CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.

Here’s a handy guide to all those financial terms you here

Please choose a letter to see the list of terms.

Glossary of terms

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
There are currently 2 glossary in this directory beginning with the letter O.
img Order

An order or trade order is a client’s instruction to their brokerage firm to buy or sell a financial asset on their behalf.Orders are usually placed through an online [trading platform] such as CFI’s [MetaTrader 5] trading platform.

The two major types of orders that every investor should familiarise themselves with are the market order and the limit order.Market Order

A market order is a request a trader sends to their broker to instruct them to execute a trade at that exact moment at the best possible price.Market orders are usually executed in seconds or even milli-seconds, providing there is a liquid market at the given moment the order has been placed. When a market order has been completed, it is known as a ‘filled order’.

Limit Orders

A limit order is another order type traders must be familiar with before starting to trade on a live account. This type of order is sometimes also referred to as a pending order which allows traders to buy and sell financial assets at a fixed price in the future.For example, if you decide to buy gold at $1,700, you could enter a limit order for this amount. This means that you would not pay a more than $1,700 for that particular asset. Bear in mind, that it is still possible for you to buy the asset for less than the $1,700if you wish to do so.

Digging deeper there are four types of limit orders:
  • Buy Limit: an order sent from a trader to their broker to purchase an asset at or below a fixed price. For limit orders to be affective the need to be placed on the correct side of the market to be beneficial. Meaning in this case, placing the order at or below the current market price.
  • Sell Limit: an order sent from a trader to their broker to sell an asset at or above a fixed price. To ensure a positive outcome, the order must be placed at or above the current market bid price.
  • Buy Stop: an order sent from a trader to their broker to buy an asset at a price above the current market bid price. A stop order to buy becomes active after the stop level(the specified price level)has been reached. Buy stop are orders placed above the market and sell stop orders are placed below the market. Once a stop level has been reached, the order will be converted to a market or limit order.
  • Sell Stop: an order sent from a trader to their broker to sell an asset at a price below the current market ask. Like the buy stop, a stop order to sell becomes active only after a particular price level has been reached.
Key Takeaways
  • An order is a request from a trader to a broker to buy or sell an asset on behalf of the trader.The two major types of orders that every investor should familiarise themselves with are the market order and the limit order.
  • The advantage of using market orders is that you are guaranteed to get the trade filled.
img Over the Counter (OTC)

OTC trading also known as over-the-counter trading or off exchange trading,describes a transaction that is not conducted via a formal exchange. OTC trading creates plenty of opportunities for traders to partake in the Forex, commodities, indices, and equities market although it does carry a higher amount of risk than traditional investing which you should be aware of. OTC trades are executed via a dealer network and involve two separate parties.

The most common OTC market is the foreign exchange (forex or FX) market, where currencies are traded 24 hours a day, 5 days a week via a network of banks and brokerages, instead of on traditional exchanges. The OTC market is known to be a decentralised exchange and therefore has no single physical location and functions over proprietary electronic trading systems, email, and telephone.

OTC trading can also include stocks, derivatives, and commodities.

Example of Over the Counter (OTC) Trading

While there are some similarities, there are plenty of differences when you compare the OTC market with exchange trading. On a more traditional exchange, like the New York Stock Exchange for example, you will see multiple buy and sell prices from various different parties. However, with OTC trading you will carefully choose one broker who you believe will offer you the best all round trading conditions and go with the buy and sell prices they provide.

Key Takeaways
  • OTC trading is more flexible than compared to more standardised and regulated exchanges.
  • OTC trading increases financial market liquidity, as companies that cannot trade on the formal exchanges gain the opportunity for exposure.
  • OTC trades have greater flexibility but are also considered more risky.

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CFI Financial Group is an award winning global financial markets provider with regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads and zero commissions, professional services, dedicated support and powerful tools.

With over 22 years of group experience, and recently awarded “Best Online Financial Trading Services, Middle East” for 2020 by Capital Finance International, Credit Financier Invest brings their award-winning CFD platform to London.

CFI Financial Group also has regulated subsidiaries in
Larnaca • Beirut • Amman • Dubai • Port Luis

Credit Financier Invest Limited
16 Berkeley Street
London
W1J 8DZ
+44(0)20-3907-4131
+44(0)20-3907-4132
uk@cfifinancial.com

CFI UK is authorised and regulated by the Financial Conduct Authority (FCA) in the United Kingdom, 828955. Company Registration Number, 11634673

Important Disclaimer:
CFDs are leveraged products that incur a high level of risk and a small adverse market movement may expose the client to lose the entire invested capital. The vast majority of retail investor accounts lose money when trading CFDs with Credit Financier Invest Limited. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. The possibility exists that you could sustain a loss in excess of your deposited funds even if a stop loss is used and therefore, you should not speculate with capital that you cannot afford to lose and be aware of trading risks. Credit Financier Invest Limited provides general information that does not take into account your objectives, financial situation or needs We recommend you read our full Risk Disclaimer.

We do not currently offer our investment /ancillary services to residents of certain jurisdictions such as but not only USA, Sudan, Syria, Republic of Korea and Belgium.

CFI does not offer advice, recommendation or opinion with respect to buying, selling or holding of CFDs. We do not issue financial and/ or otherwise advice to clients.