Every term you're likely to meet, from account opening to advanced orders — 120 definitions, alphabetical, in plain English. No jargon in the definitions; that would defeat the point. Jump by letter, or type in the filter box.
A
- After-hours dealing
- Trading a market outside its underlying exchange's normal hours. Many providers quote major indices and some shares round the clock on weekdays, but spreads are usually wider and prices can move sharply when the underlying market reopens.
- AIM
- The Alternative Investment Market, a sub-market of the London Stock Exchange for smaller growth companies. AIM shares are often less liquid, so spreads on them tend to be wider.
- Appropriateness test
- A questionnaire FCA rules require providers to give new applicants, checking they understand leverage and the risks of spread betting before an account is opened.
- Arbitrage
- Trying to profit from a price difference for the same asset in two places by buying in one and selling in the other. Genuine arbitrage opportunities are rare and short-lived in modern markets.
- Auction
- A fixed window in which buy and sell orders are pooled and matched at a single price. The London Stock Exchange's closing auction after 4.30pm sets the official closing prices used to settle many daily bets.
B
- Backwardation
- When the futures price of a commodity is below the spot price, so later delivery is cheaper. The opposite of contango.
- Base rate
- The official interest rate set by the Bank of England. It feeds directly into the overnight financing charged on rolling daily bets.
- Basis point
- One hundredth of a percentage point. If a rate rises from 4.00% to 4.25% it has risen 25 basis points.
- Bear
- Someone who expects prices to fall. A bear market is a prolonged decline, conventionally a fall of 20% or more from a peak.
- Bid price
- The lower of the two prices in a quote — the price at which you sell (go short) or close a long position.
- Binary option
- A fixed-odds bet with only two outcomes: you win a set amount or lose your stake. The FCA banned the sale of binary options to retail clients in 2019.
- Blue chip
- A large, well-established company, usually a household name. Blue-chip shares tend to be liquid with tighter spreads, though the label is no guarantee of safety.
- Bond
- A tradeable IOU issued by a government or company, paying interest and repaying its face value at maturity. Spread bets are offered on major government bond markets such as gilts and US Treasuries.
- Bull
- Someone who expects prices to rise. A bull market is a prolonged period of rising prices.
C
- Cable
- Traders' nickname for the GBP/USD exchange rate, one of the most heavily traded forex markets.
- CAC 40
- The main French stock index, tracking 40 of the largest companies listed in Paris.
- Call option
- A contract giving the right, but not the obligation, to buy an asset at a fixed price by a set date. The opposite of a put option.
- Capital gains tax (CGT)
- Tax on profits from selling assets such as shares. Spread betting profits are currently exempt from CGT for UK residents, though tax treatment depends on individual circumstances and rules can change.
- CFD (contract for difference)
- A leveraged derivative similar to a spread bet, but priced per contract in the asset's own currency. CFD profits are liable to CGT, unlike spread betting profits, though both avoid stamp duty.
- Client money segregation
- The FCA requirement that providers hold retail client funds in accounts separate from the firm's own money, so client cash is protected if the firm runs into trouble.
- Closing a position
- Ending a bet and crystallising the profit or loss. You close a buy bet by selling the same stake, and vice versa.
- Commodities
- Physical goods traded on financial markets — hard commodities such as gold and oil, and soft commodities such as coffee and wheat. Popular spread betting markets, often highly volatile.
- Contango
- When the futures price of a commodity is above the spot price, typically reflecting storage and financing costs. The opposite of backwardation.
- Cryptocurrency derivatives
- Spread bets and CFDs on cryptocurrencies. The FCA banned their sale to UK retail clients in January 2021, so FCA-regulated providers cannot offer them to retail accounts.
- Currency pair
- Two currencies quoted against each other, such as GBP/USD or EUR/USD. Buying the pair is a bet that the first (base) currency will strengthen against the second.
