Glossary
Short definitions of the terms you will meet when you trade CFDs. This page is general information, not personal advice.
- Ask
- The price at which you can buy. It is also called the offer. How pricing works
- Balance
- The money in your account, not counting the result of open positions.
- Base currency
- The first currency in a currency pair.
- Bid
- The price at which you can sell. How pricing works
- CFD
- A contract for difference. It follows the price of an asset, and you do not own the asset. How CFDs work
- Commission
- A fee charged per lot on some account types. How pricing works
- Equity
- Your balance plus or minus the result of your open positions.
- Free margin
- The money in your account that is not set aside as margin. How CFDs work
- Leverage
- Opening a position larger than the money you put up. It increases gains and it increases losses. Understanding the risks
- Long and short
- Buying to open a position is going long. Selling to open a position is going short.
- Lot
- The standard unit of trade size. The size of one lot depends on the instrument.
- Margin
- The money your account sets aside to keep a leveraged position open. It is not a fee. How CFDs work
- Margin call
- A warning that your equity is getting low compared with the margin your positions use. How CFDs work
- MetaTrader 4 and MetaTrader 5
- Trading platforms published by MetaQuotes. You use them to view charts and place orders. Platforms
- Pip
- A small unit used to measure a price change in a currency pair.
- Position
- A trade that is open.
- Quote currency
- The second currency in a currency pair.
- Spread
- The difference between the bid price and the ask price. You pay it when you open a position. How pricing works
- Stop-out
- Automatic closing of positions when your equity falls too far. It can happen quickly, and positions can close at a loss. How CFDs work
- Swap
- A charge or a credit for keeping a position open overnight. It can go either way. How pricing works
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