Glossary of Terms

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z







A


Acquisition - When a company acquires the majority or all of the shares of another company in order to take over that business, it makes an acquisition. If the acquirer purchases more than 50% of the target company's shares and other assets, the acquirer can make decisions on newly acquired assets and influence company's targets without needing the permission of the other shareholders.

Advance/decline ratio (ADR)
- A typical market-breadth indicator used in technical analysis. Advance-decline ratio (ADR) contrasts the proportion of equities that closed higher with the proportion that closed lower than their closing prices from the prior day. To get the advance-decline ratio, divide the number of advancing shares by the number of sinking shares.

Appreciation - The increase in an asset's value over time. The increase may be brought on by a variety of factors, such as a rise in demand, a decline in supply, increases in inflation or interest rates, or all of the above. Depreciation, which is a decline in value over time, is the opposite of appreciation.

Ask - The ask, also known as the offer price, is the price a seller is prepared to take for a security. The quantity of the security that may be offered at the given price is also indicated in the ask quote along with the price. The ask will always be higher than the bid since the bid is the price a buyer is willing to pay for a security.

Asset class - An asset class is a collection of investments that share similar traits and are governed by the same rules and laws. Thus, the instruments that make up asset classes frequently exhibit similar market behavior. The most common asset classes are stocks, bonds and cash equivalents. Stocks, bonds, and cash equivalents are the three most popular asset classes.






B


Bar charts - Bar charts are made up of many price bars that each show how the price of a security or asset changed over a specific period of time. Although this can be changed to merely display the high, low, and close prices, each bar normally displays the open, high, low, and closing (OHLC) prices (HLC).

Benchmark index - A group of securities used for comparison when evaluating the performance of a mutual fund or portfolio. Benchmark Index is typically a standard and unmanaged index used to gauge the performance of other equities or securities on the market. Benchmark indices include the Dow Jones Industrial Average, the S&P 500, or the Russell 2000.


Bid - An offer to purchase an asset from a person or business is referred to as a bid. At auctions and on numerous markets, including the stock market, bids are frequently placed by buyers. Companies that compete for project contracts may also submit bids. When placing a bid, a buyer must specify both the amount they are willing to pay for the item and the amount they are willing to spend on it. 1 A market maker's willingness to purchase a security at a particular price is referred to as a bid. However, market makers are also required to display an ask price, unlike retail purchasers.


Blockchain - A blockchain is a shared distributed database or ledger between computer network nodes. A blockchain serves as an electronic database for storing data in digital form. The most well-known use of blockchain technology is for preserving a secure and decentralized record of transactions in cryptocurrency systems like Bitcoin. The innovation of a blockchain is that it fosters confidence without the necessity for a reliable third party by ensuring the fidelity and security of a record of data.

Book value - When calculating book value, businesses offset the asset's depreciation against the cost of carrying the asset on their balance sheets. Therefore, book value can also be viewed as a company's net asset value (NAV), which is determined by subtracting liabilities and intangible assets (such as goodwill and patents) from its total assets. For an initial investment, book value may be gross or net of costs like trading fees, sales taxes, service fees, and so forth. The total common shareholders' equity less the preferred stock is divided by the total number of the company's common shares to arrive at book value per share.

Bond - When issued by a business, community, or the federal government, a bond functions similarly to a loan or an IOU. The issuer offers to pay the investor a certain rate of return for the usage of the money at predetermined intervals as well as the whole amount of the loan on a specific date.






C


Call option - Financial contracts known as call options grant the option buyer the right, but not the duty, to purchase a stock, bond, commodity, or other asset or instrument at a particular price within a predetermined window of time. The underlying asset is a stock, bond, or product. When the value of the underlying asset rises, the call buyer makes money. A put option, as contrast to a call option, allows the holder to sell the underlying asset at a predetermined price on or before the expiration date.

Candlestick chart -Type of price chart used in technical analysis, which shows the high, low, open, and closing prices of a securities over a given time period. Before becoming well-known in the US, it was first used by Japanese rice dealers to keep track of market prices and daily momentum over three centuries ago. Based on whether the closing price wasis greater or lower than the opening price, the wide portion of the candlestick chart known as the body of the candle, or simply the candle, informs investors of the trade emotion for that particular time frame (red if the stock closed lower, green if the stock closed higher).

Capitalization
- The overall market value of a firm and is defined as the number of outstanding shares multiplied by the share price. Market capitalization is another term for an accounting method in which a cost is included in the value of an asset, and is then deducted during the asset's useful life rather than being deducted at the time the cost was incurred.

Certificate of deposit (CD) - A type of savings product that accrues interest on a single sum of money for a predetermined amount of time. Unlike savings accounts, CDs require that the money remain untouched over the full term to avoid penalties and lost interest. Savings accounts often provide lower interest rates than CDs as compensation for liquidity loss. The majority of consumer financial institutions provide certificates of deposit (CDs), although each bank is free to set its own conditions, rate of interest in comparison to savings and money market products, and early withdrawal fees.

Common stock - Security that represents ownership in a corporation. Common stocks must be issued by the corporation itself. Common stock owners choose the board of directors and cast ballots for corporate rules. Long-term rates of return are often higher with this type of stock ownership. Common shareholders, however, do not have any rights to a company's assets in the case of liquidation until all bondholders, preferred shareholders, and other debt holders have received their full repayment. In the stockholders' equity section of a company's balance sheet, common stock is disclosed..

Contracts (options and/or futures) - Futures contracts are available for a wide range of financial assets, including precious metals and equity indexes. Depending on which way investors predict an underlying product will move, trading options based on futures entails either buying or writing call or put options. A way to benefit from the movement of futures contracts is by purchasing options, which is much less expensive than purchasing the actual future. If investors believe a future's value will rise, they will buy a call. If investors anticipate a future's value to decline, they will buy a put. The premium is what investors pay to purchase the choice. Option writers are also traders.






D


Dark pool - A dark pool is a privately run financial marketplace or exchange where securities can be traded. Institutional investors can trade through dark pools without being exposed until after the trade has been completed and disclosed. Dark pools are a kind of alternative trading system (ATS) that provide some investors the chance to make trades and place huge orders without disclosing their intentions to the public while looking for a buyer or seller.

