Forex, Stock & Crypto Terms Explained

This trading glossary collects the terms that appear across KaltraPrime's forex, stocks and crypto modules. Each definition is written to be precise enough to use on its own; where a term needs more, follow the link to the module that covers it. Terms are listed alphabetically, and the letter bar jumps to each section.

How to use this glossary

Many trading terms mean slightly different things in different markets or on different platforms. "Spread" is the same idea everywhere, but "point" can mean a pip on one platform and a tenth of a pip on another, and "swap" can mean overnight financing or a crypto token exchange. Where a term is used in more than one sense, the definition below gives the meaning used across this site. When a provider's documents define a term differently, the provider's definition governs your account, so it is worth reading its glossary alongside ours.

Several entries describe rules, such as leverage caps and settlement periods, that apply in particular jurisdictions and can change. Those definitions state where the rule applies.

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Ask price

The price at which a provider or market will sell to you, and so the price you pay when you buy. It always sits above the bid. The distance between the two is the spread, a cost you pay on every trade whether or not the fee schedule mentions it.

Base currency

The first currency in a pair. In EUR/USD it is the euro, and the quote shows how many units of the second currency one unit of the base costs. Buying a pair means buying the base currency and selling the quote currency at the same time.

Bid price

The price at which a provider or market will buy from you, and therefore the price you receive when selling. Charts on many platforms are drawn from bid prices, which is why a buy order can appear to fill above the chart line.

Blockchain

A ledger of transactions grouped into linked blocks and kept in agreement by many independent computers. Changing an old entry would mean redoing all the work or stake that followed it, which is what makes confirmed transfers so hard to reverse. See how crypto works.

CFD

Contract for difference: an agreement with a provider to exchange the change in an asset's price between opening and closing a position. It gives price exposure without ownership, is usually leveraged and, for retail clients in the UK and EU, is subject to leverage caps and negative balance protection.

Client money segregation

The rule that a regulated firm must hold clients' money in accounts separate from its own funds. If the firm fails, segregated money should be returned to clients rather than used to pay the firm's creditors. Offshore entities may not be bound by the same rule.

Clone firm

A fraudulent business that copies the name, register number or address of a genuine authorised firm to appear legitimate. The giveaway is usually a different website, email or phone number from the one on the regulator's register. See scam patterns.

Custody

Safekeeping of assets on behalf of their owner. For shares bought through a broker this usually means a nominee account; for crypto it depends on who controls the private keys, the platform or you. Custody decides what happens to your assets if a firm fails.

Difficulty adjustment

Bitcoin's automatic change to how hard it is to mine a block, made every 2,016 blocks. If blocks have been arriving faster than every ten minutes on average, difficulty rises; if slower, it falls. It keeps the issuance schedule on track as miners come and go.

Dividend

A cash payment a company makes to its shareholders, usually from profits. Dividends are not guaranteed and can be cut or cancelled. Eligibility depends on holding the share before the ex-dividend date, and cross-border payments may be subject to withholding tax.

Drawdown

The fall from an account's or asset's peak value to a later low, usually expressed as a percentage. Drawdowns matter because recovery is asymmetric: an account that falls 50% needs to double to get back to where it started.

ERC20

The token standard used on the Ethereum network. USDT issued on Ethereum follows it, and Ethereum addresses start with 0x. Tokens sent under this standard exist only on Ethereum, so the receiving platform must support ERC20 deposits for that token.

Ex-dividend date

The first trading day on which a share is sold without the right to the next dividend. Buyers from that date do not receive the payment, and the share price usually drops by roughly the dividend amount at the open.

Halving

The scheduled cut in Bitcoin's block reward that occurs every 210,000 blocks, roughly every four years. The April 2024 halving reduced the reward from 6.25 to 3.125 BTC, and the next is expected around 2028. See Bitcoin explained.

Index

A single figure that tracks a basket of shares, such as the S&P 500, FTSE 100 or Nikkei 225. Each index uses its own rules for which companies are included and how they are weighted, by market value or by share price, which changes what its moves mean.

Leverage

Exposure larger than the money committed, expressed as a ratio such as 30:1. At that ratio, $1,000 of margin supports a $30,000 position. Leverage multiplies gains and losses equally, which is why regulators cap it for retail clients.

