Binary options signals can alert you whenever there is any news that will affect the asset’s price. If you keep using binary options signals, you will slowly become familiar with the pattern of the price movement of a particular asset. These signals are not completely accurate and do not guarantee that you will win in the trade if you follow them. Before trading software exist, traders used to subscribe to binary options signals service. There are both free and paid signals and you can choose to receive the signals through email, or text messaging. Nowadays, there are binary options signals software that can automate the trading process by placing the trade on your behalf after analyzing the market.
The signals are created based on two types of analysis including technical analysis and fundamental analysis. Many different types of financial indicators are used in forming the binary signals including relative strength index (RSI), stochastic oscillator and MACD (Moving Average Convergence Divergence).
Relative Strength Index (RSI)
There are two regions in the RSI scales, with the first region starting from 0 – 30 and the second region starting from 70 – 100. If the trading signal is located in the region of 0 – 30, it means that the currency pair is oversold so the market trend will reverse. You should place a call if you see bullish reversal candlestick formation such as evening doji star or chart pattern such as falling wedge.
If the RSI value is located in the 70 – 100 region, it means that the currency pair is overbought and so the rate is falling. You should place a put if you see bearish reversal candlestick such as morning doji star and chart pattern such as rising wedge. You can also use the RSI as a trend indicator to determine the trend of the price of the asset. For example, the trend will go downward if the RSI is under 50 so this is a good opportunity to choose Touch in the Touch/No Touch option. The price will move in upward direction if the RSI is above 50, which means you should choose No Touch.
Stochastic Oscillator
Stochastic oscillator, also called K%D, allows you to make accurate prediction on the price movement by making comparison between the asset’s price and trading range. There are two lines in the stochastic oscillator including %K line and %D line. If the %K line has a zero value, the trading range is at the lowest point. If the %D line has a value of 100, the trading range is at the highest point. The value of the stochastic oscillator will drop when the price arrive at the double top. This is the best time to place a put for options with longer expiry time the downward trend of the price movement. If you want to wait for the D% line to cross the %K line, you should choose options with shorter expiry time.
MACD (Moving Average Convergence Divergence)
MACD is suitable to be used for call/put options as well as touch/no touch options. If you want to use the MACD strategy, you must make sure the asset is trending. You can use the MACD histogram to find out if there is any changes on the trend. You should place a call if the red 50 period line is situated higher than the blue 110 period line. In this scenario, the prices of the asset has bounce off from the line of the 50 period EMA.
On the other hand, you should place a put if the red 50 period EMA line is located under the blue 110 period line. There is a pullback on the price of the asset at the 50 period EMA line. The time frame you should choose depend on the time frame of the chart you are using. The timeframe should be set about 4 candlestick apart so if you are using a chart with 30 minutes time frame, you should select an expiry time that last for 2 hours. It is recommended that you don’t trade more than 5% of your investment if you are using MACD indicator.
Learning how to read the trading signals allow traders to easily analyze opportunities and implement a trading strategy. This enables you to place more trades and maximize your returns in binary options trading.
Check out the best binary options signals:Start Here
There are several ways that a binary options broker can make money from the traders’ investment. Legitimate brokers make money by marking up the price of the asset on the trading platform. Usually, the pricing structure of the different types of assets are derived from the liquidity provider. The asset’s price has been marked up to be slightly higher than the original market.
In-the-Money Trades
Binary options brokers actually make money on both in-the-money trades and out-of-money trades. For in-the-money trades, they earn a portion of the profits when you make the right prediction and win in the trade. The payout ratio displayed on the platform is not calculated based on the actual percentage on the original market so that is how the broker profit on a portion of your payout.
Out-of-Money Trades
For out-of-money trades, the broker profits on your capital investment plus the payout rate when you make the wrong prediction. For example, if the payout rate is 85% and you place a trade of $100 on the USD/EUR currency. You predict that it will go up but the result end up that the USD/EUR currency go down.