D
- DAX 40
- Germany's main stock index, tracking the 40 largest companies listed in Frankfurt. It expanded from 30 to 40 constituents in 2021.
- Day trading
- Opening and closing positions within a single trading day rather than holding overnight. It avoids financing charges, but frequent trading multiplies spread costs.
- Demo account
- A practice account using virtual money on the provider's real platform. Useful for learning the mechanics, though it cannot replicate the pressure of risking real money.
- Derivative
- A financial product whose price is derived from an underlying market rather than from owning the asset itself. Spread bets, CFDs, futures and options are all derivatives.
- Dividend
- A portion of a company's profits paid to shareholders. Spread bettors do not receive dividends directly, but positions are adjusted to reflect them.
- Dividend adjustment
- The credit (for longs) or debit (for shorts) applied to rolling positions when a share or index constituent goes ex-dividend, so nobody gains or loses from the automatic price drop.
- Dow Jones Industrial Average
- A price-weighted index of 30 large US companies, often quoted by providers under the market name 'Wall Street'.
E
- Economic indicators
- Scheduled statistics such as inflation, employment and GDP figures. Markets can move sharply — and gap — around major releases.
- Ex-dividend
- The date from which a share trades without entitlement to its next dividend. The share price normally falls by roughly the dividend amount that morning.
- Expiry date
- The date a quarterly or futures-style bet automatically closes and settles unless you close or roll it earlier. Rolling daily bets have no expiry.
- Exposure / notional
- The full market value your stake controls: roughly price × stake. For example, a £2-a-point bet on the FTSE 100 at 10,650 is about £21,300 of exposure.
F
- Fast market
- A period of frantic trading and rapidly changing prices, often after news. Orders are more likely to suffer slippage and quotes may briefly lag.
- FCA
- Financial Conduct Authority — the UK regulator. Only trade with FCA-authorised providers.
- Federal Reserve
- The central bank of the United States. Its interest-rate decisions move markets worldwide, including UK indices and GBP/USD.
- Forex (FX)
- The foreign exchange market, where currencies are traded in pairs. It is the largest and most liquid financial market, and a major category of spread betting.
- FSCS
- UK compensation scheme protecting eligible client money up to £85,000 if a regulated firm fails.
- FTSE 100
- The index of the 100 largest companies listed in London, including names such as Shell, AstraZeneca and HSBC. The most widely traded UK index among spread bettors.
- FTSE 250
- The index of the next 250 largest UK-listed companies after the FTSE 100. Often seen as a better barometer of the domestic UK economy, since many FTSE 100 firms earn most of their revenue overseas.
- Futures contract
- An exchange-traded agreement to buy or sell an asset at a fixed price on a set future date. Futures prices underpin providers' quarterly bet quotes and differ from spot prices by carrying costs and expected dividends.
G
- Gapping
- A price jumping levels (e.g. over news or a weekend) without trading in between.
- Gearing
- Another word for leverage. It also describes a company's debt relative to its equity — a highly geared company carries a lot of borrowing.
- Gilts
- UK government bonds, a common spread betting market. Gilt prices rise when interest-rate expectations fall, and vice versa.
- Going long
- Buying — profiting if the price rises.
- Going short
- Selling — profiting if the price falls.
- Good for the day (GFD)
- An order that expires automatically at the end of the trading day if it has not been filled.
- Good till cancelled (GTC)
- An order that stays active until it is either filled or you cancel it.
- Grey market
- A market some providers quote on a company's expected value before it lists — for example, betting on where an IPO will close on its first day. Prices are estimates and spreads are wide.
- Guaranteed stop
- A stop that always fills at your level, for a wider spread or premium.
H
- Hang Seng Index
- The main stock index of Hong Kong, tracking the largest companies listed there. It trades overnight UK time.
- Hedging
- Opening a position designed to offset risk elsewhere — for example, shorting the FTSE 100 to protect a portfolio of UK shares. Hedges cap losses but also cap gains, and they carry their own costs.
