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.

Other Trading Basics

Credit Account

For those with excellent credit some brokers will provide a credit account. This means the trader puts up less margin.

Cash or Spot Market

Also known as a spot market, cash markets are different to futures contracts, as commodities are traded immediately for cash at the current market price.

Credit Rating

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

Start learning

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