A - Z Trading Terms

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A daily stop loss is a predefined limit on how much money you're willing to lose in a single trading day. Once this limit is reached, you stop trading for the rest of the day—either manually or automatically - to protect your capital and control emotions.

A private trading venue or marketplace where large orders can be executed without publicly revealing the trade until after it is completed.
Why it matters: Institutional investors use dark pools to avoid moving the market with large trades.
Example: A hedge fund wants to sell 1 million shares of a company quietly. In a public exchange, this would likely drive the price down. In a dark pool, the trade is matched privately.

An individual or firm that buys and sells securities for their account, as opposed to a broker who acts as an intermediary for clients.
Note: Dealers provide liquidity to the market.

Settlement mechanism requiring simultaneous exchange of securities and funds-important for understanding liquidity settlement dynamics.

A financial instrument whose value depends on an underlying asset (e.g., stocks, commodities, interest rates, currencies).
Common types: Options, futures, swaps, and forwards.
Use case: Derivatives are widely used for hedging risks or speculative purposes.

Allows traders (usually institutional) to place buy/sell orders directly on an exchange’s order book, bypassing intermediaries.
Benefit: Faster execution and more control.

The act of making market or company information publicly available.
Importance: Timely and accurate dissemination is critical for market transparency.

When a trader or institution engages in actions that give false impressions of supply or demand, this undermines price integrity.

An investment firm’s internal policy on how its products are sold or marketed to clients, including ethical guidelines.

There are two types of dividends a company can issue: cash and stock dividends. Typically only one or the other is issued at a specific period of time (either quarterly, bi-annually or yearly) but both may occur simultaneously.

A measure of the annual income an investor receives from an investment compared to its current market price. For stocks, the income is derived from dividends. A stock’s dividend yield is calculated by dividing its annualized dividend by its current market price.