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Stock Market Terms

Sensex, short for Sensitive Index, is a stock market index in India that represents the performance of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE).

Nifty, officially known as the Nifty 50, is a stock market index in India that tracks the performance of 50 large-cap companies listed on the National Stock Exchange (NSE).

BSE, also known as the Bombay Stock Exchange, is the oldest stock exchange in Asia and one of the leading stock exchanges in India. It provides a platform for trading stocks, commodities, and other financial instruments.

NSE, short for National Stock Exchange, is the largest stock exchange in India in terms of trading volume. It offers a platform for trading a wide range of financial instruments, including stocks, derivatives, and currencies.

The stock market is a platform where buyers and sellers come together to trade stocks and other securities. It provides a mechanism for companies to raise capital and investors to buy and sell shares.

Equity refers to the ownership interest in a company. In the stock market context, it represents shares of ownership that investors hold in a company.

An index is a statistical measure used to represent the performance of a group of stocks or securities. It serves as a benchmark to evaluate the overall market or a specific sector.

A bull market is a prolonged period of rising stock prices and optimistic investor sentiment. It is characterized by increasing market participation, positive economic indicators, and expectations of further price gains.

A bear market is a prolonged period of declining stock prices, typically defined as a decline of 20% or more from recent highs. It is characterized by negative investor sentiment, widespread selling, and economic slowdown.

IPO, short for Initial Public Offering, is the process through which a private company offers its shares to the public for the first time. It allows the company to raise capital by selling ownership stakes to investors.

A dividend is a distribution of a portion of a company's earnings to its shareholders. It is typically paid in cash or additional shares and provides a return on investment for shareholders.

Blue-chip stocks

Blue-chip stocks refer to shares of large, well-established, and financially stable companies with a history of reliable performance and dividends. They are considered low-risk investments and are often leaders in their respective industries.

Mid-cap stocks are shares of companies with a medium market capitalization, typically falling between large-cap and small-cap stocks. They are generally considered to have moderate growth potential and higher risk than blue-chip stocks.

Small-cap stocks

Small-cap stocks are shares of companies with a relatively small market capitalization. They are often associated with higher growth potential but also higher volatility and risk.

Large-cap stocks

Large-cap stocks are shares of companies with a high market capitalization. They are generally well-established companies with stable earnings and a lower risk profile.

Market capitalization

Market capitalization, or market cap, is the total value of a company's outstanding shares. It is calculated by multiplying the current stock price by the number of shares outstanding and represents the company's size in the market.

A stock exchange is a regulated marketplace where securities, such as stocks, bonds, and derivatives, are bought and sold. It provides liquidity, transparency, and a platform for price discovery.

Securities and Exchange Board of India (SEBI)

The Securities and Exchange Board of India (SEBI) is the regulatory body responsible for overseeing the securities market in India. It regulates and supervises stock exchanges, brokers, mutual funds, and other market participants.

Brokerage refers to the fee or commission charged by a broker for executing trades on behalf of investors. It is the cost associated with buying or selling securities in the stock market.

A stockbroker is a licensed professional or firm that facilitates buying and selling of securities on behalf of investors. They execute trades, provide investment advice, and help clients navigate the stock market.

Stock price refers to the current market value of a single share of a company's stock. It is determined by supply and demand dynamics and represents the perceived value of the company in the market.

Trading volume is the total number of shares or contracts traded in a specific security or market during a given period. It indicates the level of activity and liquidity in the market.

Volume-weighted average price (VWAP)

Volume-weighted average price (VWAP) is a trading benchmark that calculates the average price at which a security has been traded throughout the day, weighted by trading volume. It is often used by institutional traders to assess execution prices.

A market order is an order to buy or sell a security at the prevailing market price. It guarantees execution but does not specify the exact price at which the trade will be executed.

A limit order is an order to buy or sell a security at a specified price or better. It allows investors to control the price at which they are willing to buy or sell, but execution is not guaranteed if the specified price is not met.

A stop order is an order that becomes a market order when a specified price, known as the stop price, is reached. It is used to limit losses or protect profits by triggering a trade when the market reaches a certain price level.

Day trading refers to the practice of buying and selling securities within the same trading day. Day traders aim to profit from short-term price fluctuations and typically close all their positions before the market closes.

Short selling is a trading strategy where an investor borrows shares of a security from a broker and sells them with the expectation that the price will decline. The investor aims to buy back the shares at a lower price to return them to the broker, thereby profiting from the price difference.

Circuit breaker

A circuit breaker is a mechanism used by stock exchanges to temporarily halt trading or impose restrictions on price movements in case of significant market volatility or extreme price fluctuations.

Derivatives are financial instruments whose value is derived from an underlying asset, such as stocks, bonds, commodities, or currencies. Common types of derivatives include futures contracts, options, and swaps.

Futures are derivative contracts that obligate the buyer to purchase an underlying asset or the seller to sell an underlying asset at a predetermined price and date in the future. They are often used for hedging or speculation.

Options are derivative contracts that give the buyer the right, but not the obligation, to buy (call option) or sell (put option) an underlying asset at a specified price within a predetermined period. They offer flexibility and can be used for hedging or generating income.

A call option is a type of options contract that gives the buyer the right to buy an underlying asset at a specified price within a predetermined period. It profits when the price of the underlying asset rises above the strike price.

A put option is a type of options contract that gives the buyer the right to sell an underlying asset at a specified price within a predetermined period. It profits when the price of the underlying asset falls below the strike price.

The strike price, also known as the exercise price, is the predetermined price at which the buyer of an options contract can buy or sell the underlying asset. It is the price at which the option becomes profitable.

Margin trading is a trading strategy that involves borrowing funds from a broker to buy securities. It allows investors to amplify their buying power and potentially increase returns, but it also carries higher risks.

A margin call is a notification from a broker to an investor that additional funds must be deposited into a margin account to meet the minimum margin requirements. It is triggered when the value of securities held in the account falls below a certain threshold.

Volatility refers to the degree of variation or fluctuation in the price of a security or the overall market. High volatility indicates larger price swings, while low volatility suggests relatively stable prices.

A trading halt is a temporary suspension of trading in a specific security or the entire market. It can be triggered by various factors, such as significant news announcements, regulatory concerns, or technical glitches.

Candlestick chart

A candlestick chart is a type of financial chart used to represent the price movement of a security. It displays the opening, closing, high, and low prices for a specific time period as individual 'candles'.

Technical analysis

Technical analysis is a method of evaluating securities based on historical price and volume data. It involves analyzing charts, patterns, and indicators to predict future price movements and make investment decisions.

Fundamental analysis

Fundamental analysis is a method of evaluating securities by analyzing the underlying factors that affect their intrinsic value. It involves assessing a company's financial statements, industry trends, management team, and other qualitative and quantitative factors.

P/E ratio, short for Price-to-Earnings ratio, is a valuation metric that compares a company's stock price to its earnings per share. It is used to assess whether a stock is overvalued or undervalued.

EPS, short for Earnings per Share, is a financial metric that represents the portion of a company's profit allocated to each outstanding share of common stock. It is used to assess a company's profitability on a per-share basis.

Dividend yield is a financial ratio that represents the dividend income earned from an investment relative to its market price. It is calculated by dividing the annual dividend per share by the market price per share and is used to assess the income-generating potential of dividend-paying stocks.

Book value is the net value of a company's assets minus its liabilities. It represents the theoretical value of a company's equity if all its assets were sold and liabilities were paid off.

Market order depth

Market order depth refers to the level of buying and selling interest for a particular security at different price levels. It provides an indication of the liquidity and depth of the market for that security.

Bid price is the highest price at which a buyer is willing to purchase a security in the market. It represents the demand for the security.

Ask price, also known as the offer price, is the lowest price at which a seller is willing to sell a security in the market. It represents the supply of the security.

Market sentiment

Market sentiment refers to the overall attitude or mood of investors towards the market or a specific security. It can be influenced by various factors, including economic conditions, news events, and investor psychology.

A market maker is a financial institution or individual that facilitates the trading of securities by providing liquidity to the market. They quote bid and ask prices and are ready to buy or sell securities at those prices.

High-frequency trading

High-frequency trading (HFT) is a trading strategy that uses advanced technology and algorithms to execute large volumes of trades at high speeds. HFT firms aim to capitalize on small price discrepancies and market inefficiencies.

Arbitrage is a trading strategy that involves taking advantage of price differences between two or more markets or securities. Traders buy low in one market and sell high in another to profit from the price discrepancy.

A stock split is a corporate action where a company divides its existing shares into multiple shares. It is usually done to increase the liquidity of the stock or make it more affordable to retail investors.

A bonus issue, also known as a stock dividend, is a corporate action where a company issues additional shares to existing shareholders without any cash consideration. It is often done as a way to reward shareholders or increase the liquidity of the stock.

A rights issue is a corporate action where a company offers existing shareholders the right to buy additional shares at a discounted price. It allows shareholders to maintain their proportional ownership in the company.

A merger is a corporate transaction where two or more companies combine to form a single entity. It is often done to achieve synergies, increase market share, or improve operational efficiency.

An acquisition is a corporate transaction where one company purchases another company, either through a stock purchase or asset purchase. It allows the acquiring company to gain control over the acquired company's assets, operations, and market presence.

A demerger, also known as a spin-off, is a corporate action where a company separates one or more of its business units into separate entities. It allows the parent company to focus on its core operations and unlock the value of the separated business units.

Listing refers to the process of a company's shares being admitted for trading on a stock exchange. It enables the company's shares to be bought and sold by the public.

Delisting is the removal of a company's shares from a stock exchange, ceasing their trading on that exchange. It can occur voluntarily by the company or due to non-compliance with listing requirements.

Insider trading

Insider trading refers to the buying or selling of securities based on material non-public information about the company. It is illegal and unethical as it gives insiders an unfair advantage over other market participants.

Volatility index (VIX)

Volatility index (VIX), also known as the fear index, is a measure of market expectations for near-term volatility. It represents the market's sentiment and expectations of price fluctuations in the future.

Margin requirement

Margin requirement is the amount of capital that must be deposited by an investor when using margin to trade securities. It serves as a collateral against potential losses and ensures that the investor has sufficient funds to cover their obligations.

Bullish refers to a positive or optimistic outlook on the market or a specific security. It indicates an expectation of rising prices or a favorable market trend.

Bearish refers to a negative or pessimistic outlook on the market or a specific security. It indicates an expectation of falling prices or a unfavorable market trend.

Short-term trading

Short-term trading, also known as active trading or swing trading, is a strategy where traders buy and sell securities within a short time frame to profit from short-term price movements.

Long-term investing

Long-term investing is a strategy where investors hold securities for an extended period, typically years or decades, with the expectation of achieving long-term capital appreciation and income.

Moving average is a statistical indicator that calculates the average price of a security over a specific period. It is used to identify trends, support and resistance levels, and potential entry or exit points.

Resistance level

Resistance level is a price level at which a security has historically had difficulty surpassing. It is considered a potential barrier to further upward price movement.

Support level is a price level at which a security has historically had difficulty falling below. It is considered a potential level of demand that may prevent further downward price movement.

Breakout refers to a significant price movement of a security above a resistance level or below a support level. It is often accompanied by increased trading volume and can signal the beginning of a new trend.

Stop-loss order

A stop-loss order is an order placed by an investor to sell a security if it reaches a specific price. It is used to limit potential losses and protect against adverse price movements.

Day high is the highest price at which a security has traded during a specific trading day.

Day low is the lowest price at which a security has traded during a specific trading day.

Stock market index

A stock market index is a statistical measure that represents the performance of a specific segment of the stock market. It is calculated based on the prices of selected stocks and serves as a benchmark to track the overall market.

Return on Investment (ROI)

Return on Investment (ROI) is a financial metric that measures the profitability or efficiency of an investment. It is calculated by dividing the net profit from an investment by the initial cost of the investment and expressing it as a percentage.

Liquidity refers to the ease with which a security or asset can be bought or sold in the market without causing significant price movement. It is an important factor in determining the efficiency and stability of a market.

Stock portfolio

A stock portfolio is a collection of stocks and other securities held by an individual or institution. It represents the combined investments and holdings of an investor.

Diversification

Diversification is a risk management strategy that involves spreading investments across different assets, sectors, or geographic regions. It aims to reduce risk by avoiding overexposure to any single investment.

Stock analysis is the process of evaluating the financial and qualitative factors of a company to assess its investment potential. It involves analyzing financial statements, industry trends, competitive landscape, and other relevant information.

Stock market crash

A stock market crash is a sudden and severe decline in stock prices across the market. It is typically characterized by panic selling, significant losses, and a negative market sentiment.

Stock market rally

A stock market rally is a period of sustained upward movement in stock prices. It is often accompanied by positive economic news, investor optimism, and increased buying activity.

Insider buying refers to the purchase of a company's shares by its own insiders, such as executives, directors, or employees. It can be an indication of confidence in the company's prospects.

Insider selling

Insider selling refers to the sale of a company's shares by its own insiders. It can be a normal part of their investment or compensation plans or an indication of concerns about the company's future.

Fundamental indicators

Fundamental indicators are financial or economic data that provide insights into the underlying health and performance of a company or economy. Examples include earnings reports, economic growth rates, and interest rates.

Technical indicators

Technical indicators are statistical calculations derived from historical price and volume data. They are used to analyze and predict future price movements and assist in making trading decisions.

Exchange-traded fund (ETF)

An exchange-traded fund (ETF) is a type of investment fund that is traded on stock exchanges. It tracks the performance of a specific index, sector, commodity, or asset class and offers diversification and liquidity to investors.

A mutual fund is an investment vehicle that pools money from multiple investors to invest in a diversified portfolio of securities. It is managed by professional fund managers and offers individual investors access to a wide range of investments.

Dividend payout ratio

Dividend payout ratio is a financial ratio that measures the proportion of a company's earnings that is paid out as dividends to shareholders. It is calculated by dividing the total dividends by the net income of the company.

Book closure is a period during which a company's share register is closed to update the list of shareholders entitled to receive dividends, rights issues, or other corporate actions. It determines the eligibility of shareholders for such benefits.

Stock volatility

Stock volatility refers to the degree of variation in the price of a stock over a specific period. It is a measure of the stock's price fluctuations and can indicate the level of risk associated with the stock.

Penny stock refers to a low-priced, speculative stock typically trading at a very low market capitalization. These stocks often have higher volatility and are considered high-risk investments.

Primary market is a market where newly issued securities are bought and sold directly between issuers and investors. It is where companies raise capital by selling shares through IPOs or other offerings.

Secondary market

Secondary market is a market where existing securities are bought and sold among investors. It enables investors to trade previously issued securities without involvement from the issuing company.

Market depth refers to the quantity of buy and sell orders available at different price levels for a particular security. It provides insights into the supply and demand dynamics and liquidity of the market.

A stock symbol is a unique series of letters assigned to a publicly traded company's shares. It is used to identify and track the company's stock on stock exchanges.

Public issue refers to the offering of securities by a company to the general public. It allows the company to raise capital directly from individual investors through IPOs or follow-on offerings.

Market correction

A market correction is a significant downward movement in stock prices after a period of sustained increases. It is considered a normal and healthy market adjustment after a prolonged period of market gains.

