| Gann Analysis | |
| market analysis based on a variety of technical concepts developed by William Gann, a famous stock and commodity trader during the first half of the twentieth century. Many software packages such as Sharescope will draw Gann Angles on a chart. | |
| Gap | |
| a price area at which the market didn't trade from one day to the next. For example, IBM closes at 106, a negative announcement is made then the next morning the price opens at 100, the price has gaped lower. | |
| Gaps through | |
| where the price of a certain security or market skips over the level you specified on a trade. A market either gaps up or gaps down. In a sell order, for example, if a market gaps down and does not hit your sell price, then your order to sell may not be activated. | |
| Gearing/leverage | |
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refers to debt. A company's gearing ratio is its proportion of assets funded from borrowing relative to that funded by shareholders. A company with high gearing has a high level of debt in proportion to fund available from shareholders. In spreadbetting, clients are gearing up because they only pay a margin of the total cost of their trade and the rest is effectively borrowed from the spreadbetting company. But this gearing effect also means that losses are amplified - unless you set a stop-loss. |
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| GFD | |
| "good for the day" - An order valid for the day of placement only. | |
| Gilts | |
| An abbreviation for gilt-edged. Stock issued by the Government on which there is little risk of default and an annual fixed rate of return. | |
| Gross | |
| Interest paid without deduction of tax. | |
| GTC | |
| "good till cancelled" - An order to buy/sell at a certain price; the limit order stays in the market until cancelled. | |
| Guaranteed order | |
| see guaranteed stop-loss | |
| Guaranteed stop-loss | |
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a stop-loss order that is guaranteed to be executed if the price hits that level or, more importantly, if the price gaps through that level. In other words this is a stop loss guaranteed during and outside of market hours taken at the time of opening and for which a charge is levied. A non-guaranteed stop-loss is free of charge while a guaranteed stop-loss order is paid in the form of a wider spread. |
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| Hammering | |
| The expulsion of a member of the stock exchange because he is unable to meet his commitments. | |
| Hang Seng Index | |
| the index for the thirty three largest companies on the Hong Kong Stock Exchange. | |
| Head and shoulders | |
| a sideways price formation at the top or bottom of the market that indicates a major market reversal. | |
| Hedge | |
| A strategy to reduce risk by betting against an adverse movement in share prices, commodity prices or currencies. For example, if you hold dollar-denominated investments (or shares in companies whose earnings are in dollars), a spread bet that the dollar will fall will compensate you for the negative affect on these investments. | |
| Hedge Fund | |
| A pooled investment vehicle that is privately organized, administered by a professional investment manager and not widely available to the public. The assets, investment strategies and risk profiles of funds that meet this broad definition are quite diverse... Some hedge funds are highly leveraged while others use little or no leverage. | |
| Hedger | |
| a person or firm who uses the futures market to offset price risk when intending to sell or buy the actual commodity. | |
| Hong Kong Stock Exchange | |
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The Hong Kong Stock Exchange is ranked third-largest in Asia and ninth in the world by market capitalisation, with the key index being the Hang Seng. It has recovered strongly since its low in 2003 and has since more than doubled in value to reach an all-time high, with its next major target being the 19,000 mark. The 34 constituents are made up of nine stocks from mainland China, with the biggest, China Mobile, making up a fifth of the index. All of the others are listed in Hong Kong with the largest among them being HSBC Holdings, which is worth more than a quarter of the index. The Hang Seng index futures are only traded while the Hong Kong Stock Exchange is actually open, namely from 2am to 4.30am and from 6.30am to 8am UK time. Outside of these hours, however, it is usually possible to spread bet on the index, although the dominance of China Mobile and HSBC makes it less attractive from a trading perspective. [Source: Shares Magazine] |
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| If done orders | |
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This is a more complex order type allowing spread betters to link two separate orders known as an if/then condition, which makes it possible to automate the entire trade including the entry, exit and risk management. Take the example of someone who thought that a move above 13,500 on the Dow would herald a big rise. They could use an If-Done order to buy should the market rise to 13,500 with a stop then put in place at 13,400 and a limit at 13,800. See also contingent orders. |
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| Index linked gilt | |
| Government stock with interest and final redemption payment tied to the Retail Price Index. | |
| Institutions | |
| A term used to cover all the insurance companies, banks, building societies, unit trusts, investment trusts, pension funds and similar large investment organisations. Institutional buying or support is sometimes given as a reason for a share 5 rise. | |
| In the money | |
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an option where the strike price is below the current level for a call, or above the current level for a put. |
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| Index | |
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a statistical indicator that represents the total value of the stocks that constitute it. It often serves as a barometer for a given market or industry. It also acts as a benchmark against which financial or economic performance is measured. More information available here |
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| Intraday bets | |
| bets that must be settled on the day they are made unless that are rolled over to the next day or the next expiry date. Also called daily bets. | |
| Intrinsic value | |
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Investors try an predict cash flows of a company into the future. They estimate growth rates etc to conduct this. Once they have have their future figures, they then discount these figures back to get the present value ( i.e. today's value). Therefore, if their calculated figure is higher than the current market price, the share is undervalued by the market and you should buy. If the calculated figure is lower than the current market price, the share is overvalued by the market and you should sell. A perfect example of this was the time of the dot-com, where the intrinsic value for so many companies was below the market value, indicating a sell. As we all know, as time elapsed, these dot-coms crashed. In the case of a call option, an option has intrinsic value if the strike price is lower than the current value of the underlying market. In the case of a put option, an option has intrinsic value if the strike price is above the current level of the underlying market. The intrinsic value is the difference between the current level of the underlying and the strike price. |
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| Investment-grade | |
| a low-risk bond because the bond issuer had a good credit rating. The bond issuer is usually the government of a country, which is highly unlikely to default on the debt such as the US or the UK. Due to the low risk involved, this bond has a low yield. As opposed to a junk bond. | |
| Investment Trust | |
| A company which invests in shares. It differs from a unit trust because its own shares are quoted on the stock exchange. | |
| IPO | |
| An IPO is when a company first issues shares and investors are offered the chance to buy shares at a set launch price. How many you can buy will depend on how popular they are. An IPO is very expensive, so the company may only extend the opportunity to institutional investors. Larger companies may make shares available to the public. |