Key terms
Below you can find a list of key terms and basic principles used on the brokerage platform.
A-Book
Refer to Execution model.
Account
The e-wallet that a trader opens in the Trading terminal. It can be used for financial operations such as deposits, withdrawals, and trading.
The trader can have one or more trading accounts. All accounts are multi-currency.
Once a new account is opened, it's assigned a unique identifier and becomes immediately visible in the Admin panel. A list of trader's accounts can be accessed on the Users page, in the extended information of a user. Information about current balances on trader's accounts can be found on the Users page, on the Balances tab of the detailed information. The Admin can monitor traders' balance operations (deposits and withdrawals) on the Transfers page.
The Admin can't create or delete accounts using the Admin panel, but can manage trader statuses to control their access to trading on the brokerage platform. It's also possible to set specific commission amounts and execution models for orders placed from particular accounts.
Account group
One or more accounts assigned the same properties. Account groups can be useful for:
Configuring routing rules: A specific execution model can be assigned for orders placed from accounts included in a particular group.
Configuring commissions: A specific commission amount can be set for different account groups.
These groups are synced with the CRM system, so a trader can select a group (along with a tariff plan) when creating a new account.
The Admin can select a default account group. If for some reason groups aren't configured on the CRM side, all newly created accounts will be added to the default group.
A list of account groups can be accessed on the Groups > Account groups page.
Account type
The account type determines how positions are managed: either each order opens a separate position, or positions on the same market are combined into one.
There are two types of account on the BP: Hedging and Netting.
Hedging
On Hedging account, each new order to buy or sell opens a new independent position, not connected with the existing ones. Position-close orders close a specific position.
The BP tracks each position separately, even if they are on the same market. This allows traders to maintain both Long and Short positions independently, without them being offset against each other.
For example, a trader buys 100 lots (Long) and sell 50 lots (Short) of the same asset. The trader's account will contain 100 lots Long and 50 lots Short, resulting in a gross position of 150 Lots.
The Used margin is calculated as Σ(MarketUsedMargin), where MarketUsedMargin = Σ(PositionUsedMargin).
Advantages of Hedging accounts:
Offer more flexibility for advanced trading strategies, such as options hedging or spread trading.
Keep Long and Short positions separate, which is useful for tracking individual trades and adjusting strategies.
Allow traders to manage margin requirements on separate positions more precisely.
Disadvantages of Hedging accounts:
More complex reporting and tracking, since positions are not offset.
Require higher margin since positions are not netted together.
Netting
On Netting accounts, all positions opened on a particular market are aggregated into a single position.
This means that if a trader holds both Long and Short positions on the same market, they will be combined into a single net position and will be offset against each other in overall margin parameters (Used margin, PnL, Equity, Free margin, Margin balance, Margin level).
For example, a trader buys 100 lots (Long) and sell 50 lots (Short) of the same asset. The trader's net position is 50 lots Long.
Advantages of Netting accounts:
Offer more straightforward reporting of overall exposure.
Simplify calculations of PnL on the net position.
Typically result in lower margin requirements due to consolidated Long and Short positions.
Disadvantages of Netting accounts:
May not offer as much flexibility for sophisticated hedging strategies or multiple Short and Long positions.
Limit the ability to track separate legs of a complex trade.
Admin
This is a user who has access to the Admin panel of the brokerage platform.
Such a user can manage the platform configuration and other users, including traders. Is opposed to Trader.
A list of admin users can be accessed on the Settings > Admin users page.
Admin panel
The Web interface providing access to essential settings and monitoring of the brokerage platform. Is opposed to Trading terminal.
B-Book
Refer to Execution model.
BP
The common abbreviation for the brokerage platform.
Broker
The owner of the brokerage platform.
C-Book
Refer to Execution model.
Commission
The fee amount that a trader pays to the Broker for executing orders on the brokerage platform.
