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
Collateral
The resources put up by the trader to enter a trade.
Requested by the counterparty and normally in the form of cash but sometimes other liquid assets like shares.
Balance of Payments
Also BoP. This is the difference between payments into or out of a country. It can be negative or positive and is used by traders in fundamental analysis.
Start learning
Learn the skills needed to trade the markets on our Trading for Beginners course.
