Definition§
A handle is the whole number part of a price quote, which is located to the left of the decimal point. For example, in a stock price of $56.25, the handle is $56. In the foreign exchange market, if the price quote has a bid of 1.4183 and an ask of 1.4185, the handle would be 1.41, which reflects the common decimal portion of both the bid and the ask.
This portion of the quote is used to convey the general price level of a security or index, and traders often discuss how many handles a price has changed.
| Handle | Stem |
|---|---|
| Whole number part (left of decimal) | Fractional part (right of decimal) |
Examples§
-
Stock Price Quote: $45.67
- Handle: $45
- Stem: .67
-
Forex Bid/Ask Example: 1.2300 (1.2295 bid, 1.2305 ask)
- Handle: 1.23
- Stem: .00
Related Terms§
- Quoted Price: The price at which an asset, security, or currency is being traded.
- Pip: In forex, the smallest price move that can occur with a currency pair.
- Spread: The difference between the bid and ask price.
Humorous Insights§
- “The handle is like a good haircut: it’s what everyone sees first, and you can always blame the roots if it doesn’t hold!”
- “Why do traders love talking about handles? Because ‘stem’ just doesn’t have the same ring to it!”
Fun Facts§
- The term “handle” likely originated from traders trying to ascertain the quick price level without delving into cents, which feels like trying to find spare change in the couch cushions!
- In the high-paced world of forex trading, knowing the handle can save seconds. Remember, time is money—as long as the market isn’t offering a late fee!
Frequently Asked Questions§
Q: Why do traders refer to the handle?
A: Traders refer to the handle for brevity and ease of communication, avoiding the clutter of cents when discussing price movements.
Q: Can the handle change during trading?
A: Absolutely! Handles can change as price quotes evolve, and traders often refer to these changes in their strategies.
Q: Is the stem important?
A: Definitely! While the handle gives a quick overview, the stem provides vital context for exact pricing, impacting decisions for entries and exits.
Suggested Readings§
- “Trading for a Living” by Dr. Alexander Elder
- “Technical Analysis of the Financial Markets” by John J. Murphy
- “The Little Book of Forex Trading” by Ilya Spivak
Online Resources§
Test Your Knowledge: Handle Trading Quiz§
Thank you for diving into the world of Handles! Remember, in the financial markets, having a firm grip on concepts makes trading much easier. Keep calm and trade on! 💵✨
