A
Account Currency
The currency in which a trading account is denominated, which may differ from the currencies quoted in a specific instrument.
Appreciation
A rise in the value of a currency or asset relative to another.
Appropriateness
An assessment of whether a client has the knowledge and experience to understand the risks of a particular product or service.
Ask Price
The price at which a participant may be willing to sell, or at which a client may be able to buy.
Asset Allocation
The way a portfolio is divided between approved investment or asset categories.
B
Base Currency
The first currency quoted in a currency pair, against which the second currency is measured.
Benchmark
A reference measure used, where appropriate, to compare portfolio performance. A benchmark comparison does not indicate that a portfolio will outperform it.
Bid Price
The price at which a participant may be willing to buy, or at which a client may be able to sell.
C
Capacity for Loss
A client’s financial ability to absorb investment losses without an unacceptable effect on their circumstances.
CFD (Contract for Difference)
A derivative product whose value tracks the price of an underlying asset, allowing exposure to price movements without owning the asset itself.
Client Classification
The category assigned to a client under the applicable regulatory framework, based on their knowledge, experience and circumstances.
Commission
A fee charged on a transaction, calculated separately from the spread. AETRAM’s Standard and Islamic Accounts do not currently charge commission.
Concentration Risk
The risk arising from a large proportion of a portfolio being exposed to a single investment, sector, region or currency.
Conflict of Interest
A situation where AETRAM’s interests, or those of a related party, employee or another client, may differ from the interests of a client.
Counterparty Risk
The risk that another party to a transaction may fail or be unable to meet its obligations.
D
Demo Account
A simulated trading environment using virtual funds. Demo performance does not predict live trading outcomes.
Depreciation
A fall in the value of a currency or asset relative to another.
Derivative
A financial product whose value is based on the price of an underlying asset, index or rate, rather than the asset itself.
Discretionary Portfolio Management
A service where a manager makes and implements investment decisions on a client’s behalf, within an agreed mandate.
Diversification
Spreading exposure across different investments or categories. It does not guarantee profit or prevent loss.
Drawdown
A decline in account or portfolio value from a previous peak, usually expressed as a proportion of that peak.
E
Equity
The current value of a trading account, including open positions, at a given moment.
Execution
The process through which an order is completed. The final price may differ from the price initially shown.
Exotic Currency Pair
A currency pair involving one major currency and one from a smaller or emerging economy, typically less liquid and more widely spread than major pairs.
F
Financing Charge
An adjustment applied to a position held overnight, reflecting interest-rate differences or the cost of holding the position. Also known as a swap or rollover charge.
FX (Foreign Exchange)
The global market for exchanging one currency for another.
G
Gearing
See Leverage. The term used for the same concept in some markets.
GTC Order (Good-Till-Cancelled)
An order that remains active until it is executed or manually cancelled, rather than expiring at the end of a trading session.
H
Hedging
Taking a position intended to offset the risk of an existing position. Hedging can reduce certain risks, but it does not remove them.
I
Instrument
A tradable financial product, such as a currency pair, commodity, index or cryptocurrency CFD.
International Markets
Markets and instruments located or traded outside the client’s home jurisdiction, which may involve different trading hours, currencies and regulatory conditions.
Investment Objective
The purpose a client sets for their portfolio, such as long-term growth or capital preservation, agreed and recorded as part of a mandate.
Islamic Account
A swap-free account structured so that no financing or rollover interest applies to positions held overnight.
J
No commonly used trading, market or portfolio management term currently starts with this letter. This section will be updated if one becomes relevant.
K
Know Your Customer
The identity, eligibility and due-diligence checks a regulated firm completes before providing a service to a client.
L
Leverage
Market exposure obtained using a smaller amount of capital than the full value of the position. Leverage can increase both gains and losses.
Limit Order
An instruction to buy or sell at a specified price or better. It does not guarantee execution if the market never reaches that price.
Liquidity
How easily a position or investment may be bought, sold or converted into cash without a significant effect on its price.
Long Position
A position taken in expectation that a price will rise.
Lot
A standardised unit of trade size used to measure a position.
