Glossary
COMMODITY – A basic good or raw material that is used to produce more complex goods.
CFD – contract for difference. A financial instrument that enables you to profit from the price movements of securities without actually owning the underlying security
GOING LONG – buying a security
GOING SHORT – selling a security
LEVERAGE – a loan that enables you to control more money than you have staked on a trade
RISK – the amount of capital exposed on any single trade
RISK MANAGEMENT – focusing on risk when trading in order to minimise losses
SPREAD – the difference between the buy and the sell price. This is also the cost of placing the trade
STOP LOSS – an order designed to minimise losses
TAKE PROFIT – an order to close a trade at a certain profit level
Reprinted from eToro, the copyright all reserved by the original author.
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