Trading Basics topic

Technical Analysis 101 course
#245

What is a trading exchange?

An exchange is a marketplace where securities, commodities, derivatives and other financial instruments are traded. The core function of an exchange is to ensure fair and orderly trading and the efficient dissemination of price information for any securities trading on that exchange. Exchanges give companies, governments, and other groups a platform from which to sell securities to the investing public.

What do brokers do?

A broker is a person who buys and sells things on behalf of other people. A broker may also arrange transactions between a purchaser and vendor. After the parties have completed the deal, one of them pays the broker a commission

What is margin trading?

Margin trading is when you buy and sell stocks or other types of investments with borrowed money.

What is the difference between Bid and Offer (or Bid and Ask)?

The term bid and ask refers to the best potential price that buyers and sellers in the marketplace are willing to transact at. In other words, bid and ask refers to the best price at which a security can be sold and/or bought at the current time.

BID = Price at which buyer is willing to pay.

ASK = Price at which seller is willing to sell.

What is the leverage?

Traders use leverage to get bigger returns from small investments. They only provide part of the capital needed to open a position, but this cash deposit is then magnified – or ‘leveraged’ – so the profit or loss is based on the total value of the position. If all goes well, the final return could be much greater than your initial cash stake. But if it all goes wrong, then so could your losses.

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#246

  1. A trading exchange is a marketplace for buying and selling cryptocurrencies, currencies, securities, commodities.

  2. Your broker is someone who helps you make deals.
    Buying and selling assets. For a commission or fee.
    Like a real estate broker or power broker.

  3. Margin trading is when an investor buys an asset by borrowing the balance from a broker.

  4. A bid is the maximum price that a buyer is willing to pay. A bid is the sellers price and usually represents the demand for the good.
    An offer is the lowest price a seller is willing to accept. Usually correlates to the supply.
    The buyers price.

  5. Leverage trading is the act of borrowing funds to increase your position.
    Be cautious for losses could result in liquidation.

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#247

  1. A marketplace where one can trade financial instruments, such as securities, commodities, and derivatives.

  2. They act as intermediaries between investors and a trading exchange.

  3. Margin trading means borrowing money from the exchange or broker in order to carry out trades. An investor must first deposit their collateral to receive the loan and will be paying interest on it. This increases the buying power of the investor but also exposes them to more risk.

  4. The bid is the highest price a buyer is willing to pay for a particular financial instrument, and the ask refers to the minimum price a seller is willing to sell for the same financial instrument.

  5. Leverage is using borrowed money to trade, and your wins or losses are directly proportional in magnitude to the size of leverage taken.

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#248

1)An exchange is a marketplace where securities, commodities, derivatives and other financial instruments are traded. The core function of an exchange is to ensure fair and orderly trading and the efficient dissemination of price information for any securities trading on that exchange. Exchanges give companies, governments, and other groups a platform from which to sell securities to the investing public.
2)A broker is a person who buys and sells things on behalf of other people. A broker may also arrange transactions between a purchaser and vendor. After the parties have completed the deal, one of them pays the broker a commission
A broker may be a firm. The firm acts as an agent for a customer, who pays it a commission for its services.
3)Margin trading is the act of borrowing funds from a broker with the aim of investing in financial securities. The purchased stock serves as collateral for the loan. The primary reason behind borrowing money is to utilize more capital to invest and, by extension, the potential for more profits.
4)Bid order book is filled with the deals of people who are looking to purchase cryptocurrency. Ask order book is filled with bids of people who are looking to sell cryptocurrency. When bids and asks come to an agreement, the sale or purchase can take place.
5) Traders use leverage to get bigger returns from small investments. They only provide part of the capital needed to open a position, but this cash deposit is then magnified – or ‘leveraged’ – so the profit or loss is based on the total value of the position. If all goes well, the final return could be much greater than your initial cash stake. But if it all goes wrong, then so could your losses.

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#249

  1. What is a trading exchange?

    A marketplace where securities, commodities derivatives and other financial instruments are traded.
    The core function of an exchange is to ensure fair and orderly trading and the efficient dissemination of price information for any securities trading on that exchange.
    Exchanges give companies, governments, and other groups a platform from which to sell securities to the investing public.

2 What do brokers do?

Connect buyers and sellers

  1. What is margin trading?

    Margin trading is the practice of using borrowed funds from a broker to trade a financial asset, which forms the collateral for the loan from the broker.
    Margin refers to the amount of equity an investor has in their brokerage account, so “To margin” or “to buy on margin” means to use money borrowed from a broker to purchase the assets.
    Margin is often explained as the difference between the total value of securities (held in an investor’s account) vs the loan amount from the broker.

