Trading Basics

Balance

A summarised financial result of all funds deposited in, and withdrawn from the customer’s account, and of all closed positions in that account.

An entities perceived ability to repay its debt. Provided by credit rating agencies. AAA is the best credit rating.

Backwardation occurs when a bid price exceeds the ask price.

This usually occurs when stock is suspended or under a share repurchase scheme.

It can also mean that a futures contract will trade at a higher price when it is coming close to expiring.

The opposite of backwardation is known as contango.

A option is the right to buy or sell something in the future but not the obligation. A currency option is on an FX market.

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