Spread betting glossary | NOP

Glossary

 

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N

NTR – Notional Trading Requirement (aka 'Initial Margin' and 'Deposit')

Terminology varies across spreadbetting firms for the amount of money you need to deposit to make a trade, however they all mean the same thing. Remember, it is not the total amount that can be lost on the trade but the minimum amount you need to set aside to place a specific trade. NTRs vary from product to product and across firms.

NYCE

New York Cotton Exchange

NYFE

New York Futures Exchange

NYMEX

New York Mercantile Exchange

 

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O

Offer

Spread betting prices are made of a 2 prices: the bid and offer. The offer is always the higher end of these 2 prices, and this is the price that you can buy a given market.

For example, the FTSE 100 daily index price offered is 5900-5901. The offer is 5901, and if you want to bet that the index will finish higher than the spread, then you will buy the FTSE at the offer price of 5901. If the FTSE finishes above 5901 you win money, and if it finishes below 5901 you lose money.

If you wanted to bet that the FTSE would finish lower than the spread, you would need to sell the FTSE at 5900 (the bid price).

OMLX

London Securities and Derivatives Exchange

Option

A financial derivative contract between 2 parties that offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security or other financial asset at a set price (the strike price) during a specific period of time or on a certain date in the future (exercise date).

Since a call option gives the purchaser the right to BUY at a certain price in the future, the buyer will profit if the underlying security INCREASES in price compared to the agreed-upon price.

Conversely, put options give the purchaser the right to SELL at a certain price in the future, therefore they will profit if the underlying securitiy DECREASES in price compared to the agreed price.

In practice, options can be used as either a speculation tool or a hedging tool by traders.

Orders to Open

This refers to an instruction made by you the spread bettor, to place (or open) a new bet once the underlying product has hit your specified price. Orders to Open are also referred to as 'Limit Orders'.

OSE

Osaka Securities Exchange

 

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P

P&L

Abbreviation of profit and loss: how much you have made or lost.

Pip

A ‘Percentage In Point’ is generally the fourth decimal place, i.e. 0.0001. Traditionally, a pip was the smallest point by which a forex rate could move; although as technology changes, so too does the level of precision possible, therefore this is no longer the case.

Point

The increment in price movement of an instrument or market that is used to compare to the bid/offer you price you purchased the instrument for.

For example, if you stake £5 per point on a buy the FTSE at 5901, then for every individual point that the FTSE moves you make/loss £5 depending on the direction. However, if you stake £5 per point on an individual share on a buy at say £1.00, then a point generally refers to every 1p movement in the share price.

Position

A current bet that you have running. You say you have an ‘open position’ in the FTSE if you have placed a spread bet on the FTSE index via our UK 100 Index market.

Precious Metals

Naturally occurring metallic elements of high economic value, such gold, silver and palladium.

Premium

The price of an option or the net cost of a particular options strategy such as a Straddle or Strangle.

Put

A Put is a type of option, giving the owner the right, but not the obligation, to sell a specified amount of an underlying asset/securitiy at a fixed price (the strike), at a fixed point in the future.

 

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