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Basic Concepts Relating to Forex Trades

Bid Price

Refers to the price the intermediary institution accepts to buy, i.e. the price you can sell the underlying security.

Base Currency

Refers to the first currency in the traded currency parity. For instance, in EUR/TRY parity, base currency is Euro.

Standing Order

Refers to an order to be submitted to the market only if and when a bid or ask order is entered not at the then-current market price, but at the price requested by you, and the current market price reaches the level determined by you.

Partial Execution of Standing Orders

If and to the extent only a part of orders sent by our customers is executed in the market, only the trades executed by then are booked at the end of day. The remaining passive amount is cancelled in the system at the end of day, and a new order valid in the next trading day is formed therein.

GTC Order (Good till cancelled)

Refers to an order which is valid until cancelled by you.

Trading Margin

Refers to initial and maintenance margins to be calculated by Garanti BBVA Yatırım for applicability of your bid and ask orders and required to be made by you available in your accounts held with Garanti BBVA Yatırım.

Leverage

Refers to a mechanism allowing and enabling you to execute trades above the principal sum you hold.

Leverage Ratio

Refers to a ratio indicating and determining up to how many times the amount of margin deposited by you for trading purposes you may execute trades in the market.

Counter Currency

Refers to the second currency in the traded currency parity. For instance, in EUR/TRY parity, counter currency is TRY.

Short Position

Refers to sale of a leveraged asset as of a certain moment with the expectation of a future price fall.

Protection Level Orders (Take Profit – Stop Loss)

Refers to orders given on the existing open position at a predetermined price level in order to make profit by closing the open position at the predetermined price (Take Profit Order) or if the market prices develop unfavourably, in order to close the position for limitation of loss (Stop Loss Order – Stop Loss Level).

Quotation

Refers to the price available and current in the market in respect of a currency parity.

Pip / Tick (Point)

Abbreviation of “Price Interest Point” term. Refers to the small price movement for any currency pair. 1 pip = 0.0001 (1 per ten thousands).

Position Closing Level (Stop-Out)

Refers to the minimum margin rate where positions will be automatically closed.

Ask Price

Refers to the price the intermediary institution accepts to sell, i.e. the price you can buy the underlying security.

Scalping

Refers to transactions which are executed in forex markets in fairly short time intervals and generally intend to make a profit of 10 pips or less.

Spread (Exchange Difference)

Refers to the difference between bid price and ask price.

Swap (Holding Cost)

Overnight holding cost or gain, i.e. swap arises out of the interest rate differences between two different currencies. If you are buying one of these two currencies the interest rate of which is lower, and are selling the other currency with the higher interest rate, and if the position is carried forward to the next business day, then, a swap cost arises. The other way round, an overnight swap gain arises. So, swap means an amount paid to or collected from you as a result of overnight holding of a position.

Predated Order

Refers to an order which is valid until a date predetermined by you.

Margin Call Level

Refers to a level which is expressed by a rate of the initial margin, and if your available margin falls below this level, the system does not allow you to open a new position.

Reverse Transaction

Refers to taking a long position against a short position, or a short position against a long position. Your reversing a transaction does not mean the position is closed. Each open position is required to be closed separately.

Long Position

Refers to purchase of a leveraged asset as of a certain moment with the expectation of a future price increase.

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