TRADING GLOSSARY
Alpha
Alpha is the portion of return not explained by a specified benchmark-based risk model. Positive alpha indicates performance above the model's expectation, but the estimate depends on the model, measurement period and costs, and does not by itself prove skill.
EXAMPLE
In a hypothetical assessment, a risk model implies an 8% return while the portfolio earns 10% after costs. The estimated alpha is 2 percentage points.
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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure