- Stock: A share in the ownership of a company.
- Share: A unit of ownership in a company.
- Equity: The value of an ownership interest in a company.
- Dividend: A payment made by a company to its shareholders.
- IPO (Initial Public Offering): The first sale of a company’s stock to the public.
- Bull Market: A market characterized by rising stock prices.
- Bear Market: A market characterized by falling stock prices.
- Market Capitalization: The total value of a company’s outstanding shares.
- Volume: The number of shares traded in a security or market during a given period.
- Liquidity: The ease with which an asset can be converted into cash without affecting its price.
- Market Order: An order to buy or sell a security at the best available price.
- Limit Order: An order to buy or sell a security at a specified price or better.
- Stop Order: An order to buy or sell a security once the price reaches a certain level.
- Bid: The price at which a buyer is willing to purchase a security.
- Ask: The price at which a seller is willing to sell a security.
- Spread: The difference between the bid and ask prices of a security.
- Broker: A person or firm that buys and sells securities on behalf of others.
- Commission: A fee paid to a broker for executing a trade.
- Exchange: A marketplace where securities are bought and sold.
- NYSE (New York Stock Exchange): The largest stock exchange in the world by market capitalization.
- NASDAQ: A global electronic marketplace for buying and selling securities.
- AMEX (American Stock Exchange): A stock exchange in the United States.
- Index: A measure of the performance of a group of stocks.
- Dow Jones Industrial Average (DJIA): A price-weighted average of 30 significant stocks traded on the NYSE and NASDAQ.
- S&P 500: A market-capitalization-weighted index of 500 of the largest publicly traded companies in the U.S.
- NASDAQ Composite: An index of more than 2,500 common equities listed on the NASDAQ stock market.
- Blue Chip Stocks: Stocks of large, well-established companies with a history of reliable performance.
- Penny Stocks: Stocks with a low share price, typically traded over-the-counter.
- Growth Stocks: Stocks of companies that are expected to grow at an above-average rate.
- Value Stocks: Stocks of companies that are considered undervalued by the market.
- Market Maker: A firm that provides liquidity to a market by quoting both buy and sell prices for a security.
- Market Analyst: A person who analyzes financial markets and securities.
- Stock Exchange: A marketplace where securities are bought and sold.
- Listed Company: A company whose shares are traded on a stock exchange.
- Unlisted Company: A company whose shares are not traded on a stock exchange.
- Volatility: A measure of the fluctuation of a financial instrument’s price over time.
- Beta: A measure of a stock’s volatility in relation to the overall market.
- P/E Ratio (Price-to-Earnings Ratio): A measure of a company’s current share price relative to its per-share earnings.
- EPS (Earnings Per Share): The portion of a company’s profit allocated to each outstanding share of common stock.
- Yield: The income return on an investment.
- Market Trend: The general direction in which a market is moving.
- Sector: A group of stocks that are in the same industry or business sector.
- Industry: A group of companies that produce similar products or services.
- ETF (Exchange-Traded Fund): A type of investment fund and exchange-traded product.
- Mutual Fund: A professionally managed investment fund that pools money from many investors to purchase securities.
- Hedge Fund: An investment fund that pools capital from accredited individuals or institutional investors.
- Futures: Financial contracts obligating the buyer to purchase an asset or the seller to sell an asset at a predetermined future date and price.
- Options: Financial derivatives that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price.
- Short Selling: The sale of a security that is not owned by the seller or that the seller has borrowed.
- Long Position: The buying of a security such as a stock, commodity, or currency with the expectation that the asset will rise in value.
- Short Position: The sale of a borrowed security, commodity, or currency with the expectation that the asset will fall in value.
- Margin: The amount of money required to open or maintain a leveraged position in a financial instrument.
- Margin Call: A demand by a broker that an investor deposit further cash or securities to cover possible losses.
- Blue Sky Laws: State regulations that require companies making securities offerings to register them before selling to investors.
- Day Trading: The practice of buying and selling financial instruments within the same trading day.
- Swing Trading: A style of trading that attempts to capture short- to medium-term gains in a stock.
- High-Frequency Trading (HFT): A type of algorithmic trading characterized by high speeds, high turnover rates, and high order-to-trade ratios.
- Algorithmic Trading: A method of executing orders using automated pre-programmed trading instructions.
- Technical Analysis: A method of evaluating securities by analyzing statistics generated by market activity.
- Fundamental Analysis: A method of evaluating a security in an attempt to measure its intrinsic value.
- Candlestick Chart: A style of financial chart used to describe price movements of a security, derivative, or currency.
- Moving Average: A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random price fluctuations.
- Support Level: A price level where a downtrend can be expected to pause due to a concentration of demand.
- Resistance Level: A price level where a rising price can find resistance and may have difficulty moving higher.
- Bullish: A positive outlook on a particular security or the market as a whole.
- Bearish: A negative outlook on a particular security or the market as a whole.
- Rally: A period of sustained increases in the prices of stocks, bonds, or indexes.
- Correction: A reverse movement, usually negative, of at least 10% in a stock, bond, commodity, or index.
- Market Crash: A sudden and significant decline in the value of a market.
- Circuit Breaker: A mechanism to halt trading on a stock exchange in an effort to prevent stock prices from falling too far too fast.
- Insider Trading: The buying or selling of a security by someone who has access to material, nonpublic information about the security.
- Public Offering: The sale of equity shares or other financial instruments by an organization to the public.
- Private Placement: The sale of securities to a small number of private investors.
- Prospectus: A formal legal document that is required by and filed with the Securities and Exchange Commission (SEC).
- Shareholder: An individual or institution that owns one or more shares of stock in a company.
- Board of Directors: A group of individuals elected to represent shareholders and establish corporate policies.
- Corporate Governance: The system of rules, practices, and processes by which a company is directed and controlled.
- Dividend Yield: A financial ratio that shows how much a company pays out in dividends each year relative to its stock price.
- Dividend Payout Ratio: The percentage of earnings paid to shareholders in dividends.
- Dividend Reinvestment Plan (DRIP): A plan that allows shareholders to automatically reinvest their cash dividends.