Start making money with the #1 broker IQoption: Visit IQ Option
You lose your capital investment and didn’t get any return. In this case, total amount that broker earn will be $185 including your capital investment plus the payout rate of 85%. Everyday, there may be 10 or more out-of-money trades so the broker can easily earn tens of thousands or hundreds of thousands of dollars per day. There are some brokers that offer refunds for out-of-money trades, which is usually 5% – 15% of your initial investment.
If most of the traders are winning, the broker would be losing money and close down. In truth, the majority of the trades will be losing trades for most of the time so this makes a lucrative business for binary options brokers. A survey report that was released in Japan revealed that 85% of the trader lose in their trading. Most traders are not able attain a high winning rate because they lack the patience to learn about trading binary options. Those who do spend time to educate themselves such as reading guides, watching video tutorials and attend webinar will learn how to earn a consistent income over a long term. Therefore, it is all up to you on whether you will make money or lose money binary options trading.
How Peer 2 Peer Brokers Make Money
Some brokers operate on a peer 2 peer network which allows traders to trade against one another. In peer 2 peer network, clients can create options with different types of payouts and the buyers will decide how much they want to invest and place the trade within a single click. If the buyer predict the price movement incorrectly, the seller will profit.
The broker does not profit on the out-of-money trade but they make money by charging a commission whenever the trader purchase a contract. The commission ranges from ten dollars to twenty dollars. This means that the seller won’t earn the full amount on out-of-money trade because the commission will be deducted from here. Hence, both the traditional and the peer 2 peer model are the same because the brokers will end up making the same range of income.
Welcome Bonus
Another way binary options brokers make money is by offering bonus that match with their deposits. They advertise the bonus as an incentive to help new traders to get started in the trading. New traders often get tricked and assume that they will be able to withdraw the bonus from their account. There is a string attached to the bonus, and that is you need to fulfill a certain amount of trading volumes, for example your trading volume must be 30 times of the bonus, before you can withdraw them from your account. The minimum trading volume you must reach is stated in the terms and conditions .
Illegitimate Brokers
An illegitimate broker will attempt to cheat your money in many ways for example charging your credit card for hidden fees you don’t know. This is why it is important to only trade with broker that is transparent about all their fees and lay them out upfront on the trading platform. Scam brokers will find all sorts of excuse to lock the funds in your account so that you won’t be able to withdraw the funds.
It is possible for you to consistently win in your binary options trades if you are patient and willing to spend time to learn all about it. As a rule of thumb, you should only trade with a legitimate broker that is equipped with proper licensing to avoid situation where they try to cheat your money by preventing you from making a withdrawal.
Check out the most trustworthy binary options brokers: Start Here
How Binary Options Brokers Make Money from Peer 2 Peer Trading
Some binary options brokers operate on a peer 2 peer network which allows traders to trade against each other.
In this model the broker doesn’t directly profit from out-of-money trades but rather makes money by charging a commission whenever a trader purchases a contract.
The commission typically ranging from ten to twenty dollars is deducted from the seller’s profit on an out-of-money trade.
This means that regardless of the model used whether it’s the traditional broker or the peer 2 peer model brokers ultimately end up making a similar range of income.
It’s important for traders to be aware of the commission charges and any other fees associated with trading on a peer 2 peer network as these costs can significantly impact their overall profitability.
If you’ve been looking for a broker that accepts PayPal deposits, then you have probably found out already that there are only a few PayPal binary options brokers. There used to be many brokers that accepted PayPal, but with the time, more and more decided to continue their operations without PayPal.
UPDATE May 2017: All binary options brokers stopped accepting paypal. However there are very good alternatives. CFD, Options, Forex and Crypto brokers still accept paypal. See the list below.
CFD Brokers That Still Accept Paypal Deposits
The following brokers do not offer binary options trading, but they still accept Paypal for other forms of trading.
On these platforms you can trade stocks, forex, options, crypto and much more. All of these sites still accept paypal funding.
There are no binary brokers at the moment that accept this payment method. Looks like we are the only updated binary broker review website. All other websites still recommend brokers that stopped accepting paypal long time ago. We have checked over 100 brokers and none of the accept paypal anymore. We have also double checked following brokers: 365trading, anyoption, utrader, interactive option, expert option.
