LONDON, October 14, 2010 /PRNewswire/ -- Know your resistance level from your rollover with these financial spread betting terms and definitions, courtesy of provider Finspreads (http://www.finspreads.com).
In spread betting, arbitrage describes the simultaneous buying and selling of a product at two different prices in two different markets, resulting in a profit without the usual level of risk associated with spread betting.
Refers to October 19, 1987, when the Dow Jones Industrial Average fell 508 points on the heels of sharp drops the previous week, catching spread bettors completely by surprise. On Monday, October 27, 1997, the Dow dropped 554 points, but while the point drop set a new record, the percentage decline was substantially less than in 1987.
The term given to the markets that a spread betting provider offers that are not listed on any exchange. For example, with Finspreads, IPOs and political bets are grey markets. You can see what other markets are available at http://www.finspreads.com/our_services/spread_betting_markets.aspx.
The value of an option if it were to expire immediately with the underlying stock at its current price.
Economic indicators that follow, rather than precede, a country's overall pace of economic activity.
The opposite of lagging indicators, leading indicators change before the economy does.
One Cancels the Other orders let you leave two separate opening orders in the same market so that if one of them is triggered and filled, the other spread bet is cancelled, leaving you with just the one open financial spread betting position.
A price level above which it is supposedly difficult for a spread betting security or market to rise.
A rollover is the transferring a spread betting position that is near expiry into the next contract period.
Also known as a Market Gap, this is the spread betting term used when the price of a stock rockets or dives in a direction away from its last price range. Slippage often occurs during periods of higher volatility, which is why some spread bettors choose to use guaranteed stop loss orders (http://www.finspreads.com/learn_to_spread_bet/managing_your_risk.aspx) during these times.
The security or market that spread betting providers such as Finspreads derive/base their prices on.
For more useful insights about spread betting, try a free Finspreads seminar. Visit http://www.finspreads.com/learn_to_spread_bet/spread_betting_seminars.aspx for a list of upcoming workshops.
Spread betting carries a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.