astonforex.com Direct Access to the Markets

An overview of your account(s), including base currency, value, cash available, unrealised margin profit/loss, funds available for margin trading, and margin utilisation.

An overview of the current balance and of changes in the balance of each account.

The status and trading activity of a specific account. If you maintain multiple accounts, the Account Summary shows information about individual accounts, as well as an aggregate of all the accounts.

The current value of the account, combining Cash balance, Unrealised value of positions, and Transactions not booked.

A list of all your AstonTrader activities. The Activity Log includes details of trades, orders, requested prices, chat dialogues, system messages and, for Simulation accounts, account resets.

Options that can be exercised at any time on or before the expiration date.

The study and analysis of historic price data to anticipate future movements in the price of an instrument.

An increase in the value of an instrument.

The price at which you can buy the specified instrument. This is also called the Offer price. For Forex trading, it is the price at which you can buy the trade/base currency (quoted first) by selling the price currency of the pair. For example, if you buy EURUSD 100,000, you are buying euros 100,000 against US dollars.

In Options trading, a common term for the underlying asset. This is the financial instrument upon which Options, a derivative product, are based. For example, the underlying asset for IBM stock Options is the IBM stock itself.

A condition in which the strike price of an Option is equal to (or nearly equal to) the market price of the underlying security.

The ATM forward strike price of an Option is the strike price of the corresponding forward outright price at a specific forward date, as calculated via interest rate differentials.

The maximum amount of the instrument that can be automatically traded before manual confirmation from a dealer ('Live price') is required. In periods of volatile market conditions, automatic trade execution may be disabled.

The funds available for margin trading, derived from subtracting Used for margin requirements from Account Value.

A graphical representation of an instrument's movement that usually contains the open, high, low and closing prices for a set period of time.

A chart style that shows the highest, lowest and the closing prices for each chart period.

A chart style that shows the opening, highest, lowest and the close prices for each chart period.

In Forex, this is the currency that the investor buys or sells. For example, in EURUSD the base currency is EUR, that means one unit of EUR is worth a variable amount of USD. When you buy EUR, you pay with USD, and when you sell EUR you receive USD. The other currency (USD in the example above) is called the variable currency.

A trader who believes that prices will fall. A bearish market is one in which prices are falling, whereas a bear market is when prices have fallen by 20% or more over a sustained period.

The price at which you can sell a specified instrument. For Forex trading, this is the price at which you can sell the trade/base currency (quoted first) by buying the price currency of the pair. That is, if you sell USDJPY 100,000, you are selling US dollars 100,000 and buying Japanese yen.

A formula that examines the price variation of financial instruments over time. It is often used to determine the price levels of European call Options. The formula takes into consideration the factors influencing the price of a call Option, including the price of the underlying asset, the exercise price of the Option, the interest rate, and the time until the Option's expiry.

When the price of an instrument trades through a specified level. For example, if a the execution price for a limit order to buy is set at 100, and the price jumps from 105 to 95, the 100 price level has been breached, the order will become a market order and be filled as soon as possible.

A trader who believes that prices will rise. A bullish market is one in which prices are rising, whereas a bull market is when prices have risen by 20% or more from a low point over a sustained period.

A limit order to buy at the current Offer (Ask) Price.

You can buy or sell a call Option. If you buy a call Option you have the right, but not the obligation to buy the underlying instrument at the agreed strike price on the agreed expiry date (European Option).If you sell a call Option, you have the obligation to sell the underlying instrument at the agreed strike price on the agreed expiry date (European Option).

A chart style where a thin line represents the price range for the instrument in the chart period. The opening and closing prices for the period are represented by a thicker line (red if the price finished lower and green if it finished higher). The overall effect can look like a candle. Many traders believe it is the easiest chart style to read.

The current value of the cash funds in your account.

When you hold a CFD (Contract for Difference), you agree to settle the difference between the price when you open the position and the price when you close the position. You do not pay anything up front when you open a position, but are instead charged a financing cost. Conversely, if you have a short position, you are credited/paid interest.

Close an investment by transacting the opposite trade. For example, if you bought USDJPY 100,000, you would have to sell USDJPY 100,000 to close the position.

The price a position was closed at. This is not applicable to opening trades and will be the same as the trade rate.

Any fixed commissions and ticket fees that apply to trades of the specified trade size.

