Bid / Ask
Bid and ask are the prices at which OEXN will either sell a particular instrument to you or buy particular instrument from you. The Bid / Ask price is based on the value of the underlying physical instrument, plus a spread.
Base and quote currencies
Base is the first currency in a currency pair, also referred to as the nominator. Quote is the second currency in a currency pair, also referred to as the denominator. For example, in the EUR/USD currency pair, Euro is the base currency, and the US Dollar is the quote currency.
A bull market is an appreciating market, where trades are eager to increase their long trading activity (also known as ‘’going long’’).
A bear market is a market on the decline, where you expect prices to fall, indicating there is going to be more losses in the markets. In a Bear market, the market sentiment is towards going short.
Commodities are natural products that appear in the ground or are agriculturally cultivated. Commodities play a key role in determining the prices of other financial markets as commodities are used as input in the manufacturing process – meaning national economies in general, and publicly-listed companies in particular, are affected by their prices.
Contract for Difference (CFD)
A CFD is a financial derivative that is monitored closely by financial regulators. When you buy or sell a CFD you enter a contract with the CFD issuer. You are not buying or selling the asset but are entering a contract which allows you to potentially benefit from the price movement of that asset. In other words, two parties enter into an agreement to trade on the price difference between the entry price and the closing price.
The contract size or unit amount shown in the trade window is the minimum size of the CFD contract available on the platform. Each instrument has a different minimum unit amount. Oil prices are quoted in barrels, while forex pairs such as the EUR/USD are based on the value amount and shares are based on the price of a single share.
Spreading your money out over many different investments to lower portfolio risk.
The Foreign Exchange Market is a global decentralised market for exchanging one currency for another. The most traded currencies are the United States Dollar (USD), Euro (EUR), Japanese Yen (JPY), Pound Sterling (GBP), Australian Dollar (AUD), Canadian Dollar (CAD) and Swiss Franc (CHF).
A stock market index is a performance indicator of a country’s economy or of an industry / sector within an economy. For example, FTSE 100 represents the largest 100 companies traded on the London Stock Exchange, made up of the 225 largest, publicly traded companies in Japan.
Leverage enables traders to multiply their exposure to a financial instrument without committing the entire capital upfront. It effectively allows you to trade positions larger than you could on the underlying market using the amount of money in your trading account. For example, a leverage of 1:50 means you could use $200 to open a trade valued at $10,000. This means that both profit and losses are magnified. Leveraged trading activity involves substantial risk for losing all of the invested funds in a short time period.
A limit order allows you to set price you wish to enter the market. If the price you have set is not reached, your order will not be filled.
Long versus Short position
If you are taking a long position, you are expecting the price of the instrument to rise in value. If you are taking a short position, you are expecting the price of the instrument to decline in value. In online CFD trading, we more commonly refer to a buy position, or a sell position, rather than going long or short.
Margin is not a fee or a cost, but rather a deposit amount that you must put down in order to open a trade based on the size of the contract and the asset in question. Margin is usually expressed as a percentage of the full cost of the position.
If your account balance approaches the Maintenance Margin requirement, OEXN may issue a Margin Call alert. If funds are not deposited before the account balance falls below the maintenance margin requirement, the system will automatically close one or more of your open positions. Margin Calls alerts are not to be relied upon as a risk management tool and it is your responsibility to monitor your account and make sure you have adequate funds to cover the margin requirement of all of your open positions.
Price interest point (pip) measures the smallest unit of change in a financial instrument’s price. Typically, it refers to the last decimal or digit of the instrument page.
The amount of capital exposed on any single trade.
Developing a strong risk management process will help you filter out high-risk trades and keep you aware of your risk value for each trade. Leverage helps ramp up your trading, but it also magnifies your risk. You should determine a profit / loss ratio that fits your experience, knowledge and risk appetite, and make sure that you do not enter a trade unless it fits those standards. Leveraged trading activity involves substantial risk for losing all of the invested funds in a short time period.
Shares are the ownership rights to a corporation which are divided among its stockholders. The price of a particular stock is determined by the total number of shares a company has created, usually measured in the currency of the stock market it is listed on, for example penny in the UK, euro in the European Union, yen in Japan and US Dollar in the United States. CFD share trading, on the other hand, is a form of trading- that enables you to trade with leverage on the prices of publicly-listed companies – such as Apple, Tesla and Meta – without need of owning the underlying stock. Leveraged trading activity involves substantial risks for losing all of the invested funds in a short time period.
Slippage is the difference between the price you se for opening or closing a trade / order and the price that it is actually opened or closed at. Slippage usually occurs during periods high volatility and after major market news – and can be relevant for all financial instruments: stocks, forex pairs, commodities, indices and more. Slippage can work either in your favour (when the price moves higher in your desired direction) or against you (when the price moves lower than predefined price level).
The spread is the difference between the Buy price and and the Sell price on an instrument at a particular time.
A stop loss is a level at which your trade will close automatically to prevent further losses.
A take profit order helps ensure you close your trade automatically when it’s a certain profitable threshold.
High Risk Investment Notice: The vast majority of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.