I
- Index
- A number representing the combined value of a basket of shares, such as the FTSE 100 or S&P 500. Indices are the most popular spread betting markets.
- Indicative price
- A price shown for information only, which the provider is not obliged to deal at. Common outside market hours or in fast markets.
- IPO
- Initial public offering — the first sale of a company's shares to the public when it lists on an exchange.
L
- Last dealing day
- The final day (and time) on which you can open or close a bet on a particular expiry before it settles.
- Leverage
- Controlling a large exposure with a small deposit. Magnifies gains and losses equally.
- Leverage limits
- FCA caps on retail leverage: 30:1 on major currency pairs, 20:1 on major indices and gold, 10:1 on most other commodities and 5:1 on individual shares — equivalent to minimum margins of 3.33% to 20%.
- Limit order
- An order closing (or opening) a position at a chosen better price.
- Limited-risk bet
- A bet with a guaranteed stop attached, so your maximum possible loss is fixed and known before you open it.
- Liquidity
- How easily a market can absorb trades without prices moving. Liquid markets have tight spreads; illiquid ones have wider spreads and more slippage.
- London Stock Exchange (LSE)
- The main UK stock exchange, home of the shares underlying the FTSE indices. Normal trading hours are 8am to 4.30pm.
- Loss rate disclosure
- The provider's published percentage of retail accounts that lose money — required by the FCA.
M
- Margin
- The deposit required to open and hold a leveraged position.
- Margin call / close-out
- When losses erode your funds below required margin, providers demand top-up and must close retail positions at 50% of required margin.
- Market capitalisation
- A company's stock market value: shares in issue multiplied by the share price. Used to rank companies for indices such as the FTSE 100.
- Market hours
- The times when the underlying exchange is open — 8am to 4.30pm for London shares. Many providers quote major indices and forex almost 24 hours on weekdays.
- Market maker
- A firm that quotes two-way (buy and sell) prices and earns the spread. Spread betting providers act as market makers in their own quotes.
- Market order
- An instruction to deal immediately at the best available price. It guarantees execution but not the price, so it can suffer slippage in fast markets.
- Mid price
- The midpoint between the bid and offer prices. Charts and settlement levels are usually based on the mid price.
N
- Nasdaq 100
- An index of 100 of the largest non-financial companies on the US Nasdaq exchange, dominated by technology firms. Providers often quote it as 'US Tech 100'.
- Negative balance protection
- FCA rule: retail accounts cannot go below zero.
- Nikkei 225
- Japan's headline stock index, covering 225 companies listed in Tokyo.
O
- Offer price
- The higher of the two prices in a quote, also called the ask — the price at which you buy (go long) or close a short position.
- One cancels the other (OCO)
- Two linked orders, typically a stop and a limit, where filling one automatically cancels the other.
- Open position
- A live bet that has not yet been closed, so its profit or loss is still moving with the market.
- Option
- A contract giving the right, but not the obligation, to buy (call) or sell (put) an asset at a set price by a set date.
- Overnight financing
- The daily interest charge (or occasionally credit) applied to rolling positions held overnight, usually based on a benchmark rate such as SONIA plus the provider's markup. It makes rolling bets expensive to hold long term.
- Overtrading
- Placing too many bets too often, typically while chasing losses. Every trade costs the spread, so overtrading steadily erodes an account even without bad calls.
P
- Pairs trading
- Going long one instrument and short a related one — for example, long one supermarket, short another — to trade their relative performance rather than the market's direction. It reduces market risk but doubles spread costs and does not guarantee a profit.
- Partial close
- Closing part of an open bet by dealing in the opposite direction for a smaller stake, locking in some profit or loss while leaving the rest running.
- Pip
- The standard unit of movement in forex, usually the fourth decimal place (0.0001) of a currency pair. The forex equivalent of a point.
- Point
- The unit of price movement you're betting on; its size varies by market.