- Stock Split: The division of a company’s existing shares into multiple shares.
- Reverse Stock Split: The reduction of a company’s outstanding shares.
- Merger: The combining of two or more companies into a single company.
- Acquisition: The purchase of one company by another.
- Spinoff: The creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent company.
- Takeover: The acquisition of control over a corporation through the purchase of a substantial number of the voting shares of the corporation.
- Poison Pill: A defensive strategy used by a target company to prevent or discourage a hostile takeover.
- Golden Parachute: A clause in an employment contract that provides a large financial payout to an executive upon termination.
- Proxy: A person authorized to act on behalf of another person.
- Proxy Statement: A document that the Securities and Exchange Commission (SEC) requires a company to provide to shareholders.
- Voluntary Corporate Action: A decision made by a company that affects its shareholders, such as a stock split or a dividend payment.
- Involuntary Corporate Action: A decision made by a company that affects its shareholders without their consent, such as a merger or acquisition.
- Market Sentiment: The overall feeling or mood of investors toward a particular security or financial market.
- 52-Week High: The highest price at which a stock has traded during the previous 52 weeks.
- 52-Week Low: The lowest price at which a stock has traded during the previous 52 weeks.
- Market Maker: A firm that provides liquidity to a market by quoting both buy and sell prices for a security.
- Liquidity Provider: A firm or individual that stands ready to buy or sell a security in large quantities at publicly quoted prices.
- Secondary Offering: The sale of new or closely held shares of a company that has already made an initial public offering (IPO).
- Insider Ownership: The percentage of a company’s shares that are owned by insiders, such as executives and directors.
- Share Repurchase: The buying back of a company’s own shares by the company.
- Bank: A financial institution that accepts deposits from the public and creates credit.
- Commercial Bank: A bank that offers services to businesses and individuals.
- Investment Bank: A financial institution that assists individuals, corporations, and governments in raising financial capital by underwriting or acting as the client’s agent in the issuance of securities.
- Retail Bank: A bank that offers services to individual customers rather than businesses or corporations.
- Central Bank: A financial institution that manages a country’s currency, money supply, and interest rates.
- Federal Reserve: The central banking system of the United States.
- Interest Rate: The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.
- Prime Rate: The interest rate that commercial banks charge their most creditworthy customers.
- Federal Funds Rate: The interest rate at which depository institutions lend reserve balances to other depository institutions overnight on an uncollateralized basis.
- LIBOR (London Interbank Offered Rate): The benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.
- Mortgage: A loan used to purchase real estate.
- Loan: A sum of money that is borrowed and is expected to be paid back with interest.
- Credit: The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
- Credit Score: A numerical expression based on a level analysis of a person’s credit files.
- Collateral: Property or other assets that a borrower offers as a way for a lender to secure the loan.
- Secured Loan: A loan that is backed by collateral.
- Unsecured Loan: A loan that is not backed by collateral.
- Mortgage Rate: The interest rate charged on a mortgage.
- APR (Annual Percentage Rate): The annual rate charged for borrowing or earned through an investment, expressed as a single percentage number.
- Credit Card: A card that allows its holder to buy goods and services based on the holder’s promise to pay for these goods and services later.
- Debit Card: A card that deducts money directly from a consumer’s checking account to pay for a purchase.
- ATM (Automated Teller Machine): An electronic banking outlet that allows customers to complete basic transactions without the aid of a branch representative or teller.
- Checking Account: A bank account that allows deposits and withdrawals.
- Savings Account: A bank account that earns interest.
- Certificate of Deposit (CD): A time deposit that pays a fixed interest rate for a specified term.
- Overdraft: A deficit in a bank account caused by drawing more money than the account holds.
- Overdraft Protection: A service that allows an account holder to temporarily make transactions that exceed the account balance.
- Wire Transfer: A method of electronically transferring funds from one person or entity to another.
- SWIFT (Society for Worldwide Interbank Financial Telecommunication): A messaging network that financial institutions use to securely transmit information and instructions.
- ACH (Automated Clearing House): An electronic network for financial transactions in the United States.
- NEFT (National Electronic Funds Transfer): A nation-wide payment system facilitating one-to-one funds transfer.
- RTGS (Real Time Gross Settlement): A funds transfer system where transfer of money or securities takes place from one bank to another on a “real time” and on a “gross” basis.
- FDIC (Federal Deposit Insurance Corporation): A U.S. government corporation providing deposit insurance to depositors in U.S. commercial banks and savings institutions.
- Bankruptcy: A legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts.
- Foreclosure: The legal process by which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments.
- Reconciliation: The process of comparing two sets of records to ensure they are in agreement.
- Bank Statement: A summary of financial transactions that have occurred over a given period on a bank account held by a person or business.
- ATM Fee: A fee charged for using an ATM that does not belong to your bank.
- Banker’s Draft: A check drawn by a bank on its own funds and signed by one of its officials.
- Bank Guarantee: A promise from a bank that a borrower will meet its obligations.
- Bank Run: A situation in which a large number of customers of a bank or other financial institution withdraw their deposits simultaneously.
- Chargeback: A transaction reversal made to dispute a card transaction.
- Collateral: An asset that a lender accepts as security for a loan.
- Consumer Credit: Credit that is granted to individuals for personal use.
- Consumer Loan: A loan granted to consumers for personal, family, or household purposes.
- Credit Bureau: An agency that collects and maintains individual credit information.
- Credit Limit: The maximum amount of credit that a financial institution extends to a client.
- Credit Risk: The risk of default on a debt that may arise from a borrower failing to make required payments.
- Credit Union: A member-owned financial cooperative that is created and operated by its members.
- Debt: Something, typically money, that is owed or due.
- Default: Failure to fulfill an obligation, especially to repay a loan or appear in a court of law.
- Deposit: A sum of money placed or kept in a bank account, usually to gain interest.
- Direct Debit: A financial transaction in which one person withdraws funds from another person’s bank account.
- Down Payment: A type of payment made in cash during the onset of the purchase of an expensive good or service.
