A

ADR (American Depository Receipt): A class of share, often used by companies based outside the USA to create a listing in the USA.

AEX: An index of 25 of the largest stocks traded in the Euronext Amsterdam stock exchange.

Arbitrage: Occasionally a financial instrument will trade at two different prices on two different exchanges. In this case the instrument can be bought on one exchange and sold on the other. When the prices eventually come into line both positions are closed and a risk-free profit has been made.
Arbitrage is sometimes carried out using two similar but not identical instruments.

Ask (Offer): The price at which you (the customer) can buy. If you do not have an exisiting position you can buy at the offer price to open a new long position. Alternatively, if you already have a short position you can buy at the offer price to close that position. Also see Bid.

B

Basis of Expiry : The specification of the price at which a contract (bet) expires.

Backwardation: Usually a bid price will be lower than an ask or offer price. However if the bid price exceeds the offer price for a stock, backwardation is said to have occured. Backwardation is most likely to occur when a share is suspended or under a share repurchase scheme.

Base Rate: The rate at which a central bank, such as the European Central Bank or the Bank Of England lends to the retail banks. This rate is often used to determine the lending rates offered by institutions and is used by paddypowertrader as the basis for rolling charges.

Bear: Someone who believes that prices in a market are going to decline. In a bear market the bears are in a majority and so the market prices fall. Also see bull.

Bearish Engulfing Candlestick: A bearish reversal candlestick pattern that forms after a large up period. There is a long red body that fully engulfs the green body of the previous period. There are small shadows on either end of the long body. See blog on Candlesticks.

Bid : The price at which you (the customer) can sell a contract (bet). If you do not have an existing position you can sell at the bid price to open a new short position. Alternatively, if you have a long position you can sell at the bid price to close that position. Also see offer.

Bid-Ask Spread: See spread.

Blue-Chip Share: A share in what is considered to be a large, safe, prestigious company. Such companies are usually well-known, have a large market capitalisation and a good track record of dividend payments.
Not all stocks in the FTSE 100 are blue chips and not all blue chips are in the FTSE. Some blue chips can also implode, as in the case of Marconi, the telecommunications firm.
The term comes from poker where blue chips were the highest-valued chips in the game..

BOBL: A bond issued by the German Government with a maturity of between 4.5 and 5.5 years away.

Body (Candlestick): The difference between the open price and the close price of a period. See blog on Candlesticks.

BOE: Bank Of England. Also see Base Rate.

Bond: A loan, issued by either governments or companies, in order to raise funds. Like shares, bonds are freely traded.
When issuing a bond a government or company will borrow a sum of money. They will then pay interest on the sum (called a coupon) and repay the initial capital when the bond matures.
paddypowertrader offers bets on the price of government bonds such as BOBLs, Bunds, Gilts and Schatz.

Bull: Someone who believes that prices in a market are going to rise. In a bull market the bulls are in a majority and so the market prices rise. Also see bear.

Bullish Engulfing Candlestick: A bullish reversal candlestick pattern that forms after a large down period. There is a long green body that fully engulfs the red body of the previous period. There are small shadows on either end of the long body. See blog on Candlesticks.

Bund: A bond issued by the German Governement with a maturity of between 8.5 and 10.5 years away.

Buy (Take, go long): means you make take a long position (or close a short position).

Buy Order: An instruction to buy a contract (bet). Also see orders.

C

Cable: The British pound - U.S. dollar currency pair, traded in the foreign exchange markets.

CAC 40 Index: A stock index of 40 of the largest companies listed on Euronext Paris (the largest stock exchange in France).

Candlestick: A visual representation of price movements during a period using the open price, high price, low price and close price. See blog on Candlesticks.

Candlestick Charts: A style of charting that uses numerous candlesticks to portray price movements. See blog on Candlesticks.

Capital Gains Tax: A tax on the profit from selling an asset. Under current Irish and UK legistlation profits from spread betting are free of Capital Gains Tax. However please bear in mind that tax laws can change.

CBOT: Chicago Board of Trade – an exchange where futures and options are traded. In 2006 CBOT was acquired by the Chicago Mercantile Exchange.

CFD (Contract For Difference): A financial instrument that shares many of the same characteristics as a spread bet.

CGSL (Computer Generated Stop Loss): See Maximum CGSL.

Closing Price: The price at which a bet was traded to close an open position.