- Professional client
- A trader who opts out of retail protections after meeting FCA tests on experience, trading frequency and assets. Professionals can access higher leverage but lose negative balance protection and other safeguards.
- Put option
- A contract giving the right, but not the obligation, to sell an asset at a fixed price by a set date. The opposite of a call option.
Q
- Quarterly / futures bet
- A bet with a set expiry; funding is built into a wider spread.
R
- Range trading
- A strategy of buying near the bottom and selling near the top of a sideways price range. It fails when the price finally breaks out of the range.
- Resistance
- A price level a market has repeatedly struggled to rise above, because sellers tend to appear there. The upper counterpart of support.
- Retail client
- The default FCA classification for individual traders, carrying the full set of protections: leverage limits, negative balance protection, margin close-out rules and standardised risk warnings.
- Risk management
- The discipline of limiting what any one bet can cost you — sizing stakes sensibly, using stops and never risking money you cannot afford to lose.
- Rolling daily bet
- A bet with no expiry that rolls overnight with a financing charge.
- Rollover
- Moving a position from an expiring contract into the next one instead of letting it settle. Usually offered at a reduced spread, but it still carries a cost.
S
- S&P 500
- The main US stock index, tracking around 500 of the largest companies listed on the New York Stock Exchange and Nasdaq.
- Settlement price
- The price at which a bet is closed and its final profit or loss calculated — for daily bets, usually the official closing price of the underlying market.
- Slippage
- The difference between the price you asked for and the price you got.
- SONIA
- The Sterling Overnight Index Average, the benchmark UK overnight interest rate that replaced LIBOR. Providers typically base overnight financing charges on SONIA plus their own markup.
- Spot price
- The current price for immediate delivery of an asset, also called the cash price. Contrast with futures prices, which are for later delivery.
- Spread
- The gap between the sell and buy price — the provider's charge for the trade.
- Spread betting
- Betting a stake per point on whether a market's price will rise or fall, using leverage, without owning the underlying asset. Profits are currently tax-free for UK residents, but the majority of retail accounts lose money.
- Stake
- The amount you bet per point of price movement (e.g. £2/pt).
- Stamp duty
- The 0.5% tax on purchases of UK shares. It is not payable on spread bets, because you never actually buy the shares.
- Stop-loss
- An order closing a losing position at a chosen level. Can slip in fast markets.
- Strike price
- The fixed price at which an option holder can buy (call) or sell (put) the underlying asset.
- Support
- A price level a market has repeatedly struggled to fall below, because buyers tend to appear there. The lower counterpart of resistance.
T
- Technical analysis
- Studying charts of past prices and volume to try to anticipate future moves. Widely used, but no method reliably predicts markets.
- Tick
- The smallest price increment a market can move by. Often used interchangeably with 'point', though a point can span several ticks in some markets.
- Trailing stop
- A stop-loss that automatically follows the price at a set distance when the market moves in your favour, locking in gains while the position stays open. Like any ordinary stop, it can suffer slippage.
- Trend
- A sustained directional move: an uptrend makes higher highs and higher lows, a downtrend lower highs and lower lows.
U
- Underlying market
- The real market — the share, index, currency pair or commodity — from which a spread bet's price is derived. You trade the provider's quote, not the underlying itself.
- Unrealised profit/loss
- The running profit or loss on your open positions if you closed them at current prices, also called open trade equity. Nothing is banked until you actually close.
V
- Variation margin
- Extra funds required to cover running losses on an open position, on top of the initial margin paid to open it.
- Volatility
- How much and how fast prices swing. Higher volatility means bigger potential profits and losses, wider spreads and more risk of gapping.
W
- Wall Street
- Shorthand for the US financial markets; providers commonly use it as the market name for the Dow Jones Industrial Average.
- Working order
- Any order — stop, limit or otherwise — that is active in the market but has not yet been filled or cancelled.
No terms match — try a shorter word.
The rule that outranks every guide: never bet more than you can afford to lose.
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