  2. What is the difference between Bid and Offer (or Bid and Ask),?
    One is buying the other selling. Also the difference in price between those that want to buy and those that want to sell. It can be a large amount.

  3. What is the leverage?
    Leverage is when position size is increased to increase upside gains at the risk of increasing downside risk through lending. Leverage comes with liquidation price where your trade can be liquidated.

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#250

  1. What is a trading exchange?
    A. A place to buy/sell stocks and commodities

  2. What do brokers do?
    B. they fill orders for buying and selling

  3. What is margin trading?
    C. When you buy on margin, you’re buying stock with both your money and the money you’ve borrowed. This allows you to purchase much more than you otherwise would have been able to.

  4. What is the difference between Bid and Offer (or Bid and Ask)
    D. The term “bid and ask” (also known as “bid and offer”) refers to a two-way price quotation that indicates the best potential price at which a security can be sold and bought at a given point in time.

  5. What is the leverage?
    E. Effects Buying stock on the margin with leverage can increase the potential gains of the investment. For example, $10,000 is invested in a stock using $5,000 cash from the investor and $5,000 borrowed from the broker. If the stock goes up 10% the gain is $1,000.

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#251

  1. What is a trading exchange?
    A trading exchange is a marketplace of buy/sell orders on an order book where people can go to trade securities, crypto, commodities, derivatives and other financial instruments

  2. What do brokers do?
    A broker is an intermediary between an investor/trader and a trading exchange. They help the investor secure the buy/sell’s they want on a specific asset at certain price targets

  3. What is margin trading?
    This is when you buy/sell assets with borrowed money. This is what is meant when trading with leverage is discussed. It’s a much higher risk/reward ratio. You can make more money, but if the trade goes the opposite direction you can get absolutely wrecked. Only investors/traders who truly know what they are doing should use leverage

  4. What is the difference between Bid and Offer (or Bid and Ask)
    The term “bid and ask” (also known as “bid and offer”) refers to a two-way price quotation that indicates the best potential price at which a security can be sold and bought at a given point in time. The bid price represents the maximum price that a buyer is willing to pay for a share of stock or other security. The ask price represents the minimum price that a seller is willing to take for that same security. A trade or transaction occurs when a buyer in the market is willing to pay the best offer available—or is willing to sell at the highest bid.

  5. What is the leverage?

Leveraged trading, which is also known as margin trading, margin finance or trading on margin, allows you to open a trading position with a broker using a small amount of capital in order to take a much larger position in the market** .

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#252

A trading exchange is a marketplace where securities, commodities, derivatives and other financial instruments are traded.

A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange.

Margin trading means borrowing from your brokerage firm and using that money to trade. The borrowed funds are typically paid back with interest.

Bid refers to the highest price a buyer will pay to buy a number of shares of a stock. The ask is the lowest price at which a seller will sell.

Leverage is the use of debt or borrowed funds to undertake an investment or project. The hope is that the project would yield extra returns and the funds can then be paid back.

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#253

  1. What is a trading exchange?
    A trading exchange is a platform that connects buyers and sellers together it deals mostly with financial products such as stocks, bonds, securities, derivatives etc.

  2. What do brokers do?
    Brokers act as financial intermediaries, they connect both the buyers who want to buy a commodity and sellers who want to sell a commodity in exchange for a payment once a transaction between both parties is successful

  3. What is margin trading?
    Margin trading involves borrowing funds from brokers in order to trade at a larger positions giving you more buying power for a short period of time it is mostly used to for shorting stocks and you need to open a margin account with your brokerage

  4. What is the difference between Bid and Offer (or Bid and Ask)
    Bid is the highest price a buyer is will to pay to buy a commodity while ask is the lowest price a seller is willing to sell a commodity

  5. What is the leverage?

Leverage is a similar concept to margin trading. It mostly uses a combination of your capital + borrowed funds from the brokerage to make higher profits however if things go sideways you get liquidated because you are using collateral to payback your loan and most exchanges automatically close down positions before full liquidation as a layer of protection always use stop loss before trading to avoid getting fully liquidated

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#254

  1. What is a trading exchange?
    A trading exchange is an open marketplace where things such as commodities, futures, cryptocurrencies, securities and other various assets can be purchased and sold.

