This trading glossary collects the words that come up across our answers on crypto, forex and shares. Each definition is kept short and practical, with a link to the page that explains the idea in depth. Terms are listed alphabetically; tap a letter to jump.
- Address
- A string of characters that identifies where crypto can be received on a particular blockchain, much like an account number. USDT addresses on Tron start with T and on Ethereum with 0x. Addresses are public, so anyone can see the balance, but a transfer to the wrong address or network usually cannot be reversed. See USDT networks.
- Address poisoning
- A scam in which someone sends a tiny amount of crypto from an address that looks almost identical to one you use, so that it appears in your transaction history. The hope is that you later copy it by mistake. The defence is simple: always copy an address from its original source and check both ends.
- Ask price
- The price at which you can buy right now, also called the offer. It always sits slightly above the bid, the price at which you can sell, and the gap between the two is the spread. On a fast-moving market the ask can change between the moment you look and the moment your order arrives.
- Base currency
- The first currency in a pair and the one you are buying or selling. In EUR/USD the euro is the base, and the price tells you how many US dollars one euro costs. In BTC/USDT, bitcoin plays the same role and USDT is the currency the price is expressed in.
- Bid price
- The price at which you can sell right now. If you buy at the ask and immediately sell at the bid, you lose the spread, which is why every new trade starts slightly behind. Bids are usually highest and spreads narrowest when a market is busy.
- Blockchain
- A shared record of transactions, grouped into blocks and linked in order, kept in identical copies by many computers. Because each block builds on the last, changing an old entry would mean overpowering the rest of the network. Bitcoin, Ethereum and Tron each run their own blockchain. See how crypto works.
- CFD
- Contract for difference: an agreement with a provider that pays out the change in an asset's price between opening and closing, without you owning the asset. Most retail forex, index and share trading outside the US uses CFDs, usually with leverage, overnight financing and the provider as the other party.
- Clone firm
- A fake company that copies the name, registration number, address or website design of a genuine regulated firm to borrow its credibility. The giveaway is usually a different phone number, email or web address from the one on the regulator's register. See how to choose a broker.
- Custody
- Who holds an asset on your behalf and under what rules. With a regulated stock broker, shares are usually held in segregated nominee accounts. On a crypto platform, the platform normally holds the private keys, so your coins are only as safe as the firm. In a self-custody wallet, you hold the keys yourself.
- Dividend
- A cash payment a company makes to its shareholders, usually out of profits, often quarterly or twice a year. Dividends are decided by the company's board, are never guaranteed and can be cut or cancelled when business weakens. See how the stock market works.
- ERC20
- The token standard on the Ethereum blockchain. USDT on Ethereum is labelled ERC20 on most platforms, uses addresses beginning with 0x, and pays network fees in ether that can rise sharply when the network is busy. Several other networks also use 0x addresses, so always check the network name.
- Gap
- A jump in price between one trade and the next with no trading in between, typically when a market reopens after news broke while it was closed. Shares gap at the open, forex can gap at the Sunday reopening, and a stop-loss order can be filled well beyond its level in a gap.
- Halving
- The event, roughly every four years or 210,000 blocks, when the reward for mining a Bitcoin block is cut in half. The April 2024 halving reduced it from 6.25 to 3.125 BTC, and the next is expected around 2028. It slows new supply but does not set the price. See what Bitcoin is.
- Index
- A single number that tracks a basket of shares, such as the S&P 500, FTSE 100 or Nikkei 225, to show how a market or sector is performing. Indices differ in how they weight companies, by market value or by share price, which is why two can move differently on the same day. See how to read the stock market.
- KYC
- Know your customer: the identity and background checks regulated firms must carry out before letting you deposit or trade, usually a photo ID and proof of address. They are tedious but protective. A platform that takes deposits without any checks is likely operating outside the rules.
- Leverage
- Borrowed exposure that lets you control a position larger than the money you put down. At 30:1, $1,000 of margin controls a $30,000 position, so a 1% move changes your account by $300. Gains and losses are multiplied alike, which is why regulators cap retail leverage. See the margin calculator.
- Limit order
- An instruction to buy at no more than, or sell at no less than, a price you set. It protects you from paying more than you intended, but if the market never reaches your price, the order is never filled. Limit orders usually count as maker orders on crypto exchanges.
- Liquidation
- The forced closing of a leveraged position when losses have used up too much of the margin backing it. In the UK and EU, retail CFD positions must be closed once the margin level falls to 50%. On lightly regulated crypto platforms, liquidation can wipe out a position's entire margin in minutes.
- Lot
- A standard trade size in forex: 100,000 units of the base currency for a standard lot, 10,000 for a mini lot and 1,000 for a micro lot. Gold is commonly traded in lots of 100 ounces. Lot size, together with pip size, decides what each price move is worth in money.
