Trading Basics topic

[Victrix]

1. What is a trading exchange?
   A trading exchange is a platform (centralized or decentralized) that allows people to buy and sell assets.

2. What do brokers do?
   Brokers buys and sell assets from another person in an exchange for a fee.

3. What is margin trading?
   Margin trading is a type of trade that involves borrowed money.

4. What is the difference between Bid and Offer (or Bid and Ask)
   Bid is the amount of money a buyer is willing to pay and offer is the amount of money a seller is willing to receive.

5. What is the leverage?
   Leverage is a strategy that involves using borrowed funds in order to multiply profits.

[kylemoore8]

1. A trading exchange is a marketplace where securities, commodities, derivatives and other financial instruments are traded in an organized and fair way.

2. A broker is an intermediary between investors and a financial exchange that conducts trades for the investor for a fee.

3. Margin trading is when investors borrow money from a broker in order to purchase an investment and is based on overall liquidity of the investors total account. Investors may use a percentage of their own money while borrowing most of the money in a loan from the broker.

4. Bid is the current price that a buyer is willing to pay for an investment and offer is what the seller is willing to sell an investment for.

5. Leverage is a trading term when using borrowed money or debt to gain more buying power in a marketplace.

[alve_lagander]

1. A trading exchange is a platform where you can trade assets.
2. Brokers handle the buying and selling for you.
3. Margin trading is when you trade using borrowed money.
4. Bid is the max price that the buyer is willing to buy and ask is the minimum price that the seller is willing to sell at.
5. Leverage is when you invest using debt.

[leemac]

1. A trading 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 means trading with money borrowed from a broker

4. The Bid price is the highest price that a buyer is willing to pay, whereas the Offer price is the minimum price that a seller is willing to sell

5. Leverage means borrowing capital to generate greater returns on an investment

[jschlier]

1. An exchange is a place where people can sell and buy assets.

2. A broker gives access to the exchange.

3. With margin you can borrow assets for a margin as collateral. The value of the margin is just a fraction of the value of the asset you borrowed. So you can sell assets without even having them or buy assets whose value is much higher as your account balance.

4. It’s the difference in the price of sellers and buyers.

5. With leverage you can trade assets with borrowed capital. This could be 10x of your account balance.

[DimaSha]

1. marketplace of securities, derivatives, commodities and more financial instruments!

2.Brokers connect investors and traders to the exchanges for a commission fees (like a middleman) !

3.Margin trading is a method to use a collateral for borrowed assets from your broker and get into a bigger position

4.Bid a price to buy, (all buy orders in the market), offer a price to sell (all sell orders)…

5. Leverege is to use of debt position to finance investments/trades that will yield a higher return than the interest on the debt. make or lose more money that you have. example 10X leverge with 0.1 of bitcoin in your portfolio you can get position of 1 bitcoin… you enter in 10000$ price ,when the price goes up or down your profits X10… and you have a liquidation risk of your position in 9000$ price area …

@Lizette

Here you can discuss and ask questions related to the course section “Trading Basics”

[Nakamoshi]

1.Exchange is a marketplace where cryptocurrencies, stocks, securities, commodities, derivatives and other financial assets are traded. The core function of an exchange is to ensure fair and orderly trading.

2.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.

3. Margin is the money borrowed from a brokerage firm to purchase an investment. It is the difference between the total value of securities held in an investor’s account and the loan amount from the broker.

4.A bid price is the price for which somebody is willing to buy something, ask price represents the minimum price that a seller is willing to take for that same asset. The difference between the bid price and ask price is known as the market’s spread, and is a measure of liquidity in that security.

5. Leverage is an investment strategy of using borrowed money to increase the potential return of an investment. Also the risk by leverage trading is higher.

[CryptoJedi1]

1. What is a trading exchange?
   And exchange is a marketplace where stocks, bonds, commodities, etc… are traded. Exchanges are supposed to ensure a fair and orderly trading.

2. What do brokers do?
   A broker is an individual or a firm that acts as an intermediary between an investor and a security exchange. They are the connection between buyers and sellers. Brokers are compensated for their services in the form of commissions or fees.

3. What is margin trading?
   When you use borrowed funds to trade. Margin refers to the amount of equity an investor has in their account. so “to buy on margin” means to use money borrowed from a broker to purchase the asset.

