Glossary

Technical terms

The following glossary refers to technical terms from the financial sector.

Share split and reverse split

In a share split, the number of shares is increased and the nominal value per share is reduced. The company’s share capital therefore remains the same, only the number of shares in circulation is higher. The split is already executed on the split date, i.e. the split takes place before the stock exchange opens. As the name suggests, a reverse split is the opposite of a stock split. In a reverse stock split, the number of shares is reduced but the nominal value per share is increased. This split also does not change the company’s share capital.

Bonds

The bond asset class is a fixed-interest security. There are two forms of bonds: corporate bonds and government bonds, depending on the institution to which the money is lent. The bond contains details of the associated interest rate (the coupon) in advance. As you receive the original investment amount back at the end of the term (the maturity date), the interest yield is the only profit that can be made from bonds. The interest is paid out periodically, with the period not exceeding one year.

Asset class

A group of financial assets that are grouped together according to common characteristics. The bond asset class provides a fixed income, while the equity asset class may pay a dividend and the return is determined by price performance.

CFD (contracts for difference)

CFD trading involves buying and selling CFDs, also known as contracts for difference. CFDs are derivative products that allow you to trade markets such as shares, forex, indices and commodities without having to physically buy or sell shares, currencies or futures. One of the main advantages of CFD trading is that you can speculate on price fluctuations in either direction, with the profit or loss depending on how accurate your forecast is.

Securities account

A custody account is the sum of investment instruments such as bonds, shares, etc.

ETF or fund distributing or accumulating

ETFs also differ in terms of whether income such as interest and dividends are distributed or reinvested. In the case of accumulating ETFs or funds, the income is reinvested directly into the fund assets. This different treatment of income makes it difficult to compare performance.

Fixed-term deposits

As the name suggests, classic fixed-term deposits are nothing more than time deposits. Money that the customer makes available to the bank for a predetermined period at a specific interest rate. The term in Switzerland is usually 3-24 months; shorter terms are possible for larger amounts.

Forex trading

Currencies are always traded in pairs, which is why they are also referred to as currency pairs. The FX trading market - the largest financial market in the world - is often referred to as the foreign exchange market or currency market. The return on forex trading consists of the difference with which a currency is bought and later sold again.

Instruments and investment instruments

In GT, this term includes all securities and currency pairs that can be added to a watchlist.

Intraday rates

In GT, the intraday price defines the last current price through the trading day. These prices are displayed in GT with a delay of a few minutes to half an hour.

Price index and performance index

Two different methods are commonly used to calculate share indices. On the one hand, there are the so-called price indices or price indices. In this case, only the current prices of the securities contained in the index are included in the index level. Determining the index level is therefore relatively simple. A price index does not reflect profit distributions or other capital measures.

This is not the case with a performance index, where current income from the securities, such as dividends, is not suppressed but reinvested in the index immediately. As a result, performance indices gain more than comparable price indices.

Open position

An open position is a trade that can still generate a profit or cause a loss. When a position is closed, all gains and losses are realized and the trade is no longer active. Open positions can be either long or short, which means that you can profit from both rising and falling prices.

Portfolio

A portfolio is a collection of financial investments in one or more securities accounts. In addition, there are one or more bank accounts with different currencies. In GT, a portfolio corresponds to the replication of a single portfolio of a trading platform.

Standard deviation

Measure of the spread (fluctuation range) of data around its mean value. The greater the standard deviation (SA), the greater the price fluctuations are expected. SA is the probability that future returns will lie within a certain distance of the average return. This may be above or below the mean value

• With a probability of around 68 %, the future return will be within 1 SA of being below or above the average return.
• With a probability of approximately 95.5 %, the return in the future will be below or above the average return within a 2 SA.
• With a probability of approximately 99.7 %, the future return will be below or above the average return within a 3 SA.

Structured products (certificates)

Structured products or certificates are financial instruments bundled together by banks to form a “product”. The individual structured product is a security issued by a bank and is subject to conditions. The bank “creates” the structured product by bundling individual derivatives (options, etc.) into a sensible investment solution. The structured product is launched as a new issue for subscription and can then often be traded via the bank or a stock exchange.

Disposal costs

Costs incurred when a held position is sold. These include transaction costs, taxes and currency conversion.

Currency pair

In forex trading, the term “currency pair” or “currency pair” refers to the price in one currency compared to another currency.

Currencies are always traded as pairs in forex trading. In other words: When you buy one currency, you always sell the other currency in the currency pair at the same time.

In the abbreviated notation, the base currency is always mentioned first, followed by the quote currency. The two currencies are usually separated by a slash or sometimes not at all.

Example: If you want to buy euros with US dollars, you must buy the currency pair EUR/USD (EURUSD). In this currency pair, the euro is the base currency and the US dollar is the quote currency. Forex traders also refer to the euro “against” the US dollar.

Convertible bond

Convertible bonds are fixed-interest bonds issued by public limited companies. Like normal bonds, they are defined by an issuer, an interest coupon, a limited term and a nominal value. They also have a conversion right for their holder. This allows the holder to convert the convertible bond into a certain number of shares in the issuing company during its term.

Security

In GT, all instruments that are not assigned to currency pairs belong to the group of securities, including those that are not tradable, such as indices. On the other hand, all securities are assigned to an asset class and a stock exchange.

Technical terms

The following dictionary contains technical terms from information technology.

Drag and drop

“Drag and drop” means that things can be moved and shifted very easily on the screen.

Entity

In GT, entity is the general term for a unit of an information class. The information class consists of several entities.

GT instance

GT instance refers to the back-end of GT that is used by one or more users or, in future, by other GT instances. It must be possible to assign an individual GT instance to at least one unique URL.

Hierarchy table

The hierarchy table is a combination of the table and tree view controls. The nested nodes are represented by a table row and can be shown or hidden.

Information class

An information class consists of several entities. For example, the general term information class is used for portfolio or account. Whereby a single account is an entity of this information class.

JSON

JSON (JavaScript Object Notation) is a text format for exchanging data. It is easy to learn and read. JSON is based on the JavaScript language.

REST API

REST stands for REpresentational State Transfer, API for Application Programming Interface. This refers to a programming interface that is based on the paradigms and behavior of the World Wide Web (WWW). The API therefore carries out HTTP requests with GET, PUT, POST and DELETE etc.. It can be used for communication between servers or client and server in networks.

SaaS (Software as a Service)

With “Software as a Service”, or SaaS for short, you use provided software that you have not installed locally, but use via an Internet connection. The hardware and software are provided by the service provider. You only use the functions of the software externally.

Token bucket

A token bucket manages a sliding total usage budget as a balance of tokens. This technology recognizes that not all entries in a service correspond 1:1 with requests. A token bucket adds tokens with a certain throughput. When a service request is made, the service reserves a token to process the request and the number of tokens in the bucket decreases. If the bucket contains no more tokens, the service has reached its limit and responds with a backlog signal.