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Account refers to the trading account that is held by you with BCR, for the purpose of trading financial products.
Aggregate of current balance in your Account and your current unrealised profit and losses less any margin requirements.
The price at which the market is prepared to sell a product. Prices are quoted two-way as Bid/Ask. The Ask price is also known as the Offer.
In Forex trading, the Ask represents the price at which a trader can buy the base currency, shown to the left in a currency pair. For example, in the quote AUDUSD 0.76092/0.76109, the base currency is USD, and the Ask price is 0.76109, meaning you can buy one US dollar for 0.76109 Aussie Dollars.
In derivative trading, the Ask also represents the price at which a trader can buy the product. For example, in the quote for Oil 57.92/57.97, the product the Ask price is 57.97 for one unit of the underlying market.
A base currency is the currency denomination of your account and refers to the first quoted currency in a currency pair, i.e. AUD in AUD/USD.
A type of chart which consists of four significant points: the high and the low prices, which form the vertical bar; the opening price, which is marked with a horizontal line to the left of the bar; and the closing price, which is marked with a horizontal line to the right of the bar.
The price at which the market is prepared to buy a product. Prices are quoted two-way as Bid/Ask.
In Forex trading, the Bid represents the price at which a trader can sell the base currency, shown to the left in a currency pair. For example, in the quote AUDUSD 0.76092/0.76109, the base currency is USD, and the Bid price is 0.76092, meaning you can sell one US Dollar for 0.76092 Aussie Dollars.
In derivative trading, the Bid also represents the price at which a trader can sell the product. For example, in the quote for Oil 57.92/57.97, the Bid price is 57.92 for one unit of the underlying market.
The difference between the Buy and Sell price of BCR’s quote. A client may Sell at the lower price or Buy at the higher price of the quote.
A tool used by technical analysts. A band plotted two standard deviations on either side of a simple moving average, which often indicates support and resistance levels.
Business day is any day on which a particular market (derivatives) is quoted by BCR. Due to the nature of global financial markets, BCR may continue to operate and offer markets on Australian public holidays.
Taking a long position on a product.
A chart that indicates the trading range for the day as well as the opening and closing price. If the open price is higher than the close price, The rectangle between the open and close price is shaded. If the close price is higher than the open price, that area of the chart is not shaded.
A trading strategy that captures the difference in the interest rates earned from being long a currency that pays a relatively high interest rate and short another currency that pays a lower interest rate. For example: NZD/JPY (New Zealand Dollar/Japanese Yen) has been a famous carry trade for some time. NZD is the high yielder and JPY is the low yielder. Traders looking to take advantage of this interest rate differential would buy NZD and sell JPY, or be long NZD/JPY. When NZD/JPY begins to downtrend for an extended period of time, most likely due to a change in interest rates, the carry trade is said to be unwinding.
Can refer to a Rollover/Rebate/other Fee that is deducted from the Client’s account based on positions held (either long or short) ’overnight’.
Funds that have been deposited or processed with BCR and shown on the client’s Account.
The closing price refers to the value of the transaction as determined by BCR based on current and anticipated market conditions.
The cost that a broker will charge a Client for buying/selling a financial product. Commission on derivatives range from broker to broker. Some charge a flat rate per trade while others charge a percentage of the deal size, say 0.20%. BCR’s Commission rates are disclosed in Section 4.1 of this Product Guide.
The size or amount of in an open position. Contract sizes vary by instrument.
The contract period for a product as set out in the market information sheets.
One of the participants in a financial transaction.
To sell a long position or buy back a short position.
Can refer to a Rollover/Rebate/other Fee that is paid to the Client’s account based on positions held (either long or short) ’overnight’.
The two currencies that make up a foreign exchange rate. For example EUR/USD (Euro/U.S. Dollar).
An individual or firm that acts as a principal or counterpart to a transaction. Principals take one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party. In contrast, a broker is an individual or firm that acts as an intermediary, putting together buyers and sellers for a fee or commission.
The currency in which you have nominated your Account to be denominated.
A financial contract whose value is based on the value of an underlying asset. Some of the most common underlying assets for derivative contracts are indices, equities, commodities and currencies.
Funds that are not committed to margin obligations that a Client may use to open new positions.
A Transaction which has a set contract period, at the end of which the Transaction expires automatically.
FILL OR FILLED ORDER
A completed order.
FORCE MAJEURE EVENT
Any cause that prevents BCR from performing or delaying performance of any or all of its obligations under the Client Agreement which arises from, or is attributable to, acts or omissions beyond the control of BCR including, but not limited to, strikes, industrial action, war, sabotage, terrorist activity, national emergency, blockades or government action, an act of God, a failure of the supply of communications or other infrastructure which prevents an orderly trading market being maintained, or which prevents compliance with the law or the applicable regulatory system, an emergency or exceptional market conditions, the suspension or closure of any index/market/Exchange or the abandonment or failure of such index, market or exchange.