Contingent orders are the same as related trade orders. Several types are available: If Done (slave), where a slave order only becomes active if the primary order is executed. One Cancels the Other (O.C.O.) where the execution of one order cancels the other. Three-way contingent orders are also available where two orders are placed if (If Done) a primary order is executed. These orders are themselves related as O.C.O. orders, allowing both a stop loss and a profit taking order to be placed around a position.

A CFD is a derivative of a stock product and is used for trading. The CFD price behaves exactly like the underlying stock price. CFD trading offers a number of advantages over traditional stock trading, for example, trading on margin and direct (immediate) trading instead of waiting for a trade order to be filled on an exchange.

Transfers and profit/losses from trades are converted into thebase currency of the account based on the day's prevailing exchange rate.

The cost of closing your positions, for example, commissions and trading fees.

In Forex, the currency that the investor pays with or receives when trading. For example, in EURUSD the variable currency is USD, for example, one unit of EUR is worth a variable amount of USD. When you buy EUR, you pay with USD, and when you sell EUR, you receive USD. The other currency (EUR in the example above) is called the base currency.

Select the currency cross to trade, for example, USDJPY. USDJPY means that you trade U.S. dollars against Japanese yen. If you buy, you buy dollars and pay in yen, and if you sell, you sell dollars and receive yen.

Currency trading is an alternative term for Forex trading, FX trading and Foreign Exchange trading. Saxo Bank is the provider of an online currency trading platform.

An order that is valid until the end of the day. If it has not been filled before this, it is cancelled. For Forex, the end of the day is 22:00 GMT on the day that you place the order. For CFDs and Stocks, the end of the day is when the exchange on which the stock is traded closes.

A decrease in the value of an instrument.

The date on which delivery of the underlying goods of a Futures contract will take place. For speculative investing in Futures, the contract future position must be closed on or before this date.

In Forex Options, a Delta of, for example, 25 implies a 25% exposure to the underlying spot. In other words, a spot position that equates to 25 % of the notional amount of the Option. An Option with a Delta of 25 at inception indicates a 25% likelihood that the Option will be exercised in the money. Technically, Delta can be described as a ratio that compares the change in the price of the underlying asset to the corresponding change in the price of a derivative.

A decrease in the value of an instrument.

Instruments that are constructed (derived) from another security. For example, CFDs are derivatives of physical Stocks.

Direct participation in the order book maintained by an exchange. The order book contains orders to buy and sell a security, and is used to establish the current market Bid/Ask price.

The percentage of a company's stock value paid to shareholders. A stock selling for USD 100 a share with an annual dividend of USD 1 a share yields the investor 1%.

'Double Leverage' lowers the margin requirement needed for trading an instrument by half. If 20:1 leverage is offered on Index-tracking CFDs, this means that if an investor buys, for instance, 50 DAX® Index-tracking CFDs at 6300, then their collateral requirement will be approximately EUR 15,750 or 5%. With Double Leverage, an investor can buy 50 DAX® Index-tracking CFDs at 6300, then their collateral requirement would be approximately EUR 7,875 or 2.5%.

A downward movement of one tick or more in the price quote. Many stock exchanges have an uptick rule that states that a stock can only be sold if the stock price has ticked higher than the last price at which a transaction has taken place. This is aimed at traders who want to sell short, and is designed to prevent snowballing declines in the market. Other exchanges have tick test rules that are essentially the same as the uptick rule: Stocks may only be shorted on so-called zero-upticks, which means that the transaction price is either higher than the last transaction price, or that the transaction price is unchanged but higher than the transaction price that preceded it. This is known as a zero uptick or zero plus tick. CFDs are advantageous for traders that are bearish on a stock, because there are no uptick or tick test rules associated with CFDs.

The EPS is the company's profit divided by the number of its outstanding shares. If a company earning USD 10 million in one year had USD 10 million shares of stock outstanding, its EPS would be USD 1 per share. Companies often use a weighted average of shares outstanding over the reporting term when calculating EPS.

A financial instrument that represents partial ownership of a company. Known as Stocks, equities, or shares.

Options that can only be exercised on the expiration date.

A market where securities, Options, Futures and/or commodities are traded.

