Forex, Stock & Crypto Terms Explained

This trading glossary collects the terms used across OrynPrime's guides. Definitions are short and practical: what the word means, and why it matters when you read a quote, a contract or a fee schedule. Where a term needs more room, the entry links to the full guide. Jump to a letter below.

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Address (crypto)

A string of characters that identifies where coins or tokens can be received on a blockchain. Formats differ by network: Tron addresses begin with T, Ethereum-style addresses with 0x. An address that is valid on one chain may be the wrong destination on another, and a transfer to it may be unrecoverable. See USDT networks.

Ask

The price at which a platform or market will sell to you, so the price you pay to buy. It is always higher than the bid. In fast markets and around news releases the ask can move away from the last traded price, which is why market orders sometimes fill higher than expected.

Base currency

The first currency named in a pair. In GBP/USD the pound is the base, and the quote tells you how many dollars one pound costs. Buying the pair means buying the base currency; position sizes in lots are counted in units of the base.

Bid

The price at which you can sell, and therefore the price a long position is valued at. It sits below the ask. The distance between the two is the spread, a cost you pay on every trade whether or not commission is charged.

Blockchain

A ledger of transactions grouped into blocks, each linked to the one before by a cryptographic fingerprint. Many independent computers keep copies and check every new block, so changing an old record would be rejected by the network. See how crypto works.

CFD (contract for difference)

An agreement with a provider to exchange the difference in an asset's price between opening and closing a position. You do not own the asset. CFDs are normally leveraged and incur overnight financing, and retail leverage on them is capped in the UK, EU and Australia.

Clearing house

An institution that becomes the buyer to every seller and the seller to every buyer after an exchange trade. By guaranteeing settlement, it stops the failure of one firm from spreading to others. Clearing houses hold margin from their members to cover that promise.

Cold storage

Keeping crypto private keys on devices or media that never connect to the internet. Exchanges use it for most customer holdings to reduce hacking risk, keeping a smaller "hot" balance online for withdrawals. Individuals achieve something similar with hardware wallets.

Counterparty

The party on the other side of your trade. On an exchange order book it is another participant, with a clearing house in between. With a dealing-desk CFD provider, the counterparty may be the provider itself, which creates a conflict of interest that must be disclosed and managed.

Custody

Safekeeping of assets on behalf of their owner. Brokers hold shares in nominee accounts; crypto exchanges hold keys to customer coins. Who has custody decides what happens to your holdings if a firm fails, which makes it one of the first things to check on any platform.

Dividend

A distribution of a company's profits to its shareholders, decided by the board and usually paid in cash. Dividends are not guaranteed and can be reduced or stopped. The share price normally falls by about the dividend amount on the ex-dividend date.

Drawdown

The decline in an account or asset from a peak to a later low, usually expressed as a percentage. Maximum drawdown is the largest such fall over a period. It describes how painful a strategy has been to hold, which final returns alone conceal.

Equity (account)

Your account balance adjusted for the unrealised profit or loss on open positions. It is the figure a leveraged platform uses to calculate margin level and to decide when positions are closed. In company finance, equity also means the shareholders' stake.

ETF

An exchange-traded fund: a fund whose units are bought and sold on a stock exchange during trading hours, like shares. Many track an index, which lets a single purchase spread money across hundreds of companies. ETFs carry an ongoing charge deducted inside the fund.

Expert advisor (EA)

An automated trading program that runs inside a platform such as MetaTrader, reading prices and placing or managing orders by coded rules. It executes consistently but only as well as its rules, and it depends on the platform staying connected. See EA trading.

Gap

A jump in price from one trade to the next that skips the levels in between, most often at a market open after news. Stop orders placed inside the gap are filled at the first available price, so the loss can exceed what the stop level implied.

Halving

The scheduled reduction of bitcoin's block subsidy by half every 210,000 blocks, roughly every four years. Halvings occurred in 2012, 2016, 2020 and April 2024, when the subsidy fell to 3.125 BTC. The next is expected around 2028. See Bitcoin explained.

Index

A single number that tracks the value of a defined basket of shares, such as the S&P 500, FTSE 100 or Nikkei 225. Indices differ in how they weight members, by market value or by share price, which affects how a few large companies can move them.

Leverage

Using borrowed exposure to control a position larger than the money you put up. At 30:1, $1 of margin supports $30 of position. Profits and losses are calculated on the full position, so a small adverse move can consume the whole margin.

Limit order

An instruction to buy at or below a set price, or to sell at or above it. It controls the price you trade at but not whether you trade at all: if the market never reaches the limit, the order stays unfilled.

