Trader Jargon

Just another day in the real-estate market...

Some Wall Street trader jargon and terminology.

At The Money (ATM)	An option with an exercise price that is equal to the current market price of the underlying commodity.
Out of The Money	For call options, an exercise price that above the current market price of the underlying commodity. For put options, an exercise price that below the current market price of the underlying commodity.
In The Money	For call options, an exercise price that below the current market price of the underlying commodity. For put options, an exercise price that above the current market price of the underlying commodity.
Averaging a loser	Buying more at a lower price or selling more at a higher price.
EMA	Exponential Moving Average. Data points become rapidly less significant the further back in time.
SMA	Simple Moving Average = the sum of all the data points divided by the number of data points.
WMA	Weighted Moving Average. A different percentage weighting is given to each data point.
Being on the wrong side of the market	Holding a position which continues to lose money as the market moves against your position.
Cherry picking	Selectively taking only those trades which have the highest probability of making a profit. Don't forget some cherries can be rotten.
Close out position	If short you buy back your position and go flat. If long you sell your position and go flat.
Delta Neutral	A position with a delta of zero eg. a long straddle, long strangle etc.
Flat	Holding no position whatsoever in the market.
Getting burnt	Same as "taking heat on a position" except the position was allowed to run against the trader for such a long time that the emotional pain of holding the loser caused the trader to close out the position at all costs so taking a stomping loss.
The Floor	The market makers in the exchange trading pit who typically act as counterparty to your positions.
Instrument	A specific commodity, currency, future, option etc. e.g. Bonds, Swiss Franc etc.
Long	Holding a net position having bought the instrument.
Reverse	Making a trade whereby you go from long to short or vice versa.
Short	Holding a net position having sold the instrument.
Signal	A signal to buy, sell or exit a position. A Signal is more than a pattern made by an indicator and requires the prospective trade meet risk parameters and further criteria such as being confirmed by fundamentals or other indicators.
Stop Hit	When the market price moves through the stop price so triggering the stop order to be filled.
Stops Raided / Stop Raiding	When the market moves through a price where there is a cluster of stop orders so triggering the stops to be filled. Once the stops have been filled the market usually retraces.
Straddle	A put and a call both with the same strike at the money.
Strangle	A put and a call with both strikes different and out of the money.
Taking heat on a position	Holding on to a position which is losing money
Whipsawed	Shortly after you have entered the market, the market moves in the opposite direction and against your position. You then close out or reverse this position so taking a loss. The market then moves in the opposite direction (and against your position if you reversed).