What one currency is worth in terms of another. For example, one Argentine dollar might be worth 58 US cents or 70 Japanese yen. Currencies traded freely in foreign-exchange markets have a spot rate (applying to trades settled 'spot', that is, two working days hence) and a forward rate (which is the spot rate adjusted for the interest rate differential between the two currencies until maturity). Countries can determine their exchange rates in several ways:

• A floating exchange rate system, where the currency finds its own level in the market.
• A crawling or flexible peg system, which is a combination of an officially fixed rate and frequent small adjustments that in theory work against a build-up of speculation about a revaluation or devaluation.
• A fixed exchange-rate system, where the value of the currency is set by the government and/or the central bank.

You exercise an Option when you invoke the right to purchase or sell the underlying asset at the price stated in the Option contract.

The expiration date is the day on which the Option expires. Options that can only be exercised on the expiration date are called European Options. There are also Options that can be exercised at any time after the creation of the Option contract and up to and on the expiration date, or just at discrete intervals during the contract period. These are respectively called American and Bermudan (also Mid-Atlantic) Options.

Being subject to risk, such as an exposure to foreign currency exchange-rate fluctuations.

The percentage of the exposure covered by funds available for margin.

The Fibonacci Fans and Bands are three-line guides drawn on charts derived from the Fibonacci number series. Some traders believe they help identify successive areas of support and resistance in a market.

A device typically used to protect private networks against malicious attacks from the Internet. A firewall restricts the type of network traffic that is allowed to pass to/from the Internet, and can sometimes cause problems with the operation of Client Station.

A chart style that takes the current close price as the base-line, and plots each data point relative to this base-line.

An order to trade a Forex instrument at a fixed price on a fixed date. The price of the forward outright is the spot rate adjusted for the interest rate differential between the two currencies until maturity. Forward Outright orders are often used to hedge exposure risks when dealing in foreign markets.

An order to trade (for example, buy) a Forex instrument at a fixed price on a future date, or to conduct the opposite transaction (for example, sell) at a later date at a fixed price.

Foreign Exchange trading is an alternative term for Forex trading, FX trading and currency trading. Saxo Bank is the provider of an online Foreign Exchange trading platforms and software.

A standardised exchange traded contract to trade a fixed amount of a commodity or financial instrument at a future date.

An approximation of the change in the delta of an Option relative to a change in the price of the underlying stock when all other factors are held constant. Gamma is accurate for small changes in the price of the underlying stock, but is expressed in terms of a change in delta for a one-point move in the stock. For example, if a call has a delta of .49 and a gamma of .03, if the stock moves down one point, the call delta would be .46 (.49 + (.03 x -USD 1.00)). Generated by a mathematical model, Delta depends on the stock price, strike price, volatility, interest rates, dividends, and time to expiration.

The ability to hold an investment position of greater value than that of your equity (collateral). When gearing (also called leveraging) your investment, you need only deposit a fraction of the current value of the instrument you are investing in. For example if the commodity you are trading in requires a margin of 5%, this allows you to leverage (or gear) your investment 20 times. In other words, a deposit of USD 10,000 can hold a position of USD 200,000.

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

An order that is good until a date specified by the trader. If the order is not executed by the date the trader specifies, the order will be cancelled.

The commission is charged per trade (for both buy and sell). The alternative is a round-turn commission, which includes both opening and closing positions.

A hedge is a tool used to limit exposure to investment losses. For example, an investor who has large, unrealised profits in a physical stock or stock Options position might sell a CFD for the same stock to prevent any loss of the profits. While the hedge ensures profit in this case, it also ensures that the profit cannot grow. In other words, when you hedge you limit your profits as well as your losses.

The change in the Option price or the change in the underlying spot price.

An IBAN number contains information detailing the country, bank and branch of the beneficiary, as well as the account number itself. It is used to facilitate automatic processing of cross-border payments. An IBAN can be obtained from the beneficiary's bank. An IBAN is mandatory within the EU.

An If Done order actually consists of two 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.

A call Option is in-the-money when the price of the underlying stock is greater than the call's strike price. Conversely, a put Option is in-the-money when the price of the underlying stock is lower than the put's strike price. At expiration, Options that are .01 ITM are automatically exercised.

A numerical measure of the way the price of a representative group of Stocks has changed over time. Every major exchange has one or more indices. For example, the NASDAQ exchange has the NASDAQ 100 Index (a composite of the100 largest non-financial companies listed on NASDAQ). Some indices are created and managed by private corporations, such as the Dow Jones Industrial Average and S&P 500. You can trade CFDs based on many of the world's stock market indices.