Initial margin is the initial deposit required by a broker from an investor to open a margin trading account. It represents a percentage of the total value of the securities being purchased.

Maintenance margin

Maintenance margin is the minimum amount of equity that must be maintained in a margin trading account to continue holding a position. It serves as a cushion against potential losses and is set by the broker.

An option chain is a listing of all available options for a particular security, including different strike prices and expiration dates. It provides a comprehensive view of the available options and their prices.

An index fund is a type of mutual fund or ETF that aims to replicate the performance of a specific market index, such as the Sensex or Nifty. It offers investors broad market exposure at a relatively low cost.

Systematic Investment Plan (SIP)

Systematic Investment Plan (SIP) is an investment strategy where investors regularly invest a fixed amount of money at predetermined intervals into a mutual fund or other investment vehicles. It helps investors accumulate wealth over time through disciplined investing.

Stop-limit order

A stop-limit order is an order that combines the features of a stop order and a limit order. It becomes a limit order to buy or sell a security when the specified stop price is reached or surpassed.

A short squeeze is a situation that occurs when a heavily shorted stock experiences a rapid increase in price, forcing short sellers to cover their positions by buying the stock. It can result in a sharp price increase due to a supply-demand imbalance.

Securities Transaction Tax (STT)

Securities Transaction Tax (STT) is a tax levied on the purchase and sale of securities in India. It is calculated as a percentage of the transaction value and is payable by the buyer or seller.

Securities Account Number (Demat Account)

Securities Account Number, also known as Demat Account, is an electronic account used to hold and trade securities in dematerialized form. It allows investors to hold shares and other securities in electronic format instead of physical certificates.

Market regulator

A market regulator is a regulatory authority responsible for overseeing and regulating the securities markets. In India, the Securities and Exchange Board of India (SEBI) is the primary market regulator.

A trading floor refers to a physical location, often at a stock exchange, where traders and brokers gather to buy and sell securities. It is a central hub for trading activities and communication between market participants.

Corporate actions

Corporate actions are events or decisions taken by a company that can have an impact on its shareholders or the market. Examples include dividend distributions, stock splits, mergers, and acquisitions.

A block deal is a transaction involving a significant number of shares or a large value of securities. It typically occurs off the regular market exchange and involves the transfer of a block of shares between two parties at an agreed-upon price.

Forward contract

A forward contract is a customized agreement between two parties to buy or sell an asset at a specified price on a future date. It is a type of derivative contract and is often used for hedging or speculation.

Securities lending and borrowing

Securities lending and borrowing is a process where securities are temporarily transferred from one party (lender) to another (borrower) in exchange for a fee. It allows investors to earn additional income by lending their securities to others.

Insider trading regulations

Insider trading regulations are rules and laws implemented by regulatory bodies to prevent illegal trading based on material non-public information. They aim to ensure fair and transparent markets and protect the interests of investors.

Open interest is the total number of outstanding options contracts or futures contracts at a given time. It represents the number of contracts that have not been closed or delivered and can indicate the level of activity and liquidity in the derivatives market.

Overbought is a term used to describe a security or market that has experienced a significant and sustained price increase, leading to an excessive level of buying. It suggests that the security may be due for a price correction or consolidation.

Oversold is a term used to describe a security or market that has experienced a significant and sustained price decrease, leading to an excessive level of selling. It suggests that the security may be due for a price rebound or recovery.

Cash market, also known as the spot market, is a market where financial instruments are traded for immediate delivery and settlement. It involves the exchange of cash and the physical transfer of securities.

Spot market is another term for the cash market, where financial instruments are traded for immediate delivery and settlement.

Fundamental news

Fundamental news refers to important information or news releases about a company, industry, or economy that can have a significant impact on the value or price of securities. It includes earnings reports, economic data, regulatory announcements, and other relevant news.

Stock recommendation

A stock recommendation is an opinion or advice provided by analysts, brokers, or financial institutions on whether to buy, sell, or hold a particular stock. It is based on their analysis of the company's fundamentals, industry trends, and market conditions.

Market hours are the specific time periods during which the stock market is open for trading. They vary depending on the stock exchange and are typically limited to weekdays, excluding holidays.

Market opening refers to the start of the trading session when the stock market officially opens for trading. It marks the beginning of the day's trading activities.

Market closing refers to the end of the trading session when the stock market officially closes for the day. It marks the completion of the day's trading activities.

Index weighting

Index weighting is a methodology used to determine the relative importance or representation of individual securities within an index. It can be based on market capitalization, price, or other factors.

Market capitalization-weighted index

A market capitalization-weighted index is an index where the constituent stocks are weighted based on their market capitalization. The larger the market capitalization of a stock, the higher its weight in the index.

Price-weighted index

A price-weighted index is an index where the constituent stocks are weighted based on their share prices. Stocks with higher prices have a higher weight in the index, regardless of their market capitalization.

Total return index

A total return index is an index that includes both the capital appreciation (or depreciation) of the constituent stocks and the reinvestment of dividends or other distributions. It provides a comprehensive measure of the total return of the index.

Liquidity provider

A liquidity provider is a participant in the market, often a brokerage firm or a financial institution, that offers to buy or sell securities at specified prices. They enhance market liquidity by providing continuous bid and ask prices.

Clearing and settlement

Clearing and settlement refers to the processes by which financial transactions, such as the buying and selling of securities, are reconciled, confirmed, and finalized. It involves the transfer of ownership and the exchange of payment.

A day trader is an individual who engages in short-term trading and aims to profit from intraday price movements. Day traders typically open and close positions within the same trading day and do not hold positions overnight.

A swing trader is a trader who aims to capture short-to-medium-term price swings in the market. They hold positions for a few days to several weeks, taking advantage of price fluctuations.

A long position is when an investor or trader owns securities, such as stocks or derivatives, with the expectation that their value will increase over time. They anticipate profiting from a price rise.

A short position is when an investor or trader sells borrowed securities, anticipating a decline in their value. They aim to buy back the securities at a lower price to return them to the lender and profit from the price difference.

Regulatory compliance

Regulatory compliance refers to the adherence of market participants, such as brokers and traders, to the rules, regulations, and guidelines set by regulatory authorities. It ensures fair and transparent practices in the market.

Securities fraud

Securities fraud refers to deceptive practices in the securities market with the intent to manipulate prices, mislead investors, or obtain unlawful gains. It includes activities such as insider trading, market manipulation, and dissemination of false information.

Trading suspension

Trading suspension is the temporary halt or suspension of trading in a particular security or market as authorized by regulatory authorities. It can occur in response to significant news, pending announcements, or market disruptions.

Market manipulation

Market manipulation is the intentional and illegal act of artificially influencing the price or trading volume of a security or market. It involves practices such as false information dissemination, wash trading, and spoofing.

Volatility skew

Volatility skew refers to the uneven distribution of implied volatility across different options strike prices or expiration dates. It indicates the market's perception of potential risks and can affect option pricing.

Halted stocks are securities that have been temporarily suspended from trading by a stock exchange or regulatory authority. It can be due to pending news announcements, significant price movements, or regulatory concerns.

Trading volume analysis

Trading volume analysis involves studying the volume of shares or contracts traded in a particular security or market. It provides insights into the level of investor interest, market activity, and potential trends.

Average true range (ATR)

Average true range (ATR) is a technical indicator used to measure the volatility of a security. It calculates the average price range between high and low prices over a specified period, indicating the security's price volatility.

Bullish engulfing pattern

Bullish engulfing pattern is a candlestick pattern that occurs when a small bearish candle is followed by a larger bullish candle that completely engulfs the previous candle. It is considered a bullish signal indicating a potential trend reversal.

Bearish engulfing pattern

Bearish engulfing pattern is a candlestick pattern that occurs when a small bullish candle is followed by a larger bearish candle that completely engulfs the previous candle. It is considered a bearish signal indicating a potential trend reversal.

Doji candlestick pattern

Doji candlestick pattern is a candlestick pattern that occurs when the opening and closing prices of a candle are nearly the same, resulting in a small or no body. It indicates market indecision and potential trend reversal.

Head and shoulders pattern

Head and shoulders pattern is a technical chart pattern that resembles a head between two shoulders. It indicates a potential trend reversal from bullish to bearish and is often used by traders to identify selling opportunities.

Cup and handle pattern

Cup and handle pattern is a bullish continuation pattern that resembles a cup followed by a smaller handle. It suggests a temporary pause in an uptrend before the price continues to rise.

Double bottom pattern

Double bottom pattern is a chart pattern that occurs when a security reaches a low price, bounces back, and then forms a second low before reversing the downtrend. It is considered a bullish reversal pattern.

Ascending triangle pattern

Ascending triangle pattern is a bullish continuation pattern characterized by a series of higher lows and a horizontal resistance line. It suggests that the price may break out above the resistance level and continue the uptrend.

Descending triangle pattern

Descending triangle pattern is a bearish continuation pattern characterized by a series of lower highs and a horizontal support line. It suggests that the price may break down below the support level and continue the downtrend.

Fibonacci retracement

Fibonacci retracement is a technical analysis tool used to identify potential support and resistance levels based on the Fibonacci sequence. It involves drawing horizontal lines at key Fibonacci ratios to predict price retracements in a trend.

Moving average convergence divergence (MACD)

Moving average convergence divergence (MACD) is a popular technical indicator that combines moving averages to identify potential trend reversals and generate buy or sell signals. It consists of two lines: the MACD line and the signal line.

Relative strength index (RSI)

Relative strength index (RSI) is a momentum oscillator that measures the speed and change of price movements. It ranges from 0 to 100 and is used to identify overbought or oversold conditions and potential trend reversals.

Stochastic oscillator

Stochastic oscillator is a momentum indicator that compares a security's closing price to its price range over a specified period. It ranges from 0 to 100 and is used to identify overbought or oversold conditions and potential trend reversals.

Breakout trading strategy

Breakout trading strategy is a trading strategy that aims to profit from the price breaking out of a consolidation phase or trading range. Traders enter positions when the price breaks above resistance or below support levels.

Contrarian investing

Contrarian investing is an investment strategy that involves taking positions contrary to prevailing market trends or sentiment. Contrarian investors believe that markets are often driven by irrational behavior and seek opportunities in undervalued or overlooked assets.

Dividend aristocrats

Dividend aristocrats are companies that have consistently increased their dividends for a certain number of consecutive years. They are often well-established, financially stable companies with a track record of rewarding shareholders with regular dividend payments.

Trading psychology

Trading psychology refers to the mental and emotional aspects that influence traders' decision-making processes and behavior in the market. It involves managing emotions, controlling biases, and maintaining discipline.

Stock valuation

Stock valuation is the process of determining the intrinsic value of a stock. It involves analyzing financial statements, market conditions, industry trends, and other factors to assess whether a stock is overvalued or undervalued.

Market order imbalance

Market order imbalance occurs when there is a significant difference between the buy orders and sell orders for a particular security at a given price. It can indicate a potential shift in supply and demand dynamics.

A dark pool is a private electronic trading platform or venue where large institutional investors can trade securities anonymously. It allows them to execute large orders without impacting the market price.

Front-running is an illegal practice where a broker or trader executes orders on a security based on advance knowledge of pending orders from other clients. It involves placing orders to benefit from the anticipated price movement resulting from the pending orders.

Technical breakout

A technical breakout occurs when a security's price moves above a resistance level or below a support level with increased volume, signaling a potential trend reversal or acceleration of the existing trend.

Short interest is the total number of shares of a security that have been sold short by traders or investors. It indicates the level of bearish sentiment in the market and can be used as a measure of market sentiment.

Market inefficiency

Market inefficiency refers to situations where the price of a security does not accurately reflect its fundamental value. It can create opportunities for investors to exploit pricing discrepancies and generate profits.

A margin account is a brokerage account that allows investors to borrow funds from the broker to purchase securities. It allows investors to leverage their buying power and potentially increase their returns but also carries higher risks.

Market surveillance

Market surveillance is the monitoring and oversight of trading activities in the market to detect and prevent market manipulation, insider trading, and other fraudulent or illegal activities. It is carried out by regulatory authorities and exchanges.

Portfolio management

Portfolio management is the process of managing and optimizing a collection of investments, known as a portfolio, to achieve the investor's financial goals. It involves asset allocation, risk management, and ongoing monitoring and adjustment of investments.

Risk management

Risk management is the process of identifying, assessing, and mitigating risks associated with investments. It involves implementing strategies and measures to protect against potential losses and preserve capital.

Limit order book

A limit order book is a record of all pending buy and sell orders for a particular security at various price levels. It provides transparency and displays the current supply and demand dynamics in the market.

Market sentiment analysis

Market sentiment analysis involves assessing and interpreting the overall sentiment or mood of market participants towards a particular security, sector, or the market as a whole. It can be done using various techniques, including surveys, social media analysis, and news sentiment analysis.

Seasonality refers to the tendency of certain securities or markets to exhibit recurring patterns or trends at specific times of the year. It can be influenced by factors such as weather, holidays, and economic cycles.

Reverse stock split

A reverse stock split is a corporate action where a company reduces the number of its outstanding shares by combining multiple shares into a single share. It is often done to increase the stock's price per share and meet listing requirements.

Capital gain refers to the profit realized from selling a capital asset, such as stocks, bonds, or real estate, at a higher price than its purchase price. It is subject to capital gains tax in many jurisdictions.

Capital loss refers to the loss incurred from selling a capital asset at a price lower than its purchase price. It can be used to offset capital gains for tax purposes.

A rally refers to a period of sustained upward movement in stock prices or the overall market. It is often characterized by increased buying activity, positive investor sentiment, and improving economic conditions.

A correction is a temporary decline in stock prices or the overall market after a period of significant gains. It is considered a normal and healthy market adjustment, typically ranging from 10% to 20% from the recent high.

Penny stocks are low-priced stocks with a small market capitalization, often trading at a few paise or rupees. They are considered highly speculative and volatile, with the potential for significant gains or losses.

Earnings report

An earnings report, also known as quarterly or annual financial results, is a document released by a company that provides detailed information on its financial performance. It includes revenue, expenses, net income, and earnings per share.

Volatility breakout

A volatility breakout is a trading strategy that involves entering positions when a security's price breaks out of a period of low volatility. Traders anticipate a significant price move and aim to capture the trend.

Dividend reinvestment plan (DRIP)

A dividend reinvestment plan (DRIP) is a program offered by some companies that allows shareholders to automatically reinvest their cash dividends to purchase additional shares of the company's stock.

Foreign institutional investor (FII)

Foreign institutional investor (FII) is a term used in India to refer to institutional investors, such as mutual funds, pension funds, and hedge funds, from outside the country who invest in the Indian securities market.

Futures contract

A futures contract is a standardized agreement to buy or sell an underlying asset at a predetermined price on a future date. It is traded on futures exchanges and often used for hedging or speculative purposes.

Options contract

An options contract is a financial derivative that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price within a predetermined period. It provides flexibility and can be used for hedging or speculation.

Commodity trading

Commodity trading refers to the buying and selling of physical commodities, such as gold, oil, agricultural products, or metals. It involves trading futures contracts or spot contracts on commodity exchanges.

