This trading glossary collects the vocabulary used across TrivexPrime, from currency quotes to blockchain transfers. Definitions are written to be exact rather than short, and many link to the guide where the idea is worked through with numbers. Jump to a letter below.
- Arbitrage
- Buying an asset in one place and selling it in another to capture a price difference. Arbitrage is what keeps the price of the same coin close across crypto platforms and what holds a stablecoin near its peg, because traders profit from closing any gap. In practice the gaps are small and close quickly, and fees, transfer times and withdrawal limits often make them impossible for individuals to capture.
- Ask
- The price at which a dealer or the order book will sell to you, and so the price you pay when you buy. It sits above the bid, and the difference between the two is the spread. On a crypto platform's order book, the ask is the lowest price any seller is currently willing to accept.
- Base currency
- The first currency in a pair. In GBP/USD the pound is the base, and the quoted price tells you how many US dollars one pound costs. Lot sizes are measured in units of the base currency. Buying a pair means buying its base currency; selling the pair means selling it.
- Bid
- The price at which you can sell. On a quote screen it is the lower of the two prices. When you close a long position you receive the bid, which is why the spread is paid on every round trip. In a busy market the bid and ask are very close; in a thin one the bid can sit well below the last traded price.
- Block reward
- The new coins a Bitcoin miner receives for adding a block, on top of the transaction fees in that block. It started at 50 BTC and halves every 210,000 blocks; it has been 3.125 BTC since April 2024. See what is Bitcoin.
- Blockchain
- A ledger of transactions grouped into blocks, each linked to the previous one by a cryptographic fingerprint and copied across many independent computers. Changing an old entry would break every later link. See how crypto works. Public blockchains let anyone read the full history of transactions with a block explorer.
- CFD (contract for difference)
- A contract with a provider that pays the difference between the opening and closing price of an asset, without ownership of the asset itself. CFDs are traded on margin, and in the UK and EU retail clients receive leverage caps and negative balance protection. Because there is no ownership, a CFD carries no voting rights or direct claim on the asset, and positions held overnight usually pay financing.
- Clone firm
- A fraudulent business that copies the name, registration number or address of a genuine regulated firm to appear legitimate. Checking contact details against the regulator's own register, not the ones the caller gives you, is the defence. See how to spot trading scams.
- Cross pair
- A currency pair that does not include the US dollar, such as EUR/GBP or AUD/JPY. Working out a cross pair's pip value in dollars needs an extra conversion rate, which the pip calculator asks for.
- Custody
- Who holds an asset on your behalf. A stock broker usually holds shares in a nominee account; a crypto platform holds coins in its own wallets; self-custody means you keep the private keys yourself. The custody arrangement decides what happens to your assets if the firm holding them fails, which is why it is one of the first things to check.
- Dividend
- A cash payment a company makes to shareholders out of its profits. Dividend yield is the annual dividend per share divided by the share price, so a $1.20 dividend on a $40 share is a 3% yield. Companies are not obliged to pay dividends and can cut or suspend them at any time.
- Equity (account)
- The value of a trading account including open positions: balance plus unrealised profit, minus unrealised loss. Margin level is calculated from equity, not from the cash balance. If equity falls far enough relative to the margin in use, the provider can close positions automatically.
- Execution policy
- A broker's written explanation of how it fills client orders, including whether it acts as counterparty, how it handles slippage and which venues it uses. Regulated firms must publish one.
- Gap
- A jump in price between one trade and the next with no trading in between, usually at a market open or after major news. A stop-loss inside a gap fills at the next available price, which can be much worse than planned. Weekend gaps in currencies appear at the Sunday open; share gaps usually appear at the morning open after overnight news or results.
- Halving
- The scheduled cut in Bitcoin's block reward every 210,000 blocks, roughly every four years. Halvings took place in 2012, 2016, 2020 and April 2024; the next is expected around 2028. Each halving cuts the rate at which new bitcoin is created by half, while demand is unaffected by the schedule.
- Index
- A number that tracks a basket of shares using a set formula. The weighting method matters: the S&P 500 is weighted by float-adjusted market value, while the Dow Jones Industrial Average and Nikkei 225 are price-weighted. An index cannot be bought directly; exposure comes through funds, futures or CFDs that track it.
- Leverage
- The ratio between the size of a position and the margin needed to hold it. At 30:1, $1,000 of margin supports a $30,000 position. Leverage magnifies gains and losses equally. See the margin calculator. In the UK and EU, retail caps range from 30:1 on major currency pairs to 2:1 on crypto CFDs.
- Limit order
- An instruction to buy at or below, or sell at or above, a specified price. It controls the price you get but may never fill if the market does not reach it. A buy limit sits below the current price and a sell limit above it, waiting in the order book.