- EMI (Equated Monthly Installment): A fixed payment amount made by a borrower to a lender at a specified date each calendar month.
- Financial Institution: An entity that provides financial services, such as accepting deposits, giving loans, and currency exchange.
- Fixed Deposit: A financial instrument provided by banks that provides investors with a higher rate of interest than a regular savings account.
- Forbearance: The act of refraining from exercising a legal right.
- Garnishment: A legal process whereby payments towards a debt owed by a debtor are paid to a creditor.
- Interest: The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.
- Lender: An individual, public or private group, or financial institution that makes funds available to another with the expectation that the funds will be repaid.
- Mortgage Broker: A middleman between a homebuyer and mortgage lenders.
- NPA (Non-Performing Asset): A loan or advance for which the principal or interest payment remained overdue for a period of 90 days.
- Payee: A person to whom money is paid or is to be paid, especially the person to whom a check is made payable.
- Payer: A person who pays or is responsible for paying an amount of money.
- Personal Loan: A loan that establishes consumer credit that is granted for personal use.
- Principal: The amount of money borrowed in a loan, or put into an investment.
- Refinance: The process of replacing an existing loan with a new loan.
- Risk Management: The identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events.
- Securitization: The process of taking an illiquid asset, or group of assets, and through financial engineering, transforming it (or them) into a security.
- Standing Order: An instruction to a bank to pay a fixed amount of money to someone regularly.
- Subprime Mortgage: A type of mortgage that is normally made out to borrowers with lower credit ratings.
- Surety: A promise to pay a debt or perform a duty if another party fails to do so.
- Term Loan: A loan from a bank for a specific amount that has a specified repayment schedule and a fixed or floating interest rate.
- Transaction Fee: A fee charged by a credit card company or merchant for processing a transaction.
- Underwriting: The process by which an individual or institution takes on financial risk for a fee.
- Variable Rate: An interest rate that changes periodically in relation to an index.
- Working Capital: The capital of a business that is used in its day-to-day trading operations.
- Zero Balance Account: A checking account in which a balance of zero is maintained by automatically transferring funds from a master account in an amount only large enough to cover checks presented.
- Basel III: A comprehensive set of reform measures designed to improve the regulation, supervision, and risk management within the banking sector.
- Capital Adequacy Ratio (CAR): A measure of a bank’s capital.
- Asset: Anything of value that is owned by an individual or corporation.
- Liability: An obligation that legally binds an individual or company to settle a debt.
- Capital: Wealth in the form of money or assets owned by a person or organization.
- Reserve: Funds that are set aside to cover future liabilities.
- Treasury: The funds or revenue of a government, corporation, or institution.
- Clearing House: A financial institution formed to facilitate the exchange (i.e., clearance) of payments, securities, or derivatives transactions.
- Loan Officer: A representative of a bank or other financial institution who assists borrowers in the application process.
- Mortgage Lender: A financial institution that lends money to borrowers for the purchase of real estate.
- Prime Borrower: A borrower with a strong credit history who is considered less risky to lend to.
- Subprime Borrower: A borrower with a poor credit history who is considered more risky to lend to.
- Origination Fee: A fee charged by a lender on entering into a loan agreement to cover the cost of processing the loan.
- Mortgage Insurance: An insurance policy that protects a mortgage lender or titleholder if the borrower defaults on payments, dies, or is otherwise unable to meet the contractual obligations of the mortgage.
- Home Equity: The value of ownership built up in a home or property that represents the current market value of the house less any remaining mortgage payments.
- Equity Loan: A loan based on the equity in the borrower’s home.
- Revolving Credit: A line of credit that allows borrowers to borrow money up to a certain limit without having to specify what the money will be used for.
- Debit: An entry recording a sum owed, listed on the left-hand side or column of an account.
- Overdraft: A deficit in a bank account caused by drawing more money than the account holds.
- Escrow Account: A financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction.
- Joint Account: A bank account held by two or more individuals.
- Blue Chip Company: A large, well-established company with a history of stable earnings and dividends.
- Penny Stock: A low-priced, speculative stock typically traded over-the-counter.
- Market Maker: A firm that provides liquidity to a market by quoting both buy and sell prices for a security.
- Market Sentiment: The overall feeling or mood of investors toward a particular security or financial market.
- Circuit Breaker: A mechanism to halt trading on a stock exchange in an effort to prevent stock prices from falling too far too fast.
- Market Index: A measure of the performance of a group of stocks.
- Market Order: An order to buy or sell a security at the best available price.
- Stop-Loss Order: An order to buy or sell a security once the price reaches a certain level.
- Market Cap (Market Capitalization): The total value of a company’s outstanding shares.
- Treasury Stock: Shares of a company’s own stock that it has reacquired.
- Shareholder Equity: The value of a company’s assets minus its liabilities, also known as net assets or book value.
- Annual Report: A comprehensive report on a company’s activities throughout the preceding year.
- Quarterly Report: A summary of a company’s financial performance for the most recent quarter.
- Dividend Date: The date on which a company’s board of directors announces an upcoming dividend payment.
- Dividend Yield: A financial ratio that shows how much a company pays out in dividends each year relative to its stock price.
- Dividend Per Share (DPS): The total dividends paid out by a company to its shareholders over a specific period divided by the number of outstanding shares.
- Dividend Declaration Date: The date on which a company’s board of directors announces an upcoming dividend payment.
- Dividend Record Date: The date on which a shareholder must be on the company’s books to receive a dividend.
- Dividend Payable Date: The date on which a company distributes dividends to its shareholders.
- Return on Investment (ROI): A measure of the profitability of an investment.
- Capital Gain: The profit made from the sale of securities or other assets.
- Initial Margin: The amount of equity required to open a position.
- Maintenance Margin: The minimum amount of equity required to keep a position open.
- Margin Account: An account that allows investors to borrow money to purchase securities.
- Margin Call: A demand by a broker that an investor deposit further cash or securities to cover possible losses.
- Leveraged Buyout (LBO): A transaction in which a company is acquired using a significant amount of borrowed money to meet the cost of acquisition.