Debt/EBITDA—Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a ratio that indicates how much money is made and accessible to pay down debt before those costs are paid. Debt/EBITDA gauges a business's capacity to settle its accumulated debt. A high ratio result can suggest that a business has an excessive amount of debt. In the covenants for business loans, banks frequently set a specific debt/EBITDA target that a firm must maintain in order to avoid having the full loan fall due immediately. Credit rating agencies frequently use this statistic to determine a company's likelihood of defaulting on issued debt, and businesses with a high debt/EBITDA ratio may not be able to properly pay their debt, which could result in a decreased credit rating.

Demand - Demand in economics refers to a consumer's readiness to pay a particular price for goods and services as well as their desire to buy them. Demand for a good or service typically declines when its price goes up. The amount needed will rise when a product's price drops, in a similar manner. Consumers and businesses are quite familiar with the idea of demand because it makes sense and happens organically throughout the course of almost any day. For instance, when a product's pricing is low, shoppers who are keeping an eye on it will buy more of it. When costs increase, such as during a change in season, consumers may buy less or even nothing at all.

Derivatives - A type of financial contract whose value is based on an underlying asset, group of assets, or benchmark. A derivative is an agreement made between two or more parties who can trade over-the-counter or on an exchange (OTC). These contracts have their own risks and can be used to trade a wide range of assets. Derivative prices are based on changes in the underlying asset. These financial instruments can be traded to reduce risk and are frequently used to get access to specific markets. Derivatives can be used to either accept risk with the intention of receiving a similar reward or to mitigate risk (hedging) (speculation). The risk-averse can transfer risk (and the associated profits) to the risk-takers using derivatives.

Divergence - Divergence occurs when an asset's price moves in the opposite direction from other data or from a technical signal, such an oscillator. Divergence signals that the price trend may be waning and, in extreme situations, may even result in a price reversal. Divergence can be both beneficial and bad. Positive divergence suggests that the asset's price may rise in the future. A move lower in the asset is indicated by negative divergence.

Double witching - When two different classes of stock options or futures expire at the same time. Double witching generally happens on the third Friday of each month except for March, June, September, and December. Stock options, index options, stock index futures, and single stock futures are among the assets that may be considered double witching.






E


Earnings
- Net income post-tax, showing the bottom line or profits of the business. Perhaps the most significant and carefully scrutinized statistic in a company's financial filings is its earnings. It displays a company's actual profitability in comparison to analyst forecasts, historical results, rivals' earnings, and peers' earnings in the same industry. Earnings are the primary factor in determining a public company's share price because they can only be applied in one of two ways: either investing them in the firm to boost future earnings, or paying dividends to owners.

EPS (Earnings per Share)
- A portion of company's profit that is allocated among all outstanding shares of common stock. The profitability of a corporation is shown by EPS.

Equities - Shares of stock that a corporation issues to signify ownership. Ownership of real estate, as opposed to fixed-income products like bonds or mortgages, typically in the form of common stocks. Depending on the fund's investing aim, stock funds can differ.

Ex-Dividend
- A stock is referred to as being ex-dividend if it no longer carries the value of the upcoming dividend payment. The day the stock begins trading without the value of its upcoming dividend payment is known as the ex-dividend date or "ex-date." An investor who purchases a stock on or after the ex-dividend date will not be entitled to the declared dividend. Typically, the ex-dividend date for a stock is one business day before the record date. Instead, whoever owned the stock on the day before the ex-dividend date receives the dividend payout.

Expense ratio (ER) - An expense ratio (ER), commonly referred to as the management expense ratio (MER), calculates the percentage of assets utilized for management and other operational costs in a fund. By dividing a fund's operating costs by the average dollar amount of its managed assets, an expense ratio is calculated (AUM). The assets of the fund are diminished by operating costs, which lowers the return to investors.


Exponential Moving Average (EMA) - Technical indicator that tracks an investment's price over time (such as the price of a stock or commodity). An example of a weighted moving average (WMA) is the exponential moving average (EMA), which lends more significance to recent price data. The EMA, like the simple moving average (SMA), is used to track price movements over time, and moving average ribbons make it easier to keep an eye on multiple EMAs at once.






F


FAANG
- Acronym for the stocks of five well-known American technological companies: Meta (META), formerly known as Facebook, Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOG), Google's parent company. Jim Cramer, the anchor of CNBC's Mad Money, popularized the phrase FAANG in 2013 by praising these businesses for being "completely dominating in their sectors."  Apple was added as the second "A" in the acronym to the original phrase "FANG" in 2017.

Federal Funds Rate (Fed Funds Rate)
- The interest rate that banks with excess reserves charge banks that require overnight loans to meet reserve requirements at a Federal Reserve district bank. Since it is determined daily by the market, as opposed to the prime rate and discount rate, which are periodically adjusted by banks and the Federal Reserve Board, it is the most sensitive indication of the direction of interest rates.


Fibonacci retracement - Based on the Fibonacci sequence, a series of continuously growing numbers where each number is equal to the sum of the two numbers before it, Fibonacci retracement levels are horizontal lines that show where support and resistance are expected to occur. A percentage is connected to each level. How much of a previous move the price has retraced is shown by the percentage. There are four Fibonacci levels for retracement: 23, 6, 38, 61, 8, and 78. Even though it's not really a Fibonacci ratio, 50% is also employed. The indication can be drawn between any two important price points, such as a high and a low, making it handy. The levels between those two spots will subsequently be created by the indicator.

Float - The amount of money that is briefly tallied twice within the banking system as a result of delays in recording a deposit or withdrawal. These delays are generally caused by the time it takes to process paper checks. As soon as a check is deposited, a bank credits the customer's account. The time it takes to receive and record a check from the payer's bank varies. The amount of the check "exists" in two locations, in the accounts of both the payer's and recipient's banks, until the check clears the account upon which it is drawn.

Free cash flow (FCF) - Free cash flow is the amount of money a company has left over after paying for operational costs and capital asset maintenance (FCF). In contrast to earnings or net income, free cash flow is a measure of profitability that accounts for both spending on assets and equipment as well as changes in working capital from the balance sheet. Non-cash expenses are also taken out of the income statement.

