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 is 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).
Capital - Usually, cash or other liquid assets that are held or acquired for use as funds. The phrase can be used broadly to refer to all of a company's monetary-valued assets, including its inventory, real estate, and equipment. When it comes to planning a budget, capital refers to cash flow. In general, capital can serve as both a gauge of wealth and a tool for generating more wealth through investments in capital projects or direct investments. Individuals' net worth includes capital and capital assets. Companies have capital structures that include working capital for everyday expenses, equity capital, and loan capital. More specifically, capitals often refers to long-term investments made in a firm and acquired through the issuance of preferred or common shares, the retention of a portion of the company's earnings since its creation, and long-term borrowing.
Capital gain - The difference between a security's purchase price and its selling price, when the difference is positive. The profit made on the sale of an asset whose value has improved throughout the holding term. A car, a business, or tangible or intangible property like shares are all examples of assets. Only when the asset's selling price exceeds its original acquisition price is a capital gain feasible. A capital loss happens when the buying price is higher than the sale price. Taxation on capital gains is common, and rates and exemptions may vary between nations. A variety of economic philosophers have characterized the evolution of capital gain, which began at the inception of the modern economic system, as complex and diverse. The idea of a capital gain may be compared to other important economic ideas like profit and rate of return, but it differs from those ideas in that anybody can accumulate capital gains via the routine acquisition and disposition of assets, not just corporations.
Capital gains ex-date - The day on which a shareholder loses their right to receive a capital gain distribution that have been announced by a securities or mutual fund.
Capital gains (or loss) long term - The gain (or loss) resulting from the sale of an eligible investment that was held for more than a year at the time of sale. In contrast, investments that are sold off in less than a year may see short-term gains or losses. Short-term gains frequently receive less favorable tax treatment than long-term gains.
Capital gains reinvest net asset value (NAV) - Any positive difference between the purchase price and sale price of an asset that was immediately reinvested in additional shares of that security or mutual fund at that security's net asset value.
Capital gains short term - The profit made in less than a year from the difference between the asset's acquisition price and selling price (where the difference is positive).
Capital loss - Loss that results from the decline in value of a capital asset, such as an investment or a piece of real estate. In order for the loss to become realized, the asset needs to be sold for less than the original acquisition price. Until the sale takes place, that loss if referred to as unrealized loss.
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.
Cash equivalent - A short-term money market instrument with high liquidity and safety that can be quickly turned into cash, such as a Treasury bill or repurchase agreement. Generally cash equivalents are investment instruments with good credit quality and high liquidity that are designed for short-term investing. Along with stocks and bonds, cash equivalents, usually referred to as "cash and equivalents," is one of the three major asset classes in financial investing. The risk and return characteristics of these securities are minimal.
Cash flow (CF) - The net amount of cash and cash equivalents coming into and going out of a business is referred to as cash flow. Money spent and money received reflect inflows and outflows, respectively. Fundamentally, a company's capacity to produce positive cash flows, or more specifically, its capacity to optimize long-term free cash flow, determines its ability to create value for shareholders (CFC). FCF is the cash a company generates from its regular business activities after deducting any funds used for capital expenditures (CapEx).
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.
Chapter 11 - Chapter 11 is referred to as a reorganization bankruptcy since it entails reorganizing a debtor's financial affairs, liabilities, and assets.
Climate action 100+ - An investor-led initiative to ensure that the top business emitters of greenhouse gases take the necessary climate change measures, to help promote stronger climate disclosures and emission reduction plans.
Commodity - Basic good that used in trade and can be exchanged for other items of the same kind. The majority of the time, commodities are utilized as raw materials to create other products or services. Therefore, a commodity is typically a raw resource utilized to create completed goods. Contrarily, a product is the finished good that is offered for sale to customers. A commodity's quality may slightly vary amongst producers, but it is generally the same. Commodities, usually referred to as base grades, must also satisfy specific minimum requirements in order to be traded on an exchange.
Commodity futures contract - An agreement to buy or sell a fixed quantity of a commodity at a specific price on a specific date in the future. A position in the stock market can be protected or hedged using commodity futures. They can also be used to make directional bets on the underlying asset. Investors frequently mix up futures and options contracts. The holder of a futures contract is required to take action. The underlying asset must be purchased or sold at the stated price if the holder does not unwind the futures contract before it expires. The spot commodities market can be contrasted with commodity futures.
