Jargon Buster

Confused by all the terminology surrounding spread betting and the financial markets? Check out our clear and concise trading glossary.

• 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

A

Ask

The price at which a financial instrument is sold. The ask price is the lower end of the InterTrader.com quote. Also known as the 'offer' price.

B

Basis of expiry

The InterTrader.com specification of the price at which a contract (bet) expires.

Bear (or a bear market)

Someone with a negative view of a particular market or asset. A bear market is accordingly one that is falling or lacking confidence. In financial terms a bear is the opposite of a bull.

Bid

The price at which a financial instrument is bought. The bid price is the upper end of the InterTrader.com quote.

Blue-chip

A blue-chip stock is that of a well-established company which is considered stable and which pays regular dividends. Typically, the term 'blue-chips' is used to refer to the constituents of the major stock indices. The term derives from the high value of blue casino chips.

Bull (or a bull market)

Someone with a positive view of a particular market or asset. A bull market is accordingly one that is rising or gaining confidence. In financial terms a bull is the opposite of a bear.

Buy

When you buy (or 'take' or 'go long') with InterTrader.com this means you are making an Up Bet (or closing a Down Bet).

C

Cable

The exchange rate between the UK pound sterling and the US dollar. The term is derived from the telegraph cable that was laid across the Atlantic between the UK and the US in the nineteenth century.

Capital Gains Tax

The UK tax on profits realised through the sale of assets. Profits from spread betting are exempt from CGT.

CGSL

Computer Generated Stop Level. See 'Max CGSL' below.

Commission

A charge made by brokers and other intermediaries for facilitating certain trades. InterTrader.com takes no commission for spread betting.

Commodity

A physical substance traded on an exchange. Typical commodities include 'energies' (such as crude oil), 'metals' (such as gold and silver) and 'soft' commodities (foodstuffs such as sugar, wheat and coffee).

Contract month

The month during which a futures contract expires, and during which delivery may take place according to the terms of the contract.

D

DAX 30

The premier German stock index, comprising a weighted average of the 30 largest companies on the Frankfurt Stock Exchange.

Day trading

Opening and closing a contract on the same day. Day traders trade on very short-term market movements.

Dow Jones

The Dow Jones Industrial Average is one of the premier US stock indices, comprising a weighted average of the stock prices of 30 of the largest US companies.

Down Bet

If you think the market will fall, you would place a Down Bet. See 'Sell' and 'Short'.

E

Expiry

The date and time at which the relevant bet expires.

F

Fundamental Analysis

The study of a company's key economic data, its 'fundamentals', as a guide to its future performance in the stock market. Analysts will consider both quantitative factors such as the details contained in a company's financial statements and qualitative factors such as brand strength, technology and the capability of its board of directors.

Financing

The interest you pay to InterTrader.com if you keep a long (bought) Rolling Daily position open overnight, and the interest you receive from InterTrader.com if you keep a short (sold) Rolling Daily position open overnight.

FTSE 100

The premier UK stock index, comprising a weighted average of the 100 largest companies on the London Stock Exchange.

Future/futures contract

A standardised, transferable, exchange-traded contract that expires on a specified future date.

G

Gapping

The situation where any market moves directly from one correctly quoted price to another, significantly different, correctly quoted price. There can be many reasons for gapping: economic figures, company announcements, political events, natural disaster etc. The effect of gapping is that any stop-loss, limit or new order will be subject to a gap in the price. One of the main reasons for gapping in a spread bet quote is a movement in the underlying market price overnight, during which time InterTrader.com does not quote a price.

Gearing (or Leverage)

The correlation between potential profit/loss against your initial deposit. A highly geared or leveraged position involves substantial risk to your money while increasing the potential return from your capital. Spread betting is a leveraged product in that it allows you to buy (or sell) a financial product with substantially less money than the actual full market value of that financial product. See 'Margin'.

GFD (Good For the Day)

An order valid for the day of placement only.

GTC (Good Till Cancelled)

An order valid until either cancelled or the underlying contract has expired.

H

Hedging

The action of offsetting your exposure in one area by opening an opposite position in a related area. The object of hedging is to reduce your risk. For example, a commercial farmer whose livelihood depends on selling wheat might sell a wheat futures contract to reduce his exposure to fluctuating wheat prices. Similarly, if you had an Up Bet in the FTSE you might enter a Down Bet in the DAX, a related market. Although this is not an exact hedge, it is unlikely that the FTSE will move heavily in the opposite direction to the DAX, so you have reduced your risk on the FTSE.

I

IMR

Initial Margin Requirement. See 'Max IMR' below.

L

Last dealing day

The last day in the contract month on which a customer may deal in the product. (This may differ significantly to the Expiry.)

Leverage

See 'Gearing'.

Liquidity

The ability of an asset to be converted into cash quickly, without any price discount or restriction to the size of transaction. A liquid market is one with a sizeable flow of buyers and sellers, thus facilitating new transactions.

Limit order

A limit order is designed to lock in potential profits. It is an instruction to close your position (by buying or selling) should the price hit a specified, more favourable level. The level of a limit order will be higher than the current market level for long positions or lower than the current market level for short positions.

Long

A 'long position' is one that will benefit from a rise in the market price. 'Going long' means that you are placing an Up Bet.

M

Margin

Margin is the amount of money you need on your account to run an open position. It is called margin as it is a fraction of the full market value of your position. Margin is calculated as the amount of money you must have in your account to satisfy InterTrader.com that you are able to honour your debt should your bet lose money.

