What Does it Mean?

Stocks, Options, Forex, CFD

Stock

A stock is an instrument that represents owning a part of a corporation. Stocks are brought and sold mainly on different stock exchanges.

The performance of stocks has historcally out performed every other investment type. Stocks, also called an equities, are the foundation of nearly every investment portfolio.

Options

An Options is a contract that based on the price of an underlying security like a stock or commodity.

Options give buyers the opportunity to buy or sell an asset. The trader is not obligated but has the right at the specified date and price.

Forex

Forex (Foreign Exchange) is the market where currencies are traded and it is also known as FX. The largest financial market to be traded in the world is the Forex market. Individuals can open a forex account as a Retail Trader to buy and sell currencies. Two currencies are traded against each other and are called a pair. For example the Euro (EUR) is traded against the Dollar (USD) and is traded as pair known as EURUSD.

CFD

A CFD is a shortened term for contract for differences which is a financial contract that is traded on the settlement price between the open and closing trades. When trading a CFD there is no actual delivery of the stock, currency or commodity. A CFD is simply speculation on the price movement and is usually traded over short periods of time. CFDs are especially popular in FX, metals such as Gold and also Oil markets. Cryptocurrencies like Bitcoin are also gaining popularity as CFDs.

CFD prices are different to the current market price and are quoted in the buy price and the sell price. These two prices are called the spread.

The bid price is the price at which you can sell or open a short CFD. These selling prices will alwas be slighty lower than the current market price value.

The offer price is the price at which you can buy or open a long CFD. The offer price will be slightly higher than current market price.