PRIME DESK TRADING ACADEMY
THE INSTITUTIONAL GLOSSARY
100+ Terms Every Professional Trader Should Know
A comprehensive reference covering the full vocabulary of professional trading — from brokerage back-office and market microstructure to algorithmic and quantitative trading, fundamental and macroeconomic analysis, technical concepts, and risk management. This is the language spoken inside institutions, dealing desks, and trading floors. Mastering it is the difference between participating in the market and understanding it.
100+Place of Incorporation
7Knowledge Domains
A-ZInstitutional Reference
DOMAIN 01
Brokerage & Back-Office
The operational and structural vocabulary of how a brokerage functions behind the screen.
LIQUIDITY PROVIDER (LP)
An entity quoting continuous bid/ask prices, supplying the executable prices and volume a broker passes to clients.
TIER 1 LIQUIDITY
An entity quoting continuous bid/ask prices, supplying the executable prices and volume a broker passes to clients.
TIER 2 LIQUIDITY
An entity quoting continuous bid/ask prices, supplying the executable prices and volume a broker passes to clients.
PRIME BROKER (PB)
An entity quoting continuous bid/ask prices, supplying the executable prices and volume a broker passes to clients.
A-BOOK
An entity quoting continuous bid/ask prices, supplying the executable prices and volume a broker passes to clients.
C-BOOK
A model where the dealer takes deliberate, managed proprietary positions based on aggregated client flow.
HYBRID BOOK
Dynamic routing that A-Books some flow and B-Books other flow, decided client-by-client by risk software.
INTERNALISATION
Matching opposing client orders against each other internally rather than hedging each one to the market.
NETTING
Offsetting long and short positions to determine the net exposure that actually needs managing or hedging.
EXPOSURE
The broker's net unhedged market risk on an instrument — the residual of all client positions not offset.
HEDGING / COVER
Offsetting residual exposure by placing an equal trade with an LP, capping the broker's market risk.
WAREHOUSE RISK
The deliberate retention of unhedged client exposure to profit from client losses — high risk, high control needed.
DEALING DESK
The team and systems that monitor and manage a broker's net exposure and hedging in real time.
STP (STRAIGHT-THROUGH PROCESSING)
Automated routing of orders to LPs without manual dealer intervention — a form of A-Book execution.
ECN (ELECTRONIC COMMUNICATION NETWORK)
Automated routing of orders to LPs without manual dealer intervention — a form of A-Book execution.
DMA (DIRECT MARKET ACCESS)
Direct routing of client orders to LPs/venues with no dealing-desk intervention and transparent pricing.
BRIDGE
Middleware connecting the trading platform (e.g. MT5) to aggregators and LPs, translating orders into FIX and routing them.
LIQUIDITY AGGREGATOR
Software that pulls many LP price feeds into one consolidated order book to build the best executable price.
MARKUP
A small fixed amount a broker adds to the raw LP spread as its compensation in an A-Book/STP model.
SPREAD
The difference between the bid and ask price — the most visible component of trading cost.
COMMISSION
A direct per-lot or per-trade fee, common in raw-spread/ECN accounts instead of (or alongside) a markup.
SWAP / ROLLOVER
The interest credited or debited for holding a leveraged position overnight, based on rate differentials.
SEGREGATION OF FUNDS
Holding client money in accounts separate from the broker's operating capital.
PSP (PAYMENT SERVICE PROVIDER)
A processor handling client deposits and withdrawals across cards, transfers, and e-wallets.
KYC / AML / CFT
Know-Your-Customer, Anti-Money-Laundering, and Counter Financing-of-Terrorism compliance procedures.
RECONCILIATION
Daily matching of internal records against LP, PSP, and bank statements to ensure financial integrity.
FIX PROTOCOL
The Financial Information eXchange messaging standard used to transmit orders and quotes between institutions.
WHITE LABEL
A turnkey brokerage operated under a partner's brand on another firm's infrastructure and liquidity.