Capital and exposure
- Leverage
- Exposure to a larger market position using a smaller amount of capital. Leverage magnifies both gains and losses.
- Margin
- The capital reserved to open and maintain a leveraged position.
- Margin call
- A request or automated action triggered when account equity is no longer sufficient to support open exposure.
- Pip
- A standard unit used to measure a price movement in a currency pair.
Orders and exits
- Market order
- An instruction to execute at the best available price. The final price may differ during fast markets.
- Pending order
- An instruction that becomes eligible for execution when a specified price is reached.
- Buy limit
- An order to buy below the current market price.
- Sell limit
- An order to sell above the current market price.
- Take profit
- An instruction intended to close a position after price reaches a chosen profit level.
- Stop loss
- An instruction intended to limit loss by closing after price reaches a chosen level. Gaps and slippage can affect execution.
Trading costs
- Spread
- The difference between the available buy and sell prices.
- Swap
- An overnight financing credit or charge applied to an eligible open position.
- Slippage
- The difference between the requested price and the price at which an order executes.
- Profit and loss
- The result produced by price movement, position size, trading costs, and any financing charges.