- Maker and taker fees
- Crypto exchange fees that depend on how your order interacts with the order book. A maker order, such as a limit order that waits, adds liquidity; a taker order, such as a market order, removes it by trading immediately. Takers usually pay a higher rate, and fees apply on both buying and selling.
- Margin
- The deposit a provider holds while a leveraged position is open, set by the position's value divided by the leverage. It is collateral, not a cap on your loss: profits and losses are based on the full position. If your equity falls too far relative to margin, positions are closed automatically.
- Market order
- An instruction to buy or sell immediately at the best price currently available. It is the fastest way to trade, but in a thin or fast market the fill can be noticeably worse than the last price you saw, a difference known as slippage.
- MiCA
- The European Union's Markets in Crypto-Assets regulation, which requires crypto service providers serving EU customers to be authorised and sets rules for stablecoin issuers, including reserves and disclosures. USDT is not authorised under it, so licensed EU platforms have restricted it for EU customers.
- Mining
- The process by which specialised computers compete to add new blocks to the Bitcoin blockchain by solving a costly calculation. The winner earns newly created bitcoin plus the fees paid by the transactions in that block. Mining is what makes rewriting Bitcoin's history impractically expensive.
- Negative balance protection
- A rule that stops retail clients losing more than the money in their trading account, even if a fast market closes a position at a large loss. It applies to retail CFD clients in the UK and EU. Professional clients and clients of firms outside these regimes may not have it.
- Order book
- The live list of buy orders (bids) and sell orders (asks) waiting at each price on an exchange. The best bid and best ask sit at the top, and the quantities below show how much could trade before the price moves. A thin order book means larger orders move the price further.
- Pip
- The standard unit of price movement in forex: 0.0001 for most pairs and 0.01 for pairs quoted in Japanese yen. On pairs quoted in US dollars, a pip on one standard lot is worth $10. Pips make it easy to compare moves and costs across pairs. See the pip calculator.
- Quote currency
- The second currency in a pair, the one the price is expressed in and the one your profit or loss is first calculated in. In EUR/USD it is the US dollar; in USD/JPY it is the yen; in BTC/USDT it is USDT. Results in other quote currencies are converted back to your account currency.
- Recovery phrase
- A list of 12 or 24 words that can restore a crypto wallet and everything in it on any device. Anyone who has the phrase controls the funds. It should be written down offline, never photographed, shared or typed into a website, and no genuine company will ever ask for it.
- Rollover
- The daily moment, 17:00 New York time in forex, when open positions carry over into the next trading day and overnight financing is charged or credited. Spreads often widen for a few minutes around it. In forex, Wednesday's rollover usually carries three days of financing to cover the weekend.
- Satoshi
- The smallest unit of bitcoin, named after its creator: one hundred-millionth of a coin, or 0.00000001 BTC. Prices are sometimes quoted in sats for small amounts. With Bitcoin at $62,500, one dollar buys 1,600 sats.
- Settlement
- The final exchange of cash and asset after a trade is agreed. US shares settle one business day after the trade date, known as T+1, while spot forex conventionally settles two days after. A crypto transfer settles on the blockchain once it has enough confirmations.
- Slippage
- The difference between the price you expected and the price you actually got. It is most common with market orders and stop-loss orders in fast markets, around big news releases or in thinly traded assets. Slippage can work in your favour, but more often it does not.
- Spread
- The gap between the bid and ask prices, and a cost paid on every trade whether or not you also pay commission. Spreads are tightest on busy markets at busy times and widen at night, around news and on less traded assets. See trading fees explained.
- Stablecoin
- A crypto token designed to hold a steady value, usually one US dollar, typically backed by reserves held by the company that issues it. USDT and USDC are examples. A stablecoin is not a bank deposit, is not covered by deposit insurance and can slip below its target in stressed markets.
- Stop-loss order
- An order that closes a position once the price reaches a level you set, to limit a loss. It turns into a market order when triggered, so in a gap or a fast market it can be filled at a worse price than the level. Some providers offer guaranteed stops for an extra fee.
- Swap
- An overnight financing charge or credit on leveraged forex and CFD positions held past the daily rollover. It reflects the interest-rate difference between the two currencies plus the provider's markup. For positions held for weeks, swaps can become the largest cost of the trade.
- TRC20
- The token standard on the Tron blockchain. USDT on Tron is labelled TRC20, uses addresses beginning with T and usually has low transfer fees, which makes it popular for moving USDT between platforms. It cannot be received on an Ethereum address, and vice versa.
- USDT
- Tether's US dollar stablecoin, the most traded crypto token and the main pricing currency on many platforms. It runs on several blockchains, and Tether can freeze tokens at specific addresses. Its value depends on the company's reserves and its ability to meet redemptions. See USDT explained.
- Volatility
- How much and how quickly a price moves. Crypto is typically far more volatile than major currencies or large-company shares, which means larger potential gains but also deeper and faster losses. Volatility is also why position size matters more than being right about direction.