Wash trading is a type of trading that occurs when a trader buys and sells a security for the purpose of creating the appearance of activity in the market. Wash trades are generally considered to be a form of market manipulation, as they can be used to artificially inflate the price of a security or … Read more
When trading, there is always the risk that the timing of your trade may be off, and you may end up buying or selling an asset at a bad time. This is called timing risk. There are a few ways to mitigate timing risk. One is to use a stop-loss order, which automatically sells an … Read more
. Short Covering: Definition and Examples What is short covering? Short covering is the process of buying back securities or commodities that were sold short. Short sellers hope to profit from falling prices by selling high and buying low, but if prices rise instead, they may be forced to buy back the securities at a … Read more
A short squeeze is a trading situation in which a heavily shorted stock or other asset jumps sharply higher, forcing short sellers to buy to cover their positions and adding to the upward pressure. Short squeezes can produce quick, sharp rallies in an underlying security. A short squeeze can happen for a variety of reasons, … Read more
Illiquid definition refers to when a security or asset cannot be sold quickly enough in the market without impacting the price. It is the opposite of liquid. In general, the more buyers and sellers in a market, the more liquid it is. The more unique the security or asset, the less liquid it is. For … Read more
Invisible trade refers to the flow of goods and services that are not recorded by official statistics. This includes transactions between businesses and households that are not captured by the traditional trade statistics, such as the value of services provided by freelance workers, the black market, and barter transactions. It also includes transactions that take … Read more
The term “trading margin excess” refers to the excess of the value of a trader’s securities over the amount of margin that the trader has deposited with their broker. This excess margin can be used to cover losses on the account, or it can be withdrawn by the trader. What is margin account type? A … Read more
A profit target is a level at which a trader exits a trade in order to realize a profit. Profit targets can be based on a number of factors, including technical analysis, Fibonacci levels, support and resistance levels, and price patterns. Many traders use a combination of these factors to determine their profit targets. How … Read more
A fire sale is a sale of assets by a company in order to raise cash quickly. The assets are sold at a price below their market value, and the sale is usually motivated by an urgent need for cash, such as to pay off debts or refinance. A fire sale can also refer to … Read more
The negative carry definition is when the cost of holding a position overnight is greater than the interest earned on that position. This can happen when a trader is long a currency with a lower interest rate than the interest rate of the currency they are borrowing. For example, if a trader is long EUR/USD … Read more
