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 6 names in this directory beginning with the letter L.

Leverage

This is the concept enabling traders to multiply their exposure to a financial market without committing more money.

Leveraged Products

These are financial instruments enabling traders to gain greater exposure to the market without increasing their capital investment. They do so by using leverage.

Liabilities

These are debts and obligations that detract from a company’s total value. They have to be paid over a certain period of time.

Limit Order

This is an instruction given by a trader to a broker to execute a trade at a particular level which is more favorable than the current market price.

Liquidity

This is a term that describes how easily an asset can be sold or bought in the market without affecting its price. When there is a demand for an asset, there is a high liquidity, because in this period, it is easy to find a buyer or a seller for this asset.

Long Position

This is a position that makes a profit if an asset’s market price increases.