Spread Betting Glossary

Ask
The price at which the currency or instrument is offered.

Ask Price (or Offer Price)
The price that you can buy to cover a short position or to go long. All spread bets are generally quoted as a two-way price (bid and offer).

Account
An account that you have with ODL Markets for placing spread bets

Account Limit
The maximum stake size that can be accrued in relation to your Account.

Active Orders
An Active Order is an order that is pending and awaiting the order level to be reached to be triggered. Once an order is triggered, it can be viewed in the Order History tab.

Balance
A balance is the amount of funds you have in an individual currency amount.

Base Currency
The currency that you choose when you open an account.

Basis Point (bp)
1bp= 0.01%.  If an interest rate rises from 5% to 5.5%, it is said to have increased by 50 basis points.

Bearish
Bear, expecting prices to fall.

Bet size
The amount of money bet per point.

Bid
The price that you can sell to cover a long position or to go short. All spread bets are quoted in a two-way price, bid and offer.

Bid-Ask Spread
The difference between the bid price and the offer price.

Bullish
Bull, expecting prices to rise

Buy
The purchase of a market. On buying a market you profit from a rise in the price and lose from a fall. On buying a market you are said to be “Long”.

Change

The change represents the difference between the current market price and the closing price of the previous day.

Cash Balance
Any cash deposited by you in your Account (excluding profits or losses on open positions).

Cash History
The Cash History lists all transactions that have changed the cash balance of your account. This includes realised profits (credit to your cash balance) or losses (debit to your cash balance) from trades and financing charges.

Cash price
The underlying instrument that is traded on a recognised exchange.  It is a price for immediate settlement, also known as the ‘spot price’

Charting
A visual method of trading or analysis of the markets using price information to form a picture of previous price movements. Also called technical analysis.

Close
Represents the closing price of the market.

Closed position
A long or short position that has been crystallised.

Commodities
Refers to instruments of raw materials or primary products. Commodities are categorised as Energy, Metals and Softs.

Cover
To sell a long position or buy back a short position

Derivative
A contract that derives its value from the value of an underlying instrument. For example, the price of the Vodafone spread bet market is derived from the price of Vodafone shares in the underlying market. A spread bet is therefore a derivative contract.

Discount
If the price of a spread bet is lower than the underlying market price of the product, the spread bet is deemed to be trading at a discount

Discovery (Limited Risk ) Account
A spread betting account offered by ODL

Dividend
A share of a company's earnings paid to each shareholder. Typically, dividends are paid bi-annually (in the UK) and are determined by the company's board of directors.

Down-Bet
Another way to describe a short position or a position which will decrease in price or value.

Energy
Refers to products relating to oil and gas and any product resulting from the the processing or refining of oil and gas. Energy commoditiestraded on exchanges such as Intercontinental Exchange (ICE).

Expiry
The date on which a spread bet expires. If you have a UK 100 March bet then this expires on a certain day in March. Different instruments have different expiry days so you must check and be aware of these dates beforehand. If you have a position in a contract which is about to expire you can either cover it, let it expire into cash or roll it over into next contract.

All future bets have an expiry day and time which is determined by ODL Markets and can be found in the Market Information Sheets. When a market expires all existing bets in that market are closed. Please refer to the Market Information Sheets for detailed information on the expiry dates of markets.

Exotics
Refers to currency pairs that are less broadly traded than any of the Major and Minor currencies.

Export
Allows you to transfer information within that panel to an external spreadsheet, enabling you to carry out more detailed analysis on your account.

Explore (Direct) Account
A spread betting account offered by ODL.

FIFO (First in First out)
FIFO describes the method in which a position is closed. FIFO implies that the trades that are opened first will subsequently be closed first. For example, you make the following trades

Trade 1 - Buy £10 UK 100 Rolling @ 6100

Trade 2 - Buy £10 UK 100 Rolling @ 6101

Trade 3 - Buy £10 UK 100 Rolling @ 6102

This takes your overall position to long £30 UK 100 Rolling bet.

