Traders Glossary

Explore, learn, and discover all trading-related terms here in our comprehensive glossary.

Exchange

Where an asset or derivative is traded.

Exchange Rate

The price at which one currency can be converted into another currency.

Execution

The process of completing an order to trade a security.

Exercise

The activation of the right to buy or sell the underlying security.

Exercise (Strike) Price

The price at which an asset can be bought or sold by the buyer of a call or put option.

Expiration

The date at which the option's ability to be exercised ceases.

Expiration Date

The last day on which an option can be exercised.

Extrinsic Value (Time Value)

The price of an option less its intrinsic value. Out of the Money Options are entire made up of Extrinsic (or Time) Value.

Fair Market Value

An asset's value under normal circumstances.

Fair Value

The theoretical value calculation of an option using a pricing technique such as Black-Scholes options pricing formula.

Fibonacci Retracement

Where prices on a chart move off their latest tops or bottoms in swings of 38%, 50% or 62% from their previous bottoms or tops before resuming their original trend direction. 50% is the most common and easiest to spot.

Fill

An order which has been executed.

Fill or Kill

An order where a precise number of contracts must be filled or the order is cancelled.

Fill Order

An order which must be filled immediately or cancelled.

Floor Broker

A member of an exchange who is paid to execute orders.

Floor Trader

An exchange member who trades on the floor of the exchange for their own account.

Fundamental Analysis

Analysis of a stock security which is based on the ability of the organization to generate profits for its shareholders. Such analysis embraces earnings, PE Ratios, EPS, Net Assets, Liabilities, Customers etc.

Futures Contracts

Agreement to buy or sell an underlying security at a predetermined date at an agreed price. The difference between futures and options is that with options the buyer has the Right, not the obligation. With futures, both parties are obliged to fulfil their part of the bargain.

Gamma

The speed by which Delta changes compared with the speed by which the underlying asset is moving.

Gap

Where the opening bar of a price chart opens and stays beyond (lower or higher) than the spread of the previous bar. Gaps can be lower or higher.