The commission is charged only after the order is executed (partially or fully). For Spot trading, the commission amount is frozen on the account when the order is placed.
For more details, refer to Commission basics.
Commission profile
The set of commissions that are grouped and ranked. Inside a profile, different commission rates can be specified for different markets or market groups.
For more details, refer to Commission basics.
Commission rule
The set of conditions that determines when a particular commission profile must be applied. The commission rule can be configured based on User & Account criteria and Market criteria.
For more details, refer to Commission basics.
Execution model
The BP supports three types of order execution:
A-Book: A full order amount is executed on the liquidity provider side.
B-Book: A full order amount is executed internally on the BP, without involving a liquidity provider.
C-Book: An order amount is split, executing part of it on an LP and the remainder internally on the BP.
With the help of customizable routing rules, you can determine the execution model for each particular order based on its parameters. For more details, refer to Routing basics.
External order
Refer to Order.
Funding fee
The periodic payment in perpetual futures trading, exchanged between Longs and Shorts to maintain the contract price close to the underlying asset's market price. It's determined based on the difference between the perpetual contract price and the spot market price. If the funding rate is positive, Long position holders pay Shorts, and if negative, Short position holders pay Longs.
The funding fee size is calculated as follows:
Funding fee = Position size × Lot size × Mark price × Funding, % × Rate to {RAT}
Where:
Position size is the current position size in lots.
Lot size is the standardized quantity of the asset per lot, as configured in the market settings.
Mark price is the mid-spread price, calculated as (Bid price + Ask price)/2, in conversion to RAT.
Funding, % is the funding rate, in percents, as configured in the market settings.
Rate to {RAT} is the current exchange rate to RAT.
The funding fee is calculated, credited, and charged in RAT. If the trader's balance in RAT is insufficient to pay the funding fee, the charging is settled in accordance with the Margin ratio priorities.
Internal order
Refer to Order.
Internal order book
The BP internal memory where GTC, GTD, Day Limit orders are stored until the order price aligns with the top-of-the-book price. This helps prevent traders from detecting marked-up prices, as the order isn't immediately delivered to the order book.
Once a price trigger occurs, the order is sent to an LP, resulting in three possible scenarios:
The order is fully filled: The BP receives the trade from the LP and updates balances.
The order is partially filled: The BP receives the trade from the LP, updates balances, and keeps the remaining part of the order in the Internal order book, awaiting a new price trigger.
The order isn't filled at all: The full order volume returns to the Internal order book and waits for a new price trigger.
LP
The common abbreviation for a liquidity provider. The LPs are financial entities, the main task of which is to increase liquidity on trading platforms. To learn more about how LPs work, refer to this article.
Margin balance
The total amount of funds that can be used as a collateral for CFD trading.
It’s calculated as follows:
Margin balance = SUM (TotalAmountX × MarginRatioX × Rate X/RAT)
Where:
TotalAmountX is the total amount of both available and locked asset X on a trader’s account.
MarginRatioX is the Margin ratio set by the BP Admin for the asset X.
Rate X/RAT is the constantly updated rate of the asset X to RAT.
It’s important to note that the Margin balance is continually recalculated based on price fluctuations. An increase in the prices of UMAA-listed assets boosts available Balance & Free margin. Conversely, a decrease in asset prices may reduce the available Balance and Free margin. Additionally, a decline in the prices of assets with open positions may trigger Margin calls and Stop outs.
Margin call
The system event and notification about a margin call.
If the Margin level on a trader’s account falls below the set Margin call value, the platform triggers the Margin call event: a notification is sent to the trader that they must take some action in order to increase the margin level and avoid a Stop out.
Remember that if the trader ignores this notification, the margin level may continue to decrease.
Margin level
The ratio of trader’s funds to a used collateral, in percents.
This value is calculated as (Margin balance + Unrealized PnL) / Used margin × 100% or Equity / Used margin × 100%.
