Glossary
Welcome to the Kudotrade Glossary, here you will find clear and concise definitions of key terms and concepts, which are essential for navigating the world of financial markets and trading.
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Open position
An order which has been placed and being held.
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Operating income
It is a measure of a company’s profitability that indicates how much profit a company generates from its core business operations, excluding any income or expenses not directly tied to the core business activities.
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Order
A request to purchase or sell an item at a given price or within a certain range.
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Order type
This is based on the execution instructions; instant execution, buy limit or sell limit.
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Overbought
A product has been bought too many times so the price has reached its peak and may be due a correction or decline.
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Overnight position
A trade or position in financial markets that is held open beyond the daily trading session and into the next trading day.
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Overnight rate
The interest rate at which financial institutions, particularly banks, borrow or lend funds among themselves on an overnight basis; this rate is a key benchmark in the interbank market.
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Oversold
An undervalued asset is one whose price has fallen below its current value as a result of substantial selling over a period of time.
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Pending order
An instruction given from the trader to buy or sell a financial instrument at a specific price or under certain conditions in the future.
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Pip
The smallest unit of measurement for a currency pair’s price change.
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Position
The direction of the trade; long means a price increase and short means a price decrease.
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Pre-market trading
The hours prior to the markets opening, allowing traders to analyse and observe the markets.
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Price to earnings ratio
This is a financial metric used to evaluate the valuation of a company’s stock by comparing its current share price to its per-share earnings. It is a widely used tool for investors to assess whether a stock is overvalued, undervalued, or fairly valued relative to its earnings.
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Primary market
A segment of the financial market where newly issued securities, such as stocks, bonds, and other financial instruments, are offered and sold directly by issuers to investors.
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Profit and loss
Refers to the financial results of a company’s operations over a specific period, typically reflected in a financial statement known as the profit and loss statement or income statement. This statement summarises the revenues, costs, and expenses incurred during a period.
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Pullback
This is a short-term decline in asset prices following a period of rising prices.
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Quantity
The amount of a product being bought or sold (known as lot).
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Quarterly report
A financial document that publicly traded companies and some private companies produce every three months to provide an overview of their financial performance.
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Quick ratio
Also known as the acid-test ratio, is a financial metric used to evaluate a company’s short-term liquidity and ability to meet its immediate financial obligations without relying on the sale of inventory.
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Quote
The price in which the price of an asset was last traded at.
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Resistance
This refers to a significant price level or zone on a chart where an asset’s upward price movement is expected to encounter selling pressure or barriers, potentially causing the price to stall, reverse, or consolidate.
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Return
The overall earnings from an investment/trade.
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Risk assessment
Identifying and assessing potential hazards to an investment or financial portfolio in order to evaluate the amount of risk and the best risk management measures.
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Risk management
The process of identifying, assessing, and mitigating potential risks associated with trading activities in financial markets. It involves implementing strategies and techniques to protect capital, minimise losses, and optimise returns.
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Risk mitigation
Strategies and actions taken to reduce the impact of potential risks associated with trading activities in financial markets. It involves identifying potential risks, implementing measures to minimise their occurrence or impact, and developing contingency plans to handle adverse situations effectively.