The simultaneous buying of one currency and selling of another. The global market for such transactions is referred to as the forex or FX market.
The assessment of all information available on a tradable product to determine its future outlook and therefore predict where the price is heading. Often non-measurable and subjective assessments, as well as quantifiable measurements, are made in fundamental analysis.
A futures contract is an agreement to conduct a trade at a specified time in the future where the price is agreed upon now. Therefore, It means that the expiry date is at some point in the future. Our futures products are cash settled so you will never be required to actually deliver, or take delivery of, the physical product.
Gapping is exposure to loss from failure of market prices or rates to follow a ‘smooth’ or continuous path due to external factors such as world, political, economic and specific corporate events.
If a trader buys $1000 of Commonwealth Bank stock in the cash market and it rises by 10%, his profit will be $100. But if he buys the same position using a derivative he may only have to put up a deposit of $100. If the stock moves 10% higher his profit on capital invested will be $100 or 100%. This is gearing at work.
The purchase of a stock, commodity or currency for investment or speculation – with the expectation of the price increasing.
The selling of a currency or product not owned by the seller – with the expectation of the price decreasing.
Greenwich Mean Time - The most commonly referred time zone in the derivatives market. GMT does not change during the year, as opposed to Daylight Savings/Summer time.
Minimising risk by being simultaneously long and short. Perhaps someone is long $50,000 of stock in the cash market and wants to protect this from potential downside risk. To hedge he would sell $50,000 of the same position. If the share price did go lower the loss on the stock position would be offset by profits made via the short position.
The High Price of a particular product on the trading platform is the highest Bid price of the day. The highest Ask price will come from the highest Bid price of the day plus the Spread.
Example: The High Price on the trading platform for EURUSD is 1.14345, and spread is 17 pips. Thus, the highest Bid price is 1.14345, and the highest Ask price is 1.14362.
The High Price will be reset on the trading platform at 00:00 GMT each day.
A market that doesn't have much volume, usually characterised by a wide bid - ask spreads . Illiquid markets are normally expensive to trade in.
Indices are a customised basket of securities that track a particular market or segment. Each index has its own calculation methodology and its own specific process used to select particular securities. We offer prices on all of the major financial indexes, such as the S&P/ASX 200, UK 100, DAX 40, Dow Jones and S&P 500.
An individual or entity who refers Clients to BCR. In return Introducing Brokers generally earn a Rebate or Commission based the number of Clients introduced to the firm who have opened an account and the trading volume of introduced Clients. IBs for BCR may not trade on behalf of the Clients.
Leverage involves borrowing a certain amount of the money needed to invest in something. In the case of derivatives, that money is usually borrowed from a broker. Forex trading does offer high leverage in the sense that for an initial margin requirement, a trader can build up - and control - a huge amount of money.
An order to buy or to sell a position at a specific price. Example –”Buy 1000 Vodafone shares at $1.20”. This would be placed when Vodafone is trading above $1.20. The potential buyer is hoping for a better price than where the market is currently trading. There is obviously the possibility the order will never get filled. Limit orders can also be used in the same fashion for selling above the market.
The closing of an existing position through the execution of an offsetting transaction.
LIQUIDITY OR LIQUID
The amount of business conducted in a given market or stock. Where possible you always want to trade products that have good liquidity chiefly because they are cheaper to trade because of tight bid-ask spreads.
Taking a long position on a product.
A client is said to be long if he/she has an open buy position.
The Low Price of a particular derivative on the trading platform is the lowest Bid price of the day. The lowest Ask price will come from the lowest Bid price of the day plus the Spread.
Example: The Low Price on the trading platform for EURUSD is 1.14011, and the Spread is 17pips. Thus, the lowest Bid price is 1.14011, the lowest Ask price is 1.14028.
The Low Price will be reset on the trading platform at 00:00 GMT each day.
The minimum amount of equity that must be maintained in a trading account. In the context of BCR’s trading accounts, Clients must maintain 50% of Initial Margin in their trading account to avoid a ’Stop Out’.
The amount of money needed to deposit with your broker in order to fund a position. With margined products only a percentage of the nominal value has to be lodged in cash, normally between 5 - 20%.
The additional margin required to ensure that total margin is sufficient to cover open positions.
MARGIN IN USE
Represents the aggregate amount of margin being used for all open positions at any one time in your base currency.
The adjustment of a bid/ask spread to reflect fees that the Client may be obligated to pay if they were introduced by a Referral Party to BCR and promised a fee to the Referral Party.
A dealer who regularly quotes both bid and ask prices and is ready to make a two-sided market for any financial product.
An order to buy or sell at the current bid or ask price.
A long or short position that has not been closed out.
OPEN POSITION P&L
The aggregate amount of unrealised profit and loss on all of your open positions at any one time in your base currency.
Over the Counter products are not traded on an exchange, but are an agreement between two parties.