Margin ratio
The percentage of the current asset balance on a trader’s account that can be used as a collateral. It reflects the asset’s liquidity and risk level associated with the asset from the perspective of the Broker. The BP Admin sets this value for each asset, and it can be modified at any time for any asset, except RAT. The Margin ratio for RAT is always fixed at 100.00% and can’t be changed.
The set Margin ratio is publicly accessible to traders. Traders can select which assets they wish to use as collateral in the Trading terminal; however, they can’t modify the set percentage. If the Margin ratio for an asset is set to 0.00%, it won’t be used as collateral even if a trader selects it in the Trading terminal.
The Margin ratio also determines the order in which assets are charged from a trader’s account during margin operations, such as fees, swaps, and realized PnL deductions. Here’s how it works:
Priority by RAT: RAT is always used first.
Priority by Margin ratio: Assets are deducted starting from the one with the highest Margin ratio (100.00%).
Insufficient balance: If the highest-rated asset doesn’t have a sufficient balance, the next highest is used.
Same Margin ratio: If multiple assets have the same Margin ratio, the asset with the larger balance is used first.
Market
The tradable currency pair.
The Admin can configure and manage available markets in the Admin panel. On the BP, markets provide a wide range of settings to set up trading with maximum accuracy, depending on instruments liquidity and volatility. Market statuses allow for flexible control of trading on specific instruments, with well-thought-of approach to processing of placed orders. It's also possible to set specific commission rates and execution models for orders placed on particular markets.
A list of markets can be accessed on the Settings > Markets page.
Market group
One or more markets assigned the same properties. Market groups can be useful for:
Configuring routing rules: A specific execution model can be assigned for orders placed on markets included in a particular group.
Configuring commissions: A specific commission amount can be set for orders placed on markets included in a particular group.
A list of market groups can be accessed on the Groups > Market groups page.
Order
The buy or sell request with a specific set of parameters, placed by a trader or the brokerage platform.
In addition to the "original" parameters set by a traders, such as order type, time in force, amount, and so on, parameters based on the BP configuration are applied to any order, namely: markups, commission rates, execution models, and so on.
Besides, there are two types of orders on the BP:
Internal orders: Initial orders placed and accessible by traders.
External orders: Orders placed by the BP on the side of an LP to fulfill the initial orders (A-Book). They are only visible to the Admin and depend on the configuration of the initial orders. Partial or full execution of the external orders affects the state of the initial order.
For more details, refer to Order basics.
A list of open orders can be accessed on the Orders > Open orders page. A list of orders in final statuses can be accessed on the Orders > Orders history page.
PnL
The profit-loss value which represents actual or potential earnings or losses from trading and is based on the difference between the opening and closing (or current) position prices.
There’re two primary types of PnL:
Unrealized PnL: This represents the potential earnings calculated for open positions. It can be categorized into:
Total unrealized PnL: Reflects changes from the opening of the position to the present moment.
Daily unrealized PnL: Reflects changes from the start of the current day to the present moment.
Realized PnL: This represents the actual profit or loss resulting from closing a position.
PnL calculations depend on the position type:
Long positions
Daily unrealized PnL = Position size × (Current bid price – First bid price for today)
Total unrealized PnL = Position size × (Current bid price – Open bid price)
Realized PnL = Position size × (Close price – Open price)
Short positions
Daily unrealized PnL = Position size × (First ask price for today – Current ask price)
Total unrealized PnL = Position size × (Open ask price – Current ask price)
Realized PnL = Position size × (Open price – Close price)
Position
The position represents an open trade (or sum of trades) on a specific asset.
The position can be of either of two types:
A long position involves buying an asset with the expectation that its price will rise, enabling the trader to sell it later at a profit.
A short position involves selling an asset to buy it back later at a lower price, thereby profiting from the price drop.
A position can be in either of two states:
An open position refers to a trade that has been started but not yet closed, meaning the trader still holds the asset. The Unrealized PnL shows the potential profit or loss based on current market conditions while the position is open.