Currency trading (Forex)

Currency trading, also known as Forex (foreign exchange) trading, is the buying and selling of currencies in the global foreign exchange market. It is the largest and most liquid financial market in the world.

Intraday trading

Intraday trading, also known as day trading, is a strategy where traders buy and sell securities within the same trading day. They aim to profit from short-term price fluctuations and do not hold positions overnight.

Initial public offering (IPO)

An initial public offering (IPO) is the process by which a private company offers its shares to the public for the first time, allowing it to raise capital from external investors. It is often done to fund expansion or provide an exit for early investors.

Qualified institutional buyer (QIB)

A qualified institutional buyer (QIB) is a classification of large institutional investors, such as mutual funds, insurance companies, and pension funds, who are eligible to participate in certain securities offerings or private placements.

The capital market is a financial market where long-term debt and equity securities are bought and sold. It includes primary markets (where new securities are issued) and secondary markets (where existing securities are traded).

Asset Allocation

The process of distributing investments across different asset classes, such as stocks, bonds, and cash, to achieve a desired risk-return profile and portfolio diversification.

Portfolio diversification

The strategy of spreading investments across various assets or securities to reduce risk by avoiding overexposure to any single investment or asset class.

Net asset value (NAV)

The per-share value of a mutual fund or exchange-traded fund (ETF) calculated by dividing the total value of the fund's assets minus liabilities by the number of outstanding shares.

The annual fee charged by a mutual fund or ETF to cover operating expenses, expressed as a percentage of the fund's total assets.

Active management

An investment approach where portfolio managers make specific investment decisions and actively buy and sell securities in an attempt to outperform the market.

Passive management

An investment approach that seeks to replicate the performance of a specific market index or benchmark by holding a diversified portfolio of securities without frequent trading.

Benchmark index

A standard or reference index used to measure the performance of an investment portfolio or compare the performance of a fund manager against a specific market segment.

A legal document provided to potential investors that contains essential information about a mutual fund or ETF, including investment objectives, strategies, risks, fees, and historical performance.

A fee charged by a mutual fund when an investor sells or redeems shares within a specified time period, designed to discourage short-term trading and protect long-term investors.

A sales charge or commission paid by investors when purchasing shares of a mutual fund, typically categorized as either front-end loads (paid at the time of purchase) or back-end loads (paid when selling shares).

A mutual fund that does not charge a sales load or commission to investors, allowing them to buy or sell shares without incurring additional costs.

Dividend reinvestment

An option offered by some mutual funds and companies that allows investors to automatically reinvest dividend payments by purchasing additional shares of the fund or company's stock.

Expense reimbursement

A practice where a mutual fund manager or company covers some or all of the fund's operating expenses to lower the expense ratio, potentially benefiting the fund's shareholders.

The negative impact of high operating expenses, such as management fees, on the net returns of a mutual fund or ETF.

A mutual fund or ETF that primarily invests in stocks or equity securities, seeking to provide investors with exposure to a diversified portfolio of publicly traded companies.

A mutual fund or ETF that primarily invests in fixed-income securities, such as government or corporate bonds, aiming to provide investors with income and potential capital appreciation.

Money market fund

A type of mutual fund that invests in short-term, high-quality debt securities, such as Treasury bills and commercial paper, aiming to provide stability and liquidity.

A mutual fund or ETF that focuses its investments on a specific industry or sector of the economy, such as technology, healthcare, or energy.

A mutual fund or ETF that aims to achieve capital appreciation by investing in stocks of companies with above-average growth potential.

A mutual fund or ETF that seeks to invest in stocks that are considered undervalued by the market, based on factors such as low price-to-earnings ratio or high dividend yield.

A mutual fund or ETF that primarily invests in income-generating assets, such as bonds, preferred stocks, or high-dividend-yield equities, aiming to provide regular income to investors.

International fund

A mutual fund or ETF that focuses its investments on securities issued by companies or governments outside the investor's home country, providing exposure to global markets.

Emerging markets fund

A mutual fund or ETF that invests in securities of companies or governments in developing or emerging economies, offering potential high returns but also higher risks.

A mutual fund or ETF that primarily invests in stocks of small-cap companies, typically defined as companies with a relatively small market capitalization.

A mutual fund or ETF that primarily invests in stocks of mid-cap companies, which fall between small-cap and large-cap companies in terms of market capitalization.

A mutual fund or ETF that primarily invests in stocks of large-cap companies, which are typically well-established and widely recognized companies with large market capitalization.

Fixed income fund

A mutual fund or ETF that primarily invests in fixed-income securities, aiming to provide investors with regular income and relatively low risk.

High-yield bond fund

A mutual fund or ETF that invests in lower-rated or non-investment-grade bonds, also known as high-yield or junk bonds, offering higher potential yields but also higher credit risk.

Treasury bond fund

A mutual fund or ETF that invests primarily in U.S. Treasury bonds or other government-issued securities, providing investors with relatively low-risk fixed-income investments.

Government bond fund

A mutual fund or ETF that invests primarily in bonds issued by governments, including both U.S. and international government bonds, offering relatively low-risk fixed-income investments.

Municipal bond fund

A mutual fund or ETF that invests primarily in municipal bonds issued by state and local governments, providing tax-advantaged income for investors in certain jurisdictions.

Target-date fund

A mutual fund or ETF designed to automatically adjust its asset allocation mix based on a specific target retirement date, gradually shifting towards a more conservative investment approach as the target date approaches.

Aggressive growth fund

A mutual fund or ETF that seeks significant capital appreciation by investing in high-growth companies or sectors, typically associated with higher volatility and risk.

A mutual fund or ETF that maintains a balanced allocation between stocks and bonds, aiming to provide investors with a combination of income, growth, and preservation of capital.

Total expense ratio (TER)

The total annual cost of owning a mutual fund or ETF, including management fees, operating expenses, and other charges, expressed as a percentage of the fund's average net assets.

Capital gains tax

A tax levied on the profits realized from the sale of an investment or asset, based on the difference between the purchase price and the sale price.

An agreement or provision where a mutual fund or ETF manager voluntarily agrees to waive or reduce certain fees or expenses for a specified period, benefiting the fund's shareholders.

Prospectus disclosure

The detailed information provided in a mutual fund or ETF prospectus, including investment objectives, risks, fees, past performance, and other important disclosures to assist investors in making informed decisions.

Momentum investing

An investment strategy that focuses on buying securities or assets that have shown strong price momentum, expecting the upward trend to continue.

The persistence or strength of a security's price trend in a particular direction, often used as an indicator of future price movements.

Trend following

An investment approach that seeks to identify and profit from the persistence of price trends, with the assumptionthat the trend will continue.

The movement or behavior of a security's price over time, including price patterns, volatility, and trading volume, often analyzed to make investment decisions.

The general direction in which a security's price is moving over a specific period, such as an uptrend (rising prices) or a downtrend (falling prices).

Price acceleration

The speed or rate at which a security's price changes over time, often used to identify periods of rapid price movement.

Breakout strategy

An investment strategy that aims to profit from the price breaking through a significant level of support or resistance, indicating a potential continuation of the price trend.

Reversal strategy

An investment strategy that seeks to identify and profit from a reversal in the direction of a security's price trend, anticipating a change in the prevailing trend.

Price volatility

The degree of variation or fluctuation in a security's price over time, often measured as the standard deviation of price returns.

An investment strategy that involves making buy or sell decisions based on predictions or forecasts of future market movements, attempting to enter or exit the market at opportune times.

Price momentum indicators

Technical indicators or tools used to measure and assess the strength or weakness of a security's price momentum, providing insights into potential future price movements.

Rate of change (ROC)

A momentum oscillator that measures the percentage change in a security's price over a specified period, indicating the speed or rate of price movement.

Bollinger Bands

A technical analysis tool consisting of a central moving average line and upper and lower bands that represent the standard deviation of price, used to identify price volatility and potential trading opportunities.

The theory or observation that over time, the price of an asset or security tends to move back towards its average or mean level.

Alpha generation

The process or ability of a portfolio manager or investment strategy to generate excess returns above a benchmark or market index.

Risk-adjusted returns

Investment returns that have been adjusted to account for the level of risk undertaken to achieve those returns, allowing for comparison of performance across different investments or portfolios.

The reduction or decrease in the ability of a portfolio or investment strategy to generate alpha (excess returns) over time, often attributed to increased market efficiency or changing market conditions.

Behavioral finance

A field of study that combines psychology and economics to understand how cognitive biases and emotional factors influence financial decisions and market behavior.

Herding behavior

The tendency of individuals to follow the actions or decisions of a larger group, often leading to crowd behavior and potentially amplifying market movements.

A phenomenon where market participants overemphasize or exaggerate new information or events, leading to exaggerated price movements in the short term.

A phenomenon where market participants fail to fully incorporate or respond to new information or events, resulting in delayed or insufficient price adjustments.

Behavioral biases

Systematic and predictable errors in judgment or decision-making influenced by psychological factors, leading to deviations from rationality in financial markets.

A cognitive bias where individuals rely too heavily on initial or pre-existing information when making decisions or estimating values.

Confirmation bias

A cognitive bias where individuals seek or interpret information in a way that confirms their existing beliefs or biases, while disregarding contradictory evidence.

A risk management technique where a stop-loss order is set at a specific percentage or dollar amount below the current market price, which adjusts dynamically as the price moves favorably.

Position sizing

Determining the appropriate amount of capital to allocate to a specific trade or investment based on factors such as risk tolerance, account size, and market conditions.

Portfolio rebalancing

The process of adjusting the asset allocation of a portfolio to bring it back to its original target or desired allocation, usually to manage risk and maintain diversification.

Sector rotation

A strategy where an investor or trader shifts their investments or focus between different sectors of the economy based on their expectations of relative performance.

Factor investing

An investment approach that aims to capture specific risk factors or characteristics associated with higher returns by constructing portfolios based on those factors.

Quantitative models

Mathematical or statistical models used to analyze financial data and make predictions or decisions based on quantitative analysis.

Algorithmic trading

The use of computer algorithms to automatically execute trading orders based on predefined rules or strategies, typically involving high-speed and high-frequency trading.

Evaluating the performance of a trading or investment strategy using historical data to assess its effectiveness and profitability.

Momentum crashes

Sharp and significant reversals or downturns in the prices of assets or securities that had been exhibiting strong momentum or positive price trends.

Event-driven momentum

Momentum trading strategies that capitalize on price movements driven by specific events or news announcements.

Earnings momentum

A momentum trading strategy that focuses on securities or stocks that have exhibited positive earnings surprises or strong earnings growth.

News-based momentum

A momentum trading strategy that takes advantage of price movements resulting from news releases, announcements, or other relevant news events.

Liquidity-based momentum

A momentum trading strategy that targets assets or securities with high liquidity, aiming to exploit the price impact of trading volume.

Size-based momentum

A momentum trading strategy that focuses on assets or securities with specific market capitalizations, such as small-cap or large-cap stocks.

Long-only momentum

A momentum trading strategy that involves taking long positions in assets or securities expected to continue their upward price trends.

Market-neutral momentum

A momentum trading strategy that aims to create a portfolio with zero or minimal exposure to overall market movements, focusing on relative price performance.

Scalping trading strategy

A trading strategy characterized by making quick trades to profit from small price movements, often using leverage and high trading volumes.

A financial market where participants can trade standardized futures contracts, which represent an agreement to buy or sell an underlying asset at a predetermined price and future date.

A trader who engages in scalping, executing quick trades to profit from small price differentials or spreads.

The difference between the bid and ask prices of a financial instrument, representing the cost of executing a trade or the potential profit for a market maker.

The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask) for a particular financial instrument.

A record of all buy and sell orders for a particular financial instrument, displaying the current bids and asks at different price levels.

The incoming stream of buy and sell orders for a particular financial instrument, which can provide insights into market sentiment and potential price movements.

Market liquidity

The ease with which a financial instrument can be bought or sold in the market without causing significant price movements or impacting transaction costs.

The minimum price increment or movement allowed in the trading of a particular financial instrument.

The difference between the expected price of a trade and the actual executed price, often occurring when there is insufficient liquidity or market volatility.

Execution speed

The time it takes for a trade order to be transmitted, processed, and executed, which can affect the price at which the trade is executed.

Scalping timeframes

The specific duration or intervals used by scalpers to monitor price movements and execute trades, often involving short timeframes such as seconds or minutes.

Rapid buying or selling of financial instruments to take advantage of immediate price movements or profit opportunities.

Short-term profits

Profits generated from trading or investments held for a relatively brief period, typically ranging from a few days to a few weeks.

A type of chart that displays the price movements of a financial instrument based on the number of trades or transactions that occur.

A graphical representation of the trading volume at different price levels over a specific period, providing insights into support and resistance levels.

A record of individual trades executed for a specific financial instrument, including the price, volume, and time of each transaction.

Scalping indicators

Technical indicators or tools used by scalpers to identify potential entry and exit points for their quick trades.

Scalping risk management

Strategies and techniques employed by scalpers to control and minimize the risks associated with their rapid trading approach.

Take-profit orders

Orders placed to automatically close a position and secure profits when the price reaches a predetermined level set by the trader.

Risk-reward ratio

A measure used to assess the potential return of an investment or trade relative to the risk undertaken, typically expressed as a ratio.

Scalping psychology

The psychological aspects and mindset required for successful scalping, including discipline, focus, and the ability to manage stress.

A structured and comprehensive document outlining a trader's goals, strategies, risk tolerance, and rules for executing trades.

Forward testing

The process of implementing a trading strategy in real-time market conditions to assess its performance and effectiveness.

Trade execution strategy

A set of rules and procedures used to enter and exit trades, including order types,timing, and specific conditions for trade execution.

Market analysis

The process of examining and evaluating various factors and indicators to assess the current and future potential movements in financial markets.

Delta hedging strategy

A risk management technique used by options traders to neutralize or offset the directional risk (delta) of options positions by taking offsetting positions in the underlying asset.

A financial market where options contracts are bought and sold, allowing investors to speculate on the price movements of underlying assets or manage risk.

A measure of the sensitivity of the price of an options contract to changes in the price of the underlying asset.

A measure of the rate of change of an option's delta in response to changes in the price of the underlying asset.

Underlying asset

The financial instrument or security on which an options contract is based and derives its value, such as stocks, commodities, or currencies.

The act of reducing or mitigating the risk of adverse price movements in one asset or investment by taking offsetting positions in another asset or derivative.

Synthetic position

A combination of assets or derivatives that replicates the risk and payoff profile of another asset, allowing for hedging or exposure to that asset.

The price paid by an options buyer to the options seller for the right to buy or sell the underlying asset at a specified price within a certain period.

Expiration date

The date at which an options contract expires and becomes void, after which the holder no longer has the right to exercise the option.

Refers to an options contract that has intrinsic value, meaning the current price of the underlying asset is favorable for the option holder to exercise.

Out-of-the-money

Refers to an options contract that has no intrinsic value, meaning the current price of the underlying asset is not favorable for the option holder to exercise.

Refers to an options contract where the strike price is approximately equal to the current price of the underlying asset.

A portfolio or position where the delta value is zero or near zero, resulting in limited sensitivity to small price movements in the underlying asset.

The ratio used to determine the number of options contracts required to hedge the risk associated with a specific position in the underlying asset.

