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 2 names in this directory beginning with the letter H.

Hawks and Doves

These are terms used by analysts to categorize members of the Central Bank committee ahead of their votes on monetary policy. Hawks are those members who advocate keeping inflation low as the top priority in monetary policy. Doves are more in favor of expansionary monetary policy, including low interest rates. Hawks tend to favor “tight” monetary policy.

Hedge

It is an investment or trade meant to reduce a trader’s exposure to risk. The process of reducing risk via investments is called hedging.