Orders & Execution
How a trade actually happens. These terms explain the prices you buy and sell at, the order types that get you in and out, what each trade costs, and how leverage and margin work when you control more than you put down.
23
terms in this topic
1
with a chart or figure
23
taught in an Academy lesson
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other topics
23 terms, A to Z
- 14beginner
- 9intermediate
- AskThe lowest price a seller will accept right now. You buy at the ask.
- BidThe highest price a buyer is willing to pay right now. You sell at the bid.
- CommissionThe fee your broker charges per trade, contract or share.
- Funding rateRegular payments between longs and shorts on crypto perpetual futures that keep their price near spot.
- LeverageControlling a position larger than your cash; it magnifies gains and losses equally.
- Limit orderAn order to buy at a set price or lower, or sell at a set price or higher: it guarantees the price, not the fill.
- LiquidationYour broker or exchange force-closing a leveraged position because your margin ran out.
- LongBuying first to sell later at a higher price; you profit if price rises.
- LotA forex position size unit: standard 100,000, mini 10,000, micro 1,000 units.
- Maker and takerMakers add liquidity with resting limit orders; takers remove it with market orders and often pay higher fees.
- MarginThe deposit needed to open and hold a leveraged position.
- Margin callA demand to add money because losses pushed your margin below the required level.
- Market orderAn order to fill immediately at the best available price: it guarantees the fill, not the price.
- Order bookThe live list of every waiting buy and sell order, with the size at each price.
- PipThe standard unit of forex movement: 0.0001 for most pairs, 0.01 for yen pairs.
- ShortSelling first to buy back later at a lower price; you profit if price falls.
- Short squeezeA sharp rally as short sellers rush to buy back at the same time, pushing price even higher.
- SlippageThe difference between the price you expected and the price you actually got.
- SpreadThe gap between the ask and the bid; a cost you pay on every round trip.
- Stop orderAn order that becomes a market order once price reaches your stop price.
- Stop-limit orderAn order that places a limit order, instead of a market order, once the stop price is hit.
- SwapInterest charged or paid for holding a forex or CFD position past the daily rollover at 5 pm New York.
- TickThe smallest price step a futures contract can move, worth a fixed dollar amount.