Balance of Payments

Trading Basics

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.

Other Trading Basics

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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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%.

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Bear Market

A Bear Market occurs when the price of a security is falling, and the negative outlook of the security causes the security’s price to continue to fall, causing a self-sustaining problem.

For a downturn like this to be officially considered a bear market, it must be on-going for longer than two months, otherwise it is known as a correction.

Bears are generally traders with a pessimistic view on markets that look to profit from a decline in prices.

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