Glossary
Terms, defined plainly
- CandlestickTechnicals
- A bar showing open, high, low and close for one period; the body and wicks reveal who won the session.
- Lesson: Reading candlesticks
- DojiTechnicals
- A candle whose open and close are nearly equal, indicating balance between buyers and sellers.
- Lesson: Reading candlesticks
- Gap riskRisk
- The chance that price opens beyond your stop, filling at a much worse level.
- Lesson: Stop placement, gaps and slippage
- Initial marginFutures
- The deposit required to open a futures position — a performance bond, not a cost or a loss limit.
- Lesson: Margin is not risk
- Maintenance marginFutures
- The minimum equity required to keep a position open; falling below it can trigger a margin call or liquidation.
- Lesson: Margin is not risk
- Open interestOptions
- Number of option contracts outstanding that have not been closed or exercised.
- Lesson: Option liquidity and bid-ask spreads