This trading glossary collects the terms used across PrymoInvest. Each definition is kept short; follow the links for the full explanation.
- Ask
- The lowest price a seller is currently willing to accept. You buy at the ask. See trading fees.
- Base currency
- The first currency in a pair. In EUR/USD, the euro is the base currency, and the price shows how much of the second currency one unit buys.
- Bid
- The highest price a buyer is currently offering. You sell at the bid.
- Blockchain
- A shared ledger, copied across many computers, that records transactions in linked blocks. See how crypto works.
- Bond
- A loan to a government or company that pays interest and returns the amount borrowed at a set date.
- Capital gain
- The profit made when an investment is sold for more than it cost. Taxes on gains depend on where you live and the account used.
- CFD
- Contract for difference: a leveraged contract that pays the change in an asset's price without you owning the asset.
- Compounding
- Earning returns on earlier returns. Reinvested dividends and low costs help it work over long periods.
- Diversification
- Spreading money across many holdings so that one failure does less damage.
- Dividend
- A cash payment from a company's profits to its shareholders.
- Dividend yield
- The yearly dividend divided by the share price, shown as a percentage.
- Earnings per share
- A company's profit divided by the number of its shares.
- ETF
- Exchange-traded fund: a fund whose units trade on an exchange during the session like a share. See how the stock market works.
- Ex-dividend date
- The date from which a share trades without its next dividend. You must own it before this date to receive the payment.
- Expense ratio
- A fund's yearly running cost as a percentage of the money invested, also called the ongoing charge.
- Free float
- The shares available for public trading, excluding large locked-up holdings. Many indices weight companies by free float.
- Futures contract
- An agreement to buy or sell an asset at a set price on a future date. Index futures trade almost around the clock; see Nasdaq index futures.
- Gap
- A jump in price between one session's close and the next session's open, usually caused by news while the market was shut.
- Halving
- The event, roughly every four years, when Bitcoin's block reward is cut in half. See what is Bitcoin.
- Index
- A number that tracks the value of a basket of shares, such as the S&P 500 or FTSE 100.
- Index fund
- A fund that aims to match an index by holding its shares or a representative sample.
- IPO
- Initial public offering: the first sale of a company's shares to the public, when it lists on an exchange.
- Leverage
- Controlling a position larger than your deposit. It magnifies gains and losses. See the margin calculator.
- Limit order
- An instruction to buy or sell only at a chosen price or better.
- Liquidity
- How easily something can be bought or sold without moving its price much.
- Lot
- A standard trade size in forex: 100,000 units of the base currency. Mini and micro lots are 10,000 and 1,000.
- Margin
- Money set aside as collateral for a leveraged position.
- Market capitalisation
- A company's share price multiplied by the number of its shares: the market's value of the whole company.
- Market order
- An instruction to buy or sell straight away at the best available price.
- Nominee account
- An account in which a broker holds shares on your behalf, separate from its own assets.
- Pip
- The standard unit of movement in a currency pair: 0.0001 for most pairs, 0.01 for yen pairs. See the pip calculator.
- Price-to-earnings ratio
- The share price divided by earnings per share: a rough gauge of how much investors pay for each unit of profit.
- Private key
- The secret number that proves ownership of crypto and signs transactions. Whoever has it controls the funds.
- Screener
- A tool that filters a large list of shares or other assets by criteria you choose. See screeners.
- Settlement
- The final exchange of cash and securities after a trade. US shares settle one business day after the trade.
- Spread
- The gap between the bid and ask prices, and a cost to anyone who buys and later sells.
- Stablecoin
- A crypto token that aims to keep a fixed value, usually one US dollar. See what is USDT.
- Stop-loss
- An order that closes a position once a set price is reached. It limits losses but does not guarantee the exit price.
- Withholding tax
- Tax deducted at source from dividends or interest before they are paid, often on overseas holdings.