Fundamental analysis (FA) - A type of financial analysis which looks at relevant economic and financial elements to calculate the intrinsic value of a security. An investment's intrinsic value is determined by the financial health of the issuing company, as well as the general market and economic climate. Fundamental analysts look at all potential influences on a security's value, including microeconomic elements, like managerial efficiency, and macroeconomic factors, like the status of the economy and market circumstances. The ultimate objective is to arrive at a figure that an investor can use to gauge whether an asset is being undervalued or overvalued by other investors when compared with its present price.






G


Generally Accepted Accounting Principles (GAAP)
- The term refer to a common set of accounting rules, regulations, and processes established by the Financial Accounting Standards Board (FASB) (FASB). When assembling their financial accounts, American public firms' accountants are required to adhere to GAAP. The main objective of GAAP is to guarantee the accuracy, consistency, and comparability of financial accounts for businesses. Most other countries utilize the IFRS standards, while the U.S. primarily uses GAAP.

Greeks
- The Greeks are the terms used to refer to the variables that determine risk in the options market. Each of these risks is represented by a Greek symbol. Each Greek variable is the outcome of a flawed assumption or connection between the option and another underlying variable. Different Greek values, including alpha, delta, theta, and others, are used by traders to evaluate the risk of options and manage option portfolios.

Gross Domestic Product (GDP)
- The total monetary or market worth of all the finished goods and services produced within a nation's borders during a certain time period is known as the gross domestic product (GDP). It serves as a thorough assessment of a particular country's economic health as a wide indicator of entire domestic production.

Growth company - Any company that creates considerable positive cash flows or earnings that grow significantly more quickly than the entire economy is considered a growth company. A growth company usually offers excellent potential for reinvested retained earnings. As a result, it frequently pays little to no dividends to stockholders, since it chooses to reinvest the majority or all of its earnings in growing the company instead.

Guaranteed bond
- A guaranteed bond is a type of financial security that provides a secondary assurance by a third party, in the event that the issuer defaults due to insolvency or bankruptcy. The third party is the entity that would make interest and principal payments. A guaranteed bond may be corporate or municipal in nature. Guaranteed bonds can be backed by bond insurance companies, fund or group entities, government agencies, or the corporate parents of subsidiaries or joint ventures that are issuing bonds.

Guidance - A public company provides informal guidance to shareholders outlining the expected earnings in the upcoming fiscal quarter or year. The term "guidance," which is sometimes used to refer to a forward-looking statement, comprises internal forecasts for sales, profitability, and capital expenditures. These projections are typically subject to adjustment over time. Guidance is often contrasted with analysts' estimates, which are produced by outside industry experts.






H


Hedge - An investment made as a hedge has the goal of lowering the risk of unfavorable asset price changes. Typically, hedging involves taking an opposite or offsetting position in a similar security.


Hedge fund - A hedge fund is a limited partnership of private investors whose capital is managed by experienced fund managers. These managers employ a variety of tactics, such leveraging or trading in non-traditional assets, to generate returns on investments that are higher than average investment returns. Investment in hedge funds is frequently viewed as a dangerous alternative investment option since it typically has a high minimum investment requirement or net worth requirement and frequently targets wealthy clientele.


High-frequency trading (HFT) - High-frequency trading (HFT) is a type of trading that moves lots of orders in a short period of time using potent computer programs. It analyzes several markets and executes orders in accordance with the state of the markets using sophisticated algorithms. Generally speaking, traders with the quickest execution times are more successful than those with slower times. HFT is distinguished from other trading styles by its high order-to-trade ratios and high turnover rates. Citadel LLC, IMC, Tower Research Capital, Virtu Financial, and Tradebot are the principal high-frequency trading companies in the United States.

High-yield bonds - High-yield bonds, commonly known as junk bonds, have lower credit ratings than investment-grade bonds, which causes them to have higher interest rates. Due to their increased default risk, high-yield bonds reward investors with a larger yield than investment-grade bonds. High-yield debt is typically issued by start-up businesses or capital-intensive organizations with high debt ratios. However, some high-yield bonds are fallen angels, or bonds that lost their stellar credit ratings.


Historical volatility (HV) - Historical volatility (HV) is a statistical indicator of how widely returns for a certain securities or market index have varied over time. In most cases, this metric is produced by calculating the average departure from the price of a financial instrument during the specified time frame. The most popular, though not exclusive, method for figuring out historical volatility is by using standard deviation. Generally speaking, a security is riskier the higher its historical volatility value. Given that risk might go either way—bullish or bearish—that outcome is not necessarily undesirable.

Holdings - Holdings are the contents of an investment portfolio held by an individual or an organization, such as a mutual fund or a pension fund. A variety of financial instruments, such as stocks, bonds, mutual funds, options, futures, and exchange-traded funds, may be included in a portfolio's holdings (ETFs).






I


Implied volatility (IV)
- The term "implied volatility" refers to a measurement that reflects the market's perception of the likelihood of price movements for a certain investment. Using implied volatility, which is frequently used to price options contracts, investors can forecast future movements as well as supply and demand. Implied volatility differs from historical volatility, which gauges prior market moves and their actual outcomes. Historical volatility is sometimes referred to as realized volatility or statistical volatility.

Index - An index measures the overall performance of a specific investment type or category by monitoring the performance of numerous investments. For example, the S&P 500 is frequently used as the standard for investors in large-cap stocks. It monitors the stock performance of 500 major American corporations.


Inflation - A decrease of purchasing power, frequently associated with an increase in the cost of goods and services.

Insider trading - The act of someone trading in a public company's stock who has material, non-public information about that specific company. Depending on the time the insider makes the trade, insider trading may be either legal or not. When the relevant information is still private, insider trading is prohibited and is subject to severe penalties.

Intraday trading - Short for "within the day", the term refers to securities traded on the markets during regular business hours. Day traders and scalpers who place many trades during a single trading session pay close attention to intraday price changes, as well as the bid-ask spread. When the market ends, intraday traders will close out all of their positions. Because of the limited time available to them, precise entries and exits, as well as the price paid to trade, is essential for the success of their trades.

