Trading Basics topic

[alcalvillo]

An exchange, or bourse also known as a trading exchange or trading venue, is an organized market where tradable securities, commodities, foreign exchange, futures, and options contracts are sold and bought

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

In finance, margin is collateral that the holder of a financial instrument has to deposit with a counterparty to cover some or all of the credit risk the holder poses for the counterparty.

A Bid is the price selected by a buyer to buy a stock, while the Offer is the price at which the seller is offering to sell the stock

Leverage is any technique involving using debt rather than fresh equity in the purchase of an asset, with the expectation that the after-tax profit to equity holders from the transaction

[Ebad1416]

1. What is a trading exchange?
trading exchange is a market place where commodities, securities,derivatives, crytos, fitures, options,
contract, etc is bought and sold.

2. What do brokers do?
Broker is an individual or firm that connect buyer and seller to each other and they charge their clients on every trade (buy/sell of assets) they make for their clients.

3. What is margin trading?
Margin trading is the method of using borrowed fund from a broker to trade assets. It works on the base of equity the investor has on their brokerage account.

4. What is the difference between Bid and Offer ?
Bid is the price buyer is willing to pay for an asset, whereas offer (ask) is the price seller is willing to make the deal.

5. What is the leverage?
Leverage is a trading method to use borrowed capital to amplify the return from a trade or investment.

[carlogarciac]

1. What is a trading exchange?

A marketplace where securities, commodities, derivatives and other financial instruments are traded.

2. What do brokers do?

Brokers act as intermediaries between an investor and a securities exchange.

3. What is margin trading?

The practice of borrowing 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)

Bid is the price selected as a buyer to buy a stock. Offer is the price which is the seller is offered to sell the stock.

5. What is the leverage?

Borrowed money/crypto from a broker which investor can use to trade for larger positions.

[jason]

1. What is a trading exchange?

a trading exchange is any forum - offline or online - where goods/services/commodities/etc can be traded/bought/sold

2. What do brokers do?

brokers help to match & connect buyers and sellers

3. What is margin trading?

borrowing funds from broker as to trade an asset

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

BID is the highest price the buyer is willing to buy something for; the OFFER is the lowest amount a seller will accept to sell the item for

5. What is the leverage?

borrowed funds from an exchange/broker which allows the investor a bigger position

[Nara]

1. What is a trading exchange?

It is a platform on which people can trade assets. E.g. Binance for cryptocurrencies or NYSE for stocks.

2. What do brokers do?

Arrange transactions between buyers and sellers, execute transactions on a client’s behalf, act as intermediaries to provide access to exchanges, financial services, etc. Sometimes brokers also provide investment advice.

3. What is margin trading?

Margin trading involves borrowing money from the brokerage to buy assets beyond the limits of your own capital. Borkerages set an initial margin (permitted ratio between investor capital and borrowed money) and a maintenance margin (same as initial margin, but needs to be maintained constantly). The securities bought on margin are used as collateral, so when the value of securities in an investor’s account falls below the maintenance margin, the brokerage issues a margin call, requiring the investor to add enough funds to the account to cover the maintenance margin or the brokerage will liquidate the securities bought on margin to cover the owed money. Margin trading increases volatility by magnifying the effects of price movements on your capital. E.g. trading on 3x margin, an asset only needs to lose 33% of its value for an investor to lose his entire investment.

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

A bid is a request to buy a security at a certain price
An offer is an offer to sell a security at a certain price.

5. What is leverage?

Leverage is the increase in buying power from trading at a particular margin trading. For example, a 50% initial margin requirement gives an investor 2x leverage.

[Scores24]

1. A trading exchange is an organized market where commodities, securities, assets are sold and bought.
2. Brokers act as intermediaries of investors and exchange (buyer seller) brokers also charge fees for every trade they make for their clients.
3. Margin trading is using borrowed funds from a broker to a financial asset which forms collateral for the loan from the broker.
4. Bid is what a buyer does when they want to purchase something in a market at a certain price
   Ask is what a seller does when it wants to sell a given product in a given market.
   5.Leverage is trading using borrowed capital as a funding source to expand in position a generate risk capital.

[Belle3]

1. What is a trading exchange?
   Trading exchange is a place where investments and securities are listed on the market,
2. What do brokers do?
   Brokers are intermediaries for market investors.
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)”?
   The bid price is the highest possible price that buyers in the market are willing to pay and the ask price is the lowest possible price that sellers are ready to receive.
5. What is the leverage?
   Leverage refers to the use of funds or borrowed funds to amplify returns from an investment. Investors use leverage to multiply their buying power in the market.

