Note

Glossary

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CFD – contract for difference.

A financial instrument that enables you to profit from the price movements of securities without actually owning the underlying security

DIVERSIFICATION

Spreading your money out over many different investments to lower portfolio risk

ETF – exchange-traded fund.

A type of investment fund that aims to track the performance of a specific stock market index or asset.

FUNDAMENTAL ANALYSIS

A form of analysis that focuses on information such as economic developments and data

GOING LONG

Buying a security

GOING SHORT

Selling a security

INDICES

The plural form of index

INVESTOR SENTIMENT

The general mood of investors

LEVERAGE

Using capital borrowed from a broker when opening a position to increase the potential return of an investment

MARKET CAPITALISATION

The total value of a company’s shares

MARKET RISK

The risk that the underlying index or asset falls in value.

MUTUAL FUND

An investment fund that pools money together from many individual investors to purchase securities

RISK

The amount of capital exposed on any single trade

RISK MANAGEMENT

Focusing on risk when trading in order to minimise losses

SPREAD

The difference between the buy and the sell price. This is also the cost of placing the trade

STOCK INDEX

An index that measures the performance of a particular group of stocks over time

TECHNICAL ANALYSIS 

Aform of analysis that focuses on price charts, trends, and patterns

VOLATILITY

Up and down movements in the price of a security

Reprinted from eTorothe copyright all reserved by the original author.

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