- Stock Option: A financial instrument that gives the holder the right, but not the obligation, to buy or sell a stock at a predetermined price.
- Call Option: A financial contract that gives the buyer the right, but not the obligation, to purchase an asset at a predetermined price within a specified period.
- Put Option: A financial contract that gives the buyer the right, but not the obligation, to sell an asset at a predetermined price within a specified period.
- Intrinsic Value: The actual value of a company or an asset based on an underlying perception of its true value.
- Time Value: The additional amount of value an option has over its intrinsic value.
- Volatility Index (VIX): A measure of the market’s expectation of volatility implied by S&P 500 index options.
- Dark Pool: A private forum for trading securities that are not accessible by the investing public.
- Market Depth: The ability of a security to absorb buy and sell orders without the price dramatically moving.
- Market Manipulation: Illegal conduct intended to artificially inflate or deflate the price of a security.
- Stock Split: An action by a company that increases the number of shares outstanding while simultaneously reducing the price per share.
- Reverse Stock Split: An action by a company that reduces the number of shares outstanding while increasing the price per share.
- Dividend Aristocrat: A company that has consistently increased its dividend payments over a number of years.
- Dividend Growth Rate: The annualized percentage rate of growth that a particular stock’s dividend undergoes over a period of time.
- Dividend Policy: A company’s approach to paying dividends to its shareholders.
- Sector Rotation: A strategy employed by investors involving the movement of investment capital from one sector of the economy to another in an attempt to beat the market.
- Quantitative Easing (QE): A monetary policy in which a central bank purchases government securities or other securities from the market in order to lower interest rates and increase the money supply.
- Tight Monetary Policy: A monetary policy that involves raising interest rates to curb inflation.
- Loose Monetary Policy: A monetary policy that involves lowering interest rates to stimulate economic growth.
- Yield Curve: A graphical representation of the relationship between the interest rates and the time to maturity of debt for a given borrower in a given currency.
- Economic Indicator: A statistic about the economy that provides insight into its performance and future prospects.
- Consumer Price Index (CPI): A measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
- Producer Price Index (PPI): A family of indexes that measures the average change in selling prices received by domestic producers of goods and services over time.
- Gross Domestic Product (GDP): A monetary measure of the market value of all the final goods and services produced in a specific time period.
- Unemployment Rate: The percentage of the total labor force that is unemployed but actively seeking employment and willing to work.
- Inflation Rate: The percentage change in the general price level of goods and services over a period of time.
- Federal Open Market Committee (FOMC): A branch of the Federal Reserve System that is responsible for overseeing the nation’s open market operations.
- Quantitative Tightening (QT): A contractionary monetary policy applied by a central bank to decrease the amount of liquidity within the economy.
- Ticker Symbol: A unique series of letters assigned to a security for trading purposes.
- Market Hours: The hours during which stock markets are open for trading.
- After-Hours Trading: The buying and selling of securities after the regular trading hours of major exchanges.
- Pre-Market Trading: The buying and selling of securities before the regular trading hours of major exchanges.
- Stock Exchange: A marketplace where securities are bought and sold.
- Clearing House: An intermediary between buyers and sellers of financial instruments.
- Securities and Exchange Commission (SEC): A U.S. government agency that regulates the securities industry, including the stock and options exchanges.
- Insider Trading: The buying or selling of a security by someone who has access to material, nonpublic information about the security.
- Short Selling: The sale of a security that is not owned by the seller or that the seller has borrowed.
- Bid-Ask Spread: The difference between the highest price that a buyer is willing to pay for a security and the lowest price that a seller is willing to accept.
- Price-Earnings Ratio (P/E Ratio): A measure of a company’s current share price relative to its per-share earnings.
- Book Value: The total value of a company’s assets that shareholders would theoretically receive if a company were liquidated.
- Earnings Per Share (EPS): The portion of a company’s profit allocated to each outstanding share of common stock.
- Return on Equity (ROE): A measure of a company’s profitability that calculates how much profit a company generates with the money shareholders have invested.
- Return on Assets (ROA): A measure of how profitable a company is relative to its total assets.
- Beta: A measure of a stock’s volatility in relation to the overall market.
- Alpha: A measure of the active return on an investment, the performance of that investment compared with a suitable market index.
- Standard Deviation: A measure of the dispersion of a set of data points from its mean.
- Market Order: An order to buy or sell a security at the best available price.
- Limit Order: An order to buy or sell a security at a specified price or better.
- Stop Order: An order to buy or sell a security once the price reaches a certain level.
- Fill or Kill (FOK): An order that must be executed immediately in its entirety or not at all.
- Immediate or Cancel (IOC): An order that must be executed immediately in part or in its entirety; any portion not filled immediately is canceled.
- Good ‘Til Canceled (GTC): An order to buy or sell a security that remains active until it is either executed or canceled.
- Day Order: An order to buy or sell a security that automatically expires if not executed on the day the order was placed.
- All or None (AON): An order that must be executed in its entirety or not at all.
- Market Maker: A firm that provides liquidity to a market by quoting both buy and sell prices for a security.
- Hedge Fund: An investment fund that pools capital from accredited individuals or institutional investors.
- Mutual Fund: A professionally managed investment fund that pools money from many investors to purchase securities.
- Exchange-Traded Fund (ETF): A type of investment fund and exchange-traded product.
- Diversification: A risk management technique that mixes a wide variety of investments within a portfolio.
- Asset Allocation: The practice of spreading investments across various asset classes to balance risk and return.
- Portfolio: A collection of financial investments like stocks, bonds, commodities, and cash equivalents.
- Portfolio Manager: An individual or team responsible for making investment decisions and carrying out investment activities on behalf of investors.
- Fund Manager: A person responsible for investing and managing a mutual fund or exchange-traded fund.
- Fundamental Analysis: A method of evaluating a security in an attempt to measure its intrinsic value.
- Technical Analysis: A method of evaluating securities by analyzing statistics generated by market activity.
- Moving Average: A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random price fluctuations.
- Bollinger Bands: A technical analysis tool that measures volatility by plotting two standard deviations away from a simple moving average.