Closing Price: The price of the last transaction in a day’s trading session. Exchanges often publish the official closing price for each instrument traded after the exchange has closed. Also see Settlement Price.

Contract Month : The month during which a futures contract (bet) expires.

CME: Chicago Mercantile Exchange – an exchange on which a variety of different products, including futures and options are traded. Also see CBOT.

Commodity: The types of goods used in industry or agriculture. Commodities are split into three categories for trading purposes: Energy (including oil and natural gas), Metals (including gold and copper) and Softs (including wheat and coffee).

Contingent Order (If Done Order): An instruction you (the customer) give paddypowertrader to attach a stop loss and/or a limit order to your new order if it is filled. This is also known as an if done order.

Contract Note: A confirmation of your trade, containing details of the market, the unit of trading, the action (buy or sell), the price and the expiry date. paddypowertrader will email your contract note to you unless other arrangements have been made.

Cost of Carry: The interest cost associated with keeping a geared or leveraged trade open for a period of time. Any dividends payable during this period are excluded from the cost of carry calculation.

Cross Rates: The foreign exchange rate between two currencies.

D

Day Trading: A style of trading where positions are typically opened and closed on the same day.

Derivatives: A financial instrument, such as a future, whose price is derived from an underlying instrument.

Deutsche Bourse: Germany’s largest stock exchange.

Dividend: A portion of a company's earnings paid to shareholders.

Dow Jones Industrial Average (DJIA): An index containing 30 of the largest US stocks. Often simply referred to as the Dow.

Double Witching Day: The last trading day before expiry of options and futures on the same underlying asset. Double witching days can have high volatility.
Double witching hour is simply the final hour of trading on double witching day.
See also Triple Witching Day.

Down Bet (Sell, Give, Go Short): If you think a market will fall, you would go short or place a Down Bet.

E

ECB: European Central Bank. Also see Base Rate.

Economic Indicators: Statistics that can give an indication of the health of an economy.

EUREX: European exchange on which a variety of derivatives are traded.

EURONEXT: European securities and derivatives exchange with operations in France, Belgium, the Netherlands, Portugal and the UK.

Euro/dollar (Eurodollar): The exchange rate between the Euro and the U.S. dollar.

Ex-Dividend Date: The date on or after which, if a stock is purchased, the purchaser will not receive the most recent dividend. The share prices of companies paying a dividend tend to fall slightly on their ex-dividend date.

Expiry: The date and time on which the relevant bet expires. To see the expiry for an instrument click on the picture icon in the trading window.

F

Fill: Execution of an opening or closing order.

Flat: A term indicating neither growth nor decline. It is often used when a particular market is neither rising nor falling.  

Flat: If you (the customer) have no positions in the market (i.e you had a long position but you recently sold), you are said to be flat.

FTSE 100: Financial Times Stock Exchange 100 Index. An index of 100 of the largest shares traded on the London Stock Exchange.

Foreign Exchange (FX or Forex) Markets: The market for a currency pair (e.g. selling one currency in order to buy another).

Fundamental Analysis: Examining a company's assets, management, markets and products to determine its value.

Futures : A contract to buy or sell a certain underlying instrument for a specified price on a specified date. Futures contracts are traded on exchanges and their underlying instrument could be individual shares, share indices, bonds, commodities or a variety of other instruments. Many of paddypowertrader’s prices are derived from the futures contract prices.

G

Gapping: This is the term used to describe the situation where any market moves directly from one correctly quoted price to another, significantly different, correctly quoted price. There can be many reasons for gapping; economic figures, company announcements, natural disasters etc. However the effect is that any stop-loss, limit or new order will be subject to a gap in the price. For example if the Ryanair price falls from €6.00 at Wednesday’s close to €5.50 on Thursday morning’s open, and you have a stop loss set to sell at €5.75, the stop loss will actually sell at €5.50.
One of the main occurrences of gapping in a spread bet is a movement in the underlying market price overnight, during which time paddypowertrader does not quote a price.

Gearing (Leverage): This term refers to the margin required to make a bet. Spread betting allows the client to buy (or sell) a financial product with substantially less money than the actual full market value of that financial product, so spread bets can be considered to be highly geared (leveraged) products.
A highly geared or leveraged bet is riskier than a lowly geared financial product and can therefore, potentially, generate a greater profit or loss.

GFD (Good For the Day) : An order, such as a new order, that may be valid for the day of placement only.
Note that you (the customer) can decide the period that any order (apart from a stop loss) will be active for.

