A
Arbitrage
It is the strategy of taking advantage of price differences between two or more markets to obtain profits without assuming risk. It is based on the simultaneous buying and selling of related assets. Ask (demand)
Ask
The minimum price at which someone is willing to sell an asset at a given time.
B
Balance sheet
It is the financial statement that shows the assets, liabilities and equity of a company at a given time. It shows the economic situation of the company.
Base Currency
The first currency in a currency pair. It serves as a reference to determine the value of the second currency, the quote currency.
Bear market
A period in which the prices of financial assets tend to fall, generally accompanied by pessimism and significant market declines.
Bid
The maximum price at which someone is willing to buy an asset at a given time.
Bollinger Bands
They are a technical indicator that shows volatility and possible turning points in prices. They consist of a central line and two bands that move in relation to the volatility of the asset.
Broker
A company or financial entity acts as an intermediary between investors and the financial markets, enabling the execution of purchase and sale transactions.
Bonds
These are debt securities issued by government entities, corporations, or institutions to obtain financing. Investors who purchase bonds become creditors and receive periodic interest payments.
Bull market
A period in which financial asset prices tend to rise, driven by investor confidence and optimism.
C
Candlestick Chart
A type of chart used in technical analysis that represents the price fluctuation of a financial asset over time. Each candlestick shows the open, close, high and low of the specific period, which helps to identify patterns and trends.
Close position
A position in which a purchase or sale transaction of a financial asset has been settled and closed.
Currency Pair
A combination of two currencies used in the foreign exchange market. For example, EUR/USD represents the euro against the U.S. dollar.
D
Dividend
A portion of a company's profits is distributed to shareholders as a reward for their investment. It is paid in the form of cash or additional shares.
Depreciation
The decrease in the value of a financial asset is due to factors such as wear and tear, the passage of time, or changes in market conditions.
DMA (Direct Market Access)
It is a system that allows traders to directly access the market without intermediaries, which provides greater transparency and speed in the execution of orders.
Dynamic stop loss
A type of stop loss order that automatically adjusts as the price of the asset moves in the trader's favor, to protect profits already made.
E
ETF (Exchange Traded Fund)
A publicly traded investment fund that allows investors to buy and sell shares in it, representing ownership of a diversified basket of assets.
F
Fill and Kill
It is a type of order that is executed at the specified price or at a better price. The order is automatically canceled if it cannot be filled in full.
Fixed Exchange
Rate An exchange rate system in which the value of a currency is fixed to another currency or to a standard, and remains constant in relation to that value.
Fill
The act of completing a buy or sell order, executing the transaction and confirming the price and quantity traded.
Financial Derivative
A financial instrument whose value is derived from an underlying asset, such as stocks, bonds, indices or commodities. Includes options, futures, swaps, and CFDs.
Financial market
An environment in which financial assets, such as stocks, bonds, currencies, and commodities, are bought and sold. It allows participants to obtain financing, invest and manage risk.
Fundamental analysis
A method of investment evaluation based on the analysis of a company's economic and financial fundamentals, such as its revenues, expenses, debts and growth prospects, to determine the intrinsic value of its shares.
Forex (foreign exchange market)
It is the global decentralized market where the different currencies of the world are traded. Participants buy and sell currencies in order to profit from fluctuations in exchange rates.
Financial Asset
An instrument or security that has an economic value. It includes assets such as stocks, bonds, financial derivatives, among others. Technical analysis An approach to the study of financial markets that is based on the analysis of charts and historical price data to predict future market movements.
Force open
An order used to open a position in a financial asset at a certain price, even if the market has not reached that price.
Futures
These are financial contracts that obligate the parties to buy or sell an un
G
GDP (Gross Domestic Product)
A measure of the total value of goods and services produced within a country over a given period of time. It serves as an indicator of economic activity and growth.
H
Hedge
A strategy used to reduce the risk of loss on an existing investment or position. It consists of taking an offsetting position in another asset or financial instrument to counteract the negative impact of adverse price movements.
HFT (High-Frequency Trading)
A form of automated trading that uses high-speed computer algorithms and systems to perform trades in milliseconds. It is based on taking advantage of small price discrepancies in fractions of a second.
I
Interest
The cost or return generated by the use of money. In the financial context, it refers to the interest rate charged on loans or the return earned on an investment.
IRR (Internal Rate of Return)
The annualized rate of return that equals the present value of an investment's cash flows to the initial capital invested.
IPO (Initial Public Offering)
The process by which a company offers its shares for sale to the public for the first time on the stock market.
Inflation
The sustained and generalized increase in the prices of goods and services in an economy. Inflation reduces the purchasing power of the currency over time.
Investment capital
The amount of money or resources available for investment in financial assets.
Issuer
An entity or company that issues financial securities, such as stocks or bonds, to obtain financing.
L
Leverage
A technique that allows the potential gains or losses of an investment to be amplified by using borrowed capital. It allows investors to trade at a higher nominal value of assets than the equity they have invested.
Long (long position)
Is buying a financial asset with the expectation of selling it at a higher price in the future and making a profit on the difference.
Leverage ratio
The ratio of equity capital to borrowed capital used in a transaction. A higher leverage ratio implies a higher potential risk.
LIBOR
Reference interest rates used in short-term financial transactions between banks. It is an average of the rates at which international banks are willing to lend money to each other in the London market.
Liquidity
The ability to buy or sell an asset quickly without significantly affecting its price. High liquidity implies that there are enough participants willing to buy or sell the asset.
