Trading Basics
Index
The aggregate performance of a group of individual equities. Examples include the FTSE100, DJIA and Dax indices.
Other Trading Basics
Counterparty
You need at least two parties in a financial transaction, they are counterparties.
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%.
CFD
Contract for difference.
An OTC financial derivative where the counterparties agree to exchange the change in a price.
No underlying assets are exchanged.
Start learning
Learn the skills needed to trade the markets on our Trading for Beginners course.
