Glossary: B

These are common terms used in the financial services industry
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Backwardation

A theory which says that as a futures contract nears expiry, it will trade at a higher price compared to when it was further from the expiry date. Also see 'Contango'.

Base currency

The first currency quoted in a currency pair (for example in the GBP/USD currency pair, GBP is the base currency while USD is the quote currency).

Base rate

The lending rate determined by the central bank of a given country.

Basis point

Typically one hundredth of 1%, for example an interest rate cut of 50 basis points is equal to 0.5%.

Bear market

A market distinguished by falling prices and negative sentiment.

Bid

The highest price a buyer is willing to pay for a product is referred to as the ‘bid’. Also see Ask and Offer.

Bid price

The price at which the buyer is willing to purchase at.

Bid-offer spread

The difference between the buying price (offer/ask) and selling price (bid) of a product.

Blue chip

Blue-chip companies are usually well-established, financially sound and better able to weather downturns. As a result, blue-chip stocks are regarded as less volatile. Companies listed in a country’s top tier stock index, such as the UK’s FTSE 100, are considered blue-chips.

Bollinger Bands®

A chart indicator used in technical analysis to measure market volatility, consisting of a single moving average and two standard deviation bands.

Breakout trading

Trading strategies that recommend entering spread bets or CFD trades once the price breaks through a defined resistance or support level. New ‘buy’ positions are entered into when the price breaks through a resistance level, while new ‘sell’ positions are entered into when the price breaks through a support level. These strategies are based on the view that once the price breaks through a support or resistance level, a new trend is likely to begin.

Broker

An individual or firm acting as an intermediary to bring together buyers and sellers, typically usually for a small commission or fee.

Bull market

A market distinguished by rising prices. Bullish investors have a positive opinion about a market, believing that prices will continue to rise.

Bullion

Precious metals such as gold, silver, platinum or palladium in the form of bars or ingots.

Bundesbank

Central bank of Germany.

Buy limit order

A conditional trading order that indicates a security may be purchased only at the designated price or lower. Also see Take-profit order.

Buy position

A position in the market that would profit from a rising market price, or make a loss should prices fall.

Buy stop- entry order

When you buy a security that is entered at a price above the current offer price. It is triggered when the market price touches or goes through the specified stop price.

Land Rover BAR

As official partner of Land Rover BAR we’re backing Sir Ben Ainslie’s team to bring the America’s Cup home.

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NSW Waratahs

We’re proud to support Super XV Rugby giants the NSW Waratahs, one of Australia’s most iconic teams.

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