Hedging instrument

The financial instrument or derivative used to offset or hedge the risk associated with another position or investment.

The current market price at which an asset or security can be bought or sold for immediate delivery or settlement.

Implied volatility

An estimate of the expected future volatility of an underlying asset's price derived from the prices of options on that asset.

Historical volatility

A measure of the past price fluctuations or variability of an asset or security, often calculated as the standard deviation of historical price data.

Black-Scholes model

A mathematical model used to calculate the theoretical price of options, taking into account factors such as the underlying asset price, strike price, time to expiration, risk-free rate, and volatility.

The process of determining the fair value of an options contract based on various factors such as underlying asset price, volatility, time to expiration, interest rates, and dividends.

The effect of a large trade or order on the price of a financial instrument due to increased demand or supply in the market.

Transaction costs

The expenses incurred when executing a trade, including brokerage fees, commissions, spreads, and slippage.

The expenses or risks associated with implementing a hedging strategy to offset potential losses from an existing position or portfolio.

Delta-gamma hedging

A hedging technique that involves adjusting both delta and gamma positions in an options portfolio to maintain a neutral overall position.

A measure of the sensitivity of an options contract's price to changes in implied volatility.

The rate of change of an option's price with respect to time decay, indicating how much the option's value decreases as it approaches expiration.

The measure of an option's price sensitivity to changes in interest rates.

Continuous hedging

The process of adjusting a hedging position continuously to maintain a desired risk exposure.

Discrete hedging

The process of periodically adjusting a hedging position at specific intervals rather than continuously.

Dynamic hedging

A hedging strategy that involves actively managing and adjusting positions in response to changing market conditions.

A hedging strategy that involves establishing a fixed position to offset the risk associated with an existing position.

The discrepancy between the actual performance of a hedge and the desired or expected outcome.

Hedging strategy adjustment

Modifying a hedging strategy based on changing market conditions, risk factors, or objectives.

Supertrend indicator

A technical analysis indicator that helps identify the direction of a trend and potential entry or exit points.

A specific condition or event that indicates a favorable time to enter a trade.

A specific condition or event that indicates a favorable time to exit a trade and secure profits or cut losses.

A sustained upward movement in the price of a financial instrument, indicating bullish market sentiment.

A sustained downward movement in the price of a financial instrument, indicating bearish market sentiment.

A significant price movement below a support level or a technical pattern, indicating a potential shift in market direction.

A situation in which the price of a financial instrument quickly moves in one direction and then reverses sharply in the opposite direction.

A trading signal that initially suggests a particular price movement but turns out to be incorrect or misleading.

The process of fine-tuning parameters or variables in a trading system or strategy to maximize desired outcomes or performance.

The specific period or duration of time represented on a chart, such as minutes, hours, days, or weeks.

Market conditions

The current state of the financial markets, including factors such as volatility, liquidity, and overall sentiment.

A change in the direction of a prevailing trend, indicating a potential shift in market sentiment.

Stop-and-reverse

A trading strategy that involves closing an existing position and immediately opening a new position in the opposite direction.

Price crossover

A technical analysis technique that involves the crossing of two different price lines or indicators, potentially indicating a change in market direction.

Indicator parameters

The variables or settings used to configure and customize technical indicators, affecting their sensitivity and output.

The degree of responsiveness of an indicator or trading system to changes in market conditions or input variables.

A measure of the intensity or power of a prevailing trend, indicating the likelihood of its continuation.

The length of time a trend has been in place, indicating its potential stability or vulnerability to a reversal.

Price deviation

The amount by which the current price of a financial instrument deviates from its average or expected value.

Indicator smoothing

A technique applied to technical indicators to reduce noise and produce smoother output by averaging or filtering data.

Up-to-date and immediate market information, including price quotes, trade volumes, and other relevant data points.

Indicator settings

The specific configuration or customization of a technical indicator, including input parameters and display preferences.

Multi-timeframe analysis

The process of analyzing price data and indicators across different timeframes to gain a broader perspective on market trends and signals.

Trading signals

Notifications or indications generated by a trading system or technical analysis tools to suggest potential buying or selling opportunities.

False positives

Instances where a trading signal or indicator suggests a potential trade setup but does not result in a profitable outcome.

Lagging indicator

A technical indicator that provides signals or insights based on past price data, reacting to price movements after they have occurred.

Leading indicator

A technical indicator that provides signals or insights that may anticipate future price movements, indicating potential trading opportunities.

Noise filtering

The process of reducing or eliminating irrelevant or random price fluctuations from market data to enhance the accuracy of analysis.

A technical analysis tool that consists of two parallel lines representing support and resistance levels, providing a visual range within which prices typically fluctuate.

Resistance breakout

A price movement that exceeds a defined resistance level, potentially indicating a new upward trend or increased buying interest.

Support breakdown

A price movement that falls below a defined support level, potentially indicating a new downward trend or increased selling pressure.

A graphical representation of price movement in a specific time period, usually depicted as a colored rectangle with a 'wick' on top and bottom.

The general direction in which the price of a financial instrument is moving, either upwards (bullish) or downwards (bearish).

Heikin-Ashi chart

A type of candlestick charting technique that filters out market noise and provides a smoother representation of price action.

A predefined plan or approach that traders use to make trading decisions and manage their positions.

The process of analyzing historical price data on a chart to identify patterns, trends, and potential trading opportunities.

Candlestick patterns

Specific formations or combinations of candlesticks that traders use to identify potential trend reversals or continuations.

A predetermined price level at which a trader is willing to close a winning position to secure profits.

Market psychology

The collective emotions, attitudes, and behaviors of market participants that influence price movements.

Trend identification

The process of recognizing and confirming the direction of a prevailing trend.

Trend confirmation

Additional analysis or indicators used to verify the strength and validity of a detected trend.

Price consolidation

A period of relative price stability or narrow trading range after a significant price movement.

A straight line drawn on a chart to connect consecutive peaks or troughs, providing a visual representation of a trend.

Mathematical calculations based on price or volume data used to generate trading signals or provide additional insights.

The speed or velocity of price changes, indicating the strength or weakness of a trend.

Technical indicators that fluctuate within a predetermined range, providing signals for overbought or oversold conditions.

Refers to a market or price that moves within a specific range without establishing a clear trend.

Breakout confirmation

Additional analysis or indicators used to verify a breakout and confirm the potential continuation of a new trend.

Money management

The practice of identifying, assessing, and mitigating potential risks associated with trading activities.

Price discovery

The process by which the market determines the current price of a financial instrument based on supply and demand.

Candlestick interpretation

Analyzing the shape, color, and position of candlesticks to interpret market sentiment and potential price movements.

A condition or indication that a prevailing trend may be losing momentum or nearing its end.

Reversal patterns

Specific candlestick or chart patterns that suggest a potential trend reversal.

Continuation patterns

Specific candlestick or chart patterns that suggest a temporary pause in a prevailing trend before its continuation.

Volatility bands

Technical indicators that provide upper and lower boundaries within which price movements are expected to occur.

Predetermined price levels at which traders aim to close their positions to secure profits.

Trade management

The ongoing monitoring and adjustment of open trades to optimize profits and manage risks.

An investor's ability and willingness to withstand and accept the potential losses or fluctuations in the value of their investments.

The degree of risk that an individual or entity is willing to take on in pursuit of potential returns or rewards.

Risk Assessment

The process of evaluating and analyzing the potential risks associated with an investment or business decision, considering factors such as probability, impact, and mitigation strategies.

Capital Preservation

A primary investment objective focused on protecting the original investment or capital from losses, often prioritizing safety and stability over high returns.

The peak-to-trough decline or decrease in the value of an investment or portfolio during a specific period, typically expressed as a percentage.

The implementation of strategies, measures, or policies to identify, manage, and minimize potential risks and their impact on investments or business operations.

Risk Mitigation

The process of reducing or minimizing the likelihood or impact of potential risks through various actions, strategies, or safeguards.

Excessive or frequent trading activity in a portfolio or investment account, often driven by emotional or impulsive decision-making rather than a well-defined strategy.

Revenge trading

A behavior where an investor engages in high-risk or aggressive trading activities as a response to previous losses, driven by a desire to recover those losses quickly.

Impulse trading

Spontaneous or unplanned trading decisions made without thorough analysis or consideration of the associated risks and rewards.

Trading journal

A record-keeping tool used by traders and investors to track and analyze their trading activities, including entry and exit points, strategies used, and lessons learned.

Psychological biases

Systematic and predictable deviations from rational decision-making caused by psychological factors, which can affect investment behavior and lead to suboptimal outcomes.

A cognitive bias where individuals feel the pain of losses more strongly than the pleasure of gains, leading to a preference for avoiding losses rather than seeking gains.

Regret Aversion

A bias where individuals are driven to avoid actions or decisions that may later cause regret or remorse, often resulting in missed opportunities or overly cautious behavior.

A short-term trading strategy that aims to profit from small price movements by quickly entering and exiting trades, often within minutes or seconds.

A trading strategy that seeks to profit from trading within a specific price range, buying at the lower boundary and selling at the upper boundary.

A trading strategy that involves taking advantage of price gaps between the previous day's close and the current day's open, anticipating a continuation or filling of the gap.

Pullback Trading

A trading strategy that involves entering trades during temporary price retracements or pullbacks within an existing trend, aiming to capture the resumption of the trend.

Moving Average Crossover

A technical trading strategy that involves buying or selling a security based on the crossing of two different moving averages, typically a shorter-term and longer-term average.

Opening Range Breakout

A trading strategy that involves entering trades when the price of a security breaks above or below the high or low of the initial trading range established at the market open.

Breakout Pullback Strategy

A trading strategy that combines breakout and pullback concepts, where trades are taken after a price breakout followed by a temporary pullback to support or resistance levels.

Gap and Go Strategy

A trading strategy that involves taking advantage of a price gap at the market open and riding the subsequent momentum in the direction of the gap.

Bull Flag Pattern

A bullish chart pattern characterized by a consolidation phase (flag) following an upward price move (flagpole), often signaling a continuation of the uptrend.

Bear Flag Pattern

A bearish chart pattern characterized by a consolidation phase (flag) following a downward price move (flagpole), often signaling a continuation of the downtrend.

A trading strategy that involves the simultaneous purchase and sale of two or more options contracts with different strike prices, expiration dates, or both.

Vertical Spread

An option spread strategy where options with different strike prices but the same expiration date are bought and sold, aiming to profit from the price difference between the two options.

Horizontal Spread

An option spread strategy where options with the same strike price but different expiration dates are bought and sold, capitalizing on the time value difference between the two options.

Calendar Spread

An option spread strategy that involves buying and selling options with the same strike price but different expiration dates, aiming to profit from time decay and volatility changes.

Butterfly Spread

An option spread strategy that combines the purchase and sale of three different options contracts, resulting in a limited-risk position with potential profit in a specific price range.

An advanced option spread strategy that involves combining a bullish vertical spread and a bearish vertical spread on the same underlying asset, creating a range-bound position.

An options strategy where an investor buys both a call option and a put option with the same strike price and expiration date, anticipating significant price volatility.

An options strategy where an investor buys both a call option and a put option with different strike prices but the same expiration date, expecting a significant price move in either direction.

Collar Strategy

An options strategy that involves holding a long position in a stock while simultaneously buying protective put options and selling covered call options to limit downside risk and generate income.

Synthetic Options

Positions created by combining options contracts with other financial instruments, such as stocks or futures, to replicate the payoff profile of a different option or security.

Option Assignment

The process by which the seller (writer) of an option is obligated to fulfill their obligation to buy or sell the underlying asset if the option buyer exercises their right.

Option Exercise

The act of the option buyer invoking their right to buy or sell the underlying asset at the specified strike price by notifying the option seller (writer) and fulfilling the transaction.

Volatility Trading

A trading strategy that focuses on exploiting changes in volatility levels or expectations, aiming to profit from price fluctuations resulting from increased or decreased market volatility.

Options Trading Strategies

Various approaches, techniques, or combinations of options positions and trades used by investors and traders to achieve specific objectives, such as hedging, income generation, or speculation.

Options Trading Platform

A software or online platform provided by brokers or financial institutions that allows investors to trade options contracts, access market data, and manage their options positions.

Options Trading Account

A brokerage account specifically designed for trading options, allowing investors to buy and sell options contracts, monitor positions, and manage risk.

Options Trading Simulator

A virtual trading environment or software that replicates real-market conditions and allows individuals to practice trading options without risking real money.

Options Order Types

Specific instructions given by an investor to a broker when placing an options trade, including market orders, limit orders, stop orders, and more.

Options Trading Fees

The costs associated with trading options, including commissions, contract fees, exchange fees, and other charges levied by brokers or financial institutions.

Options Trading Education

Educational resources, courses, or materials aimed at providing knowledge, understanding, and skills related to options trading, including options strategies, risk management, and market analysis.

The lead underwriting firm or investment bank responsible for coordinating and managing the issuance of new securities, such as stocks or bonds.

Fill or Kill (FOK)

An order type that instructs a broker to execute a trade immediately and in its entirety or cancel the order if it cannot be fully filled at the specified price.

A document used in initial public offerings (IPOs) that outlines the allocation of shares to institutional investors, including the quantity and price at which they will purchase the shares.

A provision in an underwriting agreement that grants the underwriters the option to sell additional shares to stabilize the price of a newly issued stock during its initial trading period.

Reverse Greenshoe

A provision in an underwriting agreement that grants the underwriters the option to buy back shares from the market to cover any short position resulting from the exercise of the greenshoe option.

Institutional Investor

An organization or entity, such as a mutual fund, pension fund, or insurance company, that invests large sums of money on behalf of its clients or members.

A term used to describe the peak or highest point of a market cycle, often indicating a potential reversal or the end of an upward trend.

The general direction or movement of a market over a specific period, characterized by consistent and sustained price movements in a particular direction, such as an uptrend or downtrend.

The total number of a company's shares that are available for trading in the open market, excluding shares held by insiders, restricted shares, or shares held by institutional investors.

A stock or security that is created as a result of a corporate action, such as a spin-off or merger, representing a portion of a larger entity or business.

Variable Prepaid Forward Contract

A financial arrangement where an investor agrees to sell a specified number of shares to a counterparty at a predetermined future date, while receiving an upfront payment that varies based on the price of the underlying shares.

Widow-and-Orphan Stock

A term used to describe a stock that is considered low-risk and suitable for conservative investors, often characterized by stable dividends and a history of steady performance.

In finance, the witching hour refers to the last hour of trading on the third Friday of March, June, September, and December when options and futures contracts expire, often resulting in increased trading volume and volatility.

Triple Witching Hour

The same concept as the witching hour, but specifically refers to the simultaneous expiration of stock options, index options, and index futures contracts on the third Friday of March, June, September, and December.

Yellow Strip Price

A term used in the oil and gas industry to refer to the price at which a crude oil producer agrees to sell oil to a refiner, typically at a discount to the prevailing market price due to quality or transportation considerations.

The time period between the filing of a registration statement with the Securities and Exchange Commission (SEC) for a new securities offering and the date when the offering becomes effective, during which the issuer cannot sell the securities.

Abnormal Returns

The returns on an investment that deviate from the expected or normal returns, often used to evaluate the performance of an investment relative to a benchmark or market index.