If you close out £15 of the position,based on FIFO, you will close £10 of trade 1 and £5 of trade 2 as they were the first trades you made. Hence you are left with:

Trade 2. Buy £5 UK 100 Rolling @ 6101

Trade 3. Buy £10 UK 100 Rolling@ 6102

Long £15 UK 100 Rolling.

Fill or filled -
A completed order.

Flat -
Having no position (short or long).

Force Open

Force Open refers to a trade condition. This feature allows you to hold two opposing positions in the same market.

You can choose to force open a trade when you have an existing opposite open position in the same market. Ordinarily, by opening an opposite position, part or all of the existing position will be closed. However, by choosing to 'force open' you can have two open opposite position.

For example If you have a position of long £10 per point of Vodafone and you want to sell £10 Vodafone at the same time without closing out any of the original bet you can force open the trade. So, instead of closing out your original position you would open a new trade and hence be long £10 per point and short £10 per point at the same time. Your overall position is flat but you have two open bets. You might use this strategy if you are holding a long term position whilst trading intraday or for the short term.

Front Month -
The nearest month to the expiry date.

Frontier (Premium) Account
A spread betting account offered by ODL.

Gapping –
Where the price of a product has either increased or decreased with no trading occurring in between.

Gearing (or Leverage) –
The ability to profit or lose on a significantly larger scale in comparison to the amount of capital invested.  If you buy £1000 of Vodafone stock in the underlying market and it rises by 10%, your profit will be £100. But if you buy the same position using a spread bet you may only have to put up a deposit of £100; if the stock moves 10% higher your profit on capital invested will be £100 or 100%; this is gearing.

Grey Market -
Spread bet firms will often make a market on different products even after the relevant underlying market has closed, or before it has opened (often referred to as the ‘pre-market’). For example, the London Stock Exchange closes at 16:30pm, but it is possible to trade the UK 100 until 21:15.

Good For the Day (GFD)
An order to buy or sell a market at a set price that is active until the close of business on the day the order is placed, or until the order is filled.

Good until Cancelled (GTC)
An order to buy or sell a spread bet that remains active until the order is executed or is cancelled.

Good Until Time (GT)
An order to buy or sell a market with an expiry date that is set by the user. The order is valid until the close of business on the date set by the user or until the order is filled.

GTC (Good Til Cancelled) -
An order to buy or sell a spread bet that remains active until the order is executed or cancelled.

Hedging
Minimising risk by being simultaneously long and short. Perhaps someone is long £20,000 of stock in the underlying market and wants to protect this from potential downside risk. To hedge he would sell £20,000 of futures or spread bets, and if the market did go lower any loss on the stock positions would be offset by profits on the short spread bet position.

| High

Represents the highest offer price quoted for that market during the ODL trading day.

If Done Orders
An “if done” order allows you to attach stops and limits to an opening order. The “if done” order only becomes active if the opening order is triggered

For example:

The UK 100 Juneis trading @ 6450 and you want to go long at 6500 so you place a buy (limit) order at6500. At the same time you want to be able to attach a stop loss order to the buy order at 6500, should the order be triggered. Therefore you place an “if done” stop at 6480. If the opening buy order is executed at 6500 then the “If Done” order becomes active. If the UK 100 June trades down to 6480 then the stop loss will close the position.

Illiquid
A market that does not have much volume, usually characterised by a wide bid-offer spread. They are therefore usually expensive to trade.

Index Rolling Bet
A rolling bet based on an Index.

Indication price
A quote that is not a firm dealing price.  You may have a spread bet position but only want to check a price without dealing and hence may ask or an ‘indication price’.

Last Trading Day
The final day of dealing in a spread bet before it expires. Be aware that not only can the Last Trading Day be different for certain spread bets but the actual time of expiry varies depending on the product.

LIBOR
London Interbank Offered Rate.

Limit Down
The maximum amount by which the price of a futures contract may fall in one trading day

Limit Up
The maximum amount by which the price of a futures contract  may rise in a single trading day

Limit Order
An order to buy or to sell a spread bet at a specific price. Limit orders to buy are placed below the current market price.  Limit orders to sell are placed above the current market price.

Linked Order
A linked order is an order that when triggered closes part or all of an existing position it is associated with.

