Trading terms and definitions

These limits are the maximum amount of money or trading assets that you're allowed to trade within a specific period. These limits are set by default.

It's a type of fee which applies to overnight positions in the Deriv MT5 Swap-free account, charged on any positions open beyond five (5) days.

American Indices replicate the performance of the leading publicly traded companies within a particular sector or segment of the US economy.

Check out all the Stock Indices offered on Deriv.

Asian Indices replicate the performance of the leading publicly traded companies in the financial markets in Asia and Oceania.

See what other Stock Indices are available for trading on Deriv.

The price a seller is willing to sell an asset to a buyer in open trades. It is the lowest price a seller is willing to accept for an asset at a given time.

Any financial instrument that holds value and can be traded such as Forex, Commodities, Stocks, Stock Indices, Cryptocurrencies, and ETFs.

Also known as an asset group, it refers to a category of financial instruments. It consists of groups of similar assets that share similar characteristics and behave in the same way in a portfolio. 

Deriv offers a range of asset classes on MT5, including:

• Forex currency pairs
• Commodities
• Stocks and Stock Indices
• Cryptocurrencies
• ETFs

Also known as the ASX 200 (Australian Securities Exchange 200 Index), Australia 200 tracks the performance of the largest and most actively traded companies listed on the Australian Securities Exchange (ASX).

Explore other Stock Indices available for trading on Deriv.

The first currency listed in a currency pair. It shows how much the base currency is worth as measured against the quote currency.

The benchmark interest rate set by a central bank or monetary authority of a country. The base rate serves as the foundation for the interest rates charged by commercial banks when they lend money to customers.

A unit of measurement used in finance to describe changes in interest rates or other financial percentages. One basis point is equal to 0.01%, or one hundredth of a percentage point.

A bear trader is someone who believes that the market or a particular asset is going to experience a decline in value. This view is known as bearish, and it typically involves selling assets that the trader owns or short selling an asset in anticipation of a market decline.

A market condition in which prices of assets are falling, and investor confidence is low. It is generally characterised by a consistent decline in market prices, typically by 20% or more, over an extended period of time, often several months or longer. The term "bear" comes from the metaphor of a bear swiping its paws downward to attack its prey, as the downward trend of the market resembles the bear's movement.

The price at which a buyer is willing to purchase an asset from a seller. The bid price in trading is the highest price a buyer is willing to pay for an asset at a given time.

The difference between the highest price a buyer is willing to pay (the "bid") and the lowest price a seller is willing to accept (the "ask") for a financial asset. The bid-ask spread represents the cost of trading and reflects market liquidity, with narrower spreads typically indicating more liquid markets.

A technical analysis indicator used to assess the volatility and potential price levels of a financial instrument. It helps traders identify periods of high or low volatility, potential trend changes, and potential breakout points in the price chart.

The price level at which your position's profit and loss are equal. In other words, the trade has paid for itself and there are no net profits or losses.

Breakout in trading refers to a price movement of a trading asset beyond a significant level of support or resistance.

A person or a firm that acts as an intermediary between buyers and sellers of financial instruments. Brokers facilitate trades by connecting buyers and sellers and executing trades on behalf of their clients.

A bull trader is someone who believes that the market or a particular asset is going to experience an increase in value. This view is known as bullish, and it typically involves buying assets that the trader believes will increase in price.

A market condition in which prices of assets are rising or expected to rise over a prolonged period, and investor confidence is high. The term "bull" comes from the metaphor of a bull attacking its prey by thrusting its horns up into the air.

The act of purchasing a financial instrument with a buy order, with the expectation that its value will increase in the future. When you buy an asset, you are taking a long position in that asset.

A pending order to buy a trading asset at a price lower than the current market price. Buy limit orders give you control over your entry points and help prevent you from overpaying for assets. However, the fulfilment of the order depends on market conditions and the availability of sellers willing to sell at or below the specified limit price.

The price at which a buyer is willing to purchase an asset. Buy price is also known as the ask price, and it is typically displayed on the right side of a quote.

A stop order that triggers a market buy order when the price trades at or above a specified stop price level. It is used to either close out short positions or enter new long positions if the price rises to the predefined trigger level.

A conditional order that combines a stop price and a limit price. When the market reaches the stop price, the order becomes a limit order to buy at or at better than the specified limit price, allowing you to control both the entry price and execution conditions.

A type of chart used to display the price movements of an asset.

The amount of money you can use to place trades.

A financial institution that is responsible for managing a country's monetary policy and regulating its banking system.

A closed position is when you complete a trade by conducting an opposite transaction, which terminates your exposure, eliminating any further potential risk or profit or loss associated with the trading asset.

Also known as close price, this refers to the last traded price of an asset at the end of a trading session. The closing price is often used as a key parameter in technical analysis.

A commodity is a basic raw material that can be bought, sold, and traded on exchanges around the world. When trading commodities such as metals and energy on Deriv, you'll predict the commodity prices without owning the underlying asset.