Gilts: 'Bonds issued by the UK Governement. Gilts are issued in a variety of maturities ranging up to 50 years.

GTC (Good Till Cancelled): An order that is valid either until cancelled by you (the customer) or until the underlying contract has expired .

H

Hammer Candlestick: A bullish reversal candlestick pattern that forms after a decline. There is a long shadow on the downside of the candlestick and a small body near the top. See blog on Candlesticks.

Hanging Man Candlestick: A bearish reversal candlestick pattern that forms after a up move. There is a long shadow on the downside of the candlestick and a small body near the top. See blog on Candlesticks.

Hedging : The action of reducing the risk of an outright position in one market by taking an opposite position in a similar or derivative market. For example if you went long on the Dow you might go short on the S&P 500. In this case the hedge would not be exact. However it is unlikely that the Dow will move heavily in the opposite direction to the S&P 500.

I

ICE: Intercontinental Exchange. A London based exchange on which futures and options on energy products are traded. One of these, Brent Crude, is a world benchmark for oil prices. ICE was formerly known as the International Petroleum Exchange.

If Done Order: An instruction you (the customer) give to paddypowertrader to attach a stop loss and/or a limit order to your new order if it is filled. This is also known as a contingent order.

IMR: Initial Margin Requirement. See Minimum IMR.

Index: A statistic that measures the change in the price of a basket of instruments, such as shares, and expresses that change as a single figure. Indices give a simple indication of whether a market is moving up or down and provide a benchmark against which investors can measure the performance of their assets.
The ‘FTSE 100’, for example, is calculated by taking the weighted average of the largest 100 companies on the London Stock Exchange. It was begun on the 3rd January 1984 with a base value of 1000. 
The most common indices, such as the Dow, the S&P 500 and the ‘FTSE 100’, are a basket of stocks. However indices of bonds and commodities also exist.

Interim Report: The financial statement of a company that reflects only a limited period, not the company’s entire fiscal year.

J

K

L

Last Dealing Day : The last day in the contract month on which a customer may deal in the product. This is often, but not always, the same as the expiry day. To see the last dealing day of an instrument click on the picture icon in the trading window.

Leverage (Gearing): This term refers to the margin required to make a bet. Spread betting allows the client to buy (or sell) a financial product with substantially less money than the actual full market value of that financial product, so spread bets can be considered to be highly geared (leveraged) products. A highly geared or leveraged bet is riskier than a lowly geared financial product and can therefore, potentially, generate a greater profit or loss.

Liquidity : A measure of activity in the market. A liquid market will have many buyers and sellers and the bid-ask spread will usually be small. An illiquid market will have fewer buyers and sellers and the bid-ask spread may be wider. Also, in an illiquid market, a relatively small transaction can significantly move the price. This is less likely to happen in a liquid market.

Limit Order (Take Profit Order) : An order placed by you (the customer) requesting paddypowertrader to buy or sell a bet and so close your position at a price that is more favourable to you than the current price.

Listing: When a share is traded on an exchange it is said to be listed.

Long (Go Long’, Buy): means you (the customer) have a bought a contract (bet). If the price rises above your purchase price you will be able to sell your bet and make a profit.

LSE: London Stock Exchange.

M

Margin : Clients who hold open positions require what is called margin. Margin is calculated as the amount of money you must have in your account to satisfy paddypowertrader that you are able to honour your debt should your bet lose money. Also see Initial Margin Requirement.

Market Hours: The hours during which paddypowertrader will quote on a given contract (bet). Market hours vary per instrument. See our Dealing Guide for details of the market hours for each instrument.

Market Capitalisation: The number of shares a company has issued multiplied by its share price. Market Capitalisation is often used as an indicator of the size of a company.

Maximum CGSL (Computer Generated Stop Level): This is the maximum margin used to automatically allocate a stop loss on newly opened positions. If you (the customer) have sufficient funds in your account to cover the Maximum CGSL, the Trading System will assign a stop at a point 80% of the Maximum CGSL away from the opening price of the trade. Otherwise, the system will allocate a stop according to funds available in your account.
Example: You have €2000 in your account and you trade the FTSE Rolling Daily at €10 per point. The maximum CGSL for FTSE rolling daily is 150. Assuming  there is sufficient funds in your account the system assigns a stop loss at 80% of the maximum CGSL away from the opening price of the trade. In this case 80% x 150 = 120. So the stop loss will be set 120 points away from the opening price and your exposure (your maximum likely potential loss) will be 120 multiplied by your bet stake of €10 = €1200. As there is €2000 in your account you have sufficient funds for the stop loss to be set here.
If you have less than €1200 in your trading resources the Trading System would set a stop loss such that your exposure would be 80% of your available funds. However also note that if your trading resource is less than the minimum margin required (see Min IMR) for the bet requested the bet will not be accepted by paddypowertrader.
You can always amend your stop loss (move it further away, or bring it closer) assuming you have sufficient funds on your account.
To check the Maximum CGSL/Min IMR for an instrument click on the picture icon in the trading window.
Please note that stop losses are not guaranteed. See Gapping.

