Slang used by traders meaning the Sterling:US Dollar exchange rate. The term originates from the fact that in the 1800s, the information was communicated between London and New York exchanges using the transatlantic cable.
A Call is a type of option granting the owner the right to buy an underlying product, at a fixed price known as the strike price, at a specified point in time.
A trading strategy used where an investor attempts to make a profit by selling one currency with a low interest rate, to purchase a different currency with a higher interest rate.
Cash price (Spot Rate)
The price of an asset if it were being transferred at the current point in time. Ie the actual price of an instrument right now. This term is commonly used for stock indices prices, whereas ‘spot rate’ is more commonly used to describe forex and commodity prices.
Chicago Board of Trade
A governmental or quasi-governmental organisation that administers the country's monetary policy. For example, in the US the Federal Reserve, is the central bank.
Financial data plotted as charts that are used by investors using the technical analysis trading strategy in an attempt to identify recurring patterns to help them make judgements on the future movement of a product price.
Terminating an existing position – ie ending the position with a Spread Betting/CFD provider, and therefore settling up any profit due to you, or losses owed to the provider.
Closing positions can be both manual (by executing the order yourself during the trading hours offered by the spread betting/CFD provier) or automatic (by placing a stop order/limit order)
A rudimentary good used in commerce which is normally the same across producers and traded on an exchange. Commodities can be describe as soft, hard, wet, and dry, with each of the explanations self-explanatory. For example, soft commodities are goods such as coffee and sugar, that can be grown. Hard commodities on the other hand are goods such as coal, and gold or other metals, that are mined.
Chicago Mercantile Exchange
Commodity Exchange Inc, New York
Controlled risk bet (Guaranteed stops)
Spread Bets can be risk managed by using guaranteed stops. A controlled risk bet is a bet that has limited the speculators’ maximum exposure using this method. Guaranteed stops differ to basic stops because basic stops are exposed to large jumps/falls in prices.
For example, if you buy the FTSE at 5500 at the end of the trading day, and have a stop at 5000. If outside of trading hours, a significant event happens, causing the FTSE to fall, and open the following day at 4500, the stop order would not have been executed outside of trading hours, and therefore the stop will only be executed at 4500. A guaranteed stop at 5000 on the other hand would be honoured by the Spread betting provider.
Guaranteed stops therefore cost more to place than normal stops.
Credit in the trading sense is no different to credit in the everyday sense. Subject to a credit check, some Spread betting/CFD/Investment providers offer you a credit facility to trade, therefore you can place trades without needing to physically deposit cash with the provider to cover the margin/notional trading requirement.
Crude Oil (WTI)
Crude oil refers to petroleum in an unrefined state. It’s importance in the provision of the world’s energy makes it one of the most significant and traded commodity. WTI stands for West Texas Intermediate. It is a type of low sulphur crude oil or sweet crude, and is used as benchmark for oil.
Coffee, Sugar and Cocoa Exchange