Check out all the Commodities offered on Deriv.

This refers to a period of price movement in which the price of a financial asset remains within a defined price range, without making significant moves in either direction.

This index is an economic indicator that evaluates inflationary trends in the market, measuring changes in the prices of goods and services over time. It is used to track market inflation and to understand the purchasing power of consumers. As the prices of goods and services increase over time, the CPI will also rise, indicating a decrease in the purchasing power of each currency unit.

The time frame between the opening of a trade contract and its expiry. This can range from a few seconds to months or even years.

A type of trading that allows you to speculate on the rise or fall of an underlying asset and profit from the difference between the contract's entry price and exit price without actually owning the asset. 

For more information, check out CFDs on Deriv.

The standardised quantity or volume of a financial instrument that is traded in a single contract.

The current value of a trade contract based on the initial buy price and the current profit/loss. The contract value depends on the instrument type.

For CFDs, the contract value is determined by the size of the contract and the current price of the underlying asset.

The rate used by a payment provider to convert one currency into another currency.

An account that is opened and maintained by a company, to manage trading accounts and activities.

In trading, cryptocurrencies are digital assets that can be bought and sold on cryptocurrency exchanges. Unlike traditional currencies, they operate on decentralised, peer-to-peer networks, which means that they are not controlled by any central authority or government.

Cryptocurrency trading on Deriv involves speculating on the price movements of various digital currencies, such as Bitcoin, Ethereum, and Litecoin, without owning the underlying asset.

Discover the Cryptocurrencies we offer on Deriv.

The act of converting unrealised profits or losses into actual realised profits or losses by selling the assets.

Currency appreciation is when one currency gains value in relation to another currency in the foreign exchange market. This results in the ability of one unit of the appreciating currency to purchase more units of the other currency than before.

Currency depreciation happens when a currency loses its value compared to another currency in the foreign exchange market. This means that it requires more of the depreciating currency to buy one unit of the other currency than it did before.

A currency pair is the quotation of two different currencies, with the value of one currency being expressed in terms of the other.

The deadline by which a trade must be executed or submitted for processing within a specific trading day for it to be considered for that day's trading activities. The cut-off time may vary depending on the financial market traded.

A type of order in financial trading that instructs a broker to buy or sell a financial instrument at a specified price during regular trading hours on a particular trading day. The order is valid for that day only and will expire at the end of the trading day if not executed.

A trading strategy in which traders buy and sell trade within the same day, with the aim of profiting from short-term price movements. Day traders don't hold any trade positions overnight, and all trades are closed before the market closes for the day.

A deal refers to a trade that is carried out when the platform fills an order.

A general decrease in prices for goods and services across the economy. This is the opposite of inflation.

A trading account that allows you to practise trading on Deriv using virtual funds. 

The act of transferring money to your Deriv Wallet from a payment account.

Learn more about how deposits work on our Deposits and withdrawals page.

The minimum and maximum deposit limits set for a specific payment method that you can use to transfer funds into your Deriv Wallet. 

Visit our Deposits and withdrawals page to learn more on the different minimum and maximum deposit limits for each payment method.

A popular multi-asset CFD trading platform, developed by MetaQuotes, that gives you access to the Forex, Stocks, Stock Indices, Cryptocurrencies, Commodities, and ETFs markets.

Explore the available account types and start trading on Deriv MT5.

A financial contract whose value is derived from an underlying asset such as Stocks, Commodities, Forex currencies, or Stock Indices. With this type of contract, you can speculate on the price movements of these financial instruments without owning them.

On Deriv, all tradable instruments are contracts for difference (CFDs), which are a type of derivative.

Divergence is a situation where the price of an asset moves in a different direction than an indicator or oscillator that is commonly used to analyse the asset's price movements.

A risk management technique that involves trading a variety of assets or securities in order to reduce the overall risk of a trading portfolio.

A distribution of a portion of a company's profits to its shareholders. It is usually paid out in cash or additional stock shares.

A market condition where an asset's price consistently decreases over time.

A measure of how risky an investment is by looking at how much it goes down. It shows, in percentages, how much a trading account or portfolio loses from its highest value to its lowest.

The time when a trade contract expires.

Energy refers to the Commodities used to generate power, such as crude oil, natural gas, gasoline, and heating oil.

Check what Commodities are available on Deriv.

The market price when you open a position. It is the first tick at or after the start time of your trade contract.

A state of balance between the supply and demand of a particular trading asset.

In trading, equities refer to stocks that are publicly traded on a stock exchange. They represent ownership in a company and are bought and sold on exchanges like the New York Stock Exchange (NYSE) or NASDAQ. 

Check out all the Stocks we offer on Deriv.

The current value of your CFD trading account in Deriv MT5. It is the sum of the account's balance and any floating profit or loss on open trades.

The Europe 50 (also known as the EURO STOXX 50 Index) tracks the performance of the 50 largest and most liquid companies listed in 18 European countries that use the euro as their currency.

