Investor's Vocabulary

CFD (Contract for difference)– is an agreement between a buyer and a seller that stipulates that the seller will pay the buyer the difference between the initial value of an asset and its value at contract maturation time. If the difference is negative, the roles are reversed and the buyer instead pays the seller.

CFD allows private clients to trade a wider spectrum of assets than just currency. With our platform you get the opportunity to speculate on prices of American publicly traded stocks, commodities, indices and futures.

FOREX Market: an interbank exchange of currency that was formed in the 1970s when the majority of exchange rates moved from a fixed to a floating regime. The rate of exchange between two currencies is determined as the rate that is agreeable to both parties.

Base Currency: the first currency in a currency pair.

For example: EURUSD: EUR is the base currency

Exchange Rate: a specified price of one currency quoted in another.

For example: an exchange rate of the Euro quoted against the US Dollar is 1.452, meaning that one Euro is worth 1.452 Dollars.

The rate has two prices:

Ask: the price needed to buy the currency quoted first

Bid: the price needed to sell the currency quoted first

Spread: the difference between the two

Pips: a minimum change in the currency price

Lot: A fixed amount of a currency being bought or sold. In our company 1 Lot is always equal to 1 base currency.

Leverage: a credit provided by the broker that allows the client to trade in quantities tens or even hundreds of times bigger than his/her available funds. It is a ratio of available funds to credit that the broker will provide you with.

For example: You have $500 deposited in your account. By using 1:200 leverage you can actually generate profit from $100,000, at the same time your loss cannot exceed the size of your deposit or $500.

Margin: a good faith deposit put up by the trader to guarantee leverage.

Margin Trading: using borrowed funds to execute trades.

Margin Call: a notification by the system of the lack of required funds in the account needed to support the client’s open positions.

Order: the client’s request for the purchase or sale of a desired amount of base currency

Conditional Order: an order with a specific price which is executed when the market reaches the desired price.

Stop Loss: a conditional order, which allows the trader to limit the amount of loss the position generates.

Position: a currently open order

Swap: a price of carrying a position overnight (02:00 Moscow Time). Depending on interest rates of the traded currencies the trader might either lose or make money with Swaps. During the night of Wednesday to Thursday all Swaps are tripled.