Intrinsic value - The value of an asset. instead of using the asset's actual market price, this metric is calculated objectively or through the use of a sophisticated financial model.






J


Job market
- The job market, also known as labour market, is the place where both employers and job seekers conduct their searches. The job market is a term that illustrates the competitiveness and interaction between various labor forces rather than a physical location. Depending on the availability and demand for labor within the larger economy, the job market may expand or contract. The demands of a particular industry, the requirement for a given degree of education or skill set, and necessary job tasks are other market-influencing elements. A important part of any economy is the job market, which is closely related to consumer demand for goods and services.

Jobless claims
- Weekly statistical report by the U.S. Department of Labor that tracks the number of people who apply for unemployment insurance benefits. In terms of unemployment claims, there are two types: initial, which includes those who are filing for the first time, and continuous, which includes those who have previously been collecting unemployment benefits. Unemployment claims are a crucial early predictor of the strength of the labor market and the economy's overall health.

Joint venture (JV)
- A joint venture (JV) is an agreement between two or more parties to combine their resources in order to carry out a certain objective, such as a new project or any other type of commercial activity. Each partner in a JV is accountable for the venture's gains, losses, and expenses. The venture, however, exists independently of the participants' other commercial ventures.

Junk bond - Bonds with a lower credit rating—BB or lower—and typically a greater yield, that carry a higher default risk than the majority of corporate and governmental bonds. A bond is a debt or promise that, in exchange for being purchased, would pay investors interest payments as well as the return of their principal investment. Junk bonds are bonds issued by struggling businesses that run a significant risk of defaulting, failing to make interest payments, or failing to return investors' principle.






K


Kappa
- Kappa measures how sensitive the price of an option contract is to changes in the volatility of the underlying asset. Volatility takes into account current price changes, historical price changes, and potential future price movements. Volatility is a term used to describe the magnitude and rate of price changes for a trading instrument, such as an option.



Keltner Channels -A volatility-based technical analysis indicator displaying a moving average line in the center of the channel, along with channel lines above and below the moving average line. Keltner Channel indicator is comparable to Bollinger Bands, which set their bands using the standard deviation. The Average True Range (ATR) is used by Keltner Channels to determine channel distance instead of the standard deviation. Usually, two Average True Range values are established above and below the 20-day EMA for the channels. The ATR determines channel width, while the exponential moving average determines direction. With the use of channel breakouts and channel direction, Keltner Channels, a trend-following indicator, can be utilized to spot reversals and trend directions. When the trend is flat, channels can also be utilized to spot overbought and oversold levels.

Kicker pattern - A reversal candlestick pattern made of two candles with the opening price of each candle occurring around the same price level, but moving in the opposite direction. The trend suggests a significant shift in investors' perceptions of a security. This major shift in market sentiment typically takes place after important information about a company, sector, or economy is made public.

Knowledge Capital - Knowledge capital is an organization's intangible value made up of its relationships, relationships, learned skills, learnt procedures, and innovations. In other terms, knowledge capital refers to all of an organization's knowledge.






L


Large-cap
- A corporation is referred to as large cap if its market capitalization is greater than $10 billion. Large size, or "big cap," is another term for a group of well-liked stocks that investors favor for their consistency.

Law of supply and demand
- The law of supply and demand combines two key economic theories that explain how variations in the prices (for goods, services, commodities...) affect its supply and demand. While demand declines as the price rises, supply grows. In contrast, as the price falls, supply is constrained and demand increases. On a chart, levels of supply and demand for various prices can be represented as curves. The point where these curves intersect denotes the equilibrium price, also known as the market clearing price, or the point when supply and demand are equal. This point also symbolizes the method of price discovery in the market.

Leverage - Financial leverage is the result of borrowing money to support investments that increase a company's asset base and produce returns on risk capital. The employment of various financial instruments or borrowed cash, or leverage, is an investing strategy that aims to improve an investment's potential return.

Liquidity
- The opportunity to quickly access money that has been invested. For example, because shares in mutual funds can be redeemed for current value on any business day, which may be greater or lower than the original cost, these investments are considered liquid.


Line chart
- A line chart connects a number of data points with a continuous line to graphically depict the historical price movement of an asset. The line chart is the simplest type of chart used in finance. It only shows the closing prices of a security over time. Although line charts can be used for any timeframe, they are most frequently employed for daily price fluctuations.

Low volume pullback
- A technical correction toward a support level that occurs on lower-than-average volume. Because of the low volume, traders frequently assume that the move is a pullback related to profit taking, rather than a reversal.






M


Margin
- Margin is the collateral that a trader or investor must deposit with their broker or exchange to cover the credit risk the trader or investor poses for them. By borrowing cash from their broker to pay for securities, borrowing securities to engage in short-selling transaction, or participating in a derivative contract, an investor can expose themselves to credit risk.


Market depth - Market depth describes a market's capacity to accommodate reasonably sizable market orders without materially affecting the security's price. Market depth relates to trading within a single securities and takes into account the total volume and breadth of open orders, bids, and offers. The depth of the market is typically correlated with the number of buy and sell orders, assuming that these orders are distributed reasonably evenly around the security's current market price.

Market sentiment - Market sentiment describes how generally investors feel about a specific security or financial market. It is the mood or tenor of a market, or the psychology of the public, as seen in the activity and fluctuation of the prices of the securities traded in that market. In general, rising prices are influenced by bullish market sentiments, whereas declining prices are influenced by bearish market sentiments.

Merger - A merger is an arrangement that combines two current businesses into a single new business. There are various merger types, and businesses merge for a variety of reasons. Mergers and acquisitions (M&A) are frequently carried out to broaden a company's clientele, enter new markets, or increase market share. The goal of all of these actions is to raise shareholder value. In order to stop other companies from buying or merging, companies frequently adopt a no-shop provision during a merger.

Mid-cap - Corporations with a market valuation (capitalization) between $2 and $10 billion are referred to as mid-cap (or mid-capitalization) companies. A mid-cap corporation, as its name suggests, is in between large-cap (or big-cap) and small-cap firms. Large-cap, mid-cap, and small-cap classifications are estimations of a company's current worth; as such, they may fluctuate over time.


