority to deal
Pip (Tick)
The smallest possible movement of the price of the underlying asset
Pull an Order
Cancel an order
Put Option
A financial derivative instrument used in options trading. A put would give an investor the right, but not the obligation, to sell shares at a fixed price up to a predetermined date. The opposite of a put is a call.
Quote
A quote will incorporate our spread which is the difference between the buying and selling price. Also see Our Quote
Rally
When there is a continuous increase in price of a product it is said to be on a rally
Real Time
A real-time stock or bond quote is one that states a security's most recent price as opposed to a delayed quote. HY Markets dealing prices update in real-time
Recession
Downturn in a country's economy, as measure by a decline in GDP
Resistance Level
A price level above which it is supposedly difficult for a security or market to rise
Retail Investor
Small individual investors who commit capital for their personal account rather than on behalf of another
Reuters
International news and quotation service based in London
Rights Issue
A privilege allowing existing shareholders to buy shares shortly before they are offered to the public at a specified and usually discounted price and usually in proportion to the number of shares already owned. Such corporate actions mean that HY Markets will adjust any position accordingly
Risk Adverse
Someone who seeks the least risky products
Risk Lover
Someone who seeks the most risky products, in the hope of higher returns
ROCE
Return On Capital Employed
Rollover
Transferring a trade that is near expiry into the next contract period
S&P 500
The Standard and Poors index of the top 500 US companies
SEAQ
Stock Exchange Automated Quotations
SEC
Securities and Exchange Commission
Sector
Used to characterise a group of securities that are similar with respect to type and industry
Sell
Same as taking a short position
Settlement Price
A figure determined by the closing price
Short
Opening a sell position in expectation that the market price it will fall
Slippage
See Gap or Market Gap
Speculate
An estimation made following research
Spike
Sharp up or down movement in the value of something
Spot market
Market in which commodities are bought and sold for cash and immediate delivery
Spread
The difference between the buy and sell price
Stop Loss order
This type of order is placed when you open a position to prevent losses. You place this in a less favourable market price to the current market price. This means if the market hits this price you will be losing money but by placing this order you are protected if the market continues to drop past this point. All HY Markets Stop/Loss orders are guaranteed.
Straddle
Purchase or sale of an equal number of puts and calls with the same terms at the same time
Strangle
Buying or selling an out-of-the-money put option and call option on the same underlying instrument, with the same expiration. Profits are made only if there is a drastic change in the underlying instrument's price
Strategy
Plan of action for achieving a goal
Strike Price
The stated price per share for which underlying stock may be purchased or sold by the option holder upon exercise of the option contract.
Supply and Demand
Economic theory that simply states price is a function of the market, supply and demand
Support Level
A price level below which it is supposedly difficult for a security or market to fall. That is, the price level at which a market tends to stop falling because there is more demand than supply; can be identified on a technical basis by seeing where the stock has bottomed out in the past
Suspended Trading
Temporary halt in trading in a particular security, in advance of a major news announcement or to correct an imbalance of orders to buy and sell
Swing Trading
Refers to a type of short term (one day to a couple of weeks) trading, triggered by technical analysis, for example, momentum
Takeover
Acquiring control of a corporation by stock purchase or exchange
Taking a view
Forming an opinion as to where market prices are headed and acting on it
Target Price
Maximum retail price for a product under development. In the context of takeovers, the price at which an acquirer aims to buy a target firm. In the context of options, the price of the underlying security at which an option will become in the money. In the context of stocks, the price that someone hopes a stock will reach in a certain time period
Technical Analysis
Analysis of a financial market by charting its performance, using historical patterns, and focusing on trends
Tick Size/Tick Value
The minimum point movement in each market, for example; “The US oil has moved 10 ticks”. This means that there is a 10 cent movement in the price per barrel of Oil.
Time to Maturity
The time remaining until a financial contract expires
Time Value
Portion of an option price that is in excess of the intrinsic value, due to the amount of volatility in the stock; sometime referred to as premium. Time value is positively related to the length of time remaining until expiration
Trade Balance
Overall difference between a country's imports and exports
Trading Range
Range between the highest and lowest prices at which a stock is traded
Two-way Quote
A quote which consists of two prices: the bid and the ask. It is quoted with a buying price and a selling price with the two figures separated by this symbol E.g. EUR/USD 1.31400/450. In this case the 400 is the bid 450 is the ask
Underlying Asset
The security or market that HY Markets prices are based on (derived from)
Unencumbered Funds
Funds that trading margin is not using, i.e. available trading resources
USDA
United States Department of Agriculture
Volatility
A measure of how rapid the price changes or suffers from extreme fluctuations
Wall Street
Referring to the index of the top 30 US traded stocks
Warrant
A derivative product that is a certificate that authorising the holder to buy securities at a certain price. Warrants are like call options, but with much longer time spans-sometimes years
Working Order
An order remains working until it is filled or deleted
Year End
End of accounting period when the books are closed out