A tradable symbol with a monetary value. This can be a Forex cross (currency pair), or a stock ticker (for CFDs and Stocks), etc.

The currency the instrument is traded in.

Short-term (often overnight) borrowing and lending between banks, as distinct from a banks' business with their corporate clients or other financial institutions.

Interest is a charge applied to borrowed money, and is generally expressed as a percentage per year. When buying CFDs, you are in principle borrowing money for a trade, so you are charged a standard interest rate based on the current LIBOR (London Interbank Offer Rate) plus a small percentage. When you sell a CFD, on the other hand, you receive interest for the amount the CFD represents. This percentage is the LIBID rate minus a small percentage.

The yield spread between two otherwise comparable debt instruments denominated in different currencies.

The amount by which an Option is in the money. In the case of a call Option, the intrinsic value is the current price for the underlying asset, less the strike price. For a put Option, the intrinsic value is the strike price less the price for the underlying asset. If the difference between the prices is not positive in either case, then the intrinsic value is zero.

A limit order to buy at the current bid price.

A limit order to sell at the current Offer (Ask) Price.

A statistical measure used to describe the distribution of observed data around the average or mean. It is sometimes described as the volatility of volatility. A high kurtosis portrays a chart with fat tails and a low, even distribution, whereas a low kurtosis portrays a chart with skinny tails and a distribution concentrated toward the mean.

The ability to hold an investment position of greater value than that of your equity (collateral). When leveraging (also called gearing) your investment, you need only deposit a fraction of the current value of the instrument you are investing in. For example if the commodity you are trading in requires a margin of 5%, this allows you to leverage (or gear) your investment 20 times. In other words, a deposit of USD 10,000 can hold a position of USD 200,000.

Limit orders are commonly used to enter a market and to take profit at predefined levels. Limit orders to buy are placed below the current market price and are executed when the ask price hits or breaches the price level specified. (If placed above the current market price, the order is filled instantly at the best available price below or at the limit price.) Limit orders to sell are placed above the current market price, and are executed when the bid price breaches the price level specified. (If placed below the current market price, the order is filled instantly at the best available price above or at the limit price.) When a limit order is triggered, it is filled as soon as possible at the price obtainable on the market. Note that the price at which your order is filled may differ from the price you set for the order if the opening price of the market is better than your limit price. In the case of Futures, the order will be filled if possible, and any remaining volume will remain in the market as a limit order. In the case of CFDs, the order will be filled if possible, and any remaining volume will remain in the market as a limit order.

The capacity to be converted easily and with minimum loss into cash. Ultra-short-dated treasury notes are an example of a liquid investment. A liquid market is one in which there is enough activity to satisfy both buyers and sellers.

In general, going long is buying, and going short is sellling. A long position will increase in value if market prices increase. For example, in Forex trading, going long is buying the trade currency of the Forex currency pair. If you were going long on USDJPY, you would be buying USD by selling JPY. For securities, going long is taking ownership of a security through buying it, as opposed to going short where you sell the security without owning it.

Used in Futures contract trading to define a fixed contract size corresponding to a fixed amount of the item that will be traded in the future.

A trend indicator chart study following the relationship between two moving average prices (usually 26-day and 12-day averages). On top of this, a 9-day average of the MACD line is plotted as a control or signal line. In its conjunctions with the MACD line, the signal line may show buy and sell opportunities.

The amount of equity (collateral) required for an investment position, as a percentage of the current value. When trading on margin (also called 'gearing', or 'leverage'), you need only deposit a fraction of the current value of the instrument you are investing in. For example, if the commodity you are trading in requires a margin of 5%, you are able to gear (or leverage) your investment 20 times. In other words, a deposit of USD 10,000 can hold a position of USD 200,000.

When you have exceeded your allowed operating margin, you are subject to a margin call to remedy the situation. To avoid having your positions closed for you (being stopped out), you must either close or reduce open positions, or send additional funds to cover your positions.

Funds that a trader must have in a margin account that represent a percentage of the current market value of the securities held by the trader. Sellers of Options must have additional funds in their accounts, besides the Option premium, to protect against possible losses incurred by the market moving against the Options position. The required margin will vary according to the Option type and whether the seller also has a position in the underlying asset. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the Trading Conditions section found in the top right-hand corner of the Account Summary.

The percentage of the available margin that you are utilising.