A financing adjustment is made to your account when an open position is held overnight. This includes positions held overnight on a non-business day, a Saturday or Sunday and any bank or public holiday.
A trade that remains open until the next business day.
The smallest price change that a given exchange rate can make. Since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point - for most pairs this is the equivalent of 1/100th of one percent, or one basis point.
For example, the smallest move the USD/CAD currency pair can make is $0.0001, or one basis point. The smallest move in a currency does not always need to be equal to one basis point, but this is generally the case with most currency pairs.
A significant price movement of a security or commodity between two trading sessions, such that there is no overlap in the trading ranges for the two days.
The second quoted currency in a currency pair, i.e. USD in AUD/USD.
The amount of money you have made or lost when a position has been closed.
Compensation paid to a Referral Party who introduces new Clients to BCR. Compensation is based on number of Clients introduced and/or trading volume of introduced Clients. Compensation is negotiated between RAs and BCR and may differ.
An employee of ours or an employee of an Associated Company.
The price at which a prior advance was terminated or a future advance is likely to terminate, or where the market expects selling to materialise. For example, if the S&P 500 Mini is trading at 1,950 you may hear pundits report that “resistance is expected at 1,950”.
If a Client holds a position past BCR’s Settlement time on a Forex product, they may receive a Rollover Benefit. The Rollover Rate for Forex/Precious Metals/Commodity derivatives is a varying rate dependent on the currency pair, the applicable rate in the interbank markets according to the duration of the rollover period, the size of the position and the Spread.
If a Client holds a position past BCR’s Settlement time on Forex products, they may have to pay a Rollover Charge. The Rollover Rate for Forex/Precious Metals/Commodity derivatives is a varying rate dependent on the currency pair, the applicable rate in the interbank markets according to the duration of the rollover period, the size of the position and the Spread.
Taking a short position in expectation that the market is going to go down.
The price at which a position is settled on expiry.
A client is said to be short if he/she has an open sell position in the market.
Relates to stop losses and is the difference between where the stop loss level is and where the order was actually filled. If the stop loss order is to sell 1000 Vodafone at $1.20 but the fill is actually at $1.19 then the 1 pip difference is referred to as negative slippage. Slippage is normally not a problem in normal markets but in very volatile ones it can be expected.
A market whereby products are traded at their market price for immediate exchange.
The current market price. Settlement of spot transactions usually occurs within two business days.
The purchase or sale of a product for immediate delivery (as opposed to a date in the future). Spot contracts are typically settled electronically.
The difference between the bid and the ask price of a contract. A client may Sell at the lower price or Buy at the higher price of the quote.
A written confirmation of our dealings with you including any Transactions that you open and/or close, any Orders that you set and/or edit and any charges that we apply.
A predetermined price at which a position will be closed to protect against further loss. The use of stop losses is the only inherently reliable way for a trader to manage risk.
A broker' s demand on an investor using margin to deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin . You would receive a Stop Out from BCR if one or more of your positions had decreased in value past a certain point . Due to the volatile nature of financial markets, it is inefficient to notify Clients via a traditional “Margin Call” when their equity falls below acceptable maintenance margin levels .
While holding a position overnight, your Account is debited or credited using the applicable overnight Tom-Next rate.
The process by which charts of past price patterns are studied for clues as to the direction of future price movements.
Equal to any cash value plus the market liquidation value of the securities in the account.
TOTAL INITIAL MARGIN REQUIREMENT
Total amount of Initial Margin invested for all Open Positions. For example, if the Client held two standard lots of EUR/USD and one standard lot of Gold, then his Total Initial Margin would be $1500 USD (2 X $1000 USD for Forex derivatives, 1 X $500 USD for Gold derivatives).
In respect of each financial product, the hours during which we provide a quote for a particular financial product as detailed in our Contract Specifications.
The electronic trading system BCR makes available to the client via the internet to facilitate trading in derivatives, including without limitation, any online or downloadable trading platform mentioned on our website i.e. MetaTrader4 or BCR Trader.
A contract for difference of any kind in relation to any instrument or any combination of instruments and means either or both Expiry Transactions and Undated Transactions as the context requires.
A Transaction with an indefinite or contract period that is not capable of expiring automatically.
A security, such as a stock, a commodity, or other type of financial product, such as a stock index, whose value determines the value of a derivative investment or product.
The theoretical gain or loss on open positions valued at current market rates, as determined by the broker in its sole discretion. Unrealised gains/losses become profits/losses when the position is closed.
Account Equity less used margin. This is the amount you have available to withdraw or cover additional Margin Requirements.
A term used to describe and quantify the relative movement of a given market in the recent past. A market that experiences significant movement is said to be volatile.
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Risk Disclosure:Derivatives are traded over-the-counter on margin, which means they carry a high level of risk and there is a possibility you could lose all of your investment. These products are not suitable for all investors. Please ensure you fully understand the risks and carefully consider your financial situation and trading experience before trading. Seek independent financial advice if necessary before opening an account with BCR.