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Orders & Trading
How trades are placed, filled, funded and settled.
- After-hours tradingTrading that takes place after the regular session closes.
- Ask (offer)The lowest price at which a seller is currently willing to sell.
- BidThe highest price a buyer is currently willing to pay.
- Bid-ask spreadThe gap between the best bid and the best ask.
- Capital gainsThe profit from selling an investment for more than its cost basis.
- Circuit breakerA rule that pauses trading after a sharp, rapid drop.
- Cost basisWhat you paid for an investment, used to work out your gain or loss.
- Day tradingOpening and closing positions within the same trading day.
- Fractional sharesOwning part of a single share instead of a whole one.
- Good-til-canceled (GTC)An order that stays active until it fills or you cancel it.
- LeverageUsing borrowed money or derivatives to control a larger position than your cash allows.
- Limit orderAn order to buy or sell only at a price you set or better.
- LiquidityHow easily something can be bought or sold without moving its price.
- Long positionOwning a security, expecting it to rise in value.
- MarginBorrowing from your broker to buy securities, using your holdings as collateral.
- Margin callA broker's demand that you add money or sell positions because your account fell below its minimum.
- Market orderAn order to buy or sell immediately at the best available price.
- Paper tradingPracticing trades with simulated money.
- Pattern day trader (PDT) ruleA US rule that limits frequent day trading in margin accounts below a minimum balance.
- Position tradingHolding positions for months to years, following larger trends.
- Pre-market tradingTrading that happens before the regular session opens.
- Settlement (T+1)The point at which a trade is final and cash and shares change hands.
- Short sellingSelling borrowed shares in the hope of buying them back cheaper.
- SlippageThe gap between the price you expected and the price you actually got.
- Stop order (stop loss)An order that becomes a market order once a set price is reached.
- Stop-limit orderA stop order that becomes a limit order, not a market order, once triggered.
- Swing tradingHolding positions for several days to a few weeks to capture a price swing.
- Trading haltA temporary stop in trading in a stock or market.
- Trailing stopA stop that moves up as the price rises, staying a set distance behind it.
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