A live video transmission from the trade floor, every banking day at 08:00 GMT. The Market Call outlines a strategy for the day based on the day's news and numbers. Access is available from Research > Market Call. To set your preferences (volume, screen size, etc.), right-click the video.

A recognised institution or individual willing to trade certain securities any time that a trader wants to buy or sell. The incentive for the market maker to buy or sell at all times is the spread, or difference, between the bid and ask prices.

An order to buy or sell a specified instrument as soon as possible at the price obtainable in the market.

The mid-price is halfway between the bid and the ask (offer) prices. For example, if the bid is 1.4426 and the ask is 1.4430, the mid-price is 1.4428.

A functional component of the platform such as the Open Orders Module, the Chart Module, etc. Modules are opened from the Menu bar.

Your net exposure is the sum of the nominal value of your current positions converted into the base currency of your account. For Forex, this is the total value of all your Forex positions converted to the base currency of your account.

The current market value of any securities (for example, equities, bonds, and so on) held as collateral for margin requirements. The market value is calculated using bid price.

A percentage of your current investments that is not available as margin collateral. This line states the amount that is not available as margin collateral.

The price at which you can buy a specified instrument. For Forex trading, it is the price at which you can buy the trade/base currency (quoted first) by selling the price currency of the pair. For example, if you buy EURUSD 100,000, you are buying euros 100,000 against US dollars.

One-cancels-other orders really consist of two orders. If either of the orders is executed because its market conditions have been met, the related order is automatically cancelled.

A position in a currency that has not yet been offset. For example, if you buy USDJPY 100,000, you have an open position in USDJPY until you offset it by selling USDJPY 100,000.

A privilege sold by one party to another that offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security at an agreed-upon price during a certain period of time or on a specific date. Options are formally referred to as Options contracts. Options are traded for almost all financial instruments, including Stocks, Futures, and currencies. Many Options are traded on public exchanges, but a significant volume of Options trading, especially for the Forex market, takes place over the counter (OTC). Options can be used for a wide range of purposes, but generally, they are most commonly used in two ways. First, a party can purchase a put or call Option as a tool for outright speculation, that is, buying an Option in the hope that the underlying instrument will rise or fall dramatically in price. Secondly, a party may purchase an Option as a hedge in order to protect from losses or protect unrealised profits in the underlying instrument. Option buyers take a limited risk (the cost of the Option, or its premium) with the potential for nearly unlimited profit. Sellers of Options have a different strategy and are taking unlimited risks for the sake of a limited profit, unless they are selling covered Options, in which a position in the underlying instrument guarantees against a loss in the Option premium (but does not guarantee against a loss in the underlying instrument).

A trade order to buy or sell a specified instrument. Limit and Stop orders are the main types.

The duration for which the order is valid. See Day Order (DO) and Good till Cancelled (GTC) for details.

Instruments that are not tradable online. For example, bonds and other positions that are transferred from another bank.

An Option that has no intrinsic value. If an Option expires out of the money, it is worthless. An out-of-the-money Option is a call Option with a strike price that is higher than the current market level, or a put Option with a strike price that is below the current market price.

A particular price level that, if hit during the life of an Option, immediately invalidates the Option.

A trade that is negotiated between two parties without the use of an exchange. For example, a security that is not traded on an exchange is known as an OTC security. It is a market where commodities and instruments are traded directly between two parties, for example, between an investment bank and a client. This is different from trading on a public exchange, which is an open market place. Over-the-counter products can be tailored to individual clients whereas exchanges trade standardised contracts. A large over-the-counter market has grown up in, for example, Forex and Forex Options.

Pip stands for percentage in point , the smallest increment by which a Forex cross price changes. Most currency pairs are quoted to four decimal places, meaning that a movement from 1.1850 to 1.1851 for a currency pair would constitute one pip. For a particular position, you can calculate the value of a single pip using the above formula. For instance, you know that the EUR/USD is quoted with four decimals, so for a given position you can multiply the position amount by the value of one pip, or USD 0.0001. So, on a EUR/USD 100,000 contract, one pip would equal USD 10. On a USD/JPY 100,000 contract, one pip is equal to JPY 1000 because USD/JPY is quoted with only two decimals (meaning one pip = JPY 0.01).

An investment portfolio is the total range of financial instruments owned, such as company shares, fixed interest securities or money-market instruments. An investment portfolio should have a range of relatively unrelated, or uncorrelated, investments in order to minimise risk�brokers and investment advisers warn against 'putting all your eggs in one basket'.