A company or individual that acquires or takes over another company through a merger, acquisition, or other form of business combination.

Acquisition of Assets

The purchase or acquisition of specific assets, such as property, equipment, or intellectual property, by a company or individual.

Acquisition of Stock

The purchase or acquisition of shares or ownership interest in a company, often through a stock purchase or equity investment.

A financial account that is actively managed or used by the account holder for frequent transactions or investment activities.

Active Commitments

Financial commitments or obligations that are currently in effect or actively being fulfilled.

Active Fund Management

An investment management approach that involves actively buying and selling securities in a portfolio with the goal of outperforming the market or a specific benchmark.

Income generated from active participation in a trade, business, or profession, typically in the form of wages, salaries, or self-employment earnings.

Active Portfolio Strategy

An investment strategy that involves actively managing and adjusting the composition of a portfolio based on market conditions, investment opportunities, and specific goals or objectives.

The return on an investment portfolio that is attributable to active management decisions and strategies, calculated by comparing the portfolio's performance to a passive benchmark or index.

The risk or volatility associated with actively managed investments, reflecting the potential for greater gains or losses compared to a benchmark or passive investment approach.

The real or existing market conditions, prices, and trading activities that occur in the financial markets.

Advance Funded Pension Plan

A pension plan in which contributions are made in advance of the employee's retirement, with the funds set aside and invested to provide retirement benefits in the future.

Advance Refunding

A financing technique in which a new debt issue is issued to repay an existing debt issue before its maturity date, often done to take advantage of lower interest rates or improve the terms of the debt.

A situation in securities trading where a transaction fails to settle or complete within the expected time frame, often due to delays or complications in the settlement process.

A method of securities trading in which a broker-dealer acts as an agent on behalf of its clients, executing trades and providing services without taking a principal position or taking ownership of the securities.

Agency Cost View

An economic theory that examines the costs and conflicts of interest that arise between shareholders and managers in a corporation, focusing on the agency relationship and the potential for agency costs to reduce shareholder value.

The costs incurred by shareholders or principals in a company due to conflicts of interest and agency problems with managers or agents who act on their behalf.

Agency Pass-Throughs

Securities or investment products, such as mortgage-backed securities, where the cash flows from underlying assets are passed through to investors or holders of the securities.

A conflict of interest or misalignment of incentives between the shareholders or owners of a company and its managers or agents, which can result in actions or decisions that are not in the best interest of the shareholders.

Agency Securities

Debt securities, such as bonds or notes, that are issued or guaranteed by a government-sponsored enterprise (GSE), federal agency, or government entity.

Announcement Date

The date on which a company publicly announces significant news, events, or information that may impact its stock price or business operations.

A meeting held by a company's shareholders or members once a year to discuss and vote on important matters, such as the election of directors, approval of financial statements, and other corporate decisions.

Annual Rate of Return

The percentage return earned on an investment over a one-year period, calculated by dividing the total gain or loss by the initial investment amount.

A comprehensive report issued by a company to its shareholders, providing information on the company's financial performance, operations, management, and other relevant details for the fiscal year.

An individual who receives or is entitled to receive payments or benefits from an annuity contract or pension plan.

Appraisal Ratio

A ratio used to evaluate the performance of a portfolio manager or investment strategy by comparing the excess returns generated to the risk or volatility of the portfolio.

A list of securities or investments that have been approved or authorized for purchase or inclusion in a particular investment portfolio or fund.

Arbitrage Trading Program (ATP)

A program or strategy that seeks to profit from price discrepancies or inefficiencies in the financial markets by simultaneously buying and selling related securities or assets.

Arbitrage-Free Option-Pricing Models

Mathematical models used to calculate the fair value or theoretical price of options, taking into account factors such as the underlying asset's price, time to expiration, volatility, and interest rates, while assuming the absence of arbitrage opportunities.

A trader or investor who engages in arbitrage, seeking to profit from price differences or discrepancies in the financial markets by buying and selling related securities or assets.

Acronym for Auction Rate Securities, which are long-term debt securities with interest rates that reset through periodic auctions.

A cognitive bias or tendency to overweight or place excessive importance on specific attributes or characteristics of an investment or decision, while ignoring or underweighting other relevant factors.

Auction Market Preferred Stock (AMPS)

A type of preferred stock that is traded in an auction market, where investors submit bids to buy or sell the stock at specified prices.

Auction Markets

Financial markets or trading platforms where the buying and selling of securities or assets is conducted through a competitive bidding process, often involving an auctioneer or electronic platform.

Authorized Shares

The maximum number of shares of stock that a company is legally allowed to issue or offer for sale, as specified in its articles of incorporation or corporate charter.

An automated system or service that provides real-time or delayed stock quotes, prices, and other market data to investors or traders.

A statistical model or process that uses past observations or data to predict future values or outcomes, assuming that the current value depends on its previous values.

Automated Bond System (ABS)

An electronic system or platform used for the trading and settlement of bonds, providing automated matching and execution of bond trades.

Automated Export System

An electronic system used by the U.S. government to collect and track export data, facilitate compliance with export regulations, and generate export documentation.

Automated Pit Trading (APT)

A trading system or method that uses computerized or automated technology to facilitate trading and order matching in open outcry or pit trading environments.

Automatic Funds Transfer

A process or service that allows funds to be transferred automatically from one account to another, often used for recurring payments or savings purposes.

Automatic Reinvestment

A feature offered by some mutual funds or dividend reinvestment plans (DRIPs) that allows investors to automatically reinvest their dividends or distributions back into additional shares of the fund or company's stock.

Availability Float

The portion of a company's outstanding shares that are available for trading on the stock market, excluding shares held by insiders, restricted shares, or shares held for other specific purposes.

A type of guarantee or endorsement on a negotiable instrument, such as a bill of exchange or promissory note, where a third party agrees to be liable for payment if the issuer defaults.

A slang term used to describe a person or entity with a personal or financial interest in a particular investment or market outcome, often implying a biased or self-serving motive.

The futures contracts with distant expiration dates, typically beyond the front or nearby month contracts.

Back-end load fund

A mutual fund that charges a sales fee or load when an investor sells or redeems their shares.

Backdoor listing

A process in which a privately held company goes public by acquiring or merging with an already listed public company.

Baltic Dry Index (BDI)

An economic indicator that measures the shipping rates of various bulk goods, such as iron ore, coal, and grain, on international shipping routes.

A type of certificate of deposit (CD) that pays a variable interest rate based on the performance of an underlying index, such as a stock market index.

An aggressive tactic used by a company or investor to pressure another company into accepting a takeover or merger offer.

A coordinated and aggressive selling campaign by investors or traders aimed at driving down the price of a particular security.

A temporary upward movement or recovery in the price of a security or market within an overall bearish trend.

An options trading strategy that involves buying put options at a higher strike price and selling put options at a lower strike price, with the goal of profiting from a bearish or downward price movement in the underlying asset.

A situation in which a declining market or security briefly reverses direction, luring bullish investors or traders into buying before resuming its downward trend.

A standard or reference point against which the performance or characteristics of a security, portfolio, or investment strategy are measured.

Benchmark error

The difference between the return of an investment portfolio and its benchmark, indicating the tracking error or deviation from the benchmark.

Benchmark interest rate

A prevailing interest rate that serves as a reference for setting other interest rates, such as the rate used for pricing loans, mortgages, or financial instruments.

Benchmark issue

A debt security or bond that is widely used as a reference or benchmark for pricing other similar securities in the market.

Beneficial owner

The person or entity that enjoys the benefits and rights of owning a security, even if the security is registered under another name.

Beneficial ownership

The ownership of shares or securities by an investor who enjoys the benefits and rights associated with ownership.

The price at which a buyer is willing to purchase a security or financial instrument.

A situation in which a buyer accepts a higher price offered by another buyer, causing the original bid to be invalidated or rejected.

A type of surety bond submitted with a bid or proposal to demonstrate the bidder's financial capacity and commitment to entering into a contract if awarded.

An indication or request from a seller or broker to receive bids or offers for a particular security or financial instrument.

Bid-to-cover ratio

In an auction or offering of securities, the ratio of the total value of bids received to the value of securities available for sale, indicating the level of demand from investors.

An investor or trader who places bids to buy securities or financial instruments in an auction or market.

Bidding through the market

A trading technique in which an investor places a bid to buy a security at a higher price than the prevailing market bid.

A situation in which buyers compete with each other, driving up the price of a security or financial instrument.

An informal economic indicator that compares the purchasing power parity (PPP) between different countries using the prices of a Big Mac hamburger sold by McDonald's.

A company or entity that is a significant producer or supplier of goods or services within a particular industry or market.

A term used to refer to large, established, and often unexciting companies or stocks that are considered undervalued or overlooked by investors.

A measure or statistic that represents the number of buy orders or bids received for a security or financial instrument during a specified period.

An illegal or unofficial market in which goods, services, or currencies are traded outside of the formal channels of commerce.

A list of securities or stocks that a brokerage firm or dealer is willing to buy or sell at specified prices.

State securities laws that aim to protect investors from fraudulent or speculative investments and ensure the disclosure of accurate and relevant information.

A large quantity of shares or securities traded or held as a single unit.

A telephone call made by a brokerage firm or dealer to solicit or offer a large block of securities for sale or purchase.

A brokerage firm or financial institution that specializes in handling and trading large blocks of securities.

A list of securities that a brokerage firm or dealer has available for trading as large blocks.

A transaction involving a large quantity of shares or securities traded as a single unit, typically executed outside of the open market.

An individual or firm specializing in executing and facilitating block trades in the financial markets.

A voting arrangement or practice in which a large shareholder or group of shareholders combine their voting rights to exert significant influence or control over a company's decisions.

A fixed income investment in which an investor loans money to an issuer, typically a government or corporation, for a specified period at a fixed interest rate.

Bond anticipation note (BAN)

A short-term municipal note issued in anticipation of the issuance of long-term bonds to finance public projects or capital expenditures.

A brokerage firm or individual broker that specializes in buying and selling bonds on behalf of investors.

A financial publication that provides news, analysis, and data related to the municipal bond market.

Bond Buyer's municipal bond index

An index published by the Bond Buyer that tracks the performance of the municipal bond market.

An attorney or law firm specializing in municipal finance that provides legal advice and guidance to issuers of municipal bonds.

A group of traders or market participants specializing in buying and selling bonds on the trading floor of an exchange.

The amount by which the market price of a bond is lower than its face value or par value.

A legal document that outlines the terms and conditions of a bond issuance, including the rights and obligations of the issuer and the bondholders.

Bond market association

An industry organization representing participants in the bond market, including broker-dealers, banks, and institutional investors.

Bond mutual fund

A type of mutual fund that invests primarily in bonds or other fixed income securities.

A measure of the price of a bond, expressed as a percentage of its face value, with each point equal to 1% of the face value.

The amount by which the market price of a bond is higher than its face value or par value.

An assessment or rating assigned by credit rating agencies to indicate the creditworthiness and risk level of a bond issuer or a specific bond issue.

A transaction in which an investor exchanges one bond for another, often to take advantage of differences in interest rates, maturities, or credit quality.

The current market price or fair value of a bond, which may be higher or lower than its face value or par value.

Bond-equivalent basis

A method of expressing the yield or interest rate of a bond on an annual basis, assuming a 365-day year.

An individual or entity that owns one or more bonds and is entitled to receive periodic interest payments and the return of principal upon maturity.

Broker loan rate

The interest rate charged by a broker-dealer to customers who borrow funds to finance their investment activities.

A financial firm or individual engaged in buying and selling securities on behalf of clients and for its own account, often requiring registration with regulatory authorities.

A certificate of deposit (CD) that is sold by a brokerage firm or financial intermediary on behalf of a bank or other issuing institution.

Brokered market

A market in which securities transactions are conducted through brokerage firms or intermediaries, rather than on an exchange or directly between buyers and sellers.

Loans provided by banks or broker-dealers to brokerage firms or customers to finance the purchase of securities.

A situation in which a government's expenditures exceed its revenues or income for a specific period, resulting in a negative budget balance.

A situation in which a government's revenues or income exceed its expenditures for a specific period, resulting in a positive budget balance.

A bond issued in the United Kingdom by a non-British company and denominated in British pounds.

A term used to describe a market characterized by strong demand for British pound-denominated bonds issued by non-British companies.

A type of bond or loan that has a single principal payment at maturity, rather than regular interest and principal payments.

Bullet contract

A futures or options contract that specifies a single delivery date for the underlying asset, rather than multiple delivery dates.

An options trading strategy that involves buying call options at a lower strike price and selling call options at a higher strike price, with the goal of profiting from a bullish or upward price movement in the underlying asset.

A certificate of deposit (CD) that allows the investor to request a one-time increase in the interest rate during the term of the CD.

An action or instruction to acquire a security, financial instrument, or asset.

A hedging strategy in which an investor or trader takes a long position in a security or financial instrument to offset potential losses in another position.

The process of purchasing or acquiring securities to cover a short position or fulfill a delivery obligation.

Buy limit order

An order to buy a security or financial instrument at a specified price or lower.

An instruction to buy a security or financial instrument at the closing price of the trading session.

The practice of buying securities or financial instruments using borrowed funds from a broker, with the securities serving as collateral for the loan.

An instruction to buy a security or financial instrument at the opening price of the trading session.

An instruction or request to purchase a security or financial instrument.

An order to buy a security or financial instrument at a specified price or higher.

An action taken by market makers or specialists to buy all the shares offered for sale at the current bid price.

The repurchase of outstanding shares or securities by a company, often as a means of returning capital to shareholders or boosting the stock price.

Buyers/sellers on balance

A technical analysis indicator that measures the buying or selling pressure in a market by comparing the total volume of shares bought and sold over a given period.

The amount of capital or funds available to an investor or trader for making new investments or trades.

Buying the index

A passive investment strategy in which an investor buys all or a representative sample of the securities in a particular market index to replicate its performance.

The acquisition or purchase of a controlling interest in a company or business by another company or group of investors.

A private equity or investment firm specializing in making buyout acquisitions of companies or businesses.

Calendar effect

A seasonal pattern or anomaly observed in financial markets, where stock prices tend to exhibit predictable patterns based on the time of year or month.

Calendar Straddle or Combination

An options trading strategy that involves buying a call option and a put option with the same strike price and expiration date.

An option contract that gives the holder the right, but not the obligation, to buy a specified quantity of an underlying asset at a predetermined price within a specified period.

The date on which a callable bond or other callable security can be redeemed or called by the issuer.

A provision in a bond or other security that grants the issuer the right to redeem or call the security before its maturity date.

The price paid by the buyer of a call option to acquire the right to buy the underlying asset at the specified strike price.

The price at which a callable bond or other callable security can be redeemed or called by the issuer.

Call protection

A provision in a bond or other security that restricts the issuer from calling or redeeming the security for a specified period, providing the bondholder with some protection against early redemption.

A contractual provision that grants the issuer the right to redeem or call a bond or other security before its maturity date.

The risk faced by bondholders that their bonds will be called or redeemed before maturity, potentially depriving them of future interest payments.

An option contract that gives the holder the right, but not the obligation, to enter into a swap agreement as the fixed-rate payer.