Please check our these Paypal brokers, to start trading using your favorite payment method.
Funding Your Account With Paypal
Picking a binary options broker by considering the payment options is not a bad idea. These are the topics we will be covering today:
I am sure this has to do with some PayPal policies or refunds, which makes it not viable for most brokers . If your only deposit method is PayPal, then you should look for an alternative as all brokers stopped accepting Paypal payments. If you are still interested, here is a list with the 3 brokers that recently stopped accepting it:
The truth is that PayPal is a really simple payment method – with only 2-3 clicks you have made your deposit instantly.However if you have a credit card, bank wire or skrill then you may find better brokers here. Another problem for traders looking for a paypal accepted broker is that most other binary options comparison websites don’t really update their paypal broker list. We make sure you get the most up to date list here at How We Trade in this constantly changing market.
List of Paypal Binary Options Brokers (update: these also stopped accepting paypal)
1. Finpari: They still accept US traders and PayPal. Finpari is the best PayPal binary options broker is a minimum deposit of $250 and average payout of 90%. They offer fast withdrawals within 1 hour and different trader accounts. You should definitely check out their social trading platform (ZuluTrade). OPEN FREE ACCOUNT
2. Bloombex Options: Even though they don’t accept US traders anymore, they still have PayPal in their list of deposit options. The payout on Bloombex Options is 85% however the minimum deposit is $300. OPEN FREE ACCOUNT
3. Trade Thunder: They were one of the newer brokers on the market. They seem to be out of business now. Ignore this broker. TradeThunder accepts paypal deposit and withdrawals. The minimum deposit is only $20 and US traders are accepted as well. This makes TradeThunder the most affordable paypal broker. OPEN FREE ACCOUNT
What is Paypal?
PayPal is an online payment method (or e-wallet) for individuals and businesses. You can send money electronically with the use of your email address, even if the received doesn’t have an account opened. You can deposit money to your PayPal account, send it instantly to other PayPal accounts or withdraw the money to your bank account. Paypal is one of the most popular options for online donations and small money transfers. Simply put, PayPal offers a safe and secure platform for sending money.
Advantages of Paypal Binary Options Brokers
All payment methods have some advantages and disadvantages:
Why would you want to choose paypal over all other payment methods? Being so popular, chances are that you already have a paypal account. If you prefer it for online payment like most of us do, then you will probably consider using it for binary options deposits as well.
Which are the alternatives to PayPal? Another advantage of paypal is that the deposits and instant and withdrawals are faster than other methods. PayPal can be compared to Skrill, one of the other companies offering payment services in the same way. Other names include: Click2Pay, Neteller, Paysafe Card, Click2Buy or WebMoney.
Reasons not to use Paypal: Remember that PayPal may not be available in your country. Or if it’s available, then there could be some high fees, depending on the country of residence. For example Eastern European countries prefer Skrill over Paypal.
Binary Options Brokers That Do Not Accept Paypal
IQ Option: They are out highest rated broker. IQ Options has a unique trading platform that you can’t find elsewhere. The minimum deposit is only $10 which is the lowest in the industry. If you don’t have a paypal account and you only want to make a small deposit, then make sure to give IQ Option a try. OPEN FREE ACCOUNT
24 Option: Considered the market leader by many, they have a stable trading platform with a minimum deposit of $250. Their customer support is great however they do not accept US traders nor Paypal deposits. OPEN FREE ACCOUNT
Paypal Alternatives
Not all binary options brokers accept Paypal deposits and withdrawals, however there are many other good alternatives to Paypal. The most popular payment methods used by traders are:
Credit and debit cards (VISA, MASTERCARD)
Bank Wire (especially for bigger deposits over $1000)
You can’t get an objective answer to this. I think it comes down to which one you like most. The fees are different from country to country. Paypal and Skrill both offer debit cards attached to the online wallet, even though Skrill offers these cards to a lot more countries.