An investment in an instrument. For example, when you trade (say, buy) USDJPY, you open a USDJPY position. When you then execute the opposite trade (in this case, sell) USDJPY, you close the position. Position can also refer to a trader's cash/securities/currencies balance, whether he or she is short of cash, has money to lend, is overbought or oversold in a currency, etc.

The date a transaction is posted as a credit or debit in your account.

In Forex Options, the premium is used in two different contexts. The premium can be the:

1. total price of the Option, or the
2. amount by which the price of the Option exceeds its intrinsic value, also known as the Option's time value

When you buy an Option, you pay a premium up front, which entitles you to profit from a price change in the underlying asset. The premium amount depends on the size of the potential profit.

When you buy an Option, your potential loss is limited to the premium, but you have an unlimited profit potential.

The Price/Earnings ratio is the price of the stock divided by the earnings per share.

The primary order of a three-way or If Done contingent order. Related (secondary) orders will not become active market orders unless this order is executed.

Closing a position to take profits. Typically done using a limit order to close a position and take profits automatically when the market breaches a defined level.

A proxy is a device that acts as an intermediary between a computer and the Internet. Proxies often have a cache built in to make Web surfing faster, and some also allow the filtering of Web content for security purposes.

You can buy or sell a put Option. If you buy a put Option, you have the right, but not the obligation, to sell the underlying instrument at the agreed strike price on the agreed expiry date (European Option). If you sell a put Option, you have the obligation to buy the underlying instrument at the agreed strike price on the agreed expiry date (European Option).

The current price offered or asked for a financial instrument.

Contingent orders are the same as related trade orders. Several types are available: If Done (slave), where a slave order only becomes active if the primary order is executed. One Cancels the Other (O.C.O.), where the execution of one order cancels the other. Three-way contingent orders are also available where two orders are placed if (If Done) a primary order is executed. These orders are themselves related as O.C.O. orders, allowing both a stop loss and a profit taking order to be placed around a position.

The price level at which a rising price is expected to stall when market participants begin to sell the instrument. The opposite of resistance is support.

Trying to control the outcome of a known or predictable range of gains or losses. Risk management involves several steps, beginning with a sound understanding of one's business and the exposures or risks that have to be covered to protect the value of that business. Then an assessment should be made of the types of variables that can affect the business and how best to protect it against unwelcome outcomes. Risk management may be as simple as placing stop loss orders to prevent large losses, or as complex as hedging positions with Options or diversifying the portfolio to ensure that you are not overexposed to a single industry or instrument type. Consideration must also be given to the preferred risk profile, that is, whether one is risk-averse or fairly aggressive in approach. This also involves deciding which instruments to use to manage risk, and whether a natural hedge can be used. Once undertaken, a risk-management strategy should be continually assessed for effectiveness and cost.

The simultaneous purchase of an out-of-the-money call (put) and the sale of an out-of-the-money put (call), usually with no up-front premium. The Options bought and sold will have the same notional size and pre-defined maturity, and the deltas will typically be set to 25%. According to Black-Scholes, the purchase and sale of Options with similar deltas (and so out-of-the-money forward to the same extent) should be zero cost. In practice, the market favours one side over the other. In the simplest case, the implied volatility of out-of-the-money puts and calls of the same strike price and maturity date are different, and the extra cost of the favoured side is commonly known as the risk reversal spread. This spread reflects the market's perception that the relevant probability distribution is not symmetrical around the forward, but skewed in the direction of the favoured side. Another way of interpreting this is to say that implied volatility is correlated with spot, which is impossible in a Black-Scholes world.

When a Spot Forex position is held at the end of the business day prior to its Value date, it will be rolled over to a new value date on a Tom/Next basis. As part of the rollover, positions are subject to a swap charge or credit based on the LIBOR/LIBID interest rates of the two traded currencies with an added a mark-up of +/- 0.25% (for private accounts) plus an interest component for any unrealised profit/loss on the position.

The commission includes both the opening and the closing of the position. The alternative is a half-turn commission, which is charged per trade (that is, for both buy and sell).

In Forex, this is the currency that the investor pays with or receives when trading. For example, in EURUSD the variable currency is USD, that is, one unit of EUR is worth a variable amount of USD. When you buy EUR, you pay with USD, and when you sell EUR you receive USD. The other currency (EUR in the example above) is called the base currency.