[cryptodleo]

1. What is a trading exchange?
   is a way for 2 people to interact together and exchange assets

2. What do brokers do?
   make easy the exchange between cryptocurrency or stocks etc.

3. What is margin trading?
   Margin trading is the practice of using borrowed funds from a broker to trade assets…

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

5. What is the leverage?
   Leverage is an investment strategy of using borrowed money to get bigger gains…

[kryptokrymmenos]

1. What is a trading exchange?
   An exchange, also known as a trading exchange, is an organized market where tradable securities, commodities, foreign exchange , futures, and options contracts are sold and bought.

2. What do brokers do?
   They bring the buyers and sellers together as a 3rd party.

3. What is margin trading?
   When you buy more shares with borrowed funds.

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

5. What is the leverage?
   Leverage is using borrowed funds to increase the returns of an investment.

[Cryptoshi007]

1. What is a trading exchange?
   It’s a platform that buyers and sellers use to make transactions on the assets they’re looking to exchange.

2. What do brokers do?
   They rob us…jk ------> They provide a bridge between buyers and sellers to make transacting easier.

3. What is margin trading?
   When you borrow funds from the exchange/broker in order to purchase more of an asset.

4. What’s the difference between a Bid and Offer (Bid/Ask)?
   Bid is when you are looking to purchase an asset and Offer is when you want to sell the asset.

5. What is leverage?
   When you want to exponentially expose your risk to an asset using the funds you have available. Buying/selling “as if” you had the amount of leverage you are using in a trade.

[hardik]

what is trading exchange ?

• an exchange is short of intermediary between buyer and seller where buyer would post an buying trade with the price he wants to buy a specific asset for and seller would post trade to sell an asset on its price , exchange typically would offer multiple services related to trading such as spot trading , margin trading leverage trading , derivatives trading and more.

2 what do brokers do ?
a broker would sell or buy an asset based on a order that is given buy the its client and in order to execute the trade he would charge a nominal fees which we call brokerage , a broker could be an individual person or an entity such a trading exchange.

3. what is margin trading ?

• a margin trading means you get to buy a financial asset more than you can afford with you initial capitol in this type of trading broker would allow you to buy more in a condition where your capitol will be held by him now in this scenario if your trade is a win you can earn more than you would earn it without margin also if your trade is on loosing side you could loose a significant amount where your broker will sell your asset and would eventually square of the trade.

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

• a bid means the price of an asset on which you want to sell it for
  a Ask means the price of an asset on which you want to buy it for

5 what is the leverage?

• a leverage is a credibility you get against your collateral to trade an asset that you can not afford with your initial capitol in a simple word you buy an asset with borrowed money to increase your holdings where the profit and lose would be totally yours in this trade you also risk your initial capitol completely as if your trade gets negative than you would might get liquidated and could loose your entire capitol .

[thecil]

Excellent answers, It’s easy to understand. Please keep them like that

Carlos Z.

[BERGLUND]

Exchange a place where buyers and sellers meet to exchange assets
Broker an entity who helps buyers and sellers to interact (with the purpose to steal a part of the trade commission and in the end make paticipants broke)
Margin trading a kind of bet on the market move. You borrow funds in order to increase the potential profit (and loss)
Bid the highest price anyone want to pay for the asset at the moment.
Ask the lowest price ayoue want to sell the asset for at the moment.
Leverage The factor of increase in margin trading you use.

Assuming you long the market (anticipate going up)
A margin trade with the leverage 10 will increase your “funds” 10 times. $100 and a market move of $10 to $15 will give you a final result of (100x10 invested value 1000, final value 1500, profit 500) +500%
A margin trade with the leverage 10 will increase your “funds” 10 times. $100 and a market move of $10 to $5 will give you a final result of (100x10 invested value 1000, final value 500, loss 500) -500%
use a stop loss

[Leone]

What is a trading exchange?

A trading exchange is a physical or electronic market place where securities, commodities and other financial instruments are traded. It is a platform where buyers and sellers can trade fairly and transparently. Companies can also raise capital on exchanges by selling shares on a listed exchange.

What do brokers do?

Brokers act as intermediaries between retail investors and exchanges, which require membership to trade. Brokers traditionally offered investment advice as well as executing trades. However, discount brokers execute trades for a low cost commission, making them widely accessible.

What is margin trading?

Margin trading is a service where one can trade with a significantly higher volume than they can afford to. The process works by a brokerage lending a trader funds to buy commodities or securities which the brokerage then uses as collateral. The investor is only required to buy a margin of the trade and close the trade at the end of a specified time period.