Conversely, a closed position occurs when the trade is completed, either by selling the asset that was bought or buying back the asset that was sold short. At this point, the Unrealized PnL becomes Realized PnL, indicating the actual profit or loss from the trade.
Price deviation
The allowed price deviation for limit orders placed on the market. Once the specified value is exceeded, that is the price deviates too much from the best bid or ask prices, an order is rejected.
Supports decimal values in the range from 0 (zero) to 1, with up to 4 decimal places, for example:
0.1 = 10%
0.01 = 1%
0.001 = 0.1%
0.0001 = 0.01%
The allowed price range is calculated as follows:
Min Limit price = TOB × (1 – Price deviation)
Max Limit price = TOB × (1 + Price deviation)
Where TOB is the top-of-the-book price: bid for Buy orders, ask for Sell orders.
If set to 0 (zero), no restriction is applied, the price deviation is ignored.
RAT
The root asset type of the BP.
RBAC
The authorization system providing granular access control to BP resources by assigning different roles to users (both traders and BP administrators).
A list of available roles can be accessed on the Settings > RBAC page.
For more details, refer to RBAC.
Retry policy
The mechanism for resending limit orders being executed per the A-Book model, if no response is received from an LP within a certain period of time (TTL).
It helps avoid order rejection due to technical issues that may occur on the way between the BP and the LP or on the LP side.
For more details, refer to Order basics.
Routing rule
The set of conditions that determine which execution model should be applied to a particular order. The routing rule can be configured based on User & Account criteria and Market criteria.
A list of configured rules can be accessed on the Routing page.
For more details, refer to to Routing basics.
Stop out
The system event and notification about a stop out.
If the Margin level on an account falls below the set Stop out value, the platform starts the process of liquidating trader’s positions.
This process continues until the margin level exceeds this value.
ANY currently open position can be closed regardless of its routing type, side, and volume.
Swap
The fee for maintaining an open position overnight, applied daily at the end of the trading session, even on non-trading days. It’s charged directly from a trader’s account, only for open positions, in the asset with the highest Margin ratio.
There’re the following types of swap provided:
Fix: The Broker specifies a fixed amount in any currency that will be credited or debited per each lot.
Point: The Broker specifies a fixed amount in points which is applied to the position size.
Percent: The Broker specifies a fixed amount of percents which is applied to the position size.
The swap type is configured by the BP Admin in the market settings, separately for long and short positions.
Trading terminal
The Web interface providing access to the Trader's room and Trading terminal. Is opposed to Admin panel.
Trader
This is a user who has registered in the Trading terminal of the brokerage platform and created at least one trading account there. Such a user is assigned the Trader role and has no access to the Admin panel. Is opposed to Admin.
A list of traders can be accessed on the Users page.
Unsolicited trade
A trade is considered unsolicited in the following two cases:
The trade report received from an LP for an external order that had already been assigned a final status: TimeOut, ExternalRejected, Fill, or PartialFill. This may occur due to Retry policy settings, if the order was executed after the TTL expiration.
The trade report received from an LP for an unknown external order. This may occur if information about the order was lost on the BP due to technical problems.
Once the BP receives a new trade from the LP, it first checks if the corresponding external order exists on the BP, and then the order status. If the external order doesn't exist or its status differs from Working or Delivery, the trade is considered unsolicited and a corresponding notification is sent to the Admin.
Used margin
The amount of funds that is used for maintaining all open positions of a trader. Is opposed to the free margin — the amount of funds that can be used for opening new positions.
The Used margin for positions on a specific market is calculated using the maximum value between the total margin of long positions and the total margin of short positions: MarketUsedMargin = max(MarketPositionLong, MarketPositionShort).
As a result, traders can open multiple opposite positions without significantly increasing the Used margin. Furthermore, closing positions never increases the Used margin.
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