M
Mandate
The agreed framework defining how a portfolio may be managed, including objectives, risk profile, permitted investments and restrictions.
Margin
The capital a client must hold to open and maintain a leveraged position.
Margin Call
A request to add funds or reduce positions when account equity falls below the required margin level.
Market Maker
A participant who provides buy and sell prices for a product, supporting liquidity in that market.
Market Order
An instruction to buy or sell immediately at the best available price.
Micro Lot
A trade size equal to one hundredth of a standard lot, used to reduce position size.
Mini Lot
A trade size equal to one tenth of a standard lot.
N
Negative Balance Protection
An arrangement, where offered, intended to prevent a client’s account balance from falling below zero even after a significant loss. Availability depends on the account type, product and applicable terms.
Notional Value
The total value of a position, calculated using the current price and the size of the trade, regardless of the margin actually committed.
O
Order
An instruction to open, modify or close a position.
OTC (Over-the-Counter)
A transaction conducted directly between two parties rather than on a centralised exchange.
Overnight Position
A position that remains open past the platform’s daily cut-off, which may incur a financing charge.
P
Pip
The smallest standard unit of price movement in most currency pairs.
Position
An open trade representing exposure to a particular instrument, either long or short.
Principal Dealing
Where permitted and disclosed, a firm acting as the counterparty to a client’s transaction rather than solely arranging a trade with another party.
Profit and Loss (P&L)
The gain or loss on a position or account over a given period.
Q
Quote
The current buy and sell price displayed for a product at a given moment.
Quoted Currency
The second currency in a currency pair, in which the pair’s price is expressed.
R
Realised Profit and Loss
The final profit or loss once a position has been closed, as distinct from unrealised profit and loss on an open position.
Rebalancing
Adjusting a portfolio’s holdings to bring it back in line with its agreed mandate. Rebalancing does not guarantee improved performance.
Risk Profile
An assessment of a client’s willingness and financial capacity to accept investment risk.
Rollover
See Financing Charge.
S
Settlement
The process by which a transaction is finalised and ownership or obligations are transferred between parties.
Short Position
A position taken in expectation that a price will fall.
Slippage
The difference between the expected order price and the price at which the order is actually completed.
Spot Price
The current market price of a product for immediate settlement, as opposed to a future date.
Spread
The difference between the displayed buying and selling prices of a product.
Standard Lot
The standard unit of trade size, from which mini and micro lots are derived as fractions.
Stop-Loss Order
An instruction to close a position once the price reaches a specified level, intended to limit loss. It does not guarantee execution at that exact price.
Suitability
An assessment of whether a service, such as portfolio management, is appropriate for a client’s objectives, circumstances and risk profile.
Swap
See Financing Charge.
T
Take-Profit Order
An instruction to close a position once the price reaches a specified level, intended to secure a gain. It does not guarantee execution at that exact price.
Technical Analysis
A method of reviewing markets using historical price and volume patterns. It does not guarantee future outcomes.
Tick
The smallest possible price movement for a given instrument.
Trading Hours
The periods during which a specific product or market can be traded, which vary by instrument and venue.
U
Underlying Asset
The actual asset, such as a currency, commodity or index, on which a derivative product’s price is based.
Unrealised Profit and Loss
The current profit or loss on an open position, which continues to change until the position is closed.
V
Volatility
The size and speed of changes in a market price or investment value.
W
Weekend Risk
The risk that a market’s price may move, sometimes sharply, over a weekend when regular trading is closed, causing prices to reopen at a different level.
X
XAU / XAG
The standard codes for gold and silver, seen alongside conventional currency codes on instrument and pricing pages, such as XAU/USD for gold priced in US dollars.
Y
Yield
Income generated by an investment, such as interest or dividends, usually expressed as a proportion of its value.
Z
Zero-Sum
A description of a transaction where one party’s gain is matched exactly by another party’s loss, a dynamic common to many derivative products.
Important Information
Glossary definitions are simplified explanations for general educational purposes. Their meaning may vary depending on the product, service, agreement, market or regulatory context.
The glossary does not provide:
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Personalised investment advice
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Trading recommendations
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Trading signals
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Suitability decisions
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Guaranteed outcomes