The characteristic of a bond or other security that allows the issuer to redeem or call it before its maturity date.

Describing a bond or other security that can be redeemed or called by the issuer before its maturity date.

Refers to a situation in which an option seller is obligated to sell the underlying asset to the option buyer due to the exercise of a call option.

An asset with a long-term useful life that is used in the production of goods or services and is not intended for sale in the ordinary course of business.

Capital asset pricing model (CAPM)

A financial model that estimates the expected return on an investment based on its systematic risk, as measured by beta, and the risk-free rate of return.

Capital market efficiency

The degree to which prices of securities in the capital market reflect all available information and are therefore accurately priced.

Capital market imperfections view

A perspective that recognizes the presence of frictions, inefficiencies, and barriers in capital markets that can lead to suboptimal allocation of resources.

Capital market line (CML)

A line representing the risk-return tradeoff for efficient portfolios of risky assets combined with a risk-free asset, based on the Capital Asset Pricing Model (CAPM).

Capital market proceeds

The funds raised by a company or government through the issuance of securities in the capital market, such as stocks or bonds.

Capitalization rate

A measure used in real estate valuation to estimate the potential return on an investment property, calculated as the net operating income divided by the property's purchase price or value.

Capitalization ratios

Financial ratios that measure a company's long-term debt and equity financing structure and its ability to meet its financial obligations.

Cash flow from operations

The net amount of cash generated or consumed by a company's core operating activities during a specific period.

An offer to purchase securities or other assets using cash as the payment method.

Cash-equivalent items

Highly liquid assets that can be readily converted into cash with minimal risk of price change, such as Treasury bills and money market instruments.

Cash-liabilities ratio

A financial ratio that compares a company's cash and cash equivalents to its total liabilities, indicating its ability to cover short-term obligations.

Cash-on-cash return

A financial metric used to evaluate the profitability of an investment property, calculated as the annual pre-tax cash flow divided by the initial cash investment.

Cash-surrender value

The amount of cash that an insurance policyholder is entitled to receive upon surrendering or canceling a cash value life insurance policy.

Cashflow matching

A portfolio management strategy that matches the cash flows from a portfolio of fixed-income investments with the timing of future liabilities or obligations.

A subsidiary of the Depository Trust & Clearing Corporation (DTCC) that acts as a nominee or custodian for securities held in electronic form.

Central bank intervention

Actions taken by a central bank to influence or control the value of a nation's currency, interest rates, or other financial variables.

Central Limit Theorem

A statistical theory that states that the distribution of sample means of a sufficiently large number of independent, identically distributed random variables will be approximately normally distributed, regardless of the shape of the original population distribution.

A real estate investment trust (REIT) that specializes in investing in Collateralized Mortgage Obligations (CMOs).

Collateral trust bonds

Bonds that are secured by a pledge of specific collateral, typically financial assets such as stocks or bonds.

Collateralized Bond Obligation (CBO)

A type of structured financial product that pools together a portfolio of corporate bonds or other debt securities and issues multiple tranches of securities backed by the cash flows from the underlying bonds.

Collateralized Debt Obligation (CDO)

A type of structured financial product that pools together a portfolio of debt instruments, such as mortgages, bonds, or loans, and issues multiple tranches of securities backed by the cash flows from the underlying debt.

Collateralized loan obligation (CLO)

A type of structured financial product that pools together a portfolio of leveraged loans and issues multiple tranches of securities backed by the cash flows from the underlying loans.

Collateralized mortgage obligation (CMO)

A type of mortgage-backed security that is created by pooling together a portfolio of mortgage loans and issuing multiple tranches of securities backed by the cash flows from the underlying mortgages.

Combination annuity

An insurance product that combines the features of a life annuity, which provides a guaranteed income for life, with a term certain annuity, which pays a fixed income for a specified period.

Combination bond

A bond that combines two or more types of financial instruments, such as fixed-rate and floating-rate components or debt and equity components.

Combination matching

A portfolio management strategy that matches the duration or maturities of a portfolio of assets with the duration or maturities of future liabilities or obligations.

Combination order

An order to buy or sell a combination of different securities or options as a single transaction.

Combination strategy

A trading or investment strategy that involves combining multiple options positions or other financial instruments to achieve a specific risk-reward profile or investment objective.

The ordinary shares or equity ownership units in a corporation that entitle the holders to voting rights and a share of the company's profits.

The most basic form of ownership in a corporation, representing a share of ownership and giving the holder voting rights and a claim on the company's earnings and assets.

Common stock ratios

Financial ratios that analyze the relationship between a company's common stock and its earnings, book value, market value, and other financial measures.

Common-base-year analysis

A method of financial statement analysis that expresses each item on a financial statement as a percentage of a base year's value, allowing for the comparison of data across different time periods.

Common-stock equivalent

Securities or financial instruments, such as stock options or convertible bonds, that have the potential to be converted into common stock.

Community Reinvestment Act (CRA)

A U.S. federal law that encourages banks and other financial institutions to meet the credit needs of the communities in which they operate, particularly low- and moderate-income neighborhoods.

Comparative statements

Financial statements that present the financial data of a company for multiple periods, allowing for the comparison of data across different time periods.

Commodity futures contract

A standardized agreement to buy or sell a specified quantity of a commodity at a predetermined price and future date, traded on a regulated commodity exchange.

Commodity indices

Indexes that track the performance of a basket of commodities or commodity-related investments, providing a measure of the overall price movements in the commodity markets.

Commodity paper

Short-term debt instruments, such as promissory notes or commercial paper, that are issued by companies in the commodity sector to finance their operations or working capital needs.

Commodity Trading Advisor

A professional individual or firm that provides advice and manages client accounts in commodity futures and options trading, typically registered with the Commodity Futures Trading Commission (CFTC).

Commodity-backed bond

A bond that is secured by a specific quantity of a commodity, such as gold or oil, which serves as collateral for the bondholders.

Concentration account

A bank account used by a company or organization to consolidate and manage multiple subsidiary accounts or receipts from different sources.

Concentration Banks

Banks that specialize in providing financial services to specific industries or sectors, often serving as major lenders or depository institutions for companies in those industries.

A bond issued by a special purpose entity (SPE) or conduit to finance a specific project or set of assets, with the cash flows from the project or assets used to repay the bondholders.

A legal and tax concept that allows income or gains to pass through a special purpose entity (SPE) or conduit to its investors or beneficiaries without being subject to entity-level taxation.

Consensus forecast

A prediction or estimate of future financial or economic variables, such as earnings or economic growth, based on the average or consensus of multiple analysts or forecasters.

Consolidated tape

A system that provides consolidated real-time or delayed market data, including trading volume, prices, and other information, for multiple securities exchanges or markets.

Consolidation loan

A type of loan that combines multiple existing debts into a single loan, often with a lower interest rate or more favorable repayment terms.

A market condition in which the futures price of a commodity is higher than the expected spot price at the time of delivery, resulting in an upward sloping futures curve.

Contingency order

An order to buy or sell a security or other financial instrument that is executed only if certain predefined conditions or criteria are met.

Contingent claim

A financial claim or contract that depends on the occurrence or non-occurrence of a specific event or condition, such as an insurance policy or an option contract.

Contingent conversion trigger

A predefined event or condition, typically specified in the terms of a convertible security, that determines when the security can be converted into common stock.

A type of security, such as a bond or preferred stock, that can be converted into a specified number of common shares or other securities of the issuer.

Convertible 100

An index that tracks the performance of the largest and most actively traded convertible securities in the market.

Convertible arbitrage

An investment strategy that involves simultaneously buying convertible securities and selling short the underlying common stock to exploit pricing discrepancies between the two securities.

Convertible bond

A type of bond that can be converted into a specified number of common shares of the issuing company at the option of the bondholder.

Convertible exchangeable preferred stock

A type of preferred stock that can be exchanged for common stock or another specified security of a different company.

Convertible preferred stock

A type of preferred stock that can be converted into a specified number of common shares of the issuing company at the option of the stockholder.

Convertible security

A financial instrument, such as a convertible bond or convertible preferred stock, that can be converted into a specified number of common shares or other securities of the issuer.

The process of exchanging one type of financial instrument, such as a bond or preferred stock, for another type of security, typically common shares.

Conversion factors

Factors used to determine the price or value of a convertible security when converted into common shares, taking into account the conversion ratio and other terms of the security.

Conversion feature

A characteristic or provision of a security, such as a convertible bond, that allows the holder to convert the security into a specified number of common shares of the issuing company.

Conversion parity

The condition in which the market price of a convertible security is equal to or close to its conversion value, indicating that the conversion feature is not significantly influencing the security's price.

Conversion parity price

The price at which a convertible security can be converted into common shares, calculated by dividing the market price of the convertible security by its conversion ratio.

Conversion parity/value

The ratio of the market price of a convertible security to its conversion value, indicating the premium or discount associated with the security's conversion feature.

Conversion Period

The specified period during which a convertible security can be converted into common shares of the issuing company, as defined in the terms of the security.

Conversion premium

The amount by which the market price of a convertible security exceeds its conversion value, representing the additional value associated with the security's conversion feature.

Conversion price

The price at which a convertible security can be converted into common shares, as specified in the terms of the security.

Daily average revenue trades (DARTs)

A measure of the number of trades executed by customers of a brokerage firm on a daily basis, used as an indicator of the firm's trading activity.

Daily price limit

The maximum amount by which the price of a security or commodity futures contract is allowed to increase or decrease in a single trading session.

A series of transactions or contracts in which each transaction is dependent on the completion of the previous transaction, often associated with complex financial arrangements.

A secure virtual or physical space where confidential and sensitive information, such as financial records and legal documents, is stored and accessed by authorized parties during due diligence or transaction processes.

The date on which a security, such as a bond or stock, is initially offered or sold to investors.

Date of payment

The date on which a payment, such as a dividend or interest payment, is made to the holders of a security.

The date on which an investor must be registered as a shareholder of a company to be eligible to receive a dividend or vote at a shareholders' meeting.

The date from which interest on a debt instrument, such as a bond, begins to accrue and is payable to the holder.

Dates convention

A standard set of rules or practices used to determine the specific dates and periods associated with financial transactions or contracts.

The process of establishing and determining the specific dates and periods associated with financial transactions or contracts.

An aggressive tactic used by an investor or group of investors to quickly accumulate a large stake in a company's shares, often by purchasing shares at the market open.

Day around order

A type of order that allows an investor to specify the price at which they want to buy or sell a security for the entire trading day, regardless of price fluctuations.

Day count convention

A method used to calculate the accrued interest or the number of days in a specific time period for interest calculations, typically based on the number of days in a year.

A short-term loan or credit facility that is extended for a single day or a very short period, often used by financial institutions to manage their daily cash flows.

An order to buy or sell a security that is valid only for the trading day on which it is placed and is automatically canceled if it is not executed by the end of the day.

DCF (Discounted Cash Flow)

A valuation method used to estimate the intrinsic value of an investment by discounting its expected future cash flows to their present value.

DDM (Dividend Discount Model)

A valuation method used to estimate the intrinsic value of a stock by discounting its expected future dividends to their present value.

Dead cat bounce

A temporary and short-lived recovery in the price of a declining stock or market after a significant decline, often followed by another decline.

The rate or volume of investment opportunities, transactions, or deals that are available or being pursued by investors, financial institutions, or investment firms.

Stock that is issued as part of a merger, acquisition, or other corporate transaction, often provided to shareholders of the acquired company as part of the deal.

A person or firm that engages in the buying and selling of securities, commodities, or other financial instruments as a principal, rather than as an agent for clients.

A loan provided by a dealer or market maker to facilitate the purchase or sale of securities, often used to provide short-term financing for trading activities.

A financial market where securities or other financial instruments are bought and sold directly between dealers or market makers, rather than through an exchange.

Options contracts that are bought or sold by market makers or dealers to facilitate trading and provide liquidity in the options market.

Dealer's spread

The difference between the bid price (the price at which a dealer is willing to buy a security) and the ask price (the price at which a dealer is willing to sell a security), representing the dealer's profit margin.

Dealing desk (Trading desk)

A department or area within a financial institution or brokerage firm where traders execute buy and sell orders for securities or other financial instruments.

A technical chart pattern that occurs when a short-term moving average of a stock or market index crosses below a long-term moving average, indicating a potential bearish signal.

A trading strategy or investment approach that involves betting on the decline or failure of a particular company, stock, or market.

Death Spiral Convertible

A convertible security, such as a bond or preferred stock, that can potentially result in significant dilution of a company's common stock if it is converted or redeemed.

A financial ratio that measures the proportion of a company's total assets that are financed by debt, calculated by dividing total debt by total assets.

Debt restructuring

The process of modifying the terms and conditions of existing debt obligations, such as extending the maturity date, reducing the interest rate, or changing the repayment schedule, in order to alleviate financial distress or improve the borrower's ability to meet its obligations.

Debt securities

Financial instruments or contracts, such as bonds, notes, or debentures, that represent a creditor relationship between the issuer and the holder, entitling the holder to receive interest payments and the repayment of principal.

The cash payments, including interest and principal, that a borrower is required to make on its outstanding debt obligations.

Debt service coverage

A financial ratio that measures a company's ability to generate sufficient cash flow to meet its debt service obligations, calculated by dividing its operating income or cash flow by its total debt service payments.

Debt service parity approach

A method of analyzing and comparing different debt financing options or alternatives by evaluating the debt service requirements and the financial impact on the borrower.

Debt-for-equity swap

A transaction or agreement in which a company's debt obligations are exchanged or converted into equity ownership in the company, often used as a restructuring mechanism to reduce the company's debt burden.

Debt-service coverage ratio

A financial ratio that measures a company's ability to generate sufficient cash flow to meet its debt service obligations, calculated by dividing its operating income or cash flow by its total debt service payments.

Debt/EBITDA ratio

A financial ratio that measures a company's leverage or indebtedness by comparing its total debt to its earnings before interest, taxes, depreciation, and amortization (EBITDA).

Debt/equity ratio

A financial ratio that measures the proportion of a company's total capitalization that is financed by debt relative to equity, calculated by dividing total debt by total equity.

A person, institution, or entity that holds or owns a debt security or has a legal claim to the repayment of a debt.

An individual, company, or other entity that owes money or has an outstanding debt obligation to another party, the creditor.

Death-backed bonds

Bonds that are issued by an insurance company and provide a death benefit to the bondholder in addition to regular interest payments, typically used for estate planning purposes.

A long-term debt instrument issued by a company or government entity that promises to repay the principal amount at a specified maturity date and pay periodic interest payments.

A type of bond that is not secured by specific assets or collateral, relying solely on the general creditworthiness and reputation of the issuer for repayment.

Debenture stock

A form of corporate equity security that has characteristics of both debentures (debt) and common stock (equity), providing a fixed income stream and the potential for capital appreciation.

An accounting entry that represents an increase in assets or an expense, or a decrease in liabilities or equity, recorded on the left side of a double-entry accounting system.

The amount owed by a customer to a broker or financial institution for the purchase of securities or other financial instruments on margin, representing a negative account balance.

An options trading strategy that involves buying and selling options contracts with different strike prices or expiration dates, resulting in a net debit to the trader's account.

