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.
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.
Start learning
Learn the skills needed to trade the markets on our Trading for Beginners course.