Alpha

Trading Basics

Alpha

This is a measure of price performance vs a benchmark.

If a trader makes 10% per annum and the index makes 7% the trader has an alpha of 3%.

Other Trading Basics

CFD

Contract for difference.

An OTC financial derivative where the counterparties agree to exchange the change in a price.

No underlying assets are exchanged.

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Bid

Traders can go short at the bid price.

The terminology is from the broker point of view, they are bidding to buy from you.

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