Glossary
Arbitrage
Arbitrage is a strategy where a commodity is purchased on different exchanges at different prices. For example, one can buy a product at a lower price on one platform and sell it at a higher price on another exchange, profiting from the price difference.
Bulls
Bulls are market participants oriented towards increasing the value of a product or an asset. They believe in the potential for price increase and seek to profit from this growth by buying assets in anticipation of a future trend.
Devaluation
Devaluation is an economic mechanism where the official exchange rate of a currency decreases compared to its initial value, which can have a significant impact on the country's economy, including the export and import of goods and services.
Divergence
Divergence is a situation where the price of an instrument changes in the opposite direction relative to other factors or data, which may indicate potential changes in the trend or market direction.
Diversification
Diversification is a strategy in which resources or investments are allocated among different asset categories or investment opportunities to reduce the potential risks associated with market fluctuations.
Dealing systems
Dealing systems are computer networks that connect investment banks around the world to facilitate and manage currency market operations, ensuring effective interaction and access to global financial resources.
Consumer price index
The consumer price index is a statistical indicator that evaluates changes in the value of a variety of goods and services each month to measure inflation or devaluation in the economy, the increase in the value of a product or asset. They believe in the potential for price appreciation and seek to capitalize on this growth by buying assets in hopes of a future trend.
Margin trading
Margin trading is a strategy in which a trader uses leverage, which means trading with funds lent by a broker to increase potential profits, but also increases the risk of losses.
Bears
Bears are investors who profit from the decline in the value of assets in the market, namely by selling goods hoping that their price will subsequently decrease, allowing them to profit from the difference in value.
Pip
A pip is a unit of measure that reflects the slightest changes in the value or quote of an asset on an exchange. It is usually used to express changes in prices or percentage changes.
Swap
A swap is a contract to exchange interest rates on a loan, in which one party, having a fixed interest rate, may decide to switch to a floating rate or vice versa, depending on their financial expectations and strategy. It is a tool that allows market participants to manage their interest rate risks.
Split
A split is the process of increasing the number of shares available in the market by dividing each original security into a number of lower-priced shares. This can be done to increase the liquidity of the asset and make it more accessible to the general public.
Spread
A spread is the difference between the purchase price and the sale price of an asset. It represents the minimal movement of value in your favor, which is required is required to make a trade profitable.
Hedging
Hedging is a strategy in financial markets where one investment position is used to protect against losses in another position. This enables risk management and more stable financial results.