Liquidity

How easily an asset can be bought or sold in size without moving its price. Liquid markets such as major currency pairs and large shares have tight spreads and deep order books; illiquid ones can have wide spreads and sudden jumps when large orders arrive.

Lot

A standard unit of position size. In forex, one standard lot is 100,000 units of the base currency, a mini lot 10,000 and a micro lot 1,000. For gold one lot is commonly 100 ounces. Lot size multiplied by pip size gives pip value.

Margin

Collateral a provider sets aside from your balance while a leveraged position is open, equal to the position's value divided by the leverage. It is not a fee and not the maximum loss. Work it out with the margin calculator.

Margin call

A warning that your equity is approaching the level at which the platform will start closing positions. For UK and EU retail CFD clients, close-out must begin when equity falls to 50% of required margin, and many platforms warn earlier.

Market capitalisation

The market value of a company's shares: share price multiplied by the number of shares in issue. It is used to classify companies as large, mid or small caps and to weight many indices. It measures equity value, not the value of the whole business including debt.

Market order

An instruction to buy or sell straight away at the best price available. It prioritises speed over price, so in a fast or thin market the fill can differ noticeably from the last quote. Stop orders become market orders when triggered.

Negative balance protection

A rule that prevents a retail trading account from going below zero, so losses cannot exceed the money deposited. It is required for retail CFD clients in the UK and EU. It does not apply everywhere, nor usually to professional clients.

Nominee account

An account in which a broker or custodian holds investments in its own name on behalf of clients, kept separate from the firm's own assets. You remain the beneficial owner. If a regulated broker fails, assets held this way should be returned to clients.

Pip

The standard unit of movement in a currency price: 0.0001 for most pairs and 0.01 for pairs quoted in yen. Many platforms show a fifth decimal, a tenth of a pip. Use the pip calculator to see what one pip is worth on your position.

Private key

The secret number that produces the signatures needed to move crypto from an address. Anyone who has it controls the funds, and if it is lost without a backup, the funds are inaccessible for good. Wallets generate and store keys; they do not store coins.

Quote currency

The second currency in a pair, in which the price is expressed. In USD/JPY the yen is the quote currency, so profit and loss are first calculated in yen and then converted. That is why pip values on yen pairs change with the exchange rate.

Recovery phrase

A sequence of 12 or 24 words from which a crypto wallet's private keys can be rebuilt. It is the master backup: anyone who sees it can take the funds. No exchange, support desk or website ever has a genuine reason to ask for it.

Rollover

The daily process, at 17:00 New York time, of carrying an open forex position to the next value date. A swap charge or credit is applied, based on the two currencies' interest-rate difference plus the provider's mark-up. Wednesday is commonly charged for three nights.

Settlement

The final transfer of cash and assets after a trade is agreed. US shares settle one business day after the trade date. Spot currency deals conventionally settle two business days later, while a confirmed crypto transfer settles on the blockchain itself.

Slippage

The difference between the price you expected when placing an order and the price you actually received. It is most common with market and stop orders during news, at market opens and in thin markets. It can occasionally work in your favour.

Spread

The gap between the bid and ask price. You pay it implicitly on every round trip, because you buy at the higher price and sell at the lower one. Spreads vary by instrument, time of day and market conditions. See trading fees explained.

Stablecoin

A crypto token designed to keep a steady value, usually one US dollar. Most large stablecoins are issued by companies that say they hold reserves to back each token. Their stability depends on those reserves and on redemptions being honoured; they are not bank deposits.

Stop-loss

An order that closes a position once a chosen price trades, to cap a loss. A standard stop becomes a market order when triggered, so it can fill beyond the set level in a gap. Some providers offer guaranteed stops for an extra charge.

Swap

The overnight financing charge or credit applied to a leveraged position held past the daily cut-off. For currency pairs it reflects the interest-rate gap between the two currencies; for share and index CFDs it is usually a benchmark rate plus a margin.

Volatility

A measure of how widely and how quickly a price moves, often expressed as a standard deviation of returns. Higher volatility means a wider range of likely outcomes in both directions, which calls for smaller positions to keep the same money at risk.

Terms that change meaning between markets

Several words mean slightly different things depending on where you meet them. "Margin" is collateral on a trading platform but a profit ratio in company accounts. "Equity" is your live account value to a trader but the shareholders' stake to an analyst. "Swap" is overnight financing on a forex platform but a type of derivative contract in banking, and on some crypto exchanges it simply means converting one token into another. When a document uses one of these words, check which meaning it intends.

Missing a term? Suggest it through the contact page. For the questions readers ask most, see the beginner FAQ.