Minimum Stake : The minimum bet in euros, pounds or dollars per point that we will accept in that contract (bet). To check the minimum stake for an instrument click on the picture icon in the trading window.

Minimum IMR: The minimum Initial Margin Requirement is a way of calculating the minimum funds required to open a new position. If the minimum IMR on a market is 50 and you wished to make a bet €5/point, you would require a minimum of €250 trading resource to open a new position.
To check the minimum IMR for an instrument click on the picture icon in the trading window.

MSI: Milan Stock Exchange.

N

NASDAQ: National Association of Securities Dealers Automated Quotations. A US-based stock exchange on which many technology companies are listed.

New Order: An order to open a new bet at a level in the market which has not yet been reached. It is not attached to any existing bet and is independent of any other instruction. Also see Contingent Order.

Nikkei: An index of 225 of the largest stocks traded on the Tokyo Stock Exchange.

NYSE: New York Stock Exchange.

O

OCO (Once Cancels Other) Order : A term for a situation where you have two orders, one above and one below the current market price. The first order to be executed automatically cancels the other order.

Offer :  see Ask.

Order: An instruction you (the customer) give to paddypowertrader to buy or sell a bet at a price the bet has not currently reached. Types include stop loss orders, new orders, limit (take profit) orders, if done orders and OCO orders.

P

Per Point/Pip/Tick : A term used to clarify the bets placed. For example:
A bet per point on Vodafone is a bet for each penny movement in paddypowertrader’s Vodafone share price.
A bet per point on the FTSE is a bet for each point move in the relevant paddypowertrader FTSE contract.
The term tick is usually used for futures contracts with a base of 100 such as Short Sterling or Bunds.
Pip (percentage in point) is used in FX trades and always refer to the last quoted digit of a foreign exchange rate.
All these terms are applied to refer to the unit movement required to alter the profit/loss on your bet by the full stake amount. Also see Unit Risk.

Position: The net total stake of your bets in a given market. For example if you make a buy for €10 per point you are said to have a €10 long position. If you then sell the same bet for €3 per point you now have a net €7 long position.
If you then sell the bet at €7 per point you would close your position. This is sometimes described as being flat.

Pull An Order: An instruction you send to paddypowertrader to cancel a new order, a limit order or an OCO order.

Q

R

Resistance Level: A price level above which it is supposedly difficult for a security or market to rise. According to Technical Analysis theory this occurs because a stock whose price was rising has reached the level at which sellers of the stock meets or exceeds buyers. Also see ‘Support Level’.

Reuters: Prestigious international news agency and quotation service. Many professional traders use Reuters news stories to make their trading decisions.

Rollover: This procedure refers to the closing of a bet at expiry and the re-opening of the bet for the following period.
A daily bet will expire at the end of the trading day. However a rolling daily bet will be transferred from one daily bet to another until the user closes the bet or a stop loss is hit.
Rolling bets have a daily charge associated with them.
See paddypowertrader’s Guide To Rolling Bets for more information.

Russell 2000 (Russ 2K): An index composed of 2000 US Companies. Unlike the Dow and the S&P 500 which track large companies, this index is useful for tracking medium and smaller sized companies.

S

Schatz: A bond issued by the German Governementwith a maturity of between 1.75 and 2.25  years away.

Sell : (Give, go short) Sell means you take a short position (or close a long position).

Settlement Price : The price at which paddypowertrader settles a position at expiry date. The source of the settlement prices we use for each contract can normally be found in the paddypowertrader Product Information guide.

Shadow (Candlestick): The difference between the low price and the high price of a period. See blog on Candlesticks.