- Relative Strength Index (RSI): A momentum oscillator that measures the speed and change of price movements.
- Stochastic Oscillator: A momentum indicator that compares a particular closing price of a security to its price range over a predetermined period.
- MACD (Moving Average Convergence Divergence): A trend-following momentum indicator that shows the relationship between two moving averages of a security’s price.
- Fibonacci Retracement: A technical analysis tool that uses horizontal lines to indicate areas of support or resistance at the key Fibonacci levels before the price continues in the original direction.
- Head and Shoulders Pattern: A technical analysis pattern that indicates a reversal in the market.
- Candlestick Pattern: A chart pattern used in technical analysis to predict future price movements.
- Bearish Engulfing Pattern: A two-candlestick pattern that suggests a potential reversal of a bullish trend to a bearish trend.
- Bullish Engulfing Pattern: A two-candlestick pattern that suggests a potential reversal of a bearish trend to a bullish trend.
- Hammer: A bullish reversal candlestick pattern that forms at the end of a downtrend.
- Hanging Man: A bearish reversal candlestick pattern that forms at the end of an uptrend.
- Morning Star: A bullish reversal candlestick pattern that consists of three candles.
- Evening Star: A bearish reversal candlestick pattern that consists of three candles.
- Doji: A candlestick pattern that indicates indecision in the market.
- Gap Up: A situation where the price of a stock opens significantly higher than the previous day’s closing price.
- Gap Down: A situation where the price of a stock opens significantly lower than the previous day’s closing price.
- Support Level: A price level where a downtrend can be expected to pause due to a concentration of demand.
- Resistance Level: A price level where a rising price can find resistance and may have difficulty moving higher.
- Breakout: A price movement through an identified level of support or resistance.
- Trend Line: A line drawn on a price chart that connects two or more price points.
- Moving Average Convergence Divergence (MACD): A trend-following momentum indicator that shows the relationship between two moving averages of a security’s price.
- Market Capitalization: The total value of a company’s outstanding shares of stock.
- Dow Theory: A theory that says the market is in an upward trend if one of its averages (industrial or transportation) advances above a previous important high and is accompanied or followed by a similar advance in the other.
- Elliott Wave Theory: A theory that prices move in specific patterns.
- Financial Ratios: A ratio between two financial variables.
- Debt-to-Equity Ratio: A measure of a company’s financial leverage.
- Price-to-Earnings Ratio (P/E Ratio): A ratio for valuing a company that measures its current share price relative to its per-share earnings.
- Price-to-Book Ratio (P/B Ratio): A financial ratio used to compare a company’s book value to its current market price.
- Price-to-Sales Ratio (P/S Ratio): A valuation ratio that compares a company’s stock price to its revenues.
- Earnings Yield: A measure of a company’s earnings in relation to its stock price.
- Dividend Yield: A financial ratio that shows how much a company pays out in dividends each year relative to its stock price.
- Return on Equity (ROE): A measure of a company’s profitability that calculates how much profit a company generates with the money shareholders have invested.
- Return on Assets (ROA): A measure of how profitable a company is relative to its total assets.
- Beta: A measure of a stock’s volatility in relation to the overall market.
- Alpha: A measure of the active return on an investment, the performance of that investment compared with a suitable market index.
- Standard Deviation: A measure of the dispersion of a set of data points from its mean.
- Capital Asset Pricing Model (CAPM): A model that describes the relationship between systematic risk and expected return for assets.
- Efficient Market Hypothesis (EMH): A theory that states that asset prices reflect all available information.
- Random Walk Theory: A theory that stock price changes have the same distribution and are independent of each other.
- Modern Portfolio Theory (MPT): A theory of investment that attempts to maximize portfolio expected return for a given amount of portfolio risk.
- Arbitrage: The simultaneous purchase and sale of an asset to profit from a difference in the price.
- Capital Asset Pricing Model (CAPM): A model that describes the relationship between systematic risk and expected return for assets.
- Sharpe Ratio: A measure for calculating risk-adjusted return.
- Treynor Ratio: A measure of the returns earned in excess of that which could have been earned on a risk-free investment per each unit of market risk.
- Sortino Ratio: A variation of the Sharpe ratio that differentiates harmful volatility from total overall volatility by using the asset’s standard deviation of negative asset returns.
- Jensen’s Alpha: A risk-adjusted performance measure that represents the average return on a portfolio or investment that exceeds the predicted return given by the capital asset pricing model (CAPM).
- Fama-French Three-Factor Model: A model that expands on the capital asset pricing model (CAPM) to include size risk and value risk.
- Black-Scholes Model: A mathematical model used for pricing options contracts.
- Option Greeks: A set of risk measures used in options trading.
- Delta: A measure of the rate of change of an option’s price with respect to a change in the price of the underlying asset.
- Gamma: A measure of how fast the delta of an option changes as the underlying price changes.
- Theta: A measure of the option’s sensitivity to time decay.
- Vega: A measure of the option’s sensitivity to changes in the volatility of the underlying asset.
- Rho: A measure of the option’s sensitivity to changes in interest rates.
- Covered Call: A strategy in which an investor holds a long position in an asset and writes (sells) call options on that same asset.
- Naked Call: The sale of a call option without owning the underlying asset.
- Covered Put: A strategy in which an investor holds a short position in an asset and writes (sells) put options on that same asset.
- Naked Put: The sale of a put option without holding the underlying asset.
- Bull Call Spread: A bullish options strategy that involves buying call options at a specific strike price while also selling the same number of calls of the same asset and expiration date but at a higher strike price.
- Bear Call Spread: A bearish options strategy that involves buying call options at a specific strike price while also selling the same number of calls of the same asset and expiration date but at a higher strike price.
- Bull Put Spread: A bullish options strategy that involves selling put options at a specific strike price while also buying the same number of puts on the same asset and expiration date but at a lower strike price.
- Bear Put Spread: A bearish options strategy that involves selling put options at a specific strike price while also buying the same number of puts on the same asset and expiration date but at a lower strike price.
