Trading Glossary

The Alternative Investment Market is a sub-market of the London Stock Exchange, allowing smaller companies to float.

Australian Securities & Investments Commission (ASIC) is the regulator of the financial services industry in Asutralia. Please visit www.asic.gov.au for more information. London Capital Group Pty Limited is regulated by ASIC. Capital CFDs  is the trading name of London Capital Group Pty Limited.

A market distinguished by declining prices.

This is the price at which you can sell. It is always the lower of the two prices quoted and is called the bid.

The bond market is where participants buy and sell debt securities. UK Gilts, German Bunds and US Treasuries are all Bonds. We quote prices derived from the underlying futures markets of the relevant contracts.

A market distinguished by rising prices.

Buying means you go long in anticipation of a market rising. You would also make a buy to close out an existing sell (short) position.

These are markets where raw or primary products are exchanged (like gold and oil). These commodities are traded on regulated exchanges, in which they are bought and sold in standardised contract sizes. We quote prices derived from the underlying futures markets of the relevant contracts.

The month during which a futures contract expires and during which delivery may take place according to the terms of the contract. Since you are trading on a derived price of these contracts, you will never have to take delivery of or deliver the underlying product.

The foreign exchange markets trade one state or economic bloc's currency versus another's (commonly called a cross rate). These markets are traded in 'pairs' of two separate currencies (i.e. AUS/USD is the Australian Dollar versus the USD Dollar currency pair). When a buy trade is made in a currency pair the client is anticipating that the first quoted currency is going to rally versus the second. Therefore if a client buys the EUR/YEN cross he wants the Euro to rally versus the Yen.

A security whose price is derived from an underlying asset (e.g. a share, currency, commodity or index) and may not give the holder any actual rights to the underlying asset.

The part of a company's profits distributed to shareholders, usually on a regular basis. If you have an open buy position on an equity (excluding quarterly equity contracts) that goes ex-Dividend you will be credited with the net dividend and if you have an open sell position you will be debited 100pc of the relevant dividend.

The part of a company's profits distributed to shareholders, usually on a regular basis. If you have an open buy position on an equity (excluding quarterly equity contracts) that goes ex-Dividend you will be credited with 80pc of the relevant dividend if you have an open sell position you will be debited 100pc of the relevant dividend.

Equities represent a share of ownership in a company. Equities are traded via the share market, a public market for the trading of company shares and derivatives at an agreed price. As you are trading on derived share prices, this does not give you ownership of the shares nor does it give you, at any time, the right to require or request delivery of those shares from us. You have no voting rights over the shares represented by your trade.

Equities represent a share of ownership in a company. Equities are traded via the share market, a public market for the trading of company shares and derivatives at an agreed price. As you are trading on derived share prices, this does not give you all the ownership rights of the shares nor does it give you, at any time, the right to require or request delivery of those shares from us. You have no voting rights over the shares represented by your trade.

The date and time on which the relevant contract expires.

The execution of an order.

The execution of an order.

A futures contract is an agreement to conduct a transaction at some specified time in the future where the price is agreed now. Therefore, it means that the expiry date is at some point in the future. Our future contracts are cash settled so you will never be required to actually deliver, or take delivery of, the physical product.

Where a market price moves from one price directly to another significantly different price. There can be many reasons for gapping: economic figures; company announcements; political events; natural disasters etc.  The effect is that stop loss orders may be filled at an  inferior price to that requested by the client.

Clients can buy or sell a financial product with substantially less money than the actual full market value of that financial product. A position in a contract with high gearing or leverage stands to make or lose a large amount from a small percentage movement in the underlying instrument.

An order to buy or sell a market that remains active until the end of the next Capital CFDs  Quoting Hours session for the relevant underlying market for that day. It should be noted that there may be more than one Quoting Hours session for each day.

An order to buy or sell a market that remains active until the order is executed or is cancelled.

A Guaranteed Stop Order is a type of stop loss order that can be used to close your open position should the market goes against you and reaches (or passes) your Guaranteed Stop Order price. Your Guaranteed Stop Order price is guaranteed according to the terms set out in the Customer Agreement. As a result a premium is charged when the order is placed and will not be refundable if the Guaranteed Stop Order expires or is cancelled.  The distance between your entry price and the Guaranteed Stop Order price is the amount of funds at risk for this particular position, which the system will hold as margin.