4. What is the difference between Bid and Offer (or Bid and Ask)?
   Bid price the highest price a buyer will pay. Ask or offers refers to the lowest price a seller will accept.

5. What is the leverage?
   Using borrowed money to increase the return of an investment. Leverage refers to the use of debt to amplify returns from an investment.

[Gabiwan68]

Trading basics-Homework
1- A trading exchange is a place where buyers and sellers can meet and trade.
2- Brokers are middlemen (persons or companies) that handle supply and demand information and facilitate buyers asn sellers to trade their stocks, commodities, etc…they charge a fee for their service
3- Margin trading is when you tarde with leverage, the margin is the colateral you have to bring to the transaction. The rest will be leverage.
4- The bid is the price someone is willing to buy something at and the offer is the price someone is willing to sell something at. When bids and offers match, the trade is made.
5- Leverage is when someone trades by borrowing money to make a larger transaction. This allows to multiply earnings but also losses.

[Denzel]

1.- What is a trading exchange?
Marketplace where financial instruments are traded.

2.- What do brokers do?
They take orders, they are the intermediary between the exchange and the investor.

3.- What is margin trading?
Trading with borrowed money.

4.- What is the difference between Bid and Offer (or Bid and Ask)
Bid: Order for buying.
Offer: Order for selling.

5.- What is the leverage?
In the case of trading, it is trading with borrowed money. Same as margin trading.

[inzhagey]

1. What is a trading exchange?
   A platform where many people are connected to buy and sell in a fair way and the price is not set by an organization.

2. What do brokers do?
   It is a platform where an organization sets the price for buying and selling. They either have the funds or are connected with other brokers to have a supply.

3. What is margin trading?
   Using borrowed money and getting into debt to buy or sell stocks or other investments and you don’t have full control over these things because it’s borrowed money and not totally yours.

4. What is the difference between Bid and Offer (or Bid and Ask)
   A high price that a person is willing to pay for something is called a bid. An offer is something a seller wants for their product or service.

5. What is the leverage?
   It is borrowed money or debt that is used by businesses, people, and trading to help get to a financial goal.

[inzhagey]

When connecting to a broker I can’t find FXCM in trading view, so should I use one of the brokerages that are listed below instead?

[mervxxgotti]

1. What is a trading exchange? — Marketplace matching buyers and sellers, makers and takers, for securities, commodities, derivatives, and other financial products
2. What do brokers do? — individual or entity acting as a hopefully more financially educated middle person to connect individual traders and investors with services of an exchange, brokers interact with exchanges and charge individuals fees and commissions. Hence, they buy and sell on behalf of clients, like a realty agent but for financial products.
3. What is margin trading? — margin is the money borrowed from a third party to purchase an investment so margin trading is trading on borrowed assets, where the third party lended assets act as collateral. This is more risky, but enables traders to trade with larger capital sums to higher leverage their positions.
4. What is the difference between Bid and Offer (or Bid and Ask). Bid is an offer to buy. Offer is amount one wishes to sell at.
5. What is the leverage? This is another term for margin trading as one is trading the margin (borrowed money between trader and third party) to leverage a higher position.

[Cajasky]

Investopedia dixit:

• What is a trading exchange?
• What do brokers do?
• What is margin trading?
• What is the difference between Bid and Offer (or Bid and Ask)
• What is the leverage?

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 is the money borrowed from a brokerage firm to purchase an investment. It is the difference between the total value of securities held in an investor’s account and the loan amount from the broker. Buying on margin is the act of borrowing money to buy securities. The practice includes buying an asset where the buyer pays only a percentage of the asset’s value and borrows the rest from the bank or broker. The broker acts as a lender and the securities in the investor’s account act as collateral.

4- 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.

5- Leverage results from using borrowed capital as a funding source when investing to expand the firm’s asset base and generate returns on risk capital. Leverage is an investment strategy of using borrowed money—specifically, the use of various financial instruments or borrowed to increase the potential return of an investment. Leverage can also refer to the amount of debt a firm uses to finance assets.

