Trading Basics

ECN

Electronic Communication Network, which amalgamates liquidity for the trader.

Asset-backed securities.

These are securities backed by assets, like mortgages, which are claimable if the creditor defaults.

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.

An option that can get exercised at any time during its life.

European options can only be exercised at the end.

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