Trading Glossary

Take a look at our list of the financial terms associated with trading and the markets.
On-Neck pattern

The on neck pattern occurs when the first candle is a down candle following by a candle that gaps down but closes at a similar level to the previous days close. This forms what is referred to as a neckline by matching or very close closing prices.

One Cancels the Other Order

One of the ways to execute an order. After the order is placed, the trading system matches the order. In this execution mode, if one of more than one order is executed, then the other orders will be canceled. 

Open Position

Refers to the remaining positions that a trader has not closed after going long or short in the financial markets. 

Opportunity Cost

It is a key concept in economic behavior. Simply put, when we use our human and material resources for one thing (such as watching a movie), we will give up other opportunities (such as reading, shopping, or sleeping), and those opportunities are the opportunity cost of watching movies. 

Options

An option is a financial instrument derived from an underlying asset (e.g. stock). Investors who purchase options have the right to buy or sell for a specific period of time for the strike price. Unlike futures, options do not have an obligation to deliver, and when the performance price is unfavorable to the investor who buys the option, they can choose not to execute, with the maximum loss being Premium for the purchase of options.  

Order execution rate

Refers to the probability that an order will be executed after it has been placed. When a trader places an order, the system matches the order at an extremely fast speed and then executes the trade. However, there are a few cases where the order cannot be matched successfully, possibly due to deviations in liquidity or prices. Therefore, the order execution rate can reflect the order execution stability of a platform.

Overnight Position

Generally refers to positions held by swing traders, who tend to hold positions for more than one trading day. In contrast, the day-to-day reversal trader will close the position before the market closes, so that it does not have to bear the impact of the price change of the next trading day due to uncertainties after the market closes.