Tape reading - Tape reading is an old method used by day traders to examine the price and volume of a certain asset. Stock prices were communicated over telegraph lines on ticker tape that included a ticker symbol, price, and volume from around the 1860s through the 1960s. As personal computers and electronic communication networks (ECNs) gained popularity in the 1960s, these technologies were phased out.
Task Force on Climate-related Financial Disclosures (TCFD) - A framework for firms to improve and expand their reporting of climate-related financial data. The task force was created by the Financial Stability Board (FSB), an international organization established after the G20 London summit in 2009, that monitors and advises on the global financial system.
Tax-exempt income - Income that is exempt from income taxes. The income earned by a buyer of state municipal bonds is exempt from federal taxation.
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.
Technical indicators - Technical indicators, which are utilized by traders who follow technical analysis, are algorithmic or pattern-based indications generated by the price, volume, and/or open interest of an asset or contract. Technical analysts utilize indicators to forecast future price changes by examining historical data. The Relative Strength Index (RSI), Money Flow Index (MFI), stochastics, moving average convergence divergence (MACD), and Bollinger Bands are a few examples of popular technical indicators.
Technology sector - The group of companies involved in the creation, distribution, or study of technology-based products and services. Businesses in this industry are focused on producing electronics, writing software applications, building computers, or providing information technology-related goods and services.
Thematic - In finance, the term thematic means two things. 1. a method of investing that concentrates on topics or assets that are specifically relevant to a topic chosen using values- or standards-based criteria. 2. a method of investing that emphasizes sustainability-related topics or assets, such as those relating to clean energy, access to water, or healthcare.
Theta - Theta is the pace at which the value of an option declines with the passage of time. It may also be known as an option's time decay. A as long as everything remains constant, an option loses value as it approaches maturity. Theta can be thought of as the daily drop in value of an option and is typically expressed as a negative number.
Thin market - A thin market, also known as a narrow market, on any financial exchange is defined as a period of time with a low number of buyers and sellers, whether for a single stock, a specific sector, or the entire market. Price volatility can result from a thin market.
Three black crows - A bearish reversal pattern made of three red (or black) consecutive long-bodied candlesticks indicating the end of an uptrend. These candlesticks should not have long shadows and should preferably open within the body of the preceding candle in the pattern. For reference, a candlestick is green (or white) when price closes above the opening price, indicating that equities are advancing; a candlestick is red (or black) when price closes below the opening price, indicating that equities are falling.
Three white soldiers - A bullish reversal pattern made of three green (or white) consecutive long-bodied candlesticks indicating the end of a downtrend. These candlesticks should not have long shadows and should preferably open within the body of the preceding candle in the pattern. For reference, a candlestick is green (or white) when price closes above the opening price, indicating that equities are advancing; a candlestick is red (or black) when price closes below the opening price, indicating that equities are falling.
Ticker symbol - A ticker symbol, also called stock symbol, is a particular set of letters assigned to a security for trading reasons. Stocks that are listed on the NYSE are limited to four letters or less. Securities that are listed on Nasdaq typically have four characters, but may have up to five letters. The fifth letter of a five-letter symbol contains company information. The fifth letter can sometimes be used to identify the type of stock or security: A or B stand for NASDAQ stocks' A and B class shares, respectively, while V or Y denote shares represented by American Depository Receipts (ADRs). There is no discernible difference between symbols with two letters, and those with three, four or even five letters because they are simply a shortcut for describing a company's stock.
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.
Time horizon - The length of time someone anticipates holding an investment or asset.
Top 10 holdings - The ten largest investments in a portfolio, according by asset value.
Top 10 long and short positions - The top 10 holdings in each position category, ordered by market value (long and short). For reference, a long position is one in which an investor purchases stock and profits as an equity holder if the stock price rises. A short position is one in which an investor sells shares of stock (generally borrowed from their brokers) and profits as an equity holder if the stock price falls.
Top 5 contributors - Top five industries in a portfolio according to assets invested.
Top 5 detractors - Five investments in a portfolio with the highest negative returns (losses).
Top 5 holdings - Top five securities in a portfolio according to total assets invested.
Top 5 industries - Top five industries in a portfolio according to the value of assets invested.
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.
Tracking error - The portfolio's active risk which computes the annualized standard deviation of the portfolio's excess returns over the benchmark.
Trade - The voluntary exchange of commodities or services between various economic entities. Because neither party is obligated to trade, a transaction will take place only if both parties believe it will benefit their respective interests. Trade can take on multiple connotations depending on the circumstance. For example, free trade refers to cross-border exchanges of goods and services that are unhindered by tariffs or other trade restrictions, where in financial markets, trades refer to the buying and selling of derivatives, commodities, or securities.