Liquidity or liquid
The amount of business conducted in a spread bet market. Where possible you always want to trade products that have good liquidity primarily because they are cheaper to trade due to tight bid-offer spreads. An example of a liquid stock would be any UK 100 company, while many stocks traded on the AIM market are deemed illiquid.

Long
If you buy a market, you are said to be "long" that market.

Long Position
Having bought, but not yet sold. A long position is entered with the aim of profiting from an increase in price. See also ‘Short Position’.

Long trade
A position that will make money in a rising market. As in ‘I’ve gone long the UK 100’.

Low
Represents the lowest bid price quoted for that market during the ODL trading day.

Maintenance Margin/Variation Margin
Spread bets are margined products and therefore all trades are credited/debited in real time as the trade moves in either direction. Maintenance margin can therefore be positive or negative. Contrast this to the stock market where profits/losses are only realised when the stock is physically sold.

Majors
Refers to the most active and widely traded currency pairs. Trading in the Major currencies represents approximately 90% of all FX trading

Margin
Also called Notional Trading Amount or Deposit Factor. The amount of deposited funds required to trade a spread bet. With margined products only a percentage of the nominal value has to be lodged in cash, normally between 1-20%.

Margin Call
A telephone call from your spread betting company asking for money to be deposited usually because of adverse price movements.

Market Information sheets
The sheets prepared by us that contain information relating to our product offering (as may be amended from time to time).

Market Order
An order to buy or sell a spread bet at the current bid or ask.

Mark to market
The value adjustment of an asset or liability to reflect the current market price. In spread betting this is done in real-time.

Maximum Trade size
The maximum stake that can be placed at any point in time.

Metals
Refers to products relating to the metals and precious metals. Examples are gold and silver.

Minors
Refers to less active and less liquid currency pairs.

Non-Linked Order
A non-linked order is an independent order that is not associated with any positions. However, when triggered it may affect any relevant open positions.

OCO order
OCO stands for “One Cancels the Other” and allows you to place two orders in the market simultaneously where if one order is filled the other is cancelled.

It is best explained by example:

Trader A has the view that UK 100 June bet is in a trading range of 6400 to 6500 and believes any movement above 6500 would mean higher prices and any movement below 6400 lower prices. Put simply Trader A is a buyer at 6500 and a seller at 6400.

Trader A places a buy (limit) order at 6500 and an “OCO” sell limit order at 6400.

If the FTSE trades at 6500, Trader A will buy the market. Because the order to sell at 6400 is “OCO” it will be cancelled once the buy (limit) order at 6500 is triggered.

Hence the expression, one cancels the other.

ODL, ODL Markets, we or us
ODL Securities Ltd.

Open
Represents the opening price of the market.

Open Position
A spread bet position, long or short, that has not been liquidated.

Opening range
Markets, especially busy ones, never really open at one price, rather they are given an opening range (usually the first 2 minutes) where opening orders are filled.

Order History
The Order History lists all filled, part filled and cancelled market, limit and stop orders.

Overbought
A term used to describe a market or a stock that has appreciated so rapidly and has generated such excessively bullish sentiment that a near-term decline is likely.

Oversold
A term used to describe a market or a stock that has declined so rapidly and has generated such excessively bearish sentiment that a near-term rally is likely.

Panel
A panel is a section of the trading screen. Panels include: Pricing, Deal Ticket, Account Summary and Information.

Pair’s trade
Another name for a spread trade but done with 2 stocks, usually from the same sector. Buying a spread bet on Barclays and selling HSBC is an example. The trade makes money if Barclays outperforms HSBC in either an bull or bear market.

Point
The minimum fluctuation of a spread bet trade. 0.1 is a point on the Gold market, or from 670.0 to 670.1 and 1 is a point for the UK 100. It is also referred to as a tick.

Positions
When an opening trade is executed you are said to have a position in the market. Your position is either long (where you have bought the market) or short (where you have sold the market). Positions are viewable in the Positions tab of the account summary panel.

Pre-market
Spread betting companies will make a market on certain products even before they have opened in the underlying market. For example the London Stock Exchange opens at 8am but spread betting companies may quote their prices from 7am. Not all markets are offered in pre-market, usually only the biggest and most popular ones.