[enzinointhesky]

1. What is a trading exchange?
   It is a marketplaces where certain commodities, contracts or assets are traded. Nowdays it is commonly a website or a computer program.
2. What do brokers do?
   The connect the buyers with the sellers and they take a commision.
3. What is margin trading?
   Trading with more capital than the one you own. The broker will lend you some of the capital to open a position
4. What is the difference between Bid and Offer (or Bid and Ask)
   One is the buying price and the other one is the selling price.
5. What is the leverage?
   The multiplier that your capital/ position can be increased in margin trading.

[manted]

1. What is a trading exchange?
   An exchange is an open, organised marketplace for commodities, stocks, securities, derivatives and other financial instruments.

2. 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
   When brokers also act as purchasers or sellers, they become the principal party to the deal.
   A broker may be a firm. The firm acts as an agent for a customer, who pays it a commission for its services.

3. What is margin trading?
   Buying on margin is borrowing money from a broker to purchase stock. You can think of it as a loan from your brokerage. Margin trading allows you to buy more stock than you’d be able to normally. To trade on margin , you need a margin account.

4. What is the difference between Bid and Offer (or Bid and Ask)
   The term bid and ask 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 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.

5. What is the leverage?
   Leverage results from using borrowed capital as a funding source when investing to expand the firm’s asset base and generate returns on risk capital. 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. Leverage can also refer to the amount of [debt] a firm uses to finance assets

[StuartZW]

1. What is a Trading Exchange

• a marketplace, a service offered by a company, usually, that facilitates buyers and sellers of a commodity to make contact with each other and exchange goods. The excahnge takes a fee for this service

2. What do Brokers do

• brokers buy and sell assets on behalf of customers for a fee

3. What is Margin Trading

• margin trading usually requires the customer to borrow funds off the broker in order to trade. In doing so they acquire leverage on their own funds
  It is usually expressed with an “X:1” format.

4. What is the difference between Bid and Offer

• or bid and ask. Bid is the price the buyer is prepared to pay
• Offer/ask is the price the seller would want

5. What is leverage

• leverage is the ratio of borrowed money vs client money that an individual can have access to when margin trading
  Expressed as “1/margin requirement”

“Leverage” and “margin” refer to the same concept, just from a slightly different angle.

[Anonymous]

1.What is a trading exchange?
A market for buyer and seller met against for do the exchange something of both want to buy and sell.
2. What do broker do?
Broker is role of centralize to make buyer and seller to make a trader something of both want to sell by doesn’t met in p2p.
3. What is margin trading?
Margin trading is like borrow fund from the broker to trade by the trader have to back their asset for back up borrow.
4. What is the difference between Bid and Offer?
A bid is who want to buy something. A sell is who want to sell something.
5. What is the leverage?
Leverage is tools to help trader doesn’t have a lot of money to invest but want to take profit in 2x 3x 100x.

[all4coins]

1. What is a trading exchange?
   A trading exchange act as a market where e.g. stock buyers connect with stock sellers. The core function of an exchange is to ensure fair and orderly trading and the efficient dissemination of price information on that exchange.

2. 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. The main advantage in using brokers is that they know their market well. In other words, they are experts. Brokers also have relationships with prospective accounts. They know who to talk to, what to do, and above all, how to do it well.

3. What is margin trading?
   Trading on margin means borrowing money from a brokerage firm in order to carry out trades. When trading on margin, investors first deposit cash that then serves as collateral for the loan, and then pay ongoing interest payments on the money they borrow. This loan increases the buying power of the investor, allowing them to buy a larger quantity of securities. The securities purchased automatically serve as collateral for the margin loan.

4. What is the difference between Bid and Offer (or Bid and Ask)
   The bid price is the maximum price the buyer wants to pay. The offer/ask is the minimum price that the sellers wants to achieve.

5. What is the leverage?
   Leverage involves borrowing a certain amount of the money needed to invest in something.

[Chapin]

1. A trading exchange is where different financial are bought and sold.

2. A broker is a middle man between the individual buying and the exchange. Often making a profit based on a percentage fee on the trade.

3. Margin trading is basically trading with borrowed funds. Usually funds borrowed from the broker.

4. The difference between Bid and Ask is that Bid is the maximum price that a buyer is willing to pay and an Ask price is the minimum the seller is willing to sell at.