Pip stands for percentage in point, the smallest increment by which a Forex cross price changes.

Most currency pairs are quoted to four decimal places, meaning that a movement from 1.1850 to 1.1851 for a currency pair would constitute one pip.

For a particular position, you can calculate the value of a single pip using the above formula.

For instance, you know that the EUR/USD is quoted with four decimals, so for a given position you can multiply the position amount by the value of one pip, or USD 0.0001.

So, on a EUR/USD 100,000 contract, one pip would equal USD 10. On a USD/JPY 100,000 contract, one pip is equal to JPY 1000 because USD/JPY is quoted with only two decimals (meaning one pip = JPY 0.01).


An investment portfolio is the total range of financial instruments owned, such as company shares, fixed interest securities or money-market instruments.

An investment portfolio should have a range of relatively unrelated, or uncorrelated, investments in order to minimise risk—brokers and investment advisers warn against 'putting all your eggs in one basket'.


An investment in an instrument.

For example, when you trade (say, buy) USDJPY, you open a USDJPY position.

When you then execute the opposite trade (in this case, sell) USDJPY, you close the position.

Position can also refer to a trader's cash/securities/currencies balance, whether he or she is short of cash, has money to lend, is overbought or oversold in a currency, etc.

Posting date

The date a transaction is posted as a credit or debit in your account.


In Forex Options, the premium is used in two different contexts. The premium can be the:

  • total price of the Option, or the
  • amount by which the price of the Option exceeds its intrinsic value, also known as the Option's time value

When you buy an Option, you pay a premium up front, which entitles you to profit from a price change in the underlying asset. The premium amount depends on the size of the potential profit.

When you buy an Option, your potential loss is limited to the premium, but you have an unlimited profit potential.

Price-to-earnings (PE) ratio

The Price/Earnings ratio is the price of the stock divided by the earnings per share.

Primary order

The primary order of a three-way or If Done contingent order. Related (secondary) orders will not become active market orders unless this order is executed.

Profit taking

Closing a position to take profits. Typically done using a limit order to close a position and take profits automatically when the market breaches a defined level.


A proxy is a device that acts as an intermediary between a computer and the Internet.

Proxies often have a cache built in to make Web surfing faster, and some also allow the filtering of Web content for security purposes.

Put option

You can buy or sell a put Option.

If you buy a put Option, you have the right, but not the obligation, to sell the underlying instrument at the agreed strike price on the agreed expiry date (European Option).

If you sell a put Option, you have the obligation to buy the underlying instrument at the agreed strike price on the agreed expiry date (European Option).