An amount of money borrowed by one party from another party, typically with the promise of repayment of the principal amount plus interest over a specified period of time.

A term used to describe a situation in which a country, company, or individual has accumulated a large amount of debt that poses significant financial risks and potential consequences.

The maximum amount of debt that a borrower or entity can prudently assume and service without jeopardizing its financial stability or ability to meet its obligations.

The maximum amount of debt that a government or organization is legally allowed to incur or issue, often set by legislation or regulations.

Debt displacement

A situation in which an increase in debt financing or borrowing by a company or government entity crowds out or displaces other potential sources of funding, such as equity financing or private investments.

Debt instrument

A legal contract or document that evidences a financial obligation, such as a promissory note, bond, debenture, or loan agreement, between a borrower and a lender.

The use of debt or borrowed funds to finance investments or business operations, often with the aim of increasing potential returns but also introducing higher financial risks.

The maximum amount of debt that a government or organization is authorized to incur or borrow, often set by legislation or regulatory authorities.

Debt limitation

The restriction or cap imposed on the amount of debt that a company, government entity, or individual can incur, often determined by financial or legal considerations.

A financial market where debt securities, such as bonds, notes, or debentures, are bought and sold by investors, providing a means for borrowing and lending capital.

Debt outstanding subject to limitation

The total amount of debt that is subject to a specific restriction or limitation, often imposed by laws, regulations, or contractual agreements.

A process or arrangement in which a debtor is granted partial or total forgiveness or reduction of its debt obligations, typically through negotiation with creditors or external assistance programs.

Debt retirement

The repayment or redemption of a debt instrument or the complete elimination of a debt obligation, often accompanied by the payment of principal and any accrued interest.

A financial transaction in which the terms or characteristics of existing debt obligations are exchanged or modified, typically to achieve better terms or alleviate financial difficulties.

Deep in the money

An options contract that has a strike price significantly lower (for a call option) or higher (for a put option) than the current market price of the underlying asset, resulting in a high intrinsic value.

Deep out of the money

An options contract that has a strike price significantly higher (for a call option) or lower (for a put option) than the current market price of the underlying asset, resulting in a low intrinsic value.

Deep-discount bond

A bond that is issued at a significantly lower price than its face value or par value, often with a low coupon rate or no coupon payments, resulting in a high yield to maturity.

The failure to fulfill or meet a financial obligation or contractual agreement, such as the failure to make timely payments of principal or interest on a debt instrument.

Default interest

Additional interest or higher interest rates that may be charged by a lender or creditor in the event of a borrower's default or failure to meet its debt obligations.

Default premium

The additional return or interest rate that investors require or demand for holding a debt security or making a loan to a borrower with a higher risk of default.

The likelihood or probability that a borrower or issuer of debt will fail to meet its financial obligations or repay its debt in accordance with the terms and conditions of the debt agreement.

Defensive securities

Investments or securities that are considered relatively stable or resistant to economic downturns, often sought by investors seeking to preserve capital or reduce portfolio volatility.

A negative balance or shortfall in a financial account, budget, or trade balance, indicating that expenses, liabilities, or losses exceed income, assets, or gains.

A specific event or condition defined in a financial contract or agreement that triggers certain rights, obligations, or actions for the parties involved.

A sustained decrease in the general price level of goods and services in an economy, often accompanied by a contraction in economic activity and increased unemployment.

Delayed issuance pool

A pool of mortgages or mortgage-backed securities that are held by an issuer or underwriter for a period of time before they are offered or sold to investors.

Delayed settlement/delivery

A situation in which the transfer of ownership or settlement of a financial transaction, such as the delivery of securities or the payment of funds, is postponed or delayed beyond the standard or expected timeframe.

To transfer or hand over ownership of securities, commodities, or other assets from one party to another, often in fulfillment of a contractual obligation or as part of a financial transaction.

Deliverable bills

Short-term debt instruments, often issued by governments or central banks, that are eligible for delivery or settlement in futures contracts or other derivative transactions.

Deliverable instrument

A financial instrument, such as a bond, stock, or commodity, that meets the specified requirements and can be delivered or transferred as part of a contractual obligation or settlement process.

The process of transferring or conveying ownership of securities, commodities, or other assets from one party to another, often involving the physical or electronic transfer of the underlying instruments or documentation.

The specified date on which the transfer of ownership of securities, commodities, or other assets is scheduled or expected to take place, often as part of a contractual agreement or financial transaction.

Delivery notice

A formal written notification or document provided by a seller or delivering party to the buyer or receiving party, indicating the intention to deliver or transfer specified securities, commodities, or other assets.

Delivery options

Options contracts that give the holder the right to deliver or transfer the underlying securities, commodities, or other assets to the counterparty in the contract.

Delivery points

Designated locations or facilities specified in a futures contract or other derivative instrument where the physical delivery of the underlying asset can be made.

The price at which the buyer of a futures contract or other derivative instrument is obligated to purchase the underlying asset upon delivery, or the price at which the seller is obligated to sell.

Delivery versus payment

A settlement mechanism or process in which the delivery of securities or commodities is synchronized or linked with the simultaneous payment of the purchase price or funds, reducing counterparty risk.

Delta cross-hedge

A hedging strategy that involves offsetting the price risk of an options position by taking an opposite position in the underlying asset, using the delta of the options contract as a hedge ratio.

A measure of the price sensitivity or risk of an options position to changes in the price of the underlying asset, calculated as the difference between the delta of the options contract and the delta of a benchmark position.

Demand-pull inflation

A type of inflation that occurs when the overall price level of goods and services in an economy rises due to increased consumer demand that outpaces the economy's ability to supply goods and services.

Demutualization

The process by which a mutual organization, such as a mutual insurance company or a mutual exchange, converts into a publicly traded company, often involving the issuance of shares to its members or policyholders.

The face value or nominal value of a financial instrument, such as a bond, note, or currency, indicating the principal amount or denomination at which it is issued.

A financial institution or entity that holds and safeguards securities, funds, or other assets on behalf of its clients or customers, providing custodial and administrative services.

Derivative instruments

Financial contracts or securities whose value is derived from an underlying asset, such as stocks, bonds, commodities, currencies, or market indices, used for hedging, speculation, or investment purposes.

Derivative markets

Financial markets where derivative instruments, such as futures contracts, options contracts, and swaps, are bought and sold, enabling participants to manage risk, speculate, or hedge against future price movements or events.

Derivative security

A financial instrument or contract, such as an options contract, futures contract, or swap, whose value is derived from an underlying asset or benchmark, used for risk management or speculative purposes.

Descending tops

A technical analysis pattern observed on a price chart where each subsequent high or peak is lower than the previous high, indicating a potential trend reversal or weakening of bullish momentum.

Direct investment

An investment made by an individual, company, or entity that involves the acquisition or establishment of a controlling or significant ownership stake in a foreign business or enterprise.

Direct participation program

A type of investment program or structure that allows individual investors to directly participate in the cash flow, income, or profits generated by a business or investment venture, often through a limited partnership or similar entity.

Direct public offering

A method of offering securities in which a company sells its shares directly to the public without the involvement of an underwriter or investment bank, often facilitated through the use of online platforms or crowdfunding.

A foreign exchange rate quotation in which the domestic currency is the base currency and the foreign currency is the quote currency, indicating the amount of foreign currency per unit of domestic currency.

Direct Registration System

A computerized system that allows investors to hold their securities directly in electronic form on the books of the company or its transfer agent, eliminating the need for physical stock certificates.

Direct rollover

A tax-advantaged method of moving retirement plan assets, such as funds from a 401(k) plan, directly from one eligible retirement account to another, without the assets being distributed to the account holder in the meantime.

Direct search market

A type of market or exchange where buyers and sellers directly interact or search for potential trading partners or counterparties to negotiate and execute transactions without the use of intermediaries.

Direct stock-purchase programs

Investment programs offered by companies that allow individual investors to purchase shares of the company's stock directly from the company, often through dividend reinvestment plans (DRIPs) or direct stock purchase plans (DSPPs).

Foreign exchange quotations in which the domestic currency is the quote currency and the foreign currency is the base currency, indicating the amount of domestic currency per unit of foreign currency.

A foreign exchange rate regime in which the value of a currency is determined by market forces, but the government or central bank occasionally intervenes or manipulates the exchange rate to influence its value.

The price of a bond or other fixed-income security that includes both the present value of future cash flows and the accrued interest or coupon earned since the last interest payment date.

Shares of a company that are trading with accrued interest or dividends, often after the ex-dividend date or ex-interest date, reflecting the fact that the buyer of the shares will be entitled to the next upcoming payment.

Discount broker

A brokerage firm or financial institution that executes trades on behalf of clients or customers at a reduced commission or fee compared to full-service brokerage firms, often offering limited investment advice or services.

The interest rate used to discount future cash flows or financial obligations to their present value, often reflecting the time value of money, risk factors, and market conditions.

Discount securities

Financial instruments, such as Treasury bills or short-term bonds, that are sold at a price below their face value or par value, resulting in a yield higher than the stated interest rate.

The annualized yield or rate of return on a discount security, calculated by dividing the discount or difference between the purchase price and face value by the face value and adjusting for the time remaining until maturity.

Discounted cash flow (DCF)

A valuation method used to estimate the intrinsic value of an investment or asset by discounting its expected future cash flows to their present value using an appropriate discount rate.

Discounted dividend model (DDM)

A method of valuing a stock by estimating the present value of its future dividends, often by applying a discount rate to the expected dividend payments.

Discounted payback

A capital budgeting method that calculates the time required for the discounted cash inflows from an investment project to equal or exceed the initial investment cost.

Discounted payback period rule

A decision rule in capital budgeting that evaluates investment projects based on the time required for the discounted cash inflows to recover the initial investment cost, with a shorter payback period considered more favorable.

Discounting the news

A phenomenon in financial markets where the impact of expected news or information is reflected in asset prices before the news is officially announced or released.

Discretionary account

An investment account managed by a financial advisor or investment professional who has the authority to make investment decisions and execute trades on behalf of the account holder, often based on agreed-upon objectives and guidelines.

Discretionary cash flow

The amount of cash generated by a company's operations that is available for discretionary purposes, such as reinvestment in the business, debt reduction, dividends, or share buybacks.

Discretionary order

An order to buy or sell a security that allows the broker or investment manager to determine the price and timing of the transaction based on their judgment and market conditions.

Discretionary trust

A type of trust in which the trustee has the discretion or authority to distribute the trust's income or assets to the beneficiaries based on their individual needs or circumstances.

Dividend capture

An investment strategy in which an investor buys shares of a stock just before the ex-dividend date and sells them shortly after, aiming to capture the dividend payment while minimizing exposure to other market factors.

Dividend clawback

A provision in an agreement or contract that allows a company to reclaim or recover previously paid dividends from shareholders, often under specific circumstances or conditions.

Dividend clientele

A theory suggesting that different groups of investors are attracted to stocks with specific dividend characteristics, such as high dividend yields or consistent dividend growth, creating a clientele effect on the company's shareholder base.

Dividend Discount Model (DDM)

A method of valuing a stock by estimating the present value of its future dividends, often by applying a discount rate to the expected dividend payments.

Dividend growth model

A variant of the dividend discount model (DDM) that assumes a constant dividend growth rate over time, allowing for the estimation of the intrinsic value of a stock based on its expected future dividends.

Dividend in arrears

Unpaid dividends on cumulative preferred stock that have not been paid in a timely manner and are owed to shareholders, often requiring future payment before dividends can be distributed to common shareholders.

Dividend income

The portion of a company's earnings or profits distributed to shareholders as dividends, often in the form of cash payments or additional shares of stock.

Dividend limitation

A provision in a company's articles of incorporation, bylaws, or debt agreements that limits the amount of dividends the company can pay to its shareholders, often based on financial conditions, earnings, or legal requirements.

Dividend policy

A company's guidelines, practices, or decisions regarding the payment of dividends to its shareholders, including the frequency, amount, and stability of dividend distributions.

The amount of dividends paid by a company to its shareholders expressed as a percentage of the stock's current market price or its face value.

Dividend record

A date specified by a company on which shareholders must be registered on its books in order to be eligible to receive a declared dividend payment.

Dividend requirement

The amount of earnings or profits that a company must allocate or set aside for the payment of dividends to its shareholders, often based on legal or contractual obligations.

Dividend rights

The entitlements and privileges conferred upon shareholders by owning shares of a company's stock, including the right to receive dividends, vote on corporate matters, and participate in the company's growth and value appreciation.

Dividend rollover plan

A program or option offered to shareholders by a company that allows them to reinvest their dividend payments into additional shares of the company's stock, often at a discounted price.

Dividend yield (Funds)

The annual dividend income earned from an investment fund, such as a mutual fund or exchange-traded fund (ETF), expressed as a percentage of the fund's net asset value (NAV).

Dividend yield (Stocks)

The annual dividend income earned from owning shares of a company's stock, expressed as a percentage of the stock's current market price.

Dividends payable

The amount of dividends that a company has declared or announced but has not yet paid to its shareholders, often recorded as a liability on the company's balance sheet until the payment date.

Dividends per share

The total amount of dividends paid by a company divided by the number of outstanding shares of its stock, often used as a measure of the company's dividend payout.

A situation in which an economy experiences a second period of recession or economic downturn shortly after recovering from a previous recession, often characterized by a decline in economic indicators and a setback in growth.

Double taxation

The imposition of taxes on the same income or assets by two or more tax jurisdictions, such as a corporation being taxed on its profits and shareholders being taxed on the dividends received from the corporation's profits.

A chart pattern in technical analysis where a stock or market index reaches a high price level, experiences a temporary decline, and then rallies to a similar high before reversing and declining further, often signaling a potential trend reversal from bullish to bearish.

A downward revision or reduction in the credit rating, investment rating, or recommendation for a stock, bond, or other financial instrument by a rating agency, analyst, or brokerage firm, often reflecting increased risk or deteriorating fundamentals.

The potential for a loss or decline in the value of an investment or portfolio due to various factors, such as market volatility, economic downturns, or adverse events.

A market or investment environment characterized by declining prices, negative sentiment, and a general lack of confidence among investors, often associated with bearish market conditions.

The volume or number of shares traded in a stock or market index during a period when the price of the stock or index decreases, often used as an indicator of selling pressure or downward momentum.

A transaction or trade in which the price of a security is lower than the previous trade or the previous closing price, often represented by a minus sign or negative value on a ticker tape or price chart.

A period of economic contraction or decline in business activity, often characterized by falling GDP, rising unemployment, reduced consumer spending, and negative market performance.

The listing of a company's shares on multiple stock exchanges, allowing investors to trade the company's stock on different markets, often providing increased liquidity and access to a broader investor base.

Dual syndicate equity offering

A method of issuing new shares of stock to the public in which two or more investment banks or underwriters collaborate and jointly manage the offering, often to share the risks, resources, and distribution capabilities.

Dual-currency issues

Bonds or securities that are denominated in one currency but pay interest or principal in another currency, allowing investors to receive cash flows or payments in different currencies.

Dual-purpose fund

A mutual fund or investment vehicle that has the flexibility to invest in both equity securities and fixed-income securities, allowing for a diversified portfolio that can adapt to market conditions.