Unfortunately Paypal is less and less accepted at binary options brokers. For this reason I’d say Skrill is better than Paypal.
IQ Option was founded in 2013. IQ Option Europe Ltd. operates in the countries of EU, is registered at Cyprus and is regulated by CySEC with license #247/14. Their other company, IQ Option Ltd. operates in all other countries and is registered at Seychelles, this entity is not regulated.
IQ Option is a great broker for beginners because of the minimum deposit requirement of only $10, which is the lowest in the industry. On the other hand, this broker is also a great choice for advanced traders because their loyalty rewards are one of the best.
The company’s primary business model was initially binary options trading. However, in recent years, the company has expanded its offerings to include other “investment products.” In this article, we will explore IQ Option’s business model, the investment products it offers besides binary options, what CFDs are, and how IQ Option makes money from affiliate programs.
About IQOption.com
You’ve probably observed that most binary options brokers look the same: the same layout, same promotions, same bonuses, same trading platform.
There is not really a big difference between them. IQ Option on the other hand is trying to be the most innovative broker with many unique features, that are not available at other brokers.
The website accepts most countries, however, US traders are not accepted here. We have a special page for US traders so make sure to check out these us welcome binary options brokers.
What is IQ Option’s business model?
IQ Option is an online trading platform that allows users to trade a range of investment products.
The company’s primary business model was binary options trading. Binary options are a financial product that allows traders to make predictions on whether the price of a particular asset will rise or fall.
However, binary options are widely considered to be a scammy and illegitimate investment product.
Therefore, IQ Option’s business model has shifted in recent years to offer other investment products such as CFDs, stocks, forex, cryptocurrencies, and ETFs.
Binary options vs. real options?
Binary options are widely considered to be a scammy and illegitimate investment product, while real options are legitimate investment vehicles. Real options, also known as vanilla options, give traders the right but not the obligation to buy or sell an underlying asset at a predetermined price and time. Real options have been traded for centuries and are widely used by professional traders and investors. Binary options, on the other hand, are all-or-nothing bets on whether the price of an asset will rise or fall. Binary options have been banned in many countries due to their fraudulent nature.
IQ Option Platform Review
First of all, this broker is one of the few that offers a free demo trading account. And it really is free, meaning that you don’t have to deposit anything to access it. Unfortunately most other broker require you to make at least a minimum deposit to take advantage of the free demo account.
As said, this broker has one of the most unique trading platforms, developed by specialists. They are improving this custom built software all the time by taking into consideration what the traders really want and need. This software is proprietary, which means that you won’t find it anywhere else. The trading platform has a ton of features but at the same time its very easy to use.
Pros
Cysec Regulated Broker
Transparent Broker With EU License
Free Demo Account (No Deposit Required)
High Payout, in case of successful trade
Minimum Deposit Of $10
New Buyback System Available On All Platforms
Advanced Tools And Charts
Available In Many Languages
Cons
Under 100 assets
US traders are not accepted
Cannot deposit with PayPal
IQ option has a new trading competition each month. This feature is very popular and many traders try their luck. There are prize funds up to $100.000 and this is increasing all the time. If you don’t want to invest a lot you can enter smaller tournaments even with $4.
Even though most binary option brokers don’t really care about charts and tools, IQ Option has it all.
They even offer candlestick charts, a feature that should be available on other brokers as well, but isn’t unfortunately.
They have 78 assets which is ok, but could be more.
What investment products does IQ Option offer besides binary options?
Besides binary options, IQ Option offers a range of investment products, including CFDs, stocks, forex, cryptocurrencies, and ETFs. CFDs are a popular trading instrument that allows traders to speculate on the price movements of an underlying asset without owning the underlying asset itself. CFDs are Over-The-Counter (OTC) products, which means that the trader is trading directly with the broker as a counterparty. This raises concerns about conflicts of interest, as the broker may be incentivized to make the trader lose money. Despite this, CFDs have become a popular investment product due to their flexibility and potential for high leverage ratios.
What are CFDs and how do they work?