A secondary order(s) of a Three-way or If Done contingent order will not become active market orders unless the Primary order is executed.

Any investment instruments, other than insurance policies or fixed annuities, issued by a corporation, government, or other organisation. Securities are typically Stocks and bonds.

A limit order to sell at the current Bid Price.

Financial instruments that represent partial ownership of a company. They are also known as Stocks or equities.

In Forex trading, going short is to buy the price currency of the Forex currency pair. For example, if you were going short on GBPUSD, you would be buying USD by selling GBP. For equities, going short is selling a security without owning it, as opposed to going long where you are taking ownership of the security by buying it. A short position benefits from a decline in market prices.

An If  Done order consisting of two 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.

Buying and selling solely in the hope of making a profit, rather than doing so for business-related motives.

A direct trade on a market price with a standard settlement date (Value date) of two business days from the trade date.

The part of the market calling for spot settlement of transactions. The precise meaning of spot depends on local custom for a commodity, security or currency. In the UK, US and Australian foreign-exchange markets, spot means delivery two working days hence.

The difference between the Bid price at which you can sell the trading instrument and the Ask price at which you can buy the trading instrument.

The area at the bottom of the platform workspace, and on many trading modules, which is used for system messages and status information.

Financial instruments that represent partial ownership of a company. Also known as equities or shares.

A buy stop is an order to buy at a specific price higher than the current market price, and a sell stop is a stop to sell at a specific price below the current market price. Traders often refer to stop-loss orders, which are stops that are placed below the market when the trader is long, and above the market when the trader is short. These orders are triggered when the market price hits them to prevent further losses in the trader's position. Stop orders are not always executed at exactly the price specified, as the market may be too volatile.

Stop-if-Bid orders are commonly used to buy the specified instrument in a rising market. If the price level specified is actually bid on the market, the order will be filled at the price offered by the bank. For example, if you sold GBPUSD at 1.4280, with a Stop Bid at 1.4330, the position would be closed (GBPUSD would be bought) if the Bid price hits or breaches 1.4330. We recommend the use of Stop-if-Bid orders only to buy Forex positions. The use of Stop-if-Bid to sell Forex positions can result in positions being prematurely closed if a market event causes the Bid/Ask spread to widen for a short duration.

Stop-if-Offered orders are commonly used to sell the specified instrument in a falling market. If the price level specified is actually offered in the market, the order will be filled at the price bid by the bank. For example, if you bought USDJPY at 132.00, with a Stop Offer at 131.50, your position would be closed (USD vs. JPY would be sold) if the Offer price hits or breaches 131.50 (in other words, if 131.50 is offered). We recommend the use of Stop-if-Offered orders only to sell Forex positions. The use of Stop-if-Offered to buy Forex positions can result in positions being prematurely closed if a market event causes the Bid/Ask spread to widen for a short duration.

In Futures trading, a stop-limit order is a variation of a stop order, with a lower/higher limit price to suspend trading if the price falls/rises too far before the order is filled. This effectively restricts trading to a defined price range.

Stop orders are commonly used to exit positions and to protect against trading losses. Stop orders to sell are placed below the current market level and are executed when the Bid price hits or breaches the price level specified. Stop orders to buy are placed above the current market level and are executed when the Ask price hits or breaches the price level specified. If the Bid price for sell orders (or the Ask price for buy orders) is hit or breached, the order becomes a market order and is filled as soon as possible at the price obtainable in the market. Note that this price may differ from the price you set for the order. In the case of Futures, the order will be filled if possible, and any remaining volume will remain open as a market order. In the case of CFDs, the order will be filled completely if the volume in the market allows for it. In the case of a partial fill, the remaining portion of the order will remain open as an order.

Forex stop orders are commonly used to exit positions and to protect investments in the event that the market moves against an open position. Stop orders to sell are placed below the current market level and are executed when the Bid price hits or breaches the price level specified. Stop orders to buy are placed above the current market level and are executed when the Ask price hits or breaches the price level specified.

This is a stop order that will execute and close a position to limit losses in case of an adverse market movement. When a stop order is executed, it becomes a market order and is filled as soon as possible at the price obtainable on the market. Note that this price may differ from the price you set for the order.

This is when your order is routed directly to the exchange.

The instrument price specified for an Option contract. The specified price (together with other factors such as the Option duration and the market volatility) will affect the price for the Option contract.