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.
Contingent deferred sales charge (CDSC) - Fee, sales charge, or load mutual fund investors must pay when selling Class-B fund shares within a certain number of years after the initial purchase date. This charge is also referred to as a "sales charge" or a "back-end load." Class-B shares in mutual funds that have share classes that determine when investors pay the load or sales charge have a contingent deferred sales charge applied to them for a holding period of five to ten years starting from the time of the original investment. A CDSC is typically expressed in the financial sector as a percentage of the dollar amount invested in a mutual fund. A CDSC may also be referred to as an exit fee or a redemption charge in the financial sector.
Consumer Price Index (CPI) - The Consumer Price Index (CPI) tracks the monthly change in prices paid by American consumers. The CPI is calculated by the Bureau of Labor Statistics (BLS) as a weighted average of prices for a selection of products and services that is indicative of total consumer spending in the United States. One of the most widely used indicators of inflation and deflation is the CPI. The producer price index (PPI), which tracks changes in the prices paid to US producers of goods and services, has a different survey methodology, pricing sample, and index weights than the CPI report.
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.
Contrarian - In a contrarian investment strategy, investors deliberately buck the direction of the market by selling when others are buying and purchasing when most investors are selling. Warren Buffett, chairman and CEO of Berkshire Hathaway, is renowned as a contrarian investor. Investors who hold a contrary opinion think that people who claim the market is rising only do so when they are completely invested and have no more purchasing power. The market has reached its pinnacle at this time. Therefore, when forecasters foresee a decline, they have already sold out and the market can only rise from here.
Convertible preferred stocks - Convertible preferred stocks are preferred shares with an option for conversion into a specific number of common shares at a later time. The majority of convertible preferred stock is swapped at the shareholder's desire, but occasionally there is a clause that enables the business, or issuer, to force the conversion. In the end, the performance of the common stock determines the value of a convertible preferred stock.
Corporate bond - A type of financial product issued by a corporation and sold to investors to raise outside capital. The investor receives a predetermined amount of interest payments at either a fixed or variable interest rate in exchange for providing the firm with the money it requires. The bond "reaches maturity" when it stops making payments and the initial investment is refunded. The ability of the corporation to repay the bond often serves as its security, and this ability is based on its expectations for future revenues and profitability. Physical assets of the corporation may occasionally be utilized as collateral.
Corporate engagement - Shareholders engaging in conversations with management of a company in an effort to better understand how the company manages particular risks and/or to have a say in how the company makes decisions.
Corporate social responsibility (CSR) - Self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental. To engage in CSR means that, in the ordinary course of business, a company is operating in ways that enhance society and the environment instead of contributing negatively to them.
Correction - A correction in the investment world is typically thought of as a price decrease of 10% or more from a security's most recent peak. Corrections can affect both an index measuring a collection of assets as well as individual assets like a stock or bond. A correction can affect an asset, index, or market for a short while or for extended periods of time—days, weeks, months, or even longer. The typical market decline, however, only lasts three to four months on average.
Country breakdown - Securities in a portfolio broken down by nation.
Covered call - A financial transaction that occurs when a call option seller also holds an equivalent quantity of the underlying securities. An investor who has a long position in an asset can then carry out this strategy by writing (selling) call options on that same asset to create an income stream. Since the seller can deliver the shares if the call option buyer decides to exercise, the investor's long position in the asset serves as the cover.
Crash - A stock market crash is a rapid and frequently unforeseen decline in stock values. A stock market crash can be a byproduct of a significant disaster, an economic downturn, or the burst of a protracted speculative bubble. A stock market crash can also be significantly influenced by public outrage over it, which can lead to panic selling and more price declines.
Custodian - A financial institution that manages the assets of mutual funds, settles all portfolio trades, and gathers the majority of the valuation information needed to determine a fund's net asset value (NAV).
Cut-off time - The time of the trading day when a transaction can no longer be accepted.
Cyclical stocks - Cyclical stocks are those whose price is influenced by systematic or macroeconomic shifts in the overall economy. Cyclical equities are well known for tracking an economy's boom, peak, recession, and recovery phases. The majority of cyclical stocks belong to businesses that sell consumer discretionary goods, which consumers tend to spend more on during an expansion and less on during a downturn.