Limit order

An instruction to buy at or below, or sell at or above, a price you specify. It controls the price you pay or receive but does not guarantee a fill: if the market never reaches your level, the order simply waits or expires.

Liquidity

How easily an asset can be bought or sold without moving its price. Liquid markets have many participants and tight spreads; illiquid ones have wide spreads and can jump when a large order arrives. Liquidity also varies by time of day.

Lot

A standard unit of trade size. In forex, one standard lot is 100,000 units of the base currency, a mini lot 10,000 and a micro lot 1,000. For gold, a lot is commonly 100 troy ounces, but providers set their own contract sizes.

Maker and taker fees

A fee structure used by many crypto platforms. Orders that rest in the order book and add liquidity (makers) are usually charged less than orders that execute immediately against existing orders and remove liquidity (takers).

Margin

The collateral a provider holds while a leveraged position is open, calculated as the position's value divided by the leverage. It is not a fee, but it is money you cannot use for anything else. Use the margin calculator to estimate it.

Margin close-out

The automatic closing of positions when account equity falls too far relative to the margin in use. For retail CFD clients in the UK and EU, providers must begin closing positions when the margin level reaches 50%.

Margin level

Account equity divided by used margin, shown as a percentage. A margin level of 200% means equity is twice the margin in use. The lower it falls, the less room the account has before positions are closed.

Market maker

A firm that continuously quotes buy and sell prices and takes the other side of client trades, managing the combined risk of its clients' positions. Many retail forex and CFD providers operate this way for some or all of their business.

Negative balance protection

A rule for retail CFD clients in the UK and EU that prevents losses from exceeding the money in the trading account. Without it, a sharp gap could leave a client owing money to the provider.

Nominee account

An account in which a broker holds shares on behalf of its clients. The shares are registered in the nominee's name but belong to the clients and are kept legally separate from the broker's own assets.

Order book

The live list of buy and sell orders waiting at each price on an exchange or trading platform. Its depth shows how much can be traded near the current price before the price has to move.

Pip

The standard unit of price movement in forex: 0.0001 for most pairs and 0.01 for pairs quoted in Japanese yen. On a standard lot of a pair quoted in US dollars, one pip is worth $10. See the pip calculator.

Private key

The secret number that authorises spending from a crypto address. Whoever holds it controls the funds, which is why wallets back it up with a recovery phrase and why no genuine service will ever ask for it.

Proof of work

A consensus method in which miners spend computing power searching for a value that makes a block valid. The first to find one adds the block and earns the reward. Bitcoin uses it to make rewriting history prohibitively expensive.

Quote currency

The second currency in a pair, in which the price is expressed. In USD/JPY it is the yen. Pip values are first worked out in the quote currency and then converted into the currency of your account.

Recovery phrase

A list of 12 or 24 words that backs up a wallet's private keys and can restore access on a new device. Anyone who sees it can take the funds, so it should be written down offline and never typed into a website or shared.

Rollover

The daily process at 17:00 New York time in which open forex positions are moved to the next value date. Financing, known as swap, is charged or paid at this point, and spreads often widen for a short time around it.

Settlement

The final exchange of an asset for payment, when ownership formally changes hands. US shares settle one business day after the trade (T+1); a crypto transfer settles when it is confirmed on its blockchain.

Slippage

The difference between the price you expected when placing an order and the price at which it was actually filled. It is most common on market and stop orders during fast markets, news releases and gaps.

Spread

The gap between bid and ask prices. You pay it implicitly on every trade, and it widens when liquidity is thin, for example around the daily rollover or major announcements. See trading fees explained.

Stablecoin

A crypto token designed to keep a steady value, usually one US dollar, through reserves held by an issuer, crypto collateral or supply rules. Stability is an aim, not a guarantee. See USDT explained.

Stop-loss

An order that closes a position once the price reaches a set level, limiting the loss on a trade. In a gap, the fill can be worse than the stop level unless the provider offers a guaranteed stop.

Swap

The overnight financing charge or credit applied to a leveraged position held past the daily cut-off. On forex it reflects the interest-rate difference between the two currencies, adjusted by the provider's markup.

TRC20

The token standard used on the Tron network. USDT on Tron follows it, and Tron addresses start with the letter T. A TRC20 transfer can only be received by an address and platform that support that network.