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This is a state when the price of a futures contract is trading lower than the expected spot price.
Learn more about backwardation
The interest rate a central bank will charge for lending to other banks.
In trading the term base currency is the first currency listed in a currency pair. It can also mean the accounting currency used by banks and other businesses.
A basis point is a unit of measurement, equal to one one-hundredth of a percent (0.01%). It is used to quantify the change between two percentages, also sometimes referred to as ‘bp’, which is pronounced ‘bip’ or ‘beep’.
A bear trader wants to short sell financial instruments, believing that a market, asset or financial instrument is heading in a downward trajectory. Opposite to “bulls” or “bull traders.”
When the market is on a sustained downward trajectory, with the majority of investors selling.
Being bearish means a trader believes that a market, asset or financial instrument is going to experience a downward trajectory. Opposite of “bullish.”
Bear call spread
A strategy in options trading, combining a short call option and a long call option with a higher strike. Basically, a short call with lower strike price + long call with a higher strike price.
A measure of the risk or volatility of a security or portfolio, when compared to the wider market.
The price a trader is willing to pay for a certain asset.
The difference between the best buy price (bid) and best sell price (offer) for an asset.
Blue chip stocks
Blue-chip stocks are the shares of companies that are reputable, financially stable and long-established. A company that is considered blue chip is generally large, at the top of its sector, features on a recognised index, and has a well-known brand. Blue chip stocks may change over time and are therefore difficult to define.
Bollinger bands are a popular form of technical price indicator, based on an asset’s simple moving average (SMA). Often referred to as a ‘lagging indicator,’ as they are reactive not predictive.
Bond trading is one way of making profit from fluctuations in the value of corporate or government bonds. This definition can also mean the trading of bonds by a broker on the floor of an exchange.
Bonds investment securities, that involve lending money to an institution for a fixed period of time. They can come in two varieties: corporate bonds and government bonds.
The monetary value of an asset reflected in an entity’s accounting books/balance sheet, not based on future appreciation or depreciation.
A company’s bottom line refers to the profit, net income, net earnings or earnings per share (EPS) of a business.
Brent crude is one of the major oil benchmarks used by those trading oil contracts, futures and derivatives. As oil from different fields varies in value, oil benchmarks are a way for traders to understand which types of oil they are trading. Brent crude is mostly drilled from the North Sea oilfields: Brent, Forties, Oseberg and Ekofisk (BFOE).
A broker is an independent person or a company that organises and executes financial transactions on behalf of another party. They can do this across a number of different asset classes, including stocks, forex, real estate and insurance. A broker will normally charge a commission for the order to be executed.
Bull traders believe that a market, instrument, or sector is going on an upward trajectory. Opposite to “bears” or “bear traders.”
Bull call spread
A trading strategy that takes advantage of upward market movements, while limiting profit and loss. It is used by trader when they believe a stock will have a limited increase in price.
Learn more about Bull Call Spreads
A market when the majority of investors are buying. Opposite of “bear market.”
Expecting that a market, asset or financial instrument is going to experience an upward trend and acting accordingly. Opposite of “bearish.”
Taking ownership of a financial asset, whether it is a commodity, stock or another asset.
Refers to the holder of an option, who has the right to purchase the underlying security.
Disclaimer: Articles are from GO Markets analysts and contributors and are based on their independent analysis or personal experiences. Views, opinions or trading styles expressed are their own, and should not be taken as either representative of or shared by GO Markets. Advice, if any, is of a ‘general’ nature and not based on your personal objectives, financial situation or needs. Consider how appropriate the advice, if any, is to your objectives, financial situation and needs, before acting on the advice. If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.