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Trading Terms

Haircut

This is a crucial concept to understand when dealing with securities, such as stocks, bonds, and derivatives. A higher haircut means a larger difference between the market value and loan amount, making it riskier for the lender. It is a way for lenders to protect themselves from potential losses and is often determined by the creditworthiness of the borrower.

Welcome to today's lesson on finance terminology. Today, we will be discussing the concept of a Haircut in the financial world. This term refers to the difference between an asset's market value and the loan amount. It is an important concept to grasp when dealing with securities like stocks, bonds, and derivatives. A higher haircut indicates a greater risk for the lender as there is a larger difference between the market value and loan amount. Lenders use haircuts as a way to safeguard themselves from potential losses, and the amount is typically influenced by the borrower's creditworthiness.

Over-the-counter Market

The financial market is a complex system where various products are traded between two parties through over the counter transactions. This entails the parties entering into ...

Derivatives Market

The Derivatives Market is a crucial component of the financial world, where financial instruments such as futures contracts and options are traded. These instruments derive ...

In the world of finance, one important concept to understand is the daily price range. This refers to the difference between the highest and lowest price of a stock or other ...

Trade transactions often involve a method of payment called open account. This is when a supplier sends goods to a buyer and the buyer credits the supplier's account with th...

A financial agreement granting the choice, but not the obligation, to purchase or sell a predetermined quantity of a security during a designated timeframe. This type of con...

Let's discuss a common occurrence in the world of finance known as a "mismatched trade". This refers to a situation where two traders in the trading pit have a disagreement ...

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Trading Terms

Trading Terms encompass terminology and phrases commonly used in financial markets, including terms

Stocks

All terms and concepts related to stocks, also known as equities, which represent ownership shares i

Financial Terms

A comprehensive resource containing definitions and explanations of terms, concepts, and jargon used

Derivatives

All terms & concepts related to financial contracts whose value is based on an underlying asset,

Loans

All terms and concepts related to borrowing money, including different types of loans, interest rate

Financial Instruments

Legal contracts that represent financial value, such as stocks, bonds, options, futures, and various

Options and Futures

All terminologies and concepts related to financial derivatives, including options and futures contr

Fixed Income Instruments

All terms related to investments like bonds or treasury bills that provide regular, fixed payments,

Technicals

All terms and concepts related to technical analysis in finance, which involves using historical pri

Property

The "Property" category in finance encompasses all aspects related to real estate and tangible asset

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