Definitions and Terms
Glossary
Below you will find the basic terms that will be useful to you in the process of trading. These terms are also used in the “Terms and Conditions” section, as well as in other documents regulating the relations between Capital Investing and its customers.
Ask
The price at which a seller is willing to sell an asset. It is always higher than the bid price.
Bid
The price at which a buyer is willing to purchase an asset. It is always lower than the ask price.
Hedged Margin
The margin required to maintain open positions in opposite directions for the same instrument. It reduces risk exposure.
Base currency
The first currency in a currency pair. It represents the value of one unit of this currency in the quote currency.
Balance
The total amount of funds in a trading account, excluding profits or losses from open positions.
Leverage
A tool that allows traders to control larger positions with a smaller amount of capital. It amplifies both gains and losses.
Margin call
A notification from a broker requiring additional funds to maintain open positions. It occurs when account equity falls below the margin requirement.
Spread
The difference between the bid and ask price of an asset. It represents the transaction cost for traders.
Liquidity
The ease with which an asset can be bought or sold without affecting its price. High liquidity means faster execution of trades.
Stop loss
An order to close a trade at a predetermined price to limit losses. It is a risk management tool.
Take profit
An order to close a trade at a predetermined price to lock in profits. It helps traders secure gains.
Volatility
The degree of price fluctuation of an asset over time. High volatility means larger price swings.
Slippage
The difference between the expected price of a trade and the actual execution price. It often occurs during high volatility or low liquidity.