Glossary

Trading terms, in plain words.

One term per page, explained in under a minute.

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B

Bid / askThe bid is the quoted price at which you can sell. The ask is the quoted price at which you can buy. The difference between them is the spread.

L

LiquidityHow easily an asset can be bought or sold without significantly affecting its price. Low liquidity can lead to wider spreads, partial fills, or less favourable execution.

S

SlippageThe difference between an expected or requested execution price and the actual fill price. Slippage can be favourable or unfavourable and is more likely during fast or illiquid markets.SpreadThe difference between the bid and ask prices. If the bid is 100.00 and the ask is 100.05, the spread is 0.05. Spreads can change with market conditions.

V

VolatilityThe degree of price variation over a period. Higher volatility means larger fluctuations, without indicating whether the next move will be upwards or downwards.