Trading terms glossary
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M

Macro-based
A trading strategy driven by macroeconomic factors.

Maintenance margin
Also known as the “variation margin”, the maintenance margin is the amount of funds that must be available to keep a margin trade open.

Margin call
A margin call is when a broker requests an increase maintenance margin from a trader, in order to keep a leveraged trade open. A margin call occurs when the percentage of an investor’s equity in falls below the broker’s required amount; this occurs after a position decreases significantly enough in value. Margin calls are charged to limit exposure to the participants, and mitigate risk to the broker.

Margin
Margin is the amount of funds required to open and maintain a leveraged position. e.g. a $500,000 position leveraged at 500:1 would required $1,000 in funds from the trader.

Margin deposit
A margin deposit is the amount a trader needs to put up in order to open a leveraged position. This can also be referred to as the initial margin, or simply as the deposit

Market capitalisation
A companies market capitalisation is the total market value of the company’s shares on the market. Market capitalisation, or “market cap”, is simple way for investors to gauge a company’s size, which can factor into their investment strategy.

Market data
Market data refers to live streaming of trade-related data. This information can include market volume, price, bid and ask quotes and more. Marketing data is available on virtually all markets including commodities, shares, indices, FX etc.

Market maker
A market maker is an trader that buys and sells large amounts of a particular asset in order to facilitate liquidity. A maker can institution or individual.

Market order
A market order is an instruction to a broker from the trader to execute a trade immediately at the current best available price. This can be a ‘buy’ or ‘sell’.

Merger
A merger is when two or more companies combine to become a single larger entity. This typically has significant financial implications and effect on the value of the participating companies stock value. A promising merger will usually resulting in an increase in share prices.

Learn more about Mergers

MetaTrader
MetaTrader is an popular online trading platform used for to trade a wide variety of instruments. MetaTrader 4 and Metatrader 5 versions are available with different tools and tradable assets.

Monte Carlo
“Monte Carlo” refers to a method of measuring risk by developing a modelling and predicting future investment prices. This is then used to predict the worst-case loss scenario of an investment.

Moving average convergence/divergence
The MACD (moving average convergence/divergence) is a technical indicator which aims to identify changes in a share price’s momentum. The MACD helps traders identify possible opportunities around support and resistance levels by collecting data from different moving averages.

Learn more about the Moving Average Convergence/Divergence oscillator (MACD).

Moving average
Often abbreviated to “MA”, the moving average is a common indicator in technical analysis, used to examine price movements while reducing the impact of random spikes in an assets price.

Multilateral trading facilities
MTFs offer investment firms and traders an alternative to traditional exchanges. MTFs typically allow trade of a wider variety markets and equity products, including assets which may not have an official market.

Multiplier effect
Multiplier effect describes the impact that changes in monetary supply can have on economic activity. When an government (or potentially company or individual) spends significant money it has a trickle-down effect the businesses and the economy which can have a much wider impact than the initial action.