Monetary policy - A country's central bank uses a set of instruments called monetary policy to regulate the total amount of money in circulation, foster economic expansion, and implement measures like adjusting interest rates and adjusting bank reserve requirements. The Federal Reserve Bank of the United States carries out monetary policy under a twin mandate to maximize employment while containing inflation.






N


Negative bond yield
- When an investor receives less money than the bond's original purchase price at maturity. A negative bond yield is a n unusual circumstance in which debt issuers are compensated for borrowing money. In other words, rather than receiving a return through interest income, the depositors or bond buyers are in fact paying the bond issuer a net amount at maturity.

Net cash - Value reported on a company's financial statements. Net cash is determined by deducting a company's total cash from its total liabilities. When analyzing a company's cash flows, the net cash figure is frequently utilized. Net cash is another term for the amount of cash that is still available after a transaction has been completed and all related fees and expenses have been deducted.

Non-GAAP earnings - Non-GAAP earnings are an alternative accounting metric used to assess a company's profitability. Many companies disclose non-GAAP results in addition to GAAP earnings (GAAP). These pro forma data, which don't account for one-time transactions, might occasionally offer a better indicator of a business's financial health based on its core operations.

Normal yield curve - A yield curve known as the normal yield curve is one in which short-term debt instruments yield less than long-term debt instruments of equivalent credit grade. As a result, the yield curve has an increasing slope. It's sometimes referred to as the positive yield curve and is the most prevalent yield curve form.

NYSE Arca - Market-traded products (ETPs) and stocks are both listed on the electronic U.S. securities exchange known as NYSE Arca. The exchange focuses on listing exchange-traded products, such as exchange-traded funds (ETFs), exchange-traded notes (ETNs), and exchange-traded vehicles (ETVs).

Number of Holdings - Individual securities held in a fund or portfolio as a whole.






O


OHCL chart
- A specific type of bar chart that displays the open, high, low, and closing prices for each period. OHLC charts are very helpful to traders since they display the four main price data points, providing a complete picture of price action during a specific period of time (daily chart, hourly chart, 15-min chart...).

Opec basket
- The OPEC Basket is a weighted average of the global oil prices from the various OPEC members. Organization of Petroleum Exporting Countries (OPEC) members submit the data that serves as the foundation for the basket. For those who monitor the price of oil and the stability of the international oil market, the basket serves as a benchmark or reference point.

Option chain
- All of the available options contracts for a certain security are listed in an options chain, sometimes referred to as an option matrix. For each listed put and call inside a specified maturity period, together with their expiration and strike values, volume and pricing data are displayed. The chain will normally be divided into calls and puts and classified by expiration date.

Option premium
- The current market value of an option contract is known as an option premium. It is thus the money received by the seller (writer) of an option contract to another party. Premiums for in-the-money options are made up of intrinsic and extrinsic value. Premiums for out-of-the-money options only include extrinsic value.

Order
- An order is a set of instructions sent to a broker or brokerage firm to buy or sell a security on behalf of an investor. Typically, orders are placed over the phone or online through a trading platform. However, automated trading systems and algorithms are increasingly being used to place orders. The process of order execution begins when an order is placed. 

Overvalued stock
- A stock is considered to be overvalued if its current price is higher than its profit estimates or price-to-earnings (P/E) ratio would indicate. As a result, analysts and other economic experts anticipate a gradual decline in price.






P


Pattern day trader (PDT)
- The term "pattern day trader" (PDT) refers to a trader or investor who uses a margin account to execute four or more day trades in a row during a period of five working days. Within that five-day period, the total number of day trades must exceed 6% of the entire volume of trades in the margin account.


Pink sheet - The term pink sheets refers to a listing for equities that trade over-the-counter (OTC) as opposed to on a major U.S. stock exchange. Many pink sheet listings are shares of company stock that don't meet the criteria to list on the main U.S. stock exchanges, like the New York Stock Exchange (NYSE), or the National Association of Securities Dealers Automated Quotations Stock Market (NASDAQ) for example.

Portfolio holdings
- investments that are a part of a portfolio. A variety of financial instruments, such as stocks, bonds, mutual funds, options, futures, and exchange-traded funds (ETFs), may be included in a portfolio's holdings.


Preferred stock - A form of fixed-dividend stock that is given preference over common stock in the distribution of dividends and the sale of corporate assets. Preferred stock comes in a variety of forms, including convertible and adjustable-rate options.


Price/earnings to growth ratio (PEG ratio) - The price/earnings to growth ratio (PEG ratio) is calculated by dividing a stock's price-to-earnings (P/E) ratio by the earnings growth rate over a given time period. In comparison to the more popular P/E ratio, the PEG ratio is used to calculate a stock's valuation while also taking the company's expected earnings growth into account.

Put option
- A put is an option that grants the owner the right, but not the obligation, to sell a particular quantity of the underlying asset for a predetermined price within a predetermined window of time. When purchasing a put option, the buyer is betting that the underlying stock will decline in value below the exercise price before the option expires. The price at which the underlying asset must trade in order for the put option contract to remain valuable is known as the exercise price.






Q


Quadruple witching - The date on which several derivatives contracts expire concurrently is referred to as quadruple witching. This occurs with four different kinds of contracts, including single stock futures, stock options, stock index futures, and stock index options. Four times a year, on the third Fridays of March, June, September, and December, there are quadruple witching dates. The final hour of trading on these days usually sees the most activity as traders try to close out their positions on these contracts.

Quality distribution
- The segmentation of a portfolio's assets according to investment quality.


Quantitative analysis (QA) -
Quantitative analysis (QA) is a method for comprehending behavior that makes use of mathematical and statistical modeling, measurement, and study. Quantitative analysts translate a certain reality into a numerical value. Measurement, performance assessment, financial instrument valuation, and the forecasting of actual occurrences, such as shifts in a nation's gross domestic product, are all done using quantitative analysis (GDP). In business and management, qualitative analysis makes use of subjective judgment to assess a company's value or prospects based on non-quantifiable data, such as management skills, industry cycles, the strength of research and development, and labor relations. In comparison to technical analysis which focuses on charts analysis, technical indicators and study of support and resistance levels, quantitative analysis focuses on data reports like balance sheets, instead. However, the two methods are frequently combined in order to assess a business' operations and determine whether it presents a good investment opportunity.


