HELP! Trading Definitions

I have a number of defintions and questions about recent terminology I've encountered and wondered whether somebody(ies!) could possibly help me please?

I don't understand what 'onside' means here?

A bull and a bear execute market orders in the Bobl at precisely the same time. 30 seconds after they do so, the ECB announce a surprise rate cut of 50 basis points. In his situation, who's trade is now more likly to be 'ONSIDE' and why?

What does 'LIFT' in trading terms and also 'SCRATCH'.

Also what is 'BOOK SQUARING' and also 'ROUND-TURN'.

Lastly what is the effect on the Euro if the ECB raise interest rates?

Any help would be grately appreciated even if it is just answering one of the questions!

Thank you very much!

Neil

Round turn is the cost of opening then closing a trade per contract, Open => Close (round turn).

Scratching is to close a trade at neither loss nor gain.

Onside is to be in profit.

If you go long and short at the same time, with the exact same amount of contracts, your net position is zero.

I'm sure someone else can full in the rest. I hope I'm right...

All the best

Phil

Fill yer boots!

http://www.investopedia.com/categories/tradingterms.asp

In Tuition said:

I have a number of defintions and questions about recent terminology I've encountered and wondered whether somebody(ies!) could possibly help me please?

I don't understand what 'onside' means here?

Click to expand...

In profit

In Tuition said:

A bull and a bear execute market orders in the Bobl at precisely the same time. 30 seconds after they do so, the ECB announce a surprise rate cut of 50 basis points. In his situation, who's trade is now more likly to be 'ONSIDE' and why?

Click to expand...

Bull - rates go down, prices go up**

In Tuition said:

What does 'LIFT' in trading terms and also 'SCRATCH'.

Click to expand...

Lift = Buy at market. Aggressively "lifting" offers in the market can cause prices to rise in the very short term, hence "lifting the offer" and similarly "hitting the bid"

In Tuition said:

Also what is 'BOOK SQUARING' and also 'ROUND-TURN'.

Click to expand...

Book Squaring = trading a porftolio towards some base position (for example flat of exposure to parallel shifts in a yield curve).

Round Turn = a complete trade cycle, in and out.

In Tuition said:

Lastly what is the effect on the Euro if the ECB raise interest rates?

Click to expand...

One of the things that drive currency prices are interest rate differentials, so if the ECB raise interest rates net to what the FOMC do, then the Euro should rise.**


** Suggest you pick up an economics textbook to build an understanding of the basics, it is very rarely black and white. Gotta do some of your homework yourself

http://www.amazon.co.uk/Macroeconom...=sr_1_7?ie=UTF8&s=books&qid=1269250407&sr=8-7

GL

Help! Trading definitions

Thank you very much for all of those that replied to my first post but I still have a few areas which are grey.

1. If the market expects a rate hike from the MPC with the vote of 8/1 in favour it emerges that the vote was in fact 5/4 in favour. Which product would be most directly affected and what would you expect to happen in the market?

2. Name one way in which a government/national bank could strengthen/support its own currency.

3. If the perception that the ECB are going to raise interest rates what would be the effect on the Euro?

4. Am I right in thinking that the bund is traded on the EUREX exchange? Could anyoen confirm that Brent Crude is traded on the IPE in London? Dow Jones on Wall Street?

5. What is the correct term for an order to buy or sell a stock immediately at the best available price?

6. What is a GTC order?

7. The number of derivative contracts that are currently active on a specific underlying security and that have identical terms is known as what?

8. At what time of day are the B.O.E and E.C.B decisions released?

Thank you very much for all your help in advance. This is a research project I'm doing in prep for starting with a prop firm in May and want to be certain I get the best answers.

oh, I've really learnt a lot through this thread.

Why don't you say what you think the answers are first, eh? Gotta sing for your supper mate

lol anyone else think these are entrance exam questions for someone?

Re: Help! Trading definitions

In Tuition said:

This is a research project I'm doing in prep for starting with a prop firm in May and want to be certain I get the best answers.

Click to expand...

sounds more like you want help with your 'O'-level Economics homework .......

sorry arabian

GMTA !!

Haha Arabiannights there may be some truth there ;-) I just wantto make sure I get a list of correct answers.

1. If the market expects a rate hike from the MPC with the vote of 8/1 in favour it emerges that the vote was in fact 5/4 in favour. Which product would be most directly affected and what would you expect to happen in the market?

STIR products be most affected. They would lead to a decrease in the price of them. However the decrease would not have been nearly as big as anticipated due to the small majority decision to increase rates and what the predictions anticapted?

2. Name one way in which a government/national bank could strengthen/support its own currency.

The governement could intervene and buy a significant amount of its own currency to push the price of the currency up?

3. If the perception that the ECB are going to raise interest rates what would be the effect on the Euro?

An increase in the value of the currency as higher interest rates in the Eurozone would attract more investors taking advantage of the higher rates?

4. Am I right in thinking that the bund is traded on the EUREX exchange? Could anyoen confirm that Brent Crude is traded on the IPE in London? Dow Jones on Wall Street?

FOUND THE ANSWER HERE, THANKS!

5. What is the correct term for an order to buy or sell a stock immediately at the best available price?

Is that a discretionary order?

6). What is a GTC order?

FOUND ANSWER THANKS!

7). 7. The number of derivative contracts that are currently active on a specific underlying security and that have identical terms is known as what?

Open Interest?

8. At what time of day are the B.O.E and E.C.B decisions released?

Is it 7.45 EU for ECB and 12.0GMT for BOE.

Thank you very much for all your help guys. I hope now I've been a conscientious student you might all give me some more help Thanks!

that ain't being a conscientious student, it's being a cheat... and i can see at least one wrong answer there

1. If the market expects a rate hike from the MPC with the vote of 8/1 in favour it emerges that the vote was in fact 5/4 in favour. Which product would be most directly affected and what would you expect to happen in the market?

On this question is it stir products or bonds which will be most effected? Thanks