The action of reducing the risk of an outright position in one market by taking an opposite position in a similar or derivative market e.g. if you had a long (buy) position in the UK 100 you might enter a short (sell) position in the DAX. In this case although the hedge would not be exact, it is unlikely that the UK 100 will move heavily in the opposite direction to the DAX (but, of course, not impossible).

Indices are a customised basket of securities that track a particular market or segment. Each index has its own calculation methodology and its own specific process in order to select particular securities. We offer prices on all of the major financial indexes, such as the ASX 200, UK 100, DAX 30, Dow and S&P 500.

The last day in the contract month of which a customer may deal in the product (may be a significant difference to the Expiry).

An order instruction given to Capital CFDs  to close an open position at a price more advantageous to the customer than that currently available.

With a Limited Risk Account all your positions will have an associated Guaranteed Stop Order attached to them. This means that, should the market move against you, we will guarantee to close all your positions at a pre-specified exact point. In other words, for every trade you open with a Limited Risk Account you must specify a stop to cover the maximum possible loss in your account. As mandatory Guaranteed Stop Orders are essentially a form of insurance against market gaps, they come at a small cost. This will be a premium that will be debited from your account when you place a trade. You should also note that by opting for a Limited Risk Account your Stop will need to be placed further away from your entry level than if you selected a standard account where Guaranteed Stop Orders are not mandatory.

The ability of an asset to be converted into cash quickly, without any price discount and any restriction to size of transaction. Liquidity also refers to a market that is regularly traded.

A client is said to be long if he/she has an open buy position.

Margin is the term used to describe funds being used to support existing trades. Clients who hold open positions require what is called margin. Margin is calculated as the amount of money you must have in your account to satisfy us that you are able to honour your debt should your trade lose money.

The times at which Capital CFDs will quote on a given contract.

This is the maximum margin from a client's account that our systems will use to allocate an automated stop loss order on any newly opened positions. In the event that a client has sufficient funds on deposit to cover the Max CGSL the system will assign a stop at 80% of the Max CGSL away from the opening price of the trade. Otherwise the system will allocate a stop at 80% of the funds available in your account.

The minimum amount of money required to open a new trade in a particular contract.

Where you have two orders, one above and one below the current market price and were the first to be executed the other is automatically cancelled.

This is the level at which you can buy and is always the higher of the two prices quoted and is called the offer.

An order is an instruction to make a Trade at a price that is not currently available in the CFD but might be available at some future time. There are three types of orders: 'Limit', 'Stop Loss' and 'New'. We also offer guaranteed stop losses which protect you against any market gaps or slippage and there is a premium for this extra protection (see the Market Information).

A pip/ tick/ point are the general terms for the smallest incremental move possible in any market quoted by us. Clients should always be aware of what the underlying stake or unit risk is for all markets in which they wish to trade.

These contracts expire prior to or on their expiry date in March, June, September or December. They can be closed out at any time before the expiry date.

A price level which is supposedly difficult for a particular market to rise above.

Selling means you go short in anticipation of a market fall. You would also make a sell to close out an existing buy position.

The price at which we settle a position at the expiry date.

A client is said to be short if he/she has an open sell position.

The difference between the buy and sell price of Capital CFDs’ quote. A customer may sell at the lower price or buy at the higher price of the Capital CFDs’ quote.

A stop loss order is an order to close an open position should the market goes against you and reaches (or passes through) your stop price. For a long position the stop loss would be a stop sell at a price lower than the current bid. For a short position it would be a stop buy at a price higher than the current offer. The stop loss price is not guaranteed. In the event of market gapping your stop loss may be filled at the next best available price.

A price level which is supposedly difficult for a particular market to fall below.

Analysis of a financial market by the utilisation of historical price data (usually charts) in an attempt to predict future price activity.

A market where prices are range bound by a higher and lower price band. Normally markets will range trade when there is little or no news. Relates to Technical Analysis.

Trading Resources are the funds you have available to make new trades or to move any of your existing stop loss orders on any open trades further away from the current quoted price.

Our quotes are always based upon the prices received from the various financial exchanges around the world. These prices are said to represent the underlying market.

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 volatile.