Quantitative easing (QE)
- Quantitative easing is a type of monetary policy in which a central bank, such as the United States Federal Reserve, uses to reduce interest rates. To lower interest rates and boost the amount of money in circulation, the Federal Reserve buys securities on the open market. By generating additional bank reserves, quantitative easing increases banks' liquidity and promotes lending and investment. QE policies are carried out by the Federal Reserve in the US and by the European Central Bank in Europe.

Quarter
- A quarter is a three-month period on a business's financial calendar that serves as the foundation for regular financial reporting and dividend payments. A quarter, which stands for one-fourth of a year, is commonly referred to as Q1 for the first quarter, Q2 for the second quarter, Q3 for the third quarter and Q4 for the fourth and last quarter of the year. A quarter is frequently represented by the year in which it belongs, such as Q1 2022 or Q122, which stands for the first quarter of the year 2022.

Quote
- A quote, also know as price quote, is the most recent price that a buyer and seller agreed upon and at which some portion of the asset was exchanged. It is the most recent price at which the asset is traded. The bid quote is the most recent price and quantity at which a share may be purchased. The bid quote displays the price and quantity at which a present buyer is prepared to buy the shares. The ask price indicates how much a current trader is willing to offer in exchange for their shares.






R


Ratings
- Evaluations of the credit quality of bonds usually made by independent rating services. Ratings generally measure the probability of timely repayment of principal and interest on debt securities.


Real body (of a candlestick) - The wide portion of a candle on a candlestick chart is its actual body. The real body encompasses the space between the opening and closing prices over a specific period of time. The candle is green (or white) if the close is higher than the open for the specified period of time. The candle is red (or black) if the close is lower than the open for the specified period of time.

Resistance
- Resistance, also known as a resistance level, is the level at which the price of an asset experiences pressure as it rises, due to the appearance of an increasing number of sellers who are eager to sell at that price. Resistance levels may be long-lasting or short-lived depending on whether new information surfaces and alters the market's perception of the asset as a whole. Drawing an horizontal line (and at times diagonal lines, known as trend lines) to connect the highs for the time period being considered, allows technical analysts to chart the resistance levels, and make a more accurate price projection. The counterpart of resistance is support. 

Return on equity (ROE)
- A financial performance indicator obtained by dividing net income by shareholders' equity. The return on equity (ROE) is known as the return on net assets since shareholders' equity is calculated as the sum of a company's assets less its debt.

Reverse stock split
- A corporate move aimed to reduce the number of existing shares of stock into fewer (higher-priced) shares. A reverse stock split, also referred as stock consolidation or stock merger, divides the existing total number of shares by a number. For example a 1-for-3 reverse split will give one share for every three shares that a qualifying shareholder owns, reducing the number of outstanding shares while increasing their price value by three folds. A stock split, in which a share is divided into many parts, is the opposite of a reverse stock split.

Risk tolerance
- The degree to which investor can accept value fluctuations in their investments.






S


Scalping
- Scalping is a trading strategy designed to trade and make money off of small movements in the price of a specific company stock. Traders that use this approach are called scalpers. Scalpers execute anything between five and tens of trades in a single day in the assumption that minor changes in stock price can produce larger combined profits rather than just a larger ones. If a tight exit strategy is adopted to prevent large losses, many little profits can readily compound into large gains at the end of day.

Short squeeze
- A short squeeze is an unusual condition that triggers rapidly rising prices in a stock or other tradable security. For a short squeeze to occur, the security must have an unusual degree of short sellers holding positions in it. The short squeeze begins when the price jumps higher unexpectedly. The condition plays out as a significant measure of the short sellers coincidentally decide to cut losses and exit their positions.

Small-cap
- The stock market capitalization of companies with less than $3 billion in market capitalization.

Smart money - The capital that is under the management of well-informed institutional investors, market experts, central banks, funds, and other financial institutions that are in-the-know. Smart money also refers to the combined power of large sums of money that has the ability to influence markets. For example, the central bank is the driving force behind smart money in this situation, and individual traders are riding on its back.

Stop order
- A stop order is an order to buy or sell a security when its price moves past a particular point, ensuring a higher probability of achieving a predetermined entry or exit price, limiting the investor's loss, or locking in a profit. Once the price crosses the predefined entry or exit point, the stop order becomes a market order.

Swing trading
- Swing trading is a type of trading strategy that aims to generate gains in the short- to medium-term trading stocks, options, ETFs, or any other financial instrument, over a few days up to several weeks. Technical analysis is a main tool used by swing traders to find trading opportunities, design their trading plan, identify entry areas and plan their exit strategies. In addition to examining price trends and patterns, swing traders may also use fundamental analysis.






T


Technical analysis (TA)
- Technical analysis is a trading methodology that uses statistical trends derived from trading activity, such as price movement and volume, to analyze investments and uncover trading opportunities. Technical analysis focuses on the analysis of price and volume as opposed to fundamental analysis, which seeks to determine a security's worth based on financial metrics like sales and earnings.

Time decay - Time decay is a measure of the rate at which the value of an option contract declines as time passes. Time decay accelerates as an option's expiration date approaches, since there is less time to profit from the trade.

Top down investing/analysis - Top-down investing is a method of investment analysis that prioritizes the macroeconomic variables of the economy before focusing on the microeconomic factors of particular industries or businesses, such as GDP, employment, taxation, and interest rates.

Total return - Accounts for all dividends, interest, and capital gains received prior to deducting fees and expenses, as well as any changes in the principle value, including share price, assuming that dividends and capital gains are reinvested. This percentage is frequently expressed in terms of time (one, five, ten years, and/or fund life). Also, a way of estimating an investment's return that takes into account share price fluctuations and dividends.


Trading halt - A brief pause of trading for a specific security or securities on one or more exchanges. Trading can be suspended in preparation of a news announcement, to rectify an order imbalance, owing to a technical problem, due to regulatory concerns, or because the price of the securities or index has moved quickly enough to warrant a halt based on exchange rules. Open orders may be cancelled and options may still be exercised when a trading halt is in place.