Product Group
The product group describes the type of market. The product group of an instrument can be Equities, Indices, Commodities, Bonds, Foreign Exchange and so on. For example, the Vodafone Rolling market relates to the “Equity” product group because the bet is based on an equity product. Likewise Brent Oil relates to the “Commodities” product group because the bet is based on a Commodity.

RFQ (Request For Quotation)
RFQ is a situation where a request is sent to the dealer for a quote in a particular market. This is to ensure the client trades on correct prices in fast moving, illiquid markets or for larger trade sizes.

Resistance
The price at which the market expects selling to materialise.  For example, if the US Tech 100 is trading at 1,900 you may hear pundits report that ‘resistance is expected at 1,925’.

Secured Stop Loss
With a traditional stop loss a spread betting client may suffer from slippage, but a secured stop is always filled at the price the order was given at, and for this privilege there is sometimes a small charge to pay for some Accounts.  The Discovery account offers a FREE Secured stop Loss.

Sell
The sale of a market. On selling a market you profit from a fall in the price and lose from a rise. On selling a market you are said to be “Short”

Short
If you sell a market, you are said to be "short" that market.

Short Position
Having sold short, but not yet covered. A short position is entered with the aim of profiting from a price decline.

Slippage
Relates to stop losses and is the difference between where the stop loss level is and where the order was actually filled. If the stop loss order is to sell £5 of UK 100 at 6500 and is actually filled at 6498 then the 2 points is slippage. Slippage can be significant in volatile markets.

Softs
Refers to commodities that are grown rather that mined.Examples are coffee, wheat, sugar and corn.

Spot
The cash or underlying price

Spread
The difference between the buying price (offer) and the selling price (bid). If the UK 100 spread bet is quoted at 6500-6502 the spread is 2 points.

Spread trade
The simultaneous purchase of one contract and the sell of another related contract. Buying gold, selling silver is an example of a spread trade. The spread betting trader is doing the trade on the assumption that gold will out-perform silver in both a rising and falling market.

Stamp duty
Stamp duty is a government tax of 0.5% paid by the buyer on all share transactions. There is NO Stamp Duty with spread bets.

Stop Loss
A predetermined price at which a position will be closed to protect against further loss. The use of 'stop losses' is the only inherently reliable way for a trader to manage risk.

Stop Loss Order
A stop loss order is used to limit the losses on an existing positioon on an individual trade. For long positions, the stop loss would be below the market and for short positions the stop would be above the market.

For example:

If you are long £10 per point of UK 100 June @ 6500 then you would place a stop below the market to limit your potential loss. For example you could place a stop at 6450. Therefore if the market falls to 6450 an order will be automatically placed to sell £10 per point of UK 100 June @ 6450 and closing your position and “stopping the loss”.

Likewise if you are short £10 per point of UK 100 June then you would place a stop above the market

You must be aware that the stop loss only generates an order to close. If the price is moving quickly and the order cannot be traded at the order price then you will be filled at the next available price in the market. It is possible to guarantee stop orders, but there can be a small charge for this service, depending on the type of account you have.

Support
The price at which a prior decline was terminated or a future decline is likely to attract buying. If the UK 100 is currently trading at 6500, market participants may well be reporting that they expect support 'to come in at 6450'.

Tab
Allows users to toggle between different information areas within a panel.

Time in Force
Time in Force indicates how long an order will remain active before it is executed or it expires. You can set orders to be valid for any period of time.

See also:

Good for the Day.

Good until Time.

Trade History
The Trade History lists all executed trades and filled orders.

Trading Range
A market where prices are range bound by a higher and lower price band. Normally markets will range trade when there is little or no news. Relates to Technical Analysis.

Trading Resources
The aggregate of your Cash Balance, open profit and loss and any Credit Allocation, less Margin

Underlying Market
The various third parties from whom we receive prices and other analogous information, on which the ODL quote is based.

Up-Bet
Another way to describe a long position or a position which will make money in a rising market. Often referred to as a Long Position.

Volatility
The degree of movement in the price of a stock or other security.

Watchlist
A watchlist is a customised list of markets that you can create and manage.