CFDs, or Contracts for Difference, are financial products that allow traders to speculate on the price movements of an underlying asset without owning the asset itself.
When trading CFDs, the trader enters into an agreement with the broker to exchange the difference between the opening and closing price of the underlying asset.
This means that the trader is not buying or selling the underlying asset but rather is speculating on the price movements.
CFDs are usually traded with leverage, which means that the trader can control a large position with a relatively small investment.
However, this also means that the potential losses are magnified, and traders need to be aware of the risks involved in trading CFDs.
How does IQ Option make money from affiliate programs?
IQ Option, like many other online trading platforms, offers an affiliate program that allows third-party websites and individuals to promote their platform in exchange for a commission.
These affiliates can earn juicy commissions for every user they refer to IQ Option who opens an account and starts trading.
This creates a win-win situation for IQ Option and their affiliates, as IQ Option gains more users, and affiliates earn commissions for their referrals.
However, this also means that there is an incentive for affiliates to promote the platform even if it may not be in the best interest of the user.
IQ Option Deposit and Withdrawals
Deposit are fast and you can pick from many payment methods.
We used Skrill for deposit and withdrawals and both were processed very fast.
IQ Option has decreased the processing time for withdrawals significantly. It used to take up to 4 days to get your money, back in 2014, it now takes only 1 day to get it. What’s even better – IQ Option has no commissions or any other hidden fees. The minimum withdrawal is $10 and you can use any payment method to get the funds.
The maximum return on IQ Option is 91% which is really good.
Your funds are protected on IQ Option, because the broker participates in compensation funds: ICF Cyprus. This means that you will get your money even if the broker cannot fulfill its financial obligations.
IQ Option Website
When you enter their website, you will see that this isn’t just another broker offering unrealistic bonuses or fake user reviews. Instead, IQ Option stands out by showing you real awards (most reliable broker, most innovative broker, best binary options broker) or reviews from other trustworthy websites in the industry (like FinanceMagnates).
The broker has its quotations from trusted sources.
IQ Option Trading App
Did you know that their trading app is the #1 rated app in over 20 countries? The app is so good, that I really doubt the competition will make a similarly good app soon. Available on Android and iOS, the assets are sorted by profit margin and the layout looks very fancy and intuitive.
Is IQ Option a Scam?
No, IQ Option is no scam as far as we know. They are one of the most transparent brokers out there with a Cysec regulation. If you have any positive or negative experience with this broker, please leave a comment below and let us know.
IQ Option Review – Conclusion
This is the most affordable broker with only $10 minimum deposit, 91% payout (in case of a successful trade) and new buyback system. IQ Option offers the best conditions for trading in the industry.
Compare IQ Option
24option is probably the biggest competitor of IQoption. 24Option is also Cysec regulated and has a fantastic reputation in the industry. Finpari is one of the few brokers that still accepts US/Australian and Canadian traders (IQ option doesn’t accept these countries).
RISK WARNING: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Your capital may be at risk.
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Top 3 Binary Options Brokers
At How We Trade we like to inform our users without over-informing. Basically we like to get you the information you need, the information you might find useful or interesting, and nothing useless. With that in mind here are (in our humble opinion) the three best binary option brokers that you would want to trade with. Each offers the trader a different set of features from the others, which we think provides a nice mozaic of choices for you.
24Option – Most Trusted Binary Options Brand
24Options is a good solid broker. They have an excellent reputation, a big enough clientele so a trader knows they are trustworthy, and offer some fun perks and competitions. They are also CySec (the Cypress Equivalent of the SEC) regulated, which inspires trust in their business practices and products.
Their website is a little less professional than Tradorax but it is still easy to use. Certainly a viable option for anyone looking to open an account, and if we did not trade with Tradorax we would trade with 24Options. Purportedly they also make depositing and withdrawing very easy though we can not speak from personal experience.
The are a solid overall broker, good reviews and trusted by their loyal users. The website is out of date though, and the customer support is not available as Tradorax. They also offer fewer educational resources. If educational resources are not important to you you probably will not mind 24Options.