- Liquidity
- How easily an asset can be traded in size without moving its price. Major currency pairs during the London and New York overlap are very liquid; small shares and minor tokens often are not, which shows up as wide spreads. Liquidity can disappear suddenly in a crisis, which is when it matters most.
- Lot
- A standard unit of trade size. In forex a standard lot is 100,000 units of the base currency, a mini lot 10,000 and a micro lot 1,000. A gold lot is commonly 100 troy ounces. Many providers allow trades in steps of 0.01 lots, which is 1,000 units of a currency pair.
- Maker and taker
- Fee categories on crypto platforms and some exchanges. A maker order rests in the order book and adds liquidity; a taker order fills immediately against existing orders. Taker rates are usually higher.
- Margin
- The collateral a provider sets aside from your account to support a leveraged position. It equals the position's value divided by the leverage ratio. Margin is not a fee, but it can be lost if the position moves against you.
- Margin close-out
- The automatic closing of positions when account equity falls too far relative to margin used. For retail CFD clients in the UK and EU, providers must begin closing positions at a 50% margin level.
- Market capitalisation
- The total market value of a company's shares: share price multiplied by shares outstanding. A company with 2 billion shares at $45 has a market capitalisation of $90 billion.
- Market maker
- A firm that continuously quotes both a buy and a sell price and profits mainly from the spread. Many retail CFD and forex providers act as market maker to their own clients, taking the other side of their trades; this is legitimate when disclosed and regulated, but it is a conflict of interest worth understanding. See how to choose a broker.
- Market order
- An instruction to buy or sell immediately at the best available price. It guarantees execution in a liquid market but not the price, which can slip in fast or thin conditions. Market orders pay the spread in full, because they buy at the ask and sell at the bid.
- Negative balance protection
- A rule that stops a retail client's account from falling below zero, so losses cannot exceed the money deposited. It applies to retail CFD clients in the UK and EU.
- Order book
- The list of buy and sell orders waiting at each price for a share, coin or future. The best bid and best ask at the top of the book set the current spread. The depth of the book, meaning how much volume waits at each price, shows how far a large order would move the market.
- P/E ratio
- Price-to-earnings: the share price divided by earnings per share. A $50 share with $2.50 of annual earnings per share trades on a P/E of 20. It describes how the market values profits; it is not a forecast.
- Pip
- The standard unit of movement in a currency pair: 0.0001 for most pairs and 0.01 for pairs quoted in Japanese yen. A tenth of a pip is sometimes called a pipette. See the pip calculator. On one standard lot of a pair quoted in US dollars, a pip is worth $10.
- Private key
- A secret number that proves ownership of crypto at a given address and signs transactions. Anyone with the key controls the funds, and a lost key cannot be reset. A seed phrase is a human-readable backup that can regenerate keys.
- Quote currency
- The second currency in a pair, in which the price is expressed. In USD/JPY the yen is the quote currency, so pip values are first calculated in yen and then converted. Profit and loss on a pair is first calculated in its quote currency and then converted into your account currency.
- Rollover
- The daily process, at 17:00 New York time, of carrying open forex positions to the next value date. Overnight financing is charged or paid at rollover, and Wednesday's usually counts three days. Liquidity is often thin in the minutes around rollover, and spreads can widen sharply.
- Settlement
- The actual exchange of cash and assets after a trade. US shares settle one business day after the trade (T+1); spot currency trades conventionally settle two business days later; on-chain crypto transfers settle when confirmed on the blockchain.
- Slippage
- The difference between the price you expected and the price at which your order filled. It is most common in fast markets, around news releases and with stop orders in a gap. Limit orders avoid negative slippage on entry, at the cost of possibly not being filled.
- Spread
- The gap between the bid and the ask. It is a cost paid on every round trip and, on accounts without commission, often the main one. Spreads widen when liquidity is thin. See trading fees explained.
- Stablecoin
- A crypto token designed to hold a steady value, usually one US dollar, typically backed by reserves held by the issuer. USDT, issued by Tether, is the largest. See what is USDT. A stablecoin is only as reliable as its reserves, its redemption process and its issuer.
- Stop-loss
- An order that closes a position once the price reaches a set level, to limit losses. A standard stop becomes a market order when triggered and can fill worse in a gap; a guaranteed stop, where offered, usually carries a fee.
- Swap (overnight financing)
- The interest adjustment on a leveraged position held past the daily rollover, based on the rate difference between the two currencies plus the provider's markup. It can be a charge or, less often, a credit.
- Volatility
- How much and how quickly a price moves. It is often measured as the standard deviation of returns. Higher volatility means wider swings in both directions, which is why regulators allow less leverage on volatile assets such as crypto. Volatility is not the same as risk of permanent loss, but it decides how large a position an account can survive.