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Adoniz
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Joined: October 8th, 2008, 2:33 pm

Trading Lingo....

February 6th, 2009, 8:05 am

I hear a lot of talk /shortcuts that I really have NO idea what they mean.Any idea where I can find info on traders lingo ? (kind of Glossary)Especially Interest rate derivatives
 
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rmax
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Joined: December 8th, 2005, 9:31 am

Trading Lingo....

February 6th, 2009, 10:36 am

can you give a few examples?
 
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Traden4Alpha
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Trading Lingo....

February 6th, 2009, 2:23 pm

You might try investopedia.Otherwise, throw as many as you can into one google search box.
 
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FischerAccounts
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Trading Lingo....

February 7th, 2009, 11:33 am

Something which I can't find in any books but which I encountered a lot over my internship is when traders refer to bid, offer and lifted. When a trader says "The March contract is very heavily bid/offered" or "I just got lifted big-time" what does it actually mean.Thanks for the clarification.
 
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daveangel
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Joined: October 20th, 2003, 4:05 pm

Trading Lingo....

February 7th, 2009, 12:37 pm

hitting the bid and lifting the offer come from open outcry markets. when someone sells to a bidder they indicate that they are doing so with a downward motion of the hand and buying with an upward motion.a market that is well bid or offered is one where there is depth. if its electronic you should be able to see good size at each spread either side. a choice market is one where the market maker is indifferent- they quote one price for you to deal at either way.
Last edited by daveangel on February 6th, 2009, 11:00 pm, edited 1 time in total.
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PlasticSaber
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Trading Lingo....

February 7th, 2009, 11:08 pm

QuoteOriginally posted by: daveangelhitting the bid and lifting the offer come from open outcry markets. when someone sells to a bidder they indicate that they are doing so with a downward motion of the hand and buying with an upward motion.In the price market, it is pretty clear. If I hear a trader says "The market was so one-sided this morning. XYZ got hit constantly after the announcement.", I know he talks about XYZ has experienced heavy selling pressure and the price would likely to have been dropped a lot.But is the lingo the same in spread market (like interest rate product or CDS) which are quoted in spread. Does hitting the bid cause the spread to tighten (and price to rise) or the other way round?
 
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MTPockets
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Joined: July 16th, 2003, 2:09 pm

Trading Lingo....

February 8th, 2009, 4:50 am

Buy = Mine = Bid = Lift the offer = Take = (Pay in swaps)Sell = Yours = Offer = Hit the bid = Give = (Receive in swaps) = ("got lifted" in your Q above Fischer)For the interest rates market as a whole if you hear references to it being well bid, it'll generally be in PRICE terms. However, rate markets can be a little confusing in that it simply comes down to how the product is quoted. Bonds, bond futures, ED's mostly trade on price. IR swaps are quoted with reference to pay fixed yield, so in YIELD terms. Spreads are the same, as they're simply a spread between yields, so if you hear the 2y spread has been smashed down to 60 that means exactly what it says (that the spread between 2y swap and 2y note yields is 60bp). Same thing with curve spreads, basis etc).So for example, if I wanted to pay on 2y swaps and hedge it by buying 2y notes (bonds). I could find an offer in the swap, which I would lift (take) by saying mine. As bonds are generally quoted in price I would also get an offer in the bond which I would lift by saying mine (or I could take it on the screen).
Last edited by MTPockets on February 7th, 2009, 11:00 pm, edited 1 time in total.
 
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PlasticSaber
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Trading Lingo....

February 9th, 2009, 9:36 pm

Here is another one that I just read recently: "Now seeing sellers of the front end.... axed to buy 1Y to 2Y CDS"What does "axed" mean in this context? Does that mean "cancel", ie protection buyers now covering their shorts ("cancelled" buying the the 1Y/2Y CDS)?
 
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Martinghoul
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Trading Lingo....

February 9th, 2009, 9:55 pm

QuoteOriginally posted by: PlasticSaberHere is another one that I just read recently: "Now seeing sellers of the front end.... axed to buy 1Y to 2Y CDS"What does "axed" mean in this context? Does that mean "cancel", ie protection buyers now covering their shorts ("cancelled" buying the the 1Y/2Y CDS)?Nah, it means that the sender wants ("axed" = "asked") to buy... Unrelated to the presence of other sellers.
 
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MTPockets
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Trading Lingo....

February 10th, 2009, 12:19 am

I'm not aure about 'axed=asked' really, but the explantion is correct.'Axes' are simply natural interests/position. So that could be (for example) a bond sales desk sending out their axes at the start of the day to clients i.e. positions they have an interest in selling and are therefore likely to be better offers in - although this is often because they're either crappy bonds (or they wouldn't be selling them...) or they're just talking up their own book.It could also just be a desk that (again for example) has a big long position in 10y they need to shift, so they're natural 'axed' sellers of that part of the curve (although in reality they could actually be buyers and just trying to spook things to help their cause).
 
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daveangel
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Trading Lingo....

February 10th, 2009, 3:10 pm

a "yard" is a billion - it comes from the french milliard"cable" referes to Sterling versus dollar - historically I think its the cross-atlantic cable."bearish" or being a bear is someone who thinks the price is going down - comes from fur traders who sold bear ksins before killing them.
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freddiemac
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Trading Lingo....

February 16th, 2009, 8:40 pm

Last edited by freddiemac on February 15th, 2009, 11:00 pm, edited 1 time in total.
 
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rmax
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Trading Lingo....

February 17th, 2009, 4:31 pm

My fav: Margarine market - spreads are wide Although I confess I have never heard it used on the floor.
 
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jrmonro
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Trading Lingo....

February 19th, 2009, 4:11 pm

Axe(d) refers to the saying "an axe to grind". As mentioned previously, an interest in a particular trade or position.
 
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r0berthardy
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Trading Lingo....

December 28th, 2011, 2:43 pm

I have written a short article on this in my blog, along with a few other mnemonics for understanding the lingo.Have a look here, should answer a few questions.
Last edited by r0berthardy on December 27th, 2011, 11:00 pm, edited 1 time in total.