Glossary

Carry trade meaning explained: borrow a low-yield currency, buy a high-yield one, and pocket the interest rate differential while accepting FX risk.

PPI vs CPI explained: how producer prices feed into consumer inflation, why the desk tracks both, and what the gap signals about margin pressure and policy.

CPI explained: how the US Consumer Price Index is calculated, when it prints, and how traders position around the monthly BLS inflation release.

Open interest measures total outstanding futures and options contracts. The desk explains how to read it, why it matters, and how traders use it daily.

COT report explained: the weekly CFTC release showing how commercials, large speculators and small traders are positioned across futures markets.

0DTE options are contracts expiring on the same trading day. The desk explains their mechanics, gamma effects, and how traders position around them.

Implied volatility is the market’s forecast of future price movement, extracted from option prices. The desk explains how IV works and how traders read it.

Option vega measures how much an option’s price changes per 1% move in implied volatility. The desk explains how traders use vega to manage risk.

Option theta measures how much an option’s price decays per day from time passing. The desk explains theta mechanics, behaviour, and trader use.

Option gamma explained: the rate of change of delta per unit move in the underlying, why it matters for hedgers, dealers and retail directional traders.

Option delta measures how much an option’s price changes per one-point move in the underlying. The desk explains delta, hedging use and worked examples.

At the money options have a strike near current spot. The desk explains ATM pricing, delta, gamma exposure and how traders position around these strikes.

Out of the money describes an option with no intrinsic value, only time value. The desk explains OTM mechanics, pricing behaviour, and trader use cases.

In the money (ITM) options carry intrinsic value when spot price has crossed the strike favourably. The desk explains how ITM status drives pricing and risk.

Strike price is the fixed level at which an option can be exercised. The desk explains how it drives payoff, premium, and trader positioning.

Put option explained: the right but not the obligation to sell an asset at a set strike before expiry. Learn pricing, payoff and how traders use puts.

Call option explained: the right but not obligation to buy at a strike before expiry. Definition, payoff, and how retail and institutional traders use them.

Crypto market cap is price multiplied by circulating supply. The desk explains how it ranks assets, where it misleads, and what traders should watch instead.

Exchange flow tracks BTC and ETH moving on and off exchanges, giving traders a transparent proxy for selling pressure and accumulation sentiment.

On-chain analysis uses blockchain transaction data, wallet flows and holder cohorts to read crypto positioning. The desk explains how it works.

Bitcoin dominance measures BTC’s share of total crypto market cap. The desk explains how traders read BTC.D for rotation signals and altcoin risk timing.

Altseason is the crypto cycle phase when alternative coins outperform Bitcoin. The desk explains the signals, drivers and trader behaviour behind it.

Stablecoin explained: how USDT, USDC and other USD pegged tokens hold their peg, who issues them, and why traders use them as dollar substitutes.

Bitcoin spot ETF explained: how US listed spot BTC funds hold actual coins, why the January 2024 SEC approval mattered, and how traders use them.

Bitcoin hash rate measures the total computational power securing the network. The desk explains how it works, why it moves, and what traders watch.

Satoshi is the smallest unit of Bitcoin, equal to one hundred millionth of a BTC. Learn how traders, exchanges and Lightning users price in sats.

Bitcoin halving explained: every 210,000 blocks the block reward is cut in half, tightening new supply and reshaping miner revenue and price cycles.

Simulated funded account explained: how prop firms use demo capital, pay traders from firm profits, and what this structure means for your payouts.

Consistency rule caps the share of total profit a trader can earn on their best single day. The desk explains how prop firms enforce it and why it matters.

Pay After You Pass Prop Firm 2026: the short answer from the KenMacro desk. A prop firm scaling plan rewards consistent funded traders with tiered capit…

Profit split is the share of net profits a funded trader keeps versus the prop firm. The desk breaks down typical 80/20 structures and payout mechanics.

EOD drawdown is an end of day balance based loss limit used by prop firms. The desk explains how it works, why it is more forgiving, and trader implications.

Trailing drawdown is a prop firm rule that measures your maximum loss from the highest equity peak. Here is how it works and what traders miss.

Funded account meaning: a post-evaluation prop firm allocation that pays a profit split on simulated capital. Rules, splits and payout mechanics covered.

Evaluation phase is the prop firm challenge stage where traders prove skill under rules to earn a funded account. Targets, drawdowns, and pitfalls.

Raw spread account explained: how brokers pass through interbank ECN pricing with a fixed per lot commission, and what it means for active traders.

Liquidity provider explained: how banks, prime brokers and non-bank market makers stream bid and ask quotes that retail brokers route client orders into.

Prime of prime (PoP) firms aggregate tier-1 bank liquidity and resell it to retail brokers that cannot meet prime broker capital thresholds.

Prime broker definition: how tier 1 banks provide hedge funds with credit, execution, custody, financing, and clearing under one consolidated relationship.

Copy trading lets retail accounts automatically mirror trades from selected signal providers. The desk explains the mechanics, costs, and structural risks.

Negative balance protection stops a retail trader’s account going below zero when gap risk hits, shifting the loss onto the broker rather than the client.

MiFID II explained: the EU directive governing broker conduct, best execution, leverage caps and transparency rules for retail and institutional clients.

Segregated client funds keep trader deposits in separate bank accounts from broker operating money, reducing insolvency risk under FCA, ASIC and CySEC rules.

FSCA regulation governs South African financial firms, including forex brokers. The desk explains licence categories, client protections, and trader implications.

CySEC regulation is the Cyprus framework licensing forex and CFD brokers under MiFID II, granting EU passporting rights and client protections.

ASIC regulation governs Australian forex brokers through capital, conduct and client money rules. The desk explains what oversight delivers for retail traders.

FCA regulation is the UK’s Tier 1 broker oversight regime. The desk explains client money rules, leverage caps, FSCS cover and what it means for traders.

Monte Carlo simulation lets traders randomise trade sequences to estimate drawdown, ruin risk, and equity curve variance beyond a single backtest result.

Calmar ratio compares annualised return to maximum drawdown, giving traders a cleaner picture of risk-adjusted performance than Sharpe alone.

Sortino ratio explained: how this risk adjusted return metric isolates downside deviation to give a cleaner read on strategy quality than Sharpe.