Glossary
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ABOVE TRADE
A trade that closes at a price higher than the “Strike Price”, also known as the “Exercise Price”, which is the underlying “Asset” or “Instrument” at the time the trade is placed.
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ASK PRICE
The price that a seller is willing to accept for a specific asset or security, i.e., the price at which an investor can purchase an asset or security.
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ASSET
The “Asset” or “Instrument” is the underlying index, stock, commodity, or currency on which each online trading contract is based.
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AT THE MONEY
When the underlying “Asset” or “Instrument” price is the same as the original “Strike Price”, also known as the “Exercise Price”.
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BELOW TRADE
A formal term used to describe a trade that closes lower than the original “Strike Price”, also known as the “Exercise Price”.
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BID PRICE
The price at which an investor is able to sell an asset or security, or the price at which a bank or brokerage is willing to purchase an asset from a private investor.
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BONUS
A bonus (also called a ‘Trading Bonus’) is an amount of money that MottoFX credits to your trading account, giving you additional leverage and liquidity. Bonuses are offered until 31.07.2018.
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BOUNDARY OR RANGE INSTRUMENT
An instrument that allows the customer to choose whether the value of an underlying asset will fall inside or outside a specified range. The range is demarcated by lower and higher target price limits.
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COMMODITIES
A commodity is a general term for raw materials produced by a variety of sectors including energy, food, and metals; e.g., Gold, Oil, Silver, and Coffee are commodities.
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CURRENCIES
Currencies are national forms of banknotes/coins. Currencies are organized into pairs. E.g., EUR/USD; GBP/USD
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CURRENT PRICE
The ‘’Current Price’’ is the contract price for each asset on the MottoFX trading platform. It mirrors the asset prices in the actual stocks, currencies and commodity markets.
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DECLARATION OF DEPOSIT (DOD)
When you deposit money into your MottoFX Account, we will send you a DOD to sign and send back a signed copy. The DOD is your declaration that you agree to the deposits visible on your account. It is part of MottoFX’s Anti-Money Laundering policy.
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FUNDAMENTAL ANALYSIS
The market prices of currencies, commodities, and stocks are evaluated by analysts in many ways. ‘’Fundamental Analysis’’ is concerned with current economic and political data affecting the markets. In other words, it’s the evaluation of an asset by looking at all factors that could affect its price, e.g. weather, financial policy, global economic conditions, company reports, etc.
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IN THE MONEY
A contract is ‘’in-the-money’’ when the predicted direction for the price movement on the underlying asset turns out to be correct.
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INDICES
An Index is a list of securities representing a particular section of a financial market which acts like an imaginary portfolio. It is usually representative of a broad portion of a given market, but can also be focused on a particular industry. Examples of ‘’Indices’’ are US Dow Jones Index; UK FTSE; Japanese Nikkei.
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INSTRUMENT
The “Instrument” or “Asset” is the underlying index, stock, commodity, or currency on which each online trading contract is based.
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INVESTMENT
These are the rates at which large banks lend money to other large banks. This is strictly a bank to bank transaction and is not accessible to members of the public.
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NET EXPOSURE
The sum of all your open positions, (i.e., contracts already placed which are not yet closed).
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OUT OF THE MONEY
A trader is “out-of-the-money” when his/her prediction on the direction of the asset price, regardless of whether it was above or below the strike price, was incorrect. The trader will then receive no payout on that contract.
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PAYOUT
The percentage amount that the trader will receive.
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PIP
A Pip or “Point In Percentage” is any of up to four “decimal points” to the right of the decimal in price values. For example, 0,0001 = 1 pip; 0,0010 = 10 pips; 1,4567 = 1 plus four thousand five hundred and sixty-seven pips.
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PROFIT
The “Profit” is the amount that you “Earn” when you make a successful trade. For example, you stake $100 on the price of an asset to go up for a profit of 80%, if the contract expires “In-The-Money”, you earn $80 profit plus you receive your investment stake back for a total return of $180.
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RANGE OR BOUNDARY INSTRUMENT
An instrument that allows the customer to choose whether the value of an underlying asset will fall inside or outside a specified range. The range is demarcated by lower and higher target price limits.
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SIGNALS
Signals are created by financial analysts with the intention of alerting investors to exciting investment opportunities. Signals are sent as brief email bulletins. Signals should be regarded as a guide only and are not 100% accurate.
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STAKES
The amount of money invested on an online trading contract.
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STRIKE PRICE
The Strike Price, also known as the “Exercise Price”, is the price of the underlying “Asset” or “Instrument” at the time the contract is placed.
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TECHNICAL ANALYSIS
Technical Analysis is the mathematical study of the price of an asset. It is concerned with data and information as well as with the supply and demand factors and the minute detail belonging top trend lines, patterns, and spikes on the chart of price movements.
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UNDERLYING ASSET
An Underlying Asset is any asset (Commodities; Currencies; Stocks; Indices) that forms the basis for a trade.