  2. What do brokers do?
    A broker can be either a firm or an individual that acts as an intermediary between an investor and exchange. Since exchanges will only place orders with individuals or firms that are members. Traders and investors require the services of these intermediaries.

  3. What is margin trading?
    Margin trading is borrowing money from a brokerage in order to carry out trades. Investors deposit funds that serve as collateral for the loan, then pay ongoing interest payments on the borrowed money.

  4. What is the difference between Bid and Offer (or Bid and ask)?
    The term “Bid and Ask” is a two way price quotation that indicates the best price at which a security can be sold or bought during a given time period. A Bid is the selected price of a buyer of a stock, while the Offer is the price at which the seller is willing to sell the stock.

  5. What is leverage?
    Leverage is a technique by which an individual borrows funds to make a purchase or investment, in the hope that profits made in the future will be way more substantial than the cost of borrowing.

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#255

What is a trading exchange?

A place for traders to trade. Could be virtual (Binance) or physical (London Metal Exchange). For this course we will likely be focusing on virtual / online trading exchanges. These are websites with software facilitating trades in crypto currencies, equities, currencies and/or commodities.

What do brokers do?

A broker is an individual or firm that buys and sells things on behalf of clients in markets such as real estate and equities. The broker must be licensed by the relevant authorities and typically earns a small commission on trades it helps facilitate.

What is margin trading?

Margin trading is a form of leverage trading enabling the trader to borrow against their holdings in order to magnify their returns should the market move in the direction hoped. However risk is also magnified and should the market move against the trader they stand to lose much more than they would through traditional spot trading.

What is the difference between Bid and Offer (or Bid and Ask)

Bids and offers are orders placed in the exchange’s order book. A bid is an order to buy at a certain price, an offer (ask) is an order to sell at a certain price. Bids and offers are made by traders placing limit orders in the order book. If a bid or offer is not met it can be canceled by the trader.

What is the leverage?

Borrowing funds to buy things, hoping that profits will be more than the cost of borrowing. Leverage trading is a popular form of crypto trading with many exchanges offering upto 100x leverage.

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#256

  1. What is a trading exchange? A stock exchange is a centralized location that brings corporations and governments so that investors can buy and sell equities .

  2. What do brokers do? A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange . A broker can also refer to the role of a firm when it acts as an agent for a customer and charges the customer a commission for its services.

  3. What is margin trading? Margin trading refers to the practice of using borrowed funds from a broker to trade a financial asset , which forms the collateral for the loan from the broker.

  4. What is the difference between Bid and Offer (or Bid and Ask)Definition . An ask or offer is the amount a seller is willing to take in exchange of a security at a given point in time. A bid is the maximum amount of money a buyer is willing to part with to get a security listed.

VERSUS BID

  1. What is the leverage? The textbook definition of “leverage” is having the ability to control a large amount of money using none or very little of your own money and borrowing the rest . For example, to control a $100,000 position, your broker will set aside $1,000 from your account. Your leverage, which is expressed in ratios, is now 100:1
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#257
  1. What is a trading exchange? a marketplace to buy and sell a financial instrument ( commodity, asset, stock, token, derivative)
  2. What do brokers do? it is the intermediare that helps to buy or sell the financial instrument
  3. What is margin trading? is when you use debt to buy or sell a financial instrument
  4. What is the difference between Bid and Offer (or Bid and Ask) bid is the buyer’s price willing to pay and offer/ask is the seller’s price
  5. What is the leverage? is the process of borrow capital to make a trade. The amount borrow would determine the multiple potential returns of a trade.
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#258
  1. What is a trading exchange?
  2. What do brokers do?
  3. What is margin trading?
  4. What is the difference between Bid and Offer (or Bid and Ask)
  5. What is the leverage?

Blockquote

  1. Trading Exchange is a marketplace in which securities, commodities, derivatives and other financial instruments are traded.

  2. A Broker is an individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.

  3. Margin trading is when investors borrow money to buy stock. It’s a risky trading strategy that requires you to deposit cash in a brokerage account as collateral for a loan, and pay interest on the borrowed funds. Margin trading—also known as buying on margin—allows you to use *leverage to boost your purchasing power and make larger investments than you could with your own resources.

  4. The term bid and ask refers to the best potential price that buyers and sellers in the marketplace are willing to transact at. The term “bid and ask” (also known as “bid and offer”) refers to a two-way price quotation that indicates the best potential price at which a security can be sold and bought at a given point in time .

