Trading Glossary Explained

Trading is a complex process, which includes many actions that a person unfamiliar with the financial world will find puzzling. Once you launch your trading career, you will be swamped with trading terms whose meaning you will not know. You will not immediately grasp how the market value of a business differs from its book value. Nor will you understand what CPI stands for and how it is different from IPO, unless we supply you with a glossary of all confusing terms that you meet in a trading business.

To help you avoid confusion, we have compiled a comprehensive glossary of financial terms used in the markets. All trading glossary is presented in our glossary in alphabetical order and is explained with linguistic precision. Any financial term that sounds baffling at you now will become crystal clear once you read its definition in our glossary below.

All | # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

There are currently 7 names in this directory beginning with the letter D.

Daily Funded Bet (DBF)

This term is used in spread betting to describe a position that remains open until a trader decides to close it. For each day that a bet remains open, an interest adjustment is made to a trader’s account to reflect the cost of funding his or her position.

Day Order

This is a type of order or an instruction from a trader to a broker to buy or sell a certain asset.

Day Trading

It is a strategy of short-term investment that involves closing out all trades before the market closes.

Derivatives

These are financial products deriving their value from the price of an underlying asset. Traders often use derivatives as a device to speculate on the future price movements of an asset, without buying the asset itself.

Digital Options

This option, also known as a digital 100, enables a trader to predict whether a statement about a market is true or false. If traders are correct in their predictions, they earn a profit. If they make a mistake, they lose money.

Dividend

This is the portion that a company chooses to return to its shareholders, usually expressed as a percentage.

Double Bottom

This is a technical analysis reversal price pattern. After an established downtrend, the last bottom fails to move lower than the previous bottom and prices rise above the last top.