- Straddle: An options strategy that involves buying both a call and a put option for the same asset with the same expiration date and strike price.
- Strangle: An options strategy that involves buying both a call and a put option for the same asset with the same expiration date but with different strike prices.
- Butterfly Spread: An options strategy that involves combining bull and bear spreads with different strike prices.
- Iron Condor: An options strategy that involves combining a bear call spread and a bull put spread.
- Index Option: An option whose underlying security is an index rather than a single asset.
- American Option: An option that can be exercised at any time prior to its expiration date.
- European Option: An option that can only be exercised on its expiration date.
- At-the-Money (ATM) Option: An option where the strike price is equal to the current market price of the underlying security.
- In-the-Money (ITM) Option: An option that would lead to a positive cash flow to the holder if it were exercised immediately.
- Out-of-the-Money (OTM) Option: An option that would lead to a negative cash flow to the holder if it were exercised immediately.
- VIX Options: Options that are based on the CBOE Volatility Index (VIX), which measures the market’s expectation of 30-day volatility.
- Put-Call Ratio: A ratio that shows the relationship between the number of put options traded versus the number of call options traded.
- Risk Reversal: An options strategy that seeks to hedge the risk of an underlying asset’s position by using options.
- Covered Call ETF: An exchange-traded fund (ETF) that employs a covered call strategy.
- Leveraged ETF: An exchange-traded fund (ETF) that aims to amplify the returns of an underlying index.
- Inverse ETF: An exchange-traded fund (ETF) that aims to deliver the opposite returns of its underlying index.
- Bond ETF: An exchange-traded fund (ETF) that invests in fixed-income securities.
- Commodity ETF: An exchange-traded fund (ETF) that invests in commodities, such as precious metals or agricultural products.
- Real Estate ETF: An exchange-traded fund (ETF) that invests in real estate securities, such as real estate investment trusts (REITs).
- Sector ETF: An exchange-traded fund (ETF) that invests in a specific sector of the economy.
- International ETF: An exchange-traded fund (ETF) that invests in securities from foreign countries.
- Market Timing: An investment or trading strategy that seeks to capitalize on predicted future price movements based on technical or fundamental analysis.
- Market Trend: The general direction in which a market or asset is moving.
- Bull Market: A financial market characterized by rising asset prices.
- Bear Market: A financial market characterized by falling asset prices.
- Sideways Market: A financial market that is moving within a narrow range.
- Dead Cat Bounce: A temporary recovery in the price of a declining stock.
- Golden Cross: A bullish technical indicator that occurs when a short-term moving average crosses above a long-term moving average.
- Death Cross: A bearish technical indicator that occurs when a short-term moving average crosses below a long-term moving average.
- Market Volatility: The degree of variation of a trading price series over time.
- Market Liquidity: The degree to which an asset or security can be bought or sold without affecting its price.
- Market Depth: The ability of a security to absorb buy and sell orders without the price dramatically moving.
- Market Capitalization: The total value of a company’s outstanding shares of stock.
- Market Order: An order to buy or sell a security at the best available price.
- Limit Order: An order to buy or sell a security at a specified price or better.
- Stop Order: An order to buy or sell a security once the price reaches a certain level.
- Fill or Kill (FOK): An order that must be executed immediately in its entirety or not at all.
- Immediate or Cancel (IOC): An order that must be executed immediately in part or in its entirety; any portion not filled immediately is canceled.
- Good ‘Til Canceled (GTC): An order to buy or sell a security that remains active until it is either executed or canceled.
- Day Order: An order to buy or sell a security that automatically expires if not executed on the day the order was placed.
- All or None (AON): An order that must be executed in its entirety or not at all.
- Bid Price: The price at which a buyer is willing to buy a security.
- Ask Price: The price at which a seller is willing to sell a security.
- Spread: The difference between the bid price and the ask price.
- Volume: The number of shares or contracts traded in a security or an entire market during a given period of time.
- Volatility: The degree of variation of a trading price series over time.
- Liquidity: The degree to which an asset or security can be bought or sold without affecting its price.
- Trading Session: A period of time during which trading takes place.
- Extended Hours Trading: The buying and selling of securities outside of regular trading hours.
- Pre-Market Trading: The buying and selling of securities before the regular trading hours of major exchanges.
- After-Hours Trading: The buying and selling of securities after the regular trading hours of major exchanges.
- Over-the-Counter (OTC) Market: A decentralized market where securities are traded directly between parties.
- Exchange-Traded Fund (ETF): A type of investment fund and exchange-traded product.
- Index Fund: A type of mutual fund with a portfolio constructed to match or track the components of a market index.
- Mutual Fund: A professionally managed investment fund that pools money from many investors to purchase securities.
- Closed-End Fund: A type of investment fund that raises a fixed amount of capital through an initial public offering (IPO) and then lists shares for trade on a stock exchange.
- Hedge Fund: An investment fund that pools capital from accredited individuals or institutional investors.
- Derivative: A financial contract whose value is derived from the performance of an underlying entity.
- Futures Contract: A standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future.
- Forward Contract: A customized contract between two parties to buy or sell an asset at a specified price on a future date.
- Options Contract: A financial derivative that represents a contract sold by one party to another.
- Swaps: A financial derivative contract where two parties agree to exchange cash flows or other financial instruments.
- Call Option: A financial contract that gives the buyer the right, but not the obligation, to purchase an asset at a predetermined price within a specified period.
- Put Option: A financial contract that gives the buyer the right, but not the obligation, to sell an asset at a predetermined price within a specified period.
- In-the-Money (ITM) Option: An option that would lead to a positive cash flow to the holder if it were exercised immediately.
- Out-of-the-Money (OTM) Option: An option that would lead to a negative cash flow to the holder if it were exercised immediately.
- At-the-Money (ATM) Option: An option where the strike price is equal to the current market price of the underlying security.
- ATM (Automated Teller Machine): An electronic banking outlet that allows customers to complete basic transactions without the aid of a branch representative or teller.
- ACH (Automated Clearing House): A network for electronic financial transactions in the United States.