The combined trading status and activity for your account(s), that is, your account value, securities and equity, net positions, and the closing amount (total profit and loss over all your positions). The available margin and the margin required for your open positions are also found here, as is an overview of your open positions.

The price level at which the fall of a price is expected to slow or turn when market participants begin to buy the instrument. The opposite of support is resistance.

An order to spot trade (for example, buy) a Forex instrument as well as to conduct the opposite transaction (for example, sell) at a fixed price on a later date. If the first transaction is on a future date, the transaction is a forward-forward contract. Other variations are overnight and tomorrow/next day (tom/next) swaps.

A price adjustment, added to the opening price of the position, for forwarding a Forex trade beyond the original value date. It is a function of the interest rate differential between the two trading currencies, and may be in your favour or against you.

A combination of letters used to uniquely identify a traded instrument. This is also called the ticker symbol. For example: for the Forex instrument dollar-yen, the symbol is USDJPY. An example of a CFD symbol is VOLVb:xome. For Futures, an example is JYZ5. For Stocks, an example is MAERSKa:xcse.

The amount by which the value of the Option exceeds the intrinsic value.

Describes the change in value of an Option over time . The change in value stems from the reduction in the time to expiration and hence the reduction in the life of the Option.

Or

An approximation of the decrease in the price of an Option over a period of time when all other factors are held constant. Theta is generally expressed on a daily basis. For example, if a call has a price of USD3.00 and a theta of 0.10, one day later, with all else unchanged, the call would have a price of USD2.90 (USD3.00 - (.10 x 1)). Generated by a mathematical model, Theta depends on the stock price, strike price, volatility, interest rates, dividends, and time to expiration.

A Trailing Stop order is a stop order that has a trigger price that changes with the spot price. As the market rises (for long positions), the stop price rises according to the proportion set by the user, but if the market price falls, the stop price remains unchanged. This type of stop order helps an investor to set a limit on the maximum possible loss without limiting the possible gain on a position. It also reduces the need to constantly monitor the market prices of open positions.

Trades, commissions and so on, that have not yet been booked. For example, a trade executed today, will be booked next business day.

The asset (instrument, index or reference rate) upon which the Options derivative is based.

The unrealised profit/loss on your positions in margin based products.

The sum of non-margin positions (value of collateral), unrealised margin profit/loss (unrealised value of all open positions) and cost to close (commissions and fees).

The amount currently used to cover your positions, combining cash balance and the value of un-booked Forex Spot and Forward positions, as well as the implied value of un-booked Forex Option positions.

The date on which the settlement of funds for a trade transaction will take place in your account.

An ordinary Option with no special features.

In Forex, this is the currency that the investor pays with or receives when trading. For example, in EURUSD the variable currency is USD, that is, one unit of EUR is worth a variable amount of USD. When you buy EUR, you pay with USD, and when you sell EUR you receive USD. The other currency (EUR in the example above) is called the base currency.

A measure used to describe the change in value of the Option when the volatility of the underlying asset changes.

A View is a term invented by Saxo Bank for a single tab in your screen�s workspace, which includes both trade and information modules. You can add, change or delete Views to suit your own requirements. For example, you may want a View set up for trading specific instruments such as DollarYen, and that includes the Chart, Trade and analysis modules specifically for DollarYen. You will also typically want a View dedicated to a summary of your account. A number of default Views are set up in platform to get you started.

There are two types of volatility:

• Historical volatility is actual volatility based on volatility realised in past movements in the market.
• Implied volatility is the volatility interpreted from the price of Options. So, the implied volatility is the expected spread of movement of an underlying asset�s price, predicted over the term of the Option, and derived from the known prices of Options and the other parameters used in the calculation of those prices.

These are Saxo Bank's morning meeting slides, which provide information on overnight events and expectations for the day. This information includes the general state of the markets and numbers published that day, as well as important news and its expected impact. Based on this, a general strategy for the day is outlined for the various markets. Access is from Research > Wake-Up Call.

Workspaces contain the entire platform layout, including what Saxo Bank calls Views, the trading modules inside the Views, and any customised module settings. platform allows you to save any number of workspaces as separate files (.cs2 files). Besides saving the current workspace layout, you can also save a workspace template (.cst files), that is, a basic layout that you can reload if you regret any changes made to your workspace.

The increase in the value of a company's stock value plus the dividend paid out per share from one year ago.