MetaProTrader

Glossary Page

  • American-style option
    An option contract that may be exercised at any time before it expires.
  • Ask
    The quoted price at which a customer can buy. Also referred to as the "offer," "ask price," or "ask rate."
  • Bid
    The quoted price where a customer can sell. Also known as the "bid price," or "bid rate."
  • Bid/Ask Spread
    The point difference between the bid and ask (offer) price.
  • Call
    A call option gives the option buyer the right to purchase a particular commodity at a stated exchange rate. Risk is limited to the investment made, which is premium and all fees paid.
  • Derivative
    A broad definition of a derivative is a substance that can be made from another substance. For example, orange juice is a derivative of an orange. One definition of a financial derivative is having a value from an underlying variable asset. By way of example, a share of common stock is a derivative of an existing company, such as McDonald's Corp. Simply said, when you buy a share of McDonald's Corp, you are buying a derivative of McDonald the company.
  • European
    Style Option An option contract that can be exercised only on or near its expiration date.
  • Expiration
    This is the last day on which an option may either be exercised or offset.
  • Leverage
    The ability to control large dollar amount of a commodity with a comparatively small amount of capital. Also known as "gearing."
  • Margin
    See Security Deposit.
  • Offer
    See ask.
  • Open Position
    Any transaction that has not been closed out by a corresponding opposite transaction.
  • Premium
    The price an option buyer pays for the option, not including commissions.
  • Put
    A put option gives the option buyer the right to sell a particular commodity at a stated exchange rate. Risk is limited to the investment made, which is premium and all fees paid.
  • Security Deposit
    The amount of money needed to open or maintain a position. Also known as "margin."
  • Settlement
    The actual delivery of currencies made on the maturity date of a trade.
  • Spread
    The point or pip difference between the ask and bid price of the option.
  • Strike Price
    The exchange rate at which the buyer of a call has the right to purchase a specific commodity or at which the buyer of a put has the right to sell a specific commodity. Also known as the 'exercise price'.
  • Open Account