- SWIFT (Society for Worldwide Interbank Financial Telecommunication): A messaging network that financial institutions use to securely transmit information and instructions through a standardized system of codes.
- Wire Transfer: An electronic transfer of funds across a network administered by hundreds of banks and transfer service agencies around the world.
- Direct Deposit: A payment method whereby an employer electronically transfers an employee’s pay directly into the recipient’s bank account.
- Overdraft: A deficit in a bank account caused by drawing more money than the account holds.
- NSF (Non-Sufficient Funds): A term used in the banking industry to indicate that a demand for payment cannot be honored because insufficient funds are available in the account on which the instrument was drawn.
- Account Statement: A periodic summary of account activity within an accounting period.
- Bank Reconciliation: The process of matching and comparing figures from accounting records against those presented on a bank statement.
- Debit Card: A payment card that deducts money directly from a consumer’s checking account when it is used.
- Credit Card: A payment card issued to users to enable the cardholder to pay a merchant for goods and services based on the cardholder’s promise to the card issuer to pay them for the amounts plus the other agreed charges.
- Charge Card: A card that requires the cardholder to pay for charges in full upon receipt of the statement, as opposed to a credit card, which allows the cardholder to carry a balance.
- EMV (Europay, Mastercard, and Visa): A global standard for credit and debit payment cards based on chip card technology.
- PIN (Personal Identification Number): A numeric or alphanumeric password used in the process of authenticating a user accessing a system.
- CVV (Card Verification Value): A security feature for “card not present” payment card transactions.
- Routing Number: A nine-digit numeric code printed on the bottom of checks that is used to identify the financial institution on which it was drawn.
- ABA Number (American Bankers Association Number): A nine-digit code assigned to banks in the United States.
- IBAN (International Bank Account Number): An international system used to identify bank accounts across national borders to facilitate the communication and processing of cross-border transactions with a reduced risk of transcription errors.
- BIC (Bank Identifier Code): A standard format code used to uniquely identify financial and non-financial institutions.
- FDIC (Federal Deposit Insurance Corporation): A United States government corporation providing deposit insurance to depositors in U.S. commercial banks and savings institutions.
- SIPC (Securities Investor Protection Corporation): A non-profit corporation that protects investors from losses caused by the failure of a brokerage firm.
- CD (Certificate of Deposit): A time deposit offered by banks, thrift institutions, and credit unions.
- Savings Account: An interest-bearing deposit account held at a bank or another financial institution.
- Checking Account: A transactional deposit account held at a financial institution that allows deposits and withdrawals.
- Money Market Account: A type of savings account that typically offers a higher interest rate in exchange for maintaining a higher balance.
- IRA (Individual Retirement Account): A type of retirement account that provides tax advantages for retirement savings in the United States.
- 401(k): A retirement savings plan sponsored by an employer that allows employees to save and invest a piece of their paycheck before taxes are taken out.
- 529 Plan: A tax-advantaged savings plan designed to encourage saving for future education costs.
- HELOC (Home Equity Line of Credit): A line of credit secured by the equity in a borrower’s home.
- Mortgage: A loan used to purchase real estate in which the property serves as collateral.
- Amortization: The process of paying off a debt with a fixed repayment schedule in regular installments over time.
- Principal: The amount of money loaned or invested, excluding any interest or dividends.
- Interest: The cost of borrowing money, typically expressed as an annual percentage rate (APR).
- APR (Annual Percentage Rate): The annual rate charged for borrowing or earned through an investment, expressed as a percentage that represents the actual yearly cost of funds over the term of a loan.
- Compound Interest: Interest calculated on the initial principal and also on the accumulated interest of previous periods.
- Simple Interest: Interest calculated only on the initial principal, without including any accumulated interest from previous periods.
- Foreclosure: The legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property.
- Bankruptcy: A legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts.
- Credit Score: A numerical expression based on a level analysis of a person’s credit files to represent the creditworthiness of an individual.
- Credit Report: A detailed report of an individual’s credit history.
- Credit Bureau: An agency that collects and maintains individual credit information and sells it to creditors for a fee.
- Credit Freeze: A security measure that restricts access to a borrower’s credit report.
- Credit Monitoring: A service that monitors a consumer’s credit reports for signs of potential fraud.
- Credit Card Fraud: The unauthorized use of a credit or debit card to fraudulently obtain money or property.
- Identity Theft: The fraudulent acquisition and use of a person’s private identifying information, usually for financial gain.
- Phishing: The fraudulent attempt to obtain sensitive information such as usernames, passwords, and credit card details by disguising oneself as a trustworthy entity.
- Money Laundering: The illegal process of making large amounts of money generated by a criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source.
- KYC (Know Your Customer): The process of a business verifying the identity of its clients and assessing their suitability, along with the potential risks of illegal intentions.
- AML (Anti-Money Laundering): A set of procedures, laws, and regulations designed to stop the practice of generating income through illegal actions.
- OFAC (Office of Foreign Assets Control): A financial intelligence and enforcement agency of the U.S. Treasury Department.
- CFT (Combating the Financing of Terrorism): Measures to stop the financing of terrorism.
- Patriot Act: A U.S. law that was designed to deter and punish terrorist acts in the United States and around the world.
- Dodd-Frank Act: A law that reformed financial regulation in response to the financial crisis of 2007–2008.
- Basel Accords: A set of banking regulations developed by the Basel Committee on Bank Supervision to enhance the stability of the international financial system.
- Glass-Steagall Act: A law that prohibited commercial banks from engaging in the investment business.
- Market Maker: A firm that provides liquidity to a market by quoting both buy and sell prices for a security.
- High-Frequency Trading (HFT): A type of trading that uses powerful computer algorithms to transact a large number of orders at extremely high speeds.
- Dark Pool: A private forum for trading securities that are not accessible by the investing public.
- Penny Stock: A common stock valued at less than one dollar and thus highly speculative.
- Blue Chip Stock: The stock of a well-established, financially stable, and large-cap company.
- Growth Stock: A stock expected to grow at an above-average rate compared to other companies in the market.