We recommend 24Options because they have excellent reviews from their customers and they offer some good bonuses and promotions as well.
Tradorax is a fairly new broker. The smallest of the three, they are competing for market share aggressively. Because of this they offer the best promotions for traders of the bunch. Some of the promotions they offer are 2 risk free trades, account bonuses, and gifts such as Ipads for funding a large account.
Their website is simple and easy to use, yet has a certain professional elegance within its simplicity. They are getting good reviews from users, and they are growing very quickly. This brokerage could very well be the world leader in a couple of years. They are also CySec regulated. Customer reviews say withdrawing money has been a breeze, and it is hard to find an unsatisfied customer amidst their good reviews.
There doesn’t seem to be a real downside to using Tradorax except for the fact that they are a little bit smaller and newer than some of their competitors.
We recommend Tradorax to users that want to take advantage of great promotional offers, have a great trading software platform, and want the quickest access to withdrawing their money.
EZtrader is a name that everyone in binary options knows. They were the first company to offer a web based trading platform, they have an app for smartphones, and they have the most professional looking website. They also have by far the most educational resources for traders.
They are a legitimate choice for an amateur or more experienced trader alike because of their professional yet easy to use platform. They also have 24/7 customer service, and offices located in multiple countries. If you feel most comfortable trading with the titan of the industry, this is the choice for you.
The downside is that they don’t offer a lot of incentives to open an account because they are so well known, and there are some complaints out there about them. Complaints have mostly focused on later adjustments to accounts to turn winning trades into losing trades, and having a very long and difficult withdrawal process.
Any large company is going to receive some complaints, and some of these readjustments may be legitimate, for instance data feeds could have been interrupted or inaccurate at a trades execution, and later corrected to true prices.
This is a judgement call for traders. EzTrader is one of the largest companies in the world, so many clients must be very satisfied.
We recommend them because of their trading software, which is professional and convenient, and it allows trading from smartphone and tablet devices.
Aggressive Order – An aggressive order is one that removes liquidity that is posted on a stock exchange or ECN, to buy or sell. This is also known as taking liquidity. An aggressive order need not be a market order, but it could be. The defining characteristic is that the posted liquidity is removed by the order. This order type is used to improve the ability of the order to be executed over one posted to an exchanges books.
Ask– The ask refers to the asking price of a stock, which is the lowest price at which sellers are willing to sell shares of a stock.
Bid– The bid of a stock is the highest price at which buyers are willing to purchase shares of a stock.
Blotter– A list of each order entered by a trader and each execution that actually transacted. Usually uses a one day time period and is used by traders to review their trading methods.
Book– The book of a stock is the listing of all the shares that are being bid to buy and offered to sell. The book shows all shares on all light pools for a particular stock.
Capitulation– The period of intense selling as long positions rapidly exit, usually marks the bottom of a downward move.
Dark Pool-A dark pool is an electronic exchange which facilitates buying and selling of shares of a stock just like a light pool exchange. A dark does not display the liquidity that is posted to buy and sell within its books. The purpose of this is for large buyers and sellers to have less influence on the price movement of a stock. Dark pools are used mostly be very sophisticated investors. Dark pool volume consists of more than 10% of all trading volumes in the United States.
Day Trading– Day trading is the buying and selling of financial securities for the financial gain of the trader, while typically holding positions for less than a day.
ECN– ECN stands for electronic communications network. This is a purely electronic stock exchange used to connect buyers and sellers of stock shares. The purpose of the ECN is so traders and institutions transacting on the exchange can interact directly with each other, essentially removing the middleman of previous exchanges.
Exchange Traded Fund (ETF) – A fund traded like a stock which tracks an index, asset class, or commodity.
Light Pool (LIT Market)– A light pool refers to any ECN where shares of a stock for purchase and sale are posted publicly, for all those interacting on the exchange to see. This is opposed to a dark pool, which hides all liquidity.
Limit Order– A limit order is an order entered to transact at a specific price. While it is not guaranteed that the order will be transacted, it is guaranteed that it will not transact at any other price.