Lot
A standardized unit of measurement in which financial assets, such as stocks or currencies, are traded. It may vary according to the type of asset.
M
Margin
The amount of capital required to open and maintain a position in an asset. It allows trading with a higher nominal value of equity.
Market capitalization
The total market value of a company. It is calculated by multiplying the current share price by the total number of shares outstanding.
Market Order
An instruction to buy or sell a financial asset at the current market price. It is executed at the best price available at that time.
Maintenance margin
The minimum level of capital that must be maintained in a trading account to avoid liquidation of positions. It is used to control risk.
Market Value
The current price at which an asset is traded in the market. It represents the market capitalization or total market value of a company.
Moving average
A technical indicator that shows the average of an asset's prices over a given period of time. It is used to identify trends and buy or sell signals.
N
Nasdaq 100
A stock market index that tracks the performance of the 100 largest and most active companies listed on the Nasdaq market. These companies are typically high-tech and represent a variety of sectors, such as information technology, biotechnology, electronics and telecommunications.
Net Change
The difference between purchases and sales of a financial asset during a given period of time.
O
Online Trading
The activity of buying and selling financial assets through online trading platforms, using the Internet.
Overexposure
A situation in which a trader has an excessive amount of risk or exposure to a particular asset or market, which increases vulnerability to price fluctuations.
Open position
A position in which a financial asset has been bought or sold, but not yet closed.
P
Price gap
A gap or jump in the price of a financial asset between the previous close and the next open. It indicates a sudden change in supply and demand and can be caused by news, events, or changes in market conditions.
Purchase order
An instruction to buy a financial asset at a specific price.
PIP
The minimum unit of measure used to represent the price change in a currency pair. Usually refers to the fourth decimal place in the quotation of currency pairs.
Pullback
A temporary correction or pullback in the price of an asset within an uptrend or downtrend. It can offer entry opportunities for traders.
R
Range
The price range in which a financial asset has moved in a given period of time. It is calculated by subtracting the lowest price from the highest price.
Rate of return
A measure of the yield or profit generated by an investment in relation to the capital invested. It is expressed as a percentage.
Ratio
A ratio or proportion between two quantities or variables. In trading, it is used to evaluate the profitability, risk, or efficiency of a trade or strategy.
RCI
It is an indicator that compares the performance of a currency with respect to a group of other currencies. It helps to identify the strongest and weakest currencies.
Resistance Level
A price level at which supply is expected to exceed demand, making it difficult for the price to rise further. It is a point at which it is common to see a reversal or pullback.
Risk
The possibility of financial loss in an investment or transaction. Risk is present in all financial transactions and must be properly managed.
Risk management
The process of identifying, assessing and managing the risks associated with investments and financial transactions, with the objective of minimizing potential losses.
Risk-reward
It is the relationship between the amount of risk assumed in a trade and the possible reward or expected profit. Good management of risk-reward is fundamental in trading.
Roll Over
The action of extending the expiration date of a futures or options contract, changing the existing open position for a new one with a later expiration date.
RSI (Relative Strength Index)
A technical indicator that measures the strength and speed of changes in the price of an asset. It is used to identify overbought or oversold conditions.
S
Scalping
It is a trading strategy that seeks to obtain small profits by taking advantage of rapid price movements and short periods of time.
Sell Order
An instruction to sell a financial asset at a specific price.
Shares
Represent partial ownership of a company. When you buy shares, you become a shareholder and have the right to participate in the company's profits and decisions.
Short (short position)
It is to sell a financial asset that is not owned, with the expectation of repurchasing it at a lower price in the future and making a profit on the difference.
Spread
The difference between the bid and ask prices of an asset. It represents the cost of trading and the liquidity of the market.
Stock index
An indicator that represents the performance of a group of selected stocks representing a specific market or sector. It serves as a benchmark to assess the health and direction of the market.
Stop loss
An automatic sell order is triggered when the price of an asset reaches a predetermined level. It is used to limit losses on a position.
Stochastic
A technical indicator is used to assess a trend's strength and direction on a price chart.
Support level
A price level at which demand is expected to outstrip supply, making it difficult for the price to fall further. It is a point at which it is common to see a rebound or a reversal to the upside.
T
Take profit
An automatic sell order that is triggered when the price of an asset reaches a predetermined profit level. It is used to lock in profits on a position.
Technical analysis
An approach to the study of financial markets that relies on the analysis of charts and historical price data to predict future market movements.
Trader
A person who buys and sells financial assets in order to profit from market movements. Also known as a trader or speculator.
Trend
The general and persistent direction in which the price of an asset moves. It can be bullish (rising), bearish (falling) or sideways (no clear direction).
Trend reversal
A change of direction in the previous price trend of an asset. It may indicate a change from a bull market to a bear market or vice versa.
U
Underlying asset
The basic asset on which a derivative financial contract, such as an options or futures contract, is based. For example, in a stock option contract, the stock is the underlying asset.
V
Volatility
A measure of the change in the price of a financial asset over a given period of time. Higher volatility implies greater price fluctuations and greater opportunities for profit or loss.
Volume
The total amount of financial assets bought or sold in a given period of time. Volume is used to assess liquidity and the strength of a trend.
W
Warrants
Warrants Contract (OTC) that gives the holder the right to buy or sell a financial asset at an agreed price within a specified period, in exchange for the payment of a premium.
Whipsaw
The term refers to markets with very high volatility. They are characterized by many price rises and price reversals in specific periods of time.
Y
Yard
Yard= one billion dollars
Yield
It is known as "return yield". It is the indicator that measures the performance of stocks.