- Value Stock: A stock that is perceived to be undervalued by the market and is trading at a lower price than its fundamentals suggest.
- Income Stock: A stock that pays a consistent dividend to its shareholders.
- Dividend: A payment made by a corporation to its shareholders, usually as a distribution of profits.
- Dividend Yield: A financial ratio that shows how much a company pays out in dividends each year relative to its stock price.
- Stock Split: A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares.
- Reverse Stock Split: A corporate action in which a company reduces the number of its outstanding shares to increase the price per share.
- Stock Buyback: The repurchase of outstanding shares by a company to reduce the number of shares available on the open market.
- Initial Public Offering (IPO): The first time that the stock of a private company is offered to the public.
- Secondary Offering: The sale of new or closely held shares by a company that has already made an initial public offering (IPO).
- Stock Exchange: A marketplace where securities, such as stocks and bonds, are bought and sold.
- NYSE (New York Stock Exchange): The largest stock exchange in the world by market capitalization.
- NASDAQ: A global electronic marketplace for buying and selling securities.
- FTSE (Financial Times Stock Exchange): An index that measures the performance of the 100 companies listed on the London Stock Exchange with the highest market capitalization.
- DAX (Deutscher Aktienindex): A blue-chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange.
- Nikkei Index: A stock market index for the Tokyo Stock Exchange.
- S&P 500 (Standard & Poor’s 500): A stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States.
- Dow Jones Industrial Average (DJIA): A stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.
- Russell 2000 Index: A stock market index that measures the performance of 2,000 small-cap companies in the United States.
- Bear Market: A financial market characterized by falling asset prices.
- Bull Market: A financial market characterized by rising asset prices.
- Market Correction: A reverse movement of at least 10% in a stock, bond, commodity, or index to adjust for an overvaluation.
- Market Crash: A sudden and steep decline in stock prices across a significant cross-section of a stock market.
- Black Monday: A global stock market crash that occurred on October 19, 1987.
- Black Tuesday: The fourth and last day of the stock market crash of 1929.
- Black Thursday: The beginning of the stock market crash of 1929.
- Financial Crisis: A situation in which the value of financial institutions or assets drops rapidly.
- Subprime Mortgage Crisis: A financial crisis characterized by a sharp increase in mortgage delinquencies and foreclosures, leading to a decline in mortgage-backed securities.
- Great Recession: A period of economic decline during the late 2000s.
- Quantitative Easing: A monetary policy in which a central bank purchases government securities or other securities from the market to lower interest rates and increase the money supply.
- Taper Tantrum: A surge in U.S. Treasury yields that began in May 2013 when the Federal Reserve signaled that it might reduce its quantitative easing program.
- Flash Crash: A sudden, deep, and rapid drop in stock prices.
- Circuit Breaker: A mechanism to halt trading on stock markets in an attempt to prevent stock prices from falling too far too fast.
- Volatility Index (VIX): A popular measure of the stock market’s expectation of volatility implied by S&P 500 index options.
- TED Spread: The difference between the interest rates on interbank loans and on short-term U.S. government debt.
- LIBOR (London Interbank Offered Rate): The benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.
- Repo Rate (Repurchase Agreement Rate): The rate at which the central bank of a country lends money to commercial banks.
- FOMC (Federal Open Market Committee): A committee within the Federal Reserve System that is responsible for implementing monetary policy in the United States.
- Federal Funds Rate: The interest rate at which depository institutions lend reserve balances to other depository institutions overnight.
- Discount Rate: The interest rate charged to commercial banks and other depository institutions for loans from a country’s central bank.
- Quantitative Easing (QE): A monetary policy in which a central bank purchases government securities or other securities from the market to lower interest rates and increase the money supply.
- Inflation: The rate at which the general level of prices for goods and services is rising.
- Deflation: A decrease in the general price level of goods and services.
- Stagflation: A situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high.
- Hyperinflation: Extremely high and typically accelerating inflation.
- Recession: A significant decline in economic activity spread across the economy, lasting more than a few months.
- Depression: A severe and prolonged downturn in economic activity.
- GDP (Gross Domestic Product): The total value of goods produced and services provided in a country during one year.
- GDP Growth Rate: The percentage increase in GDP from one period to the next.
- GNP (Gross National Product): The total value of all final goods and services produced within a nation in a particular year, plus income earned by its citizens abroad, minus income earned by foreigners from domestic production.
- GNI (Gross National Income): The total domestic and foreign output claimed by residents of a country.
- GDP Per Capita: The total GDP of a country divided by its population.
- Trade Balance: The difference between a country’s exports and its imports.
- Trade Deficit: A negative balance of trade, in which a country’s imports exceed its exports.
- Trade Surplus: A positive balance of trade, in which a country’s exports exceed its imports.
- Current Account: The sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid).
- Capital Account: A national account that records transactions of financial assets.
- Balance of Payments: A record of all transactions made between one particular country and all other countries during a specified period of time.
- Foreign Exchange Market (Forex): A global decentralized or over-the-counter market for the trading of currencies.
- Currency Pair: The quotation of two different currencies, with the value of one currency being quoted against the other.
- Base Currency: The first currency quoted in a currency pair on forex.
- Quote Currency: The second currency quoted in a currency pair on forex.
- Bid Price: The price at which a trader is willing to buy a currency pair.
- Ask Price: The price at which a trader is willing to sell a currency pair.
- Spread: The difference between the bid price and the ask price in a currency pair.
- Pip (Percentage in Point): The smallest price move that a given exchange rate can make.
- Currency Futures: A standardized foreign exchange derivative contract traded on a recognized stock exchange to buy or sell a fixed amount of a foreign currency at a predetermined price at a specified future date.
- Currency Option: A financial contract that gives the holder the right, but not the obligation, to buy or sell a currency at a specified exchange rate during a specified period of time.
- Currency Swap: A foreign exchange derivative between two institutions to exchange the principal and/or interest payments of a loan in one currency for equivalent amounts in another currency.
- Carry Trade: A trading strategy that involves borrowing in a currency with a low-interest rate and using the funds to invest in a currency with a higher interest rate.