Explore other Stock Indices available for trading on Deriv.

European indices replicate the performance of the leading publicly traded companies in the financial markets across Europe. 

See what Stock Indices are available for trading on Deriv.

An exchange is a marketplace for trading financial assets like stocks, indices, and currencies.

The value of one currency shown in terms of another currency.

Also known as ETFs, exchange-traded funds are a type of investment fund traded on a stock exchange designed to track the performance of a specific index or basket of assets, such as stocks, bonds, commodities, or currencies. 

Discover ETFs you can trade on Deriv.

The process of completing a trade once an order to buy or sell a financial instrument has been submitted. It is carried out by a trading broker.

A situation where asset price movement becomes unstable, signalling an imminent trend reversal.

The market price when you close a trade position. It is the last tick at or before the end time of your trade contract.

Forex exotic pairs are currency pairs that are not commonly traded in the forex market. These pairs typically consist of a major currency, such as US dollar, Euro, or Japanese yen, paired with a currency from a developing or emerging economy. 

Learn more about exotic pairs on our Forex page.

The time at which a pending order will be cancelled if it has not been executed.

A type of moving average that is calculated by placing greater weight and significance on recent price data, making it more responsive to recent price changes than other moving averages.

The Fed refers to the Federal Reserve Bank, the central bank of the US, or the FOMC (Federal Open Market Committee). This is the central banking system of the US that is responsible for implementing monetary policy, supervising and regulating banks, maintaining stability in the financial system, and providing certain financial services to the U.S. government.

The Federal Open Market Committee (FOMC) is a committee within the US Federal Reserve that implements monetary policy and influences the supply of money and credit in the economy.

Money issued by governments or central banks, with a value that depends on the country’s economy. For example, the US dollar, euro, and Japanese yen.

A technical analysis tool used in trading to identify potential levels of support and resistance in a financial asset's price movement. It is based on the idea that after a price move, prices tend to retrace a predictable portion of that move before continuing in the original direction.

The execution of a trade order at a specified price. When an order has been completed, it is often referred to as ‘filled’. There is no guarantee that every trade will become filled.

An assessment to evaluate your financial health and performance. It involves analysing your source of income and wealth to determine your net worth and overall financial position.

A type of trading asset that holds the potential to generate future cash flows or other valuable economic benefits. This can include stocks, commodities, forex, and other assets.

A marketplace for trading financial instruments such as stocks, commodities, and derivatives.

A system where a country’s currency value changes based on supply and demand in the foreign exchange market. Also known as a flexible exchange rate.

Forex is short for foreign exchange. Forex trading, also known as currency trading or FX trading, is the process of buying and selling different currencies from around the world. It is a global decentralised marketplace where currencies are traded 24 hours a day, five days a week (Mondays to Fridays).

Discover the currency pairs you can trade with Deriv on our Forex page.

Also known as CAC 40 (Cotation Assistée en Continu), this index tracks the performance of the 40 most actively traded companies listed on the Euronext Paris Stock Exchange.

See what other Stock Indices are available for trading on Deriv.

The amount of funds available in a trader's account that can be used to open new trading positions or absorb losses. By keeping track of your free margin, you can ensure that you have enough available funds to maintain your trades and withstand market fluctuations.

The process of asset valuation which involves analysing the underlying macroeconomic fundamentals and financial factors of an asset. It is often used in combination with technical analysis.

Greenwich Mean Time (GMT) is the average solar time zone at the Royal Observatory in Greenwich, London. The GMT time zone is often used as a reference time for the entire world and is sometimes called Universal Time Coordinated (UTC) or Coordinated Universal Time (CUT). Deriv uses GMT all year round.

A Good Till Cancelled (GTC) order is a trade order used in financial markets. When you place a GTC order, you are instructing your broker to keep your trade active until it is executed or until you manually cancel it.

Also known as the DAX (Deutscher Aktienindex), the Germany 40 index tracks the performance of the 40 largest and most actively traded companies listed on the Frankfurt Stock Exchange.

Explore other Stock Indices available for trading on Deriv.

Refers to a trader's profit before factoring in any costs. This is the profit that you earn from a trade before considering costs such as fees and commissions.

A trading strategy used to reduce the risk of adverse price movements by taking an offsetting position in a related asset. Hedging can help protect against potential losses, but it may also limit potential gains.

The fee applied to Deriv trading accounts that have been inactive for a year. If the account remains inactive after the initial deduction, a fee will be charged every six months until the account is active again.

To learn more, check the “Inactive and dormant accounts” section in our General terms of use.

A mathematical calculation tool used to analyse the price movements of an asset and provide traders with insights into the asset's potential future price direction.

Indices, or stock indices, are a collection of stocks that represent a particular market or sector. 

Find out the Stock Indices you can trade on Deriv.

A continuous rise in the overall prices of goods and services within an economy over a period of time. Inflation is measured by the Consumer Price Index (CPI).

A specific financial asset or security that can be bought or sold in trading.