Trading Basics
American Option
An option that can get exercised at any time during its life.
European options can only be exercised at the end.
Other Trading Basics
Ask Price
The ask price is the level at which a seller is willing to accept a bid on a security.
The ask price is always higher than the bid price.
Also known as the offer price.
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%.
AIM
Alternative Investment Market. A small cap stock market in the UK.
Lighter listing rules reduce the costs for the companies listing and seeking external equity finance.
A good starting point for growth companies not quite ready for the main LSE.
Start learning now
Learn the skills needed to trade the markets on our Trading for Beginners course.