  5. Leverage is nothing more or less than using borrowed money to invest. Leverage can be used to help finance anything from a home purchase to stock market speculation. Businesses widely use leverage to fund their growth, families apply leverage—in the form of mortgage debt—to purchase homes, and financial professionals use leverage to boost their investing strategies.

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#259

1. What is a trading exchange?
It’s a marketplace where you can trade secruties, commodities and other financial instruments that are traded.

2. What do brokers do?
Brokers process transactions between a buyer and a seller

3. What is margin trading?
Margin is collateral to cover the credit risk when they borrow cash from the brokerage to buy financial instruments.

4. What is the difference between Bid and Offer (or Bid and Ask)
Bid refers to the highest price the buy will pay for shares or tokens.
Ask refers to the lowest price the seller is willing to sell the shares or tokens at.

5. What is the leverage?
Financial leverage is to borrow capital as a fundig source when investing to expand your assets and to amplify your potential returns.

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#260
  1. What is a trading exchange?

Answer: a trading exchange is a marketplace where securities, commodities, derivatives and other financial instruments are traded.

  1. What do brokers do?

Answer: A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange. Because securities exchanges only accept orders from individuals or firms who are members of that exchange, individual traders and investors need the services of exchange members.

Brokers provide that service and are compensated in various ways, either through commissions, fees, or through being paid by the exchange itself.

  1. What is margin trading?

Answer: margin trading involves borrowing money from a broker and using that money to purchase securities or equity shares. By taking out a loan, the investor can buy more shares than they would have otherwise been able to afford using only the cash in their account. In return, the investor must repay the loan plus the interest that the broker charges.

  1. What is the difference between Bid and Offer (or Bid and Ask)

Answer: the term “bid and ask” (also known as “bid and offer”) refers to a two-way price quotation that indicates the best potential price at which a security can be sold and bought at a given point in time. The bid price represents the maximum price that a buyer is willing to pay for a share of stock or other security. The ask price represents the minimum price that a seller is willing to take for the same security.

The difference between bid and ask prices is called the spread. It is key indicator of the liquidity of the asset - the smaller the spread, the higher the liquidity.

  1. What is the leverage?

Answer: leverage is the use of debt (borrowed capital) in order to undertake an investment or project.

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#261

  1. An exchange is: a marketplace where securities, commodities, derivatives and other financial instruments are traded.

  2. A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange.

  3. Margin trading is a method of trading assets using funds provided by a third party.

  4. A bid is a price at which somebody wishes to buy, and an offer (or ask) is the price at which somebody wishes to sell.

  5. Leverage is the use of borrowed funds to increase one’s trading position beyond what would be available from their cash balance alone.

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#262

Exchange: Where peer meet to buy and sell assets, securities and futures etc
Brokers: Pair buyers and sellers together and take a small fee for the transaction.
Margin trading: is buying an asset on collateral.
Bid & offer: Bid is the price its currently going for whatever asset might be. Offer, is what the buyer is offering may be more or less than the bid.
Leverage: is for example someone wanting to sell btc at a certain price but the others wont buy, and your the only one selling, they have the leverage over you because they might give you an offer for far less than the current market price for the convenience of selling immediately, and you have two choices either, sell immediately or you will have to hold and risk losing more money on whatever said asset.

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#263
  1. Is a virtual market where financial instruments are traded.
  2. Most important things brokers do is to connect buyers and traders.
  3. Margin trading refers to the practice of using borrowed funds from a broker to trade a financial assets, which forms the collateral for the loan from the broker.
  4. The ‘‘bid’’ is the highest price a buyer will pay for a specific thing. ‘‘Offer’’ will be the price a seller will ask for his financial instrument o thing.
  5. Leverage is the borrowed capital for an investment, expecting the profits made to be grater than the interest payable.
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#264
  1. What is a trading exchange?

Is a market platform where securities, commodities, derivatives and other financial instrumens are traded.

  1. What do brokers do?

A broker is an individual or firm that acts as intermediary between an investor and an exchange.

  1. What is margin trading?

Margin refers to the collateral that the investor has to deposit with his broker or exchange in order to cover the credit risks that the investor poses to the broker or exchange.

  1. What is the difference between BID and OFFER (BID and ASK)?

BID: Is the highest price that a buyer is willing to pay for a specific number of a stock or share of any financial instrument at any point in time.

  1. What is leverage?

Is the use of borrowed funds in order to increase a position in the market beyond what the original disposable cash balance would allow.

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