Long Position– A position is defined as being “long” if the trader owns shares of a stock or security, or has an interest in the price of the security rising.
Market Maker– A market maker is a brokerage who maintains an inventory of shares of a security for which they are the designated market maker. A market maker must offer a certain quantity of shares on both the bid and offer at all times on a stock’s books in order to facilitate an orderly marketplace for traders.
Market Order– A market order is an order type that will remove liquidity posted from the books until the entire order is filled. A market order essentially ensures that an order will get filled, but it is not discriminate with price, and will continue to seek liquidity at higher (or lower) price levels until the order is entirely filled.
Moving Average– A moving average is a common trading indicator used to show trend by smoothing data and to identify areas of support and resistance. Moving average is calculated by averaging the value of a stock over a defined past period. Common time periods used as indicators are 10,15,20,50, and 200, but any time period can hypothetically be used if the trader considers the information valuable.
Offer– An offer is the lowest price at which sellers of a stock are willing to sell shares. It is the same as the asking price of a stock.
Passive Order (fill)– A passive order or fill is a limit order that gets posted to a stock exchange’s books. It does not fill immediately like an aggressive order, because it is adding liquidity to the books instead of removing it. When a passive order gets filled, the fill would be considered passive as well. The advantage of a passive order is that the trader can define the price, the disadvantage is that the order is not guaranteed to be filled.
Price– The price of a stock or other financial security is the current dollar value of one share or unit of the security. Price is normally defined by the last transaction, but also could be quoted by the current bid or offer.
Relative Strength Index – A technical indicator used to determine when a stock is in an overbought or oversold state.
Scalping– Scalping refers to the practice of capturing small price changes in a stock for profit. This strategy is done either many times, or will very large position sizes so even small price movement can create sizable profits.
Series 56– The Series 56 is the FINRA exam required by the SEC for all United States based proprietary traders to trade a proprietary trading account.
Share-A share of stock is represents an ownership stake in a company. A share is what traders buy and sell to take advantage of changes in value.
Short Position– A short position is one in which the trader has an interest in the price of a security going down. A short position in a stock is done by selling shares that the trader does not own, and receiving the value of the sale. A trader would then hope to buy back the same number of shares later at a lower price, and keep difference in value.
Spread– The spread is the difference between the bid and the ask of a stock or other security, and is influenced by a number of factors including stock price, volatility, volume, and market maker activity.
Stock– Stock refers to shares of a company; the ownership of stock denotes ownership in the underlying company.
Strategy– The strategy is the approach that a trader will take in trying to extract profits from the market. There aremany strategies such as scalping, momentum, fading, and pivot strategies.
Stock Option– A right that gives the owner the choice to purchase or sell shares of a stock at a previously agreed upon price at a predetermined future date.
Tape– The tape of a stock is the list of all transactions that take place for that stock. The tape lists time, price, size, and market the execution took place on. By looking at the tape of a stock traders can get an idea of what direction the stock will move in the future.
Trading Hours– Regular trading hours on the New York Stock Exchange take place from 9:30 a.m. to 4:00 p.m. Pre-market trading is open from 4:00 a.m. to 9:30 a.m. and after market trading is open from 4:00 p.m. to 8:00 p.m. Pre-market and after-market trading takes place over electronic exchanges only.
The Stock Market– This is a term for the collective market for the buying and selling of shares of publicly traded companies. The stock market is not a physical location, but a term for the aggregate market of the exchanging of shares of stock for money. The stock market takes place over both various ECN markets and the New York Stock Exchange floor, as well as in hundreds of dark pools.
Trade– A trade is the term for the buying or selling of stock in exchange for money.
Trader (Day Trader)– A trader is a person whose profession is to place trades in the marketplace. A trader can make money either from transacting securities trades for another party, or from buying and selling financial securities himself to capture changes in value. A day trader trades for his own account and takes advantage of short term price movements, normally closing all positions by the end of the trading day.
Volume– Volume is a measure of the quantity of shares exchanged for a particular stock for a chosen period of time.
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