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

The Bid is the price a buyer stipulates he is willing to buy a security at. The offer is the price a seller is prepared to sell a security at. The difference between the two prices is called the spread and this is usually the profit the market maker makes for connecting buyer and seller.

What is leverage?

Leverage is debt used to magnify potential returns on an investment. The disadvantage is that it can also magnify losses too. It is differentiated from margin trading which is debt or borrowed money a firm uses to invest in other financial instruments.

[Thomas_VL]

A trading exchange is a system or market in which commercial transactions involving currency, shares, etc. can be carried out within or between countries.

*Brokers buy and sell goods or assets to others

3. What is margin trading?

Margin trading is a method of trading assets using funds provided by a third party. It allows traders to access greater sums of capital to leverage their positions.

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

Bid is the price a buyer is willing to pay while Offer or Ask is the price a seller is willing to accept for an asset.

5. What is the leverage?

Leverage is to use borrowed capital for an investment and expects the profits made to be greater than the interest payable.

[tarekhlb]

1. What is a trading exchange?
   An exchange is essentially a marketplace where financial instruments are traded.
2. What do brokers do?
   A broker is an intermediary between an investor and an exchange.
3. What is margin trading?
   Margin trading means using borrowed broker funds to trade a financial asset. T
   Margin then refers to the difference between the total value of investment made and the loan amount.
4. What is the difference between Bid and Offer (or Bid and Ask)
   The bid price is the maximum price that a buyer is willing to pay while the ask price is the minimum price that a seller is willing to accept for that same asset. The difference between bid and ask is the spread. In general, the smaller the spread, the better the liquidity.
5. What is the leverage?
   Leverage is an investment strategy of using borrowed money to increase the potential return of an investment. Leverage can also refer to the amount of debt a firm uses to finance assets.

[daninvest]

1. What is a trading exchange?

It is the market in which you can buy or sell different financial assets such as shares or cryptocurrencires. The exchange has to guarantee secure and orderly trading.

2. What do brokers do?

A broker is an intermediary between buyers and sellers in an exhange. They earn a comission from each trade.

3.What is margin trading?

It is a method that lets traders to increase their position on ther investments without adding more capital. This is possible because the different exchanges or brokers “lend” this additional sums of capital to investors.

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

Bid is the price that buyers are willing to pay for an asset, while k is the price at which sellers are willing to sell an asset.

5. What is the leverage?

Leverage makes possible to increase your open position in your trades, without adding more capital. It will highly increase your gains, but it is way more risky, since a dump on the price could get your position liquidated, losing all your money.

[klby]

1. A trading exchange is an organized market where tradable securities, commodities, foreign currencies, futures, options, cryptocurrencies contracts are bought and sold

2. Brokers buy and sell goods or assets for others

3. Margin Trading is a practice of using borrowed funds from a broker to trade a financial asset, which forms the collateral for the loan from the broker

4. A bid is a price selected by a buyer to buy a stock. An offer is a price at which the seller is offering to sell the stock

5. Leverage is an investment strategy of using borrowed money to increase the potential return of an investment.

[ghiasi12reza]

1. 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

2. What do brokers do?
   they act as intermediary between investors and securities exchange

3. What is margin trading?
   margin is collateral that the holder of a financial instrument has to deposit with a counterparty to cover some or all of the credit risk the holder poses for the counterparty.

4. What is the difference between Bid and Offer (or Bid and Ask)
   Bid is the higher price that a buyer is willing to pay, and Ask is the lowest amount that the seller is willing to sell.
   the difference between these two is called Bid & Ask spread

5. What is the leverage?
   leverage is any technique involving using debt rather than fresh equity in the purchase of an asset

[Palmeguppsi]

What is a trading exchange?

A trading exchange is a marketplace for trading things like securities, commodities, derivatives, and other financial instruments.
Or in our case: Cryptocurrencies.

What do brokers do?

A broker is essentially an intermediary between you and the investing world. Brokers can be organizations and individuals. Their purpose is to connect buyers and sellers.

What is margin trading?

Margin trading is when you buy and sell stocks or other types of investments with funds that you borrow from the broker. Essentially, you’re borrowing from the brokerage on the assumption that price of the stock you’re purchasing will rise.

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

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 after the buyer and seller agree on a price for the security which is no higher than the bid and no lower than the ask.

The difference between bid and ask prices, or the spread, is a key indicator of the liquidity of the asset. In general, the smaller the spread, the better the liquidity.

What is the leverage?

Leverage is an investment strategy of using borrowed money—specifically, the use of various financial instruments or borrowed capital to increase the potential return of an investment.