A document or instrument used in securities transactions to evidence the transfer of ownership or entitlement to a security or dividend payment, often used in situations where the actual delivery of the security or payment is delayed or pending.

The date on which a payment, obligation, or task is required to be completed or fulfilled, often specified in a contract, agreement, or invoice.

The process of conducting a thorough investigation, analysis, or examination of a company, investment opportunity, or financial transaction to assess its suitability, risks, compliance, and potential benefits.

Due diligence meeting

A meeting or discussion held as part of the due diligence process, typically involving representatives from the acquiring company and the target company to exchange information, clarify details, and address concerns or questions.

Due-on-sale clause

A provision in a mortgage or loan agreement that allows the lender to demand full repayment of the outstanding balance if the borrower sells or transfers the property or collateral used to secure the loan.

To sell a security, asset, or investment in a large quantity or at a rapid pace, often resulting in a decline in the market price or value of the asset.

The practice of selling goods or products in a foreign market at a price below their production cost or fair market value, often with the intention of driving competitors out of the market or gaining a competitive advantage.

Duplicate Proxy

A proxy form or authorization that has been submitted by a shareholder to vote on behalf of their shares more than once, often resulting in only the most recent proxy being valid and counted.

Duplicative portfolio

A portfolio that contains multiple securities or assets with similar characteristics, such as similar risk profiles, sectors, or investment strategies, resulting in reduced diversification and increased exposure to specific risks.

Dupont system of financial control

A financial analysis and performance measurement framework that assesses a company's return on equity (ROE) by examining its profitability, asset efficiency, and financial leverage, often used to identify areas for improvement and measure financial performance.

The change or deviation in the duration of a bond or fixed-income security due to changes in interest rates, market conditions, or the composition of the bond portfolio, often affecting the bond's price sensitivity to interest rate changes.

Duration matching strategy

An investment strategy that aims to match the duration of a bond or fixed-income portfolio with the investor's desired investment horizon or the timing of anticipated cash flows, reducing the portfolio's sensitivity to interest rate changes.

Dynamic asset allocation

An investment strategy that involves actively adjusting the allocation of assets in a portfolio based on changing market conditions, economic outlook, or investment opportunities, often aiming to optimize risk-adjusted returns and adapt to market trends.

Early withdrawal

The withdrawal of funds from a financial account or investment before the specified maturity or withdrawal date.

Early withdrawal penalty

A fee or penalty imposed by a financial institution or investment vehicle for withdrawing funds before the agreed-upon maturity or withdrawal date.

A contractual provision in a business acquisition agreement that allows for additional future payments to the seller based on the performance of the acquired business over a specified period.

An asset that generates income or earnings, such as interest income from loans, dividends from investments, or rental income from real estate.

The ability of a company or individual to generate profits or earnings from their operations or investments.

The financial profits or income generated by a company from its operations, investments, or other sources.

Earnings per share (EPS)

A financial metric that represents the portion of a company's profit allocated to each outstanding share of common stock.

Earnings response coefficient

A measure used in financial analysis to assess the relationship between a company's earnings announcement and subsequent changes in its stock price.

Earnings retention ratio

A financial ratio that measures the proportion of a company's earnings retained and reinvested into the business rather than distributed as dividends.

Earnings surprises

Unexpected or surprising differences between a company's reported earnings and the earnings expected by analysts or the market.

A financial ratio that measures a company's earnings per share relative to its stock price, often used to evaluate investment opportunities.

Earnings-price ratio

A financial ratio that compares a company's earnings per share to its stock price, often used to assess the valuation of a stock.

Economic bubble

A rapid and unsustainable increase in the price of an asset or a market, often driven by speculation and investor optimism.

Efficient diversification

The process of constructing an investment portfolio that maximizes returns for a given level of risk by combining assets with low or negative correlations.

Efficient frontier

A graph or representation that shows the set of optimal portfolios that offer the highest expected return for a given level of risk or the lowest risk for a given expected return.

Efficient market

A market where all relevant information is fully and immediately reflected in the prices of securities, making it difficult for investors to consistently achieve abnormal returns.

Efficient portfolio

A portfolio that offers the highest expected return for a given level of risk or the lowest risk for a given expected return, based on the principles of diversification and asset allocation.

A set of portfolios that offer the same level of expected return but different levels of risk, forming a curve or line on an efficient frontier graph.

Efficient surface

A three-dimensional representation of the risk-return tradeoff for a set of portfolios, showing the relationship between expected return, risk, and asset allocation.

Electronic funds transfer (EFT)

The electronic transfer of funds from one bank account to another, often used for various financial transactions, such as payments, payroll, and online banking.

Electronic Funds Transfer Systems

Systems and networks that enable electronic funds transfers, allowing individuals, businesses, and financial institutions to send and receive funds electronically.

Elliott Wave Theory

A technical analysis approach that suggests that financial markets move in predictable wave patterns, consisting of upward and downward price swings, based on investor psychology and crowd behavior.

Emerging markets

Countries or economies that are in the process of rapid growth and development, often characterized by expanding industrialization, increasing foreign investment, and improving living standards.

Employee stock ownership plan (ESOP)

A company-sponsored retirement plan that allows employees to become partial owners of the company by acquiring shares of its stock.

Equity carve out

The process of separating a subsidiary or division of a company and offering shares of that subsidiary's stock to the public while the parent company retains majority ownership.

The market where stocks or shares of ownership in companies are bought and sold, enabling investors to participate in the ownership and potential profits of businesses.

Financial derivatives that give the holder the right, but not the obligation, to buy or sell shares of stock at a predetermined price within a specified period.

A financial contract between two parties to exchange future cash flows based on the returns of an underlying equity instrument, such as a stock or stock index.

A state of balance or stability in a market or economic system, where the supply of goods or services matches the demand and there is no inherent tendency for change.

Equilibrium price

The price at which the quantity of goods or services supplied matches the quantity demanded, resulting in a state of market equilibrium.

Equilibrium rate of interest

The interest rate at which the supply of savings or funds matches the demand for borrowing, resulting in an equilibrium in the financial markets.

Equity financing

Raising capital or funds for a company by selling shares of ownership (equity) in the company to investors, often through the issuance of stocks or other equity securities.

A benchmark or measure that tracks the performance of a specific group or basket of stocks, representing a particular sector, industry, market, or investment strategy.

The risk of financial loss or negative impact arising from fluctuations in the value of investments in stocks or equity securities due to market volatility or other factors.

Equity securities

Financial instruments or investments that represent ownership in a company, such as common stocks or shares, which entitle the holder to a share of the company's profits and voting rights.

Equity valuation

The process of determining the fair value or worth of a company's equity securities, often based on financial analysis, market trends, and other relevant factors.

A derivative security that gives the holder the right, but not the obligation, to buy shares of a company's stock at a specified price within a certain period.

Event anomalies

Unusual or unexpected events or occurrences in financial markets that result in abnormal price movements or trading patterns, often deviating from the normal market behavior.

The risk of financial loss or negative impact arising from unforeseen or significant events, such as natural disasters, political events, or major economic developments.

A research method used in finance and economics to analyze the impact of specific events, such as earnings announcements or mergers, on stock prices or other financial variables.

Exchange controls

Government-imposed restrictions or regulations on the buying, selling, or movement of foreign currencies or capital across national borders.

Exchange distribution

The distribution of shares or securities to shareholders of a company resulting from a corporate action, such as a spin-off, stock split, or dividend payment.

Exchange members

Individuals or entities who hold membership rights or privileges to trade on a specific exchange or market, typically authorized by the exchange's regulatory body.

Exchange of assets

The process of swapping one asset for another between two parties, typically done to achieve certain financial or strategic objectives.

A transaction in which a company offers its shareholders the opportunity to exchange their existing securities or shares for a different class of securities or shares.

The rate at which one currency can be exchanged for another currency, determining the value of one currency relative to another.

The risk that the value of an investment or transaction will be affected by changes in exchange rates.

Exchange Traded Notes (ETN)

Debt instruments issued by financial institutions that track the performance of a specific index or benchmark. ETNs trade on exchanges, providing investors with exposure to various asset classes.

Exchange traded product (ETP)

A broad term that refers to investment products that are traded on a securities exchange. This includes exchange-traded funds (ETFs), exchange-traded notes (ETNs), and other similar products.

Exchangeability

The ease and ability with which a financial instrument or asset can be exchanged or converted into cash or other assets without significant transaction costs or price impact.

A type of financial option contract with complex or non-standard features, usually tailored to specific investment objectives or market conditions.

Expectations hypothesis theories

Theories that attempt to explain the relationship between the current price of a financial asset and the expected future prices of that asset based on market expectations and investor behavior.

Expectations theory of forward exchange rates

A theory that suggests that the forward exchange rate for a currency is determined by the market's expectations of the future spot exchange rate.

Expected dividend yield

The anticipated dividend income, expressed as a percentage of the current stock price, that an investor expects to receive from holding a particular stock.

Expected future cash flows

The estimated cash inflows and outflows that are expected to be generated by an investment or project in the future.

Expected future return

The anticipated return or profit that an investor expects to earn from an investment in the future, based on their analysis and projections.

Expected return

The anticipated return or profit that an investor expects to earn from an investment, taking into account the probabilities of different possible outcomes.

Expected return-beta relationship

The relationship between the expected return of an investment and its beta, a measure of its sensitivity to market movements.

The date on which an options contract or futures contract expires and becomes void, after which the rights and obligations associated with the contract cease to exist.

Expiration cycle

A predetermined cycle or pattern followed by options and futures contracts in terms of their expiration months, typically categorized as monthly, quarterly, or other specified intervals.

Expiration time

The specific time of day at which an options contract or futures contract expires, often expressed in hours and minutes.

Expost average rate of return

The average rate of return earned by an investment over a specific period of time, calculated using actual historical data.

Exposure netting

A risk management technique that involves offsetting or reducing the net exposure to a particular risk or group of risks by taking opposite positions or using hedging strategies.

Extendable bond

A type of bond that gives the bondholder the option to extend the maturity date of the bond beyond its original maturity date.

The act of extending the maturity date or payment terms of a financial instrument, loan, or contract beyond its original terms.

The revised date at which the maturity date or payment terms of a financial instrument, loan, or contract are extended.

A financial derivative contract that allows the parties involved to exchange the maturity dates or payment terms of two different financial instruments or contracts.

External efficiency

The efficiency or effectiveness of a market in reflecting all relevant information and incorporating it into the prices of traded assets.

External market

The market or exchange where financial instruments, such as stocks, bonds, or commodities, are bought and sold by investors or traders.

A dividend payment made by a company that is in addition to its regular or normal dividend distributions.

Extraordinary call

The redemption or call of a bond or security by the issuer under specific circumstances or events outlined in the bond or security's terms and conditions.

Extraordinary item

An unusual or non-recurring event or transaction that significantly impacts a company's financial statements and is not considered part of its regular business operations.

The nominal or stated value of a financial instrument, such as a bond, note, or stock, as indicated on the instrument itself.

A financial institution or company that purchases accounts receivable or invoices from businesses at a discount, providing immediate cash flow to the business.

Factor analysis

A statistical technique used to identify underlying factors or dimensions that explain the correlation patterns among a set of variables.

A financial model that seeks to explain and predict the returns of an investment portfolio or asset class based on a set of systematic factors.

Factor portfolio

A portfolio constructed to capture the risk and return characteristics associated with a specific factor or set of factors.

The portion of an investment's return that can be attributed to the exposure or sensitivity to a particular factor or set of factors.

The process of selling accounts receivable or invoices to a third-party factor at a discount in exchange for immediate cash.

A situation in which all participants in a market or game have equal and fair opportunities to succeed or profit.

A price that is considered reasonable, just, or equitable based on prevailing market conditions and factors.

The estimated or calculated value of an asset, liability, or investment based on objective measurement criteria and assumptions.

Bonds or securities that were originally issued with investment-grade ratings but have subsequently been downgraded to below investment-grade or junk status.

The potential risk or negative impact on other securities, markets, or investments resulting from a specific event, market movement, or economic condition.

Fama and French Three Factor Model

A financial model developed by Eugene Fama and Kenneth French that seeks to explain the returns of a portfolio based on three factors: market risk, size, and value.

Federal deficit/ surplus

The difference between the government's total expenditures and its total revenues in a given fiscal year, resulting in either a deficit or surplus.

Excess reserves held by commercial banks at the Federal Reserve that can be loaned to other banks to meet short-term funding needs.

Federal funds market

A market where banks and financial institutions lend and borrow funds held in their accounts at the Federal Reserve to meet short-term liquidity needs.

Federal funds rate

The interest rate at which depository institutions (banks) lend or borrow funds held in their accounts at the Federal Reserve to other banks overnight.

Feedback Systems

Systems or processes that incorporate feedback loops, where the output or results of a system are used to make adjustments or modifications to the system itself.

A credit score calculated using the FICO scoring model, which is widely used by lenders to assess an individual's creditworthiness and likelihood of repaying debts.

Financial adviser

A professional who provides advice and guidance on financial matters, such as investments, retirement planning, insurance, and estate planning.

Financial analysis

The process of evaluating and interpreting financial data and information to assess the financial performance, stability, and prospects of a company or investment.

Financial analysts

Professionals who analyze financial data, market trends, and economic factors to provide insights and recommendations for investment decisions.

Financial assets

Tangible or intangible assets that have financial value and can be traded or invested in, such as cash, stocks, bonds, derivatives, and bank deposits.

Financial distress

A situation in which a company or individual faces significant financial difficulties or the inability to meet financial obligations.

Financial engineering

The application of mathematical and quantitative methods to design and create financial products, structures, or strategies to achieve specific financial objectives or solve financial problems.

Financial institution

A company, organization, or entity that provides financial services, such as banking, insurance, investment management, or lending, to individuals, businesses, or governments.

Financial leverage

The use of borrowed funds or debt to finance investments or operations, with the aim of magnifying returns but also increasing the risk of losses.

Financial market

A marketplace where buyers and sellers trade financial instruments, such as stocks, bonds, currencies, commodities, and derivatives.

Financial model

A quantitative representation or framework that uses mathematical and statistical techniques to simulate and analyze the financial performance or behavior of an asset, investment, or business.

Financial planning

The process of setting and achieving financial goals, creating a budget, managing investments, and making financial decisions based on individual or business circumstances.

Financial position

The overall financial health or status of a company, individual, or organization, typically determined by assessing assets, liabilities, and net worth.

Financial pyramid

A fraudulent investment scheme in which new investors' funds are used to pay returns or benefits to earlier investors, creating the illusion of profitable investments.

Financial ratio

A quantitative measure or comparison of financial variables or indicators that provides insights into the financial performance, solvency, liquidity, or efficiency of a company or investment.

The potential for financial loss or negative impact resulting from uncertainties or fluctuations in market conditions, interest rates, creditworthiness, or other factors.

Financial statement

A formal document or report that presents the financial position, performance, and cash flows of a company, typically including the balance sheet, income statement, and cash flow statement.

Financial statement analysis

The process of examining and interpreting financial statements to assess the financial health, performance, and prospects of a company or investment.

Financial structure

The composition and mix of different sources of funding or capital used by a company or organization to finance its operations and investments.

Financial