Head and Shoulders

Trading Basics

Head and Shoulders

A complex price pattern that forms in an uptrend and suggests a reversal.

Head and Shoulders pattern in the AUD/NZD pair
Head and Shoulders pattern in the AUD/NZD pair

Other Trading Basics

Abnormal Market Conditions

A term used by brokers to describe a rapidly moving or thinly traded market.

Depending on the terms and conditions, this allows brokers to examine and possibly change trades placed during these conditions.

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Commercial Paper

How big companies finance short-term cash flow.

Like bonds but without the coupon, instead, the APR is determined by the discount the agreements are entered into and the length of time to repayment.

For example, a blue chip company might borrow $9.95m dollars today and repay $10m in a month’s time.

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Call

An option that gives the purchaser the right, but not the obligation, to buy a security at a certain price.

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