Margin requirement

Your margin requirement will differ from position to position, and is calculated according to the level of your stop-loss order, which determines the most you might expect to lose on the position. In certain cases, for instance where the market 'gaps' (see above), you may lose more than your initial margin requirement. Your margin requirement will also change when you change the level of your stop-loss order.

Market hours

The times at which InterTrader.com will quote on a given contract.

Max CGSL (Computer Generated Stop Level)

This is the maximum figure used to allocate an automatic stop-loss on newly opened positions. If you have sufficient funds to cover the CGSL on deposit, the trading system will assign a stop at 80% of the CGSL. Otherwise, the system will allocate a stop-loss at a level to cover 80% of the funds available in your account. For example, if you have £2000 in your account and you trade the Daily FTSE at £10 per point, the system will automatically allocate a stop-loss 100 points away from your opening level, because the Max CGSL for Daily FTSE is 125 and 80% of 125 is 100. The maximum risk on this bet would therefore be £10 x 100 points = £1000, even though you have £2000 on your account. See 'Stop-loss order'.

Minimum bet

The minimum bet in pounds (euros or dollars) per point that we will accept for that contract.

Min IMR

The Minimum Initial Margin Requirement. This is how we calculate the minimum funds required to open a new position, by multiplying the bet size by the Min IMR for that market. If the Min IMR on a market is 50 and you wish to bet £5 per point, you would require a minimum of £250 in your account to open this position.

N

NASDAQ

A major US stock index. The NASDAQ-100 is a weighted average of 100 of the largest non-financial companies traded on the NASDAQ.

New order

An order to open a new position (buying or selling) at a level in the market which has not yet been reached. It is not attached to any existing position and is independent of any other instruction. Contingent stop-loss and limit orders may be attached to a new order.

O

OCO

One Cancels Other. A special type of order stating that if one part of the order is executed the other is cancelled. For instance, if you have two instructions to trade a market at different levels and one of the instructions is executed, the other instruction will be cancelled automatically.

Offer

Another name for the ask or selling price.

Open position

A contract or trade that is currently active.

P

Per point/per pip

These terms refer to the unit movement required to alter the profit/loss on your bet by the full stake amount. For instance, a bet per point on Vodafone is for each full penny movement in the InterTrader.com price for Vodafone shares. A bet per point on the FTSE 100 is for each full point's change in the relevant InterTrader.com FTSE 100 contract. A 10-point movement from 5100 to 5110 on our Daily FTSE 100 contract would therefore correspond to a win or loss of £100 for a £10 per point bet. The term 'pip' is commonly used in FX to denote the last digit quoted.

R

Rolling Daily

A type of contract with no expiry date. Your bet will normally remain open until you decide to close it or an order is triggered. Adjustments are made overnight to account for the cost of interest (and dividends) in holding your position. See 'Financing' and also consult our Product Info Tables.

Rollover

Rolling over is the practise where a position that is due to expire is closed and transferred into the next relevant monthly or daily contract. We will allow clients to roll positions from the expiring contract to the next contract for a reduced spread. For futures contracts, the original bet is closed (and becomes due for settlement) and a new bet is established.

S

Sell

When you sell (or 'give' or 'go short') with InterTrader.com this means you are making an Down Bet (or closing an Up Bet).

Settlement price

The price at which InterTrader.com settles a position on expiry. The basis of settlement for each contract can normally be found in the Product Info Tables.

Short

A 'short position' is one that will benefit from a fall in the market price. This is also known as a sold position. 'Going short' means that you are placing a Down Bet.

Spot

A contract for immediate or 'on the spot' delivery, as opposed to a futures contract with a future expiry date. Used in FX to denote the immediate exchange of currencies.

Spread

The difference between the buying and selling ends of our quote.

Stamp duty

A UK tax on the transfer of shares and securities. One major benefit of spread betting is that it is not liable to stamp duty (although tax laws can of course change).

Stop-loss order

An order attached to an open position, giving an instruction where to close the position (by buying or selling) if the position is making a loss. The stop-loss level will be lower than the current market level for long positions or higher than the current market level for short positions. All open positions with InterTrader.com must have a stop-loss order attached: if you do not specify where you want to place your stop-loss it will be calculated automatically. The level can be amended later, assuming you have sufficient funds on your account. Each product has a minimum stop level that limits how close you may place any stop.

T

Technical Analysis

The study of historical market activity in order to predict future market activity. Technical Analysis, or TA, concentrates on the price chart, attempting to identify recurring patterns and levels of support and resistance, as a basis for creating a trading strategy. Different types of TA employ different technical indicators to process the statistical data.

Tick

The standard term for the smallest possible price movement in a contract. For example, one tick of the FTSE 100 is 0.1 of a point (as the FTSE is quoted to one decimal point) while one tick of Wall Street is 0.01 of a point (as the Dow is quoted to two decimal points).

U

Underlying market

Our quote is always based upon a price received from an actual financial exchange, a real market for the instrument concerned. We refer to this as the 'underlying' market.

Up Bet

If you think the market will rise, you would place an Up Bet. See 'Buy' and 'Long'.

V

Volatility

A term to describe, and quantify, the relative movement of a given market in the recent past. A market that moves a great deal is said to be of high volatility and one that is quiet is said to have low volatility.