Share: a portion of a company sold by that company in order to raise capital. Owning a share usually entitles the shareholder to certain rights, including the right to a dividend and the right to vote to elect the management of a company.
Once shares are publicly sold their price will go up and down depending on investors’ perceptions of that company and its prospects.
It should be remembered that when you (the customer) buy a contract (bet) you are buying a bet on the value of a share rather than buying the share itself.
The terms share and stock are similar. However share is more commonly used in Ireland, the UK, Australia and South Africa. Stock is more common in North America.

Spot Market: A market in which an asset is bought or sold for cash and for immediate (or more commonly 2 day) delivery. The term is often used in the commodity markets where, for example, an industrial client might want to purchase a quantity of copper in spot market.

Spread (Bid-Ask Spread): The difference between the buy and sell sides of our quote.

Stake: The size of the bet you specify when making a trade.
 
Stamp Duty: A form of tax levied on, amongst other things, the purchase of shares. The current rates of stamp duty is 1% for Irish shares and 0.5% for British shares. Hence an investor purchasing €10,000 of Irish shares would currently pay stamp duty of 1/100 x €10,000 = €100.
When you (the customer) buy a spread bet you do not actually purchase the share. Hence, under current Irish and UK legislation there is no need to pay Stamp Duty. Please note though that tax laws can change.

Stock: See shares.

Stop Loss Order : An order attached to an open bet which will close the bet at a worse price than the current level. If the paddypower quote touches or goes through the stop loss price the bet will be closed.
While Stop Loss Orders can help you (the customer) to manage your risk and can help to limit your potential losses, please remember that stop loss levels are not guaranteed and you can lose more than your deposit. Also see Gapping.
paddypowertrader automatically applies a stop loss on every trade – however it is up to you to alter the stop loss level to suit your needs. Also see Maximum CGSL.

Support Level: A price level below which it is supposedly difficult for a security or market to fall. According to Technical Analysis theory this may occur because a stock whose price was falling has reached the level at which buyers of the stock meets or exceeds sellers. Also see Resistance Level.

STIRs (Short Term Interest Rates): While Bonds provide a means of trading longer-term interest rates, STIRs allow trading of shorter term interest rates.

Swing Trading: Refers to a style of trading where postions are often held open overnight or longer. Buv and sell decisions are typically triggered by Technical Analysis indicators.

T

Technical Analysis: The analysis of a financial market by charting its performance using historical patterns and focusing on trends.

Three White Soldiers: A bullish continuation candlestick pattern. It consists of three consecutive green bodied candlesticks, each with a higher close than the previous candlestick. See blog on Candlesticks.

Three Black Crows: A bearish continuation candlestick pattern. It consists of three consecutive red bodied candlesticks, each with a lower close than the previous candlestick. See blog on Candlesticks.

Triple Witching Day: A day on which at least three types of derivative contracts (e.g. Stock Index Futures, Stock Index Options and Stock Options) expire. Also sometimes known as Freaky Friday, these days can feature large fluctuations or volatility in the markets.
Triple witching hour is simply the final hour of trading on Triple Witching Day.
Triple witching most commonly occur on the third Friday of March, June, September and December.

Trading Resource: The value of your funds that can be used to trade. If you have no positions open your trading resource will be the same as your account balance. However if you have one or more positions open your trading resource will equal your account balance less the Maximum CGSL multiplied by your bet Stake for each open position.
Your trading resource is always displayed at the bottom of the trading window insert screen grab.

U

Underlying Instruments : Our bet prices are always based upon the prices of financial assets traded on various financial exchanges around the world. These financial assets are the 'underlying instruments'.

Up Bet : (Buy Take Go Long) If you think the market will rise, you would place an Up Bet.

Unit Risk: The smallest movement on the relevant contract (bet) that would lead to a change in your profit/loss that is the same as your stake. So for example the FTSE Rolling Daily contract (bet) may be quoted at 6600. It has a unit risk of 1 point. So if you opened a position  with a Stake of €10, every change in the FTSE Rolling Daily price of 1 point would result in a profit or loss of €10.
However the AEX Daily Future may be quoted at 530.5. This contract (bet) has a unit risk of 0.1 point. In this case if you opened a position with a stake of €10, every change in the AEX Daily Future price of 0.1 points would result in a profit or loss of €10.
The unit risk for every market quoted by paddypowertrader is shown in our Product Information sheets.

V

Volatility : A term to describe, and quantify, the relative movement of a given market in the recent past. A market that moves a great deal is said to have high volatility and one that is quiet is said to have low volatility.

W

X

Y

Z