Trading account - Any investment account that holds securities, money, or other assets. The term trading account most frequently refers to (but not limited to) the main account of a day trader. Because traders often buy and sell assets, frequently within the same trading session, their accounts are subject to additional scrutiny. Assets that may be part of a long-term buy and hold investment plan are kept separate from those that are held in a trading account.
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.
Trading platform - A software program used to trade securities, mainly through an online broker or other type of financial intermediary, enabling investors to open, cancel, and manage their positions online.
Trading strategy - A trading strategy is a methodical approach used to buy and sell securities in the markets. A trading strategy is built upon predetermined guidelines and standards that are applied when making trading selections.
Trading session - A trading session is a period of time that corresponds to the main daytime trading hours in a specific location, generally refer to as regular market hours. Depending on the markets and locations, market hours will vary. Individual investors and traders will typically refer to a single day of business in the local financial market, from the opening bell to the closing bell.
Trailing stop - A trailing stop is a variation on a standard stop order that can be put at a specific percentage or dollar amount distant from a security's current market price. Trailing stops are generally used to lock in profits after an asset's price as reached the investor's desired level. For reference, a trailing stop loss on a long investment (or trade) is placed below the current market price, where a trailing stop is placed above the current market price for a short sell type of trade or investment.
Transfer agent - An agent, usually a commercial bank, who is in charge of keeping track of stock, bond, and shareholder data. A transfer agent maintains a record of each registered shareholder's name, address, and the number of shares owned, as well as ensuring that certificates given for transfer are properly canceled and fresh certificates are issued in the name of the new owner.
Treasury bill - Negotiable, one-year or less, short-term debt obligations that are issued and guaranteed by the United States government.
Treasury bond - Negotiable, long-term financial obligations with a maturity of 10 years or more that are issued and guaranteed by the United States government.
Treasury note - Negotiable, medium-term financial obligations with a maturity of one to ten years that are issued and guaranteed by the United States government.
Treasury security - Securities issued by the United States Treasury Department, with support from the American government.
Treasury yield - Treasury yield is the effective yearly interest rate, stated as a percentage, that the US government pays on a certain debt obligation. In other words, Treasury yield is the annual return investors can anticipate from holding a U.S. government securities with a specific maturity.
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.
Trend line - Trend lines are distinctive lines drawn on charts to link a series of prices. A trend line is generally drawn above or below pivot highs or lows to indicate the price's primary direction. They depict patterns during consolidation periods. In every time frame, trend lines offer a visual representation of support and resistance. The resulting line and/or pattern is then used to provide the trader with a good sense of the direction in which the value of an investment may go.
Triangle - A triangle is a consolidation pattern that denotes a pause in the current trend. A triangle is represented by two converging trend lines within a narrow price range, resembling a triangular shape. After price moves out of the triangle (breakout/breakdown), and price resumes the previous trend prior to the pause, the triangle is then categorized as a continuation pattern. However, a breakout and hold above the triangle top (bullish), or a breakdown and hold below the triangle bottom (bearish), requires volume confirmation. Regardless of the consolidation pattern from which they emerge (triangles, rectangles, flags, pennants, etc.), increased volume activity is necessary to validate any breakout or breakdown.
Triple bottom - A triple bottom is a bullish technical pattern that consists of three near-identical lows followed by a breakout above the resistance level. Typically a triple bottom is used in technical analysis to predict the reversal in the movement of an asset's price, in this case bullish. However, in addition to price holding above the breakout level, increased volume activity is also needed to validate that a bullish reversal is, in fact, happening.
Triple top - A triple top is a bearish technical pattern that consists of three near-identical highs followed by a breakdown below the support area. Typically a triple top is used in technical analysis to predict the reversal in the movement of an asset's price, in this case bearish. However, in addition to price holding below the breakdown area, increased volume activity is also needed to validate that a bearish reversal is, in fact, happening.
Triple witching - Triple witching is when stock options, stock index futures, and stock index options contracts all expire at the same time on the same trading day. Triple witching occurs four times a year, on the third Friday in March, June, September, and December. Since three options classes with the same underlying securities expire on the same day, it might result in higher trading volume and unexpected price behavior in the underlying assets. Similar to triple witching, option expiration also experiences double witching and quadruple witching. Double witching happens when two classes of options on the same underlying security expire on the same day. Quadruple witching happens when four classes of options on the same underlying security expire on the same day.
Trustee - A trustee is business or a person who is in charge of one or more accounts. The term trustee also refers to a member of the board of trustees who is ultimately in charge of the operations of a fund.
Turnover ratio - Percentage of mutual fund holdings sold in a specific period of time.