Market Terms

Hedging is an effective strategy to reduce and control investment risks. Visit the AvaTrade education centre to learn more about hedging today!

Market cycles dictate the trend direction in financial markets ⭐ Find out what drives the markets & how you can use it in your strategy.

A swap is a rollover interest that you earn or pay for holding your positions overnight, depending on the interest rates of the currencies.

Are you wondering if contango is bullish or bearish? ⭐ Contango is assumed when the forward curve is rising relative to the spot price.

In trading, it refers to the drop in a trader's account, while in banking it refers to how much credit a borrower is accessing.

Slippage is the difference between a trade’s expected price and the actual price at which the trade is executed. ➤ Read more.

Learn about different types of arbitrage in financial markets - Currency, statistical & triangular arbitrage. ⭐ How to use it for profit?

How Liquidity Affects Forex Trading Strategy? ⭐ What are Liquid and Illiquid Assets? ⭐ Opportunity to Boost your Trades...

Learn about carry trading. ⭐ Utilize this powerful trading strategy to take advantage of interest rate differential when trading Forex.

Learn how volatility affects markets, explore real-world cases, and discover trading strategies to manage risk and seize opportunity with AvaTrade.

A practical guide to decentralised finance—how it works, key risks, and ways to stay safe. Build confidence with AvaTrade.

Gamma squeezes have been a more common occurrence in recent months. They present lucrative opportunities for modern investors. Learn more today!

Discover why investors HODL crypto: explore psychological drivers, global tax considerations, exit signals, case studies and risk warnings with AvaTrade.

The petrodollar has assisted the USD in dominating the global economy. Learn more with AvaTrade about the petrodollar system and its impact on the markets.

Discover how free float affects liquidity, volatility, and trading decisions. Learn how to evaluate float levels with AvaTrade’s expert insights and tools.

A drawdown refers to how much an account has fallen from its peak to its trough in terms of capital or investment amount.

Learn how to read an options chain with our comprehensive guide. Unlock key insights, manage risk and make informed options trading decisions with confidence.

Learn about currency pegging (fixed exchange rate) ⭐ Why countries do it? ⭐ How it creates arbitrage opportunities in Forex trading?

Learn what causes stock market crashes, how to navigate them, and ways traders can turn volatility into opportunity—insights and strategies from AvaTrade.

Understand contango vs backwardation, roll yield mechanics, and curve-reading tactics to design smarter futures and CFD strategies.

Understand dividends: key dates, yields, payout ratios and ex-date pricing. A clear global overview for 2026. Learn with AvaTrade.

Stock market indexes provides a glimpse into a country’s economy by looking at how its major corporations are faring ➤ For beginners.

We pay a premium to keep a position open overnight. ⭐ But what happens when the formula involves a negative exchange rate?

Your activities are directed by the time of day ⭐ where in the world is your desired asset up for sale or purchase, & are they awake?

A gearing ratio is a financial ratio that measures a company's financial leverage or risk level and is used in investment risk assessment. Learn more here!

A meme stock refers to shares of a company that has viral online and garnered massive attention from retail investors. Learn more about them here!

Learn how to use the Sharpe Ratio for risk-adjusted trading. See real examples, case studies, and apply it with AvaTrade’s advanced platforms.

Discover what a pip is, how to calculate pip value, and why it matters in Forex trading. Learn with real examples and tools from AvaTrade.

Learn how to use the Treynor Ratio to measure market risk-adjusted returns. See real examples and apply it with AvaTrade’s trading platforms.

A block trade is the purchase or sale of a large number of securities at an arranged price between two parties. Join Avatrade today!

Learn about the different types of price weighting ⭐ Gain an insight into how different cultures measure success and importance.

Understand ATM options fast: Greeks, time value, and trader setups. See why ATM is volatility-focused and how to execute cleanly with AvaTrade.

Learn how deep-in-the-money options work, when to use them, and how to manage execution, dividends and risk—so you trade with confidence on AvaTrade.

Discover how to calculate intrinsic value using DCF: forecast free cash flows, choose the right discount rate, model terminal value, and run sensitivity tests.

Discover how in-the-money (ITM) options work in forex & commodities. Learn strategies, psychology & benefits with AvaTrade.

Learn what Out of the Money (OTM) options are, how they’re used in forex and commodities, and how to trade them effectively with AvaTrade.

Scalping is a day trading strategy that involves opening and closing trades within a short period of time. ⭐ Read our complete guide.

Strike prices are used in derivatives (mainly options) trading. ⭐ Derivatives are financial products whose value is based (derived) on the ...

The various Greek letters are used in the options market to describe parameters of risk when taking an options position. ⭐ Want to know more?

Discover how asset correlation works, how to calculate and interpret it for better portfolio diversification. Practical trading tips from AvaTrade.