Trend analysis - Trend analysis is a technical analysis technique that aims to forecast future stock price movements based on recent trend data. Trend analysis forecasts the long-term direction of market sentiment by analyzing past data such as price movements and transaction volume.






U


Ultra ETF - A type of exchange-traded fund (ETF) that uses leverage to increase the return of a specific benchmark. Introduced in 2006, ultra ETFs have expanded to encompass a variety of ETFs with underlying benchmarks ranging from broad market indexes like the S&P 500, Nasdaq 100 and Russell 2000 to specific sectors (financial, technology, health care...), industries (semiconductors, biotech, oil and gas exploration and production...), geographical regions (Asia, Europe, Mexico...) and even short-sell holdings (inverse S&P 500, inverse Nasdaq 100, inverse Russel 2000...). Ultra ETFs are often referred to as leveraged ETFs or geared funds.


Underlying asset - The financial assets on which the price of a derivative is based. Options are a type of derivative; derivatives are derivatives are financial products whose value is based on other assets. 

Unicorn
- A startup company with a valuation of over $1 billion. The term unicorn is extensively used in the venture capital industry. Venture capitalist Aileen Lee is credited with coining the term. Due to their rarity, unicorns need tremendous amount of creativity. Due to their enormous size, unicorn investors typically are private investors or venture capitalists, making them unavailable to retail investors. Although it is not required, many unicorns work their way up to being public companies.

Universe of securities
- A group of securities that have something in common with each other. For example, for a U.S. investor, the broad universe of equities will comprise all listed companies (large, mid and small cap), as well as international corporations listed as American depositary receipts (ADRs). Other investors may employ a more narrow universe that is limited to only value stocks or those with a market cap above a certain minimal threshold.

Upside/downside ratio - The upside/downside ratio is a market breadth indicator that depicts the relationship between the volume of advancing and declining stocks on a stock exchange. This indicator is commonly used by investors to determine the market's momentum at any particular period. The upside/downside ratio is a variation of the advance-decline ratio (ADR), which analyzes the number, rather than the volume, of stocks that closed higher to the number of stocks that closed lower than their previous day's closing prices. 

Uptick - An increase in a financial instrument's price since the previous transaction. An uptick, also known as plus tick, happens when the price of a securities rises in proportion to the previous tick or trade.






V


Valuation
- a company's estimated worth or value; also the value investors give to a particular stock of company share. The analytical process of determining the current (or future) worth of an asset or a company. There are numerous methods for performing an evaluation. When determining a company's value, an analyst considers a variety of factors, including the management of the company, the makeup of its capital structure, the likelihood of future earnings, and the market value of its assets.


Value investing - A method whereby investors buy equities securities they think are being sold for less than their assessed actual worth. 


Venture capitalist (VC) - A venture capitalist (VC) is a type of private equity investor who invests money in growing businesses in exchange for an equity ownership. This could include providing beginning capital or aiding small businesses that want to grow but lack access to equity markets.

Volatility
- Volatility is a statistical measure of the spread of a security's or market index's returns. In most circumstances, a security is riskier the higher its volatility. Volatility is frequently calculated using the standard deviation or variance of returns from the same securities or market index. Volatility in the financial markets is frequently correlated with significant swings in either direction. For instance, a market is considered volatile when it fluctuates by more than 1% over an extended period of time. The volatility of an asset is an important consideration when pricing options contracts.

Volume
- The amount of an asset or security traded during a specified period of time, usually over the course of one day. For example, stock trading volume refers to the total number of shares of a securities traded during the entirety of one trading session (from open to close). Trading volume, as well as fluctuations in volume over time, are key information for technical traders.

Voting shares - Shares with voting rights are those that allow the holder to cast a vote for decisions affecting corporate policy. The majority of the time, voting shares are represented by a company's common stock. Voting rights are occasionally absent from various classes of shares, such as preferred stock.






W


W-shaped recovery - A W-shaped recovery is an economic cycle of recession and recovery that looks like the letter W on a chart. In a W-shaped recovery, price experiences a sharp decrease for an extended period of time, followed by a sharp rise to test some near resistance levels, a sharp decline to retest the recent lows, and then another sharp rise above the recent resistance levels. This back-to-back drop and bounce gives form to the W-shape pattern formation.

Warrant
- Warrants are a type of derivative that grant the right, but not the obligation, to buy or sell a security—most often an equity—at a specific price before expiration. T he cost at which the underlying securities may be purchased or sold is referred to as exercise price or strike price. European warrants may only be exercised on the expiration date, whereas American warrants may be exercised at any time on or before that date. Call warrants and put warrants are terms used to describe warrants that grant the right to buy or sell securities, respectively.

Wash sale
- The term wash sale refers to a transaction in which a person sells or trades a security at a loss and then re-purchases the same stock or security, or obtains a contract or option to do so, within 30 days before or after the date when the loss-generating investment was sold. This window of time account as a total of 61-day wait period. Another scenario that leads to a wash sale is when a person sells a security and then, during the 61-day waiting period, their spouse or a business they control purchases a substantially identical investment. Under Internal Revenue Service (IRS) regulations, a tax deduction for a loss on a securities sold in a wash sale is not allowed. This provision is known as the wash-sale rule. The rule is intended to discourage investors from making an investment loss in order to claim a tax deduction while effectively keeping their stake in the securities.

Wash sale rule
- An Internal Revenue Service (IRS) policy that forbids a taxpayer from claiming a tax deduction for a loss on a securities sold in a wash sale. A wash sale is one that takes place when a person sells or trades an asset at a loss and then purchases the same stock or security, or obtains a contract or option to do so, within 30 days before or after the sale. The purpose of the wash-sale rule is to discourage individuals and corporations from making an investment loss in order to claim a tax deduction while effectively keeping their stake in the securities.

Weighted Average Market Capitalization Indices
- Most indices are built by weighting the market capitalization of each stock in the index. Larger corporations make up a larger part of this type of indexes. The S&P 500 Index is an example of that.

Weekly chart - Weekly charts show a succession of data points, every one of which is made up of the price movement over the course of a single trading week. Each candle, bar, or point on a line on a weekly chart indicates the price summary for a specific trading week. A weekly chart displays the high, low, open, and close for the whole week but not the day-by-day trading moves inside that week. The most popular forms of charts used by traders and investors are candlestick charts and bar charts. The weekly chart is generally used for long-term trading.






X


X
- X is a ticker symbol extension. The X-extension to is used to identify a mutual fund.


X-efficiency - The degree of efficiency maintained by companies under situations of imperfect competition. When a corporation is said to be efficient, it means that it is maximizing its outputs from all of its inputs, including worker productivity and production efficiency. Firms are required to be as efficient as possible in order to secure significant profits and continuing existence, in a highly competitive market. This is not true when there is insufficient competition, as when there is a monopoly or a duopoly.

XD - The symbol XD is used to indicate that a security is trading ex-dividend. It is an alphabetic qualifier that serves as abbreviation to advise investors about important information regarding a specific asset in a stock quote. At times, when the stock is trading ex-dividend, the symbol X alone might be used to.






Y


Y
- Y is an extension to a ticker symbol. It denotes that the security is an American depositary receipt (ADR). Therefore, a stock symbol ending with the letter Y indicates that the stock is an American depositary receipt (ADR). ADRs, or negotiable certificates representing shares of foreign stock, are a popular means for U.S. investors to purchase equities of companies based outside of the United States.

Year-over-year (YOY) - A year-on-year comparison is a common financial comparison that looks at two or more quantifiable events on a yearly basis. YOY performance can be used to determine if a company's financial performance is improving, staying the same, or declining. For instance, you can read in financial reports that a certain company stated its fourth-quarter revenues increased year over year for the previous five years.

Year to date (YTD) - Year to date (YTD) refers to the time period from the first day of the current calendar year or fiscal year to the present day. YTD data can be used to compare performance to peers or competitors in the same industry or to analyze business trends over time. Often, the acronym YTD is used in reference to terms such earnings, net pay, and investment returns.

Yield
- Annual percentage rate of return on capital. The dividend or interest paid by a company expressed as a percentage of the current price. "Yield" refers to the earnings generated and realized on an investment over a particular period of time. It's expressed as a percentage based on the invested amount, current market value, or face value of the security. Yield includes the interest earned or dividends received from holding a particular security. Depending on the valuation (fixed vs. fluctuating) of the security, yields may be classified as known or anticipated.


Yield curve - Return on capital, expressed as a percentage annually. A company's dividend or interest paid stated as a percentage of its current price. Yield is a term used to describe the profits made and realized on an investment over a specific time frame. It is represented as a percentage based on the amount invested, the security's current market value, or its face value. Yield is made up of the interest or dividends that come with holding a specific security. Yields can be categorized as known or anticipated depending on the security's valuation (fixed vs. variable).

Yield spread - A yield spread is the difference in yields on several financial instruments with different maturities, credit ratings, issuers, or risk levels. It is computed by subtracting the yield of one instrument from the yield of the other. This distinction is commonly stated in basis points (bps) or percentage points.






Z


Z
- The term Z refers to a Nasdaq-listed security designation that defines a variety of entities. This is one of several fifth-letter identifiers that come after a company's ticker symbol. It denotes that the stock is distinct from individual issue of common or capital stock.

Zeta model (Z-score) - The Zeta Model is a mathematical model that predicts the likelihood of a public company going bankrupt within two years. The model's output is known as the company's Z-score (or zeta score), and it is thought to be a reasonably accurate predictor of future bankruptcy.

Zig zag indicator - The zig zag indicator is a simple tool used by analysts to determine whether a security's trend is changing. By identifying support and resistance levels, it is possible to recognize major price movements while filtering out short-term variations, thus removing the noise of daily market conditions. It is a great tool for any trader that uses swing highs and swing lows as indicators.

Zone of resistance - Also known as a resistance level, or simply resistance, is the level at which the price of an asset experiences pressure as it rises, due to the appearance of an increasing number of sellers who are eager to sell at that price. Resistance levels may be long-lasting or short-lived depending on whether new information surfaces and alters the market's perception of the asset as a whole. Drawing an horizontal line (and at times diagonal lines, known as trend lines) to connect the highs for the time period being considered, allows technical analysts to chart the resistance levels, and make a more accurate price projection. The counterpart of resistance is support.

Zone of support - Also known as a support level, or simply support, is the level at which the price of an asset experiences stability as it drops, due to the appearance of an increasing number of buyers who are eager to buy at that price. Support levels may be long-lasting or short-lived depending on whether new information surfaces and alters the market's perception of the asset as a whole. Drawing an horizontal line (and at times diagonal lines, known as trend lines) to connect the lows for the time period being considered, allows technical analysts to chart the support levels, and make a more accurate price projection. The counterpart of support is resistance.






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10-year treasury note
- The 10-year Treasury note is a debt obligation issued by the United States government with a 10-year maturity at the time of issuance. A 10-year Treasury note pays a fixed rate of interest every six months and pays the face value to the holder at maturity. Ten-year Treasury notes are a source of partial funding for the US government.

12b-1 fee - A mutual fund fee is a fee used to pay for broker-dealer compensation and other distribution costs. It is called after the SEC rule that authorizes it. If a fund charges a 12b-1 fee, it will be disclosed in the prospectus' fee table.

30-year treasury - A U.S. Treasury debt obligation with a 30-year maturity. Prior to the 10-year Treasury's popularity rising, the 30-year Treasury was widely regarded as the benchmark U.S. bond.

52-week high - The highest price at which a security has traded in the previous 52 weeks.


52-week low - The lowest price at which a security has traded in the previous 52 weeks.


52-week range - The 52-week range is a data point commonly published by financial news media, that includes the stock's lowest and highest price throughout the last 52 weeks. Investors use this data to estimate the level of risk and variation they might encounter over the course of a year if they decide to purchase a particular stock. Investors can locate a stock's 52-week range in the quote summary that a broker or financial information website provides for the stock. This data can be seen on a pricing chart that displays one year's worth of price data.

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