Every trade begins with an order – an instruction to a broker or an exchange to buy or sell a certain quantity of an instrument. The order type sets the conditions under which it is carried out: immediately at the next available price, only at a specified price, only within a certain period or only if the full quantity can be traded at once. This choice affects the price at which a trade is filled – and with it the costs and risk of the trade.
The terms in this section start with the two prices behind every quote, the bid price and the ask price, whose difference is the spread. They go on to explain market orders without a price limit, orders with limited validity or special execution conditions such as the day order, and the lot as the standard unit of trade size in forex. Other entries cover short selling, closing a position and being flat.
The list does not claim to be complete, but it covers the terms traders meet most often when placing orders, both on stock exchanges and in forex and CFD trading.