CFD
A contract for difference is a product designed to reflect the price movement of an underlying market without conferring ownership of that underlying asset.
Why the definition matters: Price movement in either direction can result in a loss.
Trading glossary
Platform and market language, clearly explained.
Use these definitions while exploring markets, comparing accounts, or learning the platform. Each entry adds context but does not replace a complete trading decision.
Trade with risk in view
Platform tools and market information can support your process, but they cannot remove uncertainty. Review costs, product terms, and potential loss before trading.
Market structure
Order controls
Currencies
Costs
Execution
Risk language
Spread
The spread is the difference between quoted buy and sell prices at a particular time.
Why the definition matters: A changing spread can affect the cost and timing assumptions behind an idea.
Pip
A pip is a standardised unit used to describe small price changes in many currency pairs.
Why the definition matters: The financial effect of a pip depends on the size of the exposure.
Margin
Margin is the amount set aside to support an exposure in a leveraged product.
Why the definition matters: A smaller margin requirement does not mean the market risk is small.
Leverage
Leverage allows a relatively small amount of capital to represent a larger market exposure.
Why the definition matters: It can amplify losses just as readily as gains.
Stop order
A stop order is an instruction intended to trigger or close a position at a defined price level.
Why the definition matters: Fast conditions or price gaps can affect the level at which an order is carried out.
Limit order
A limit order is an instruction linked to a specified price or better, subject to market conditions and available liquidity.
Why the definition matters: An instruction may not be filled if the market does not reach the stated condition.
Slippage
Slippage is the difference between an expected price and the price at which an instruction is carried out.
Why the definition matters: It can be more pronounced in fast or thinly traded conditions.
Liquidity
Liquidity describes how readily market participants can trade without creating a large price impact.
Why the definition matters: Lower liquidity can make pricing and execution less predictable.
Volatility
Volatility describes the pace and scale of price movement over time.
Why the definition matters: Higher volatility can quickly change both risk and the relevance of a prior assumption.
Overnight financing
Some leveraged products can involve an adjustment for holding an exposure beyond a specified time.
Why the definition matters: The applicable terms and potential costs should be reviewed before relying on a longer-horizon plan.
Drawdown
Drawdown is the fall from a previous high value to a subsequent lower value.
Why the definition matters: A sustained drawdown can affect capital, confidence, and decision quality.
Turn a definition into better context.
Pair each term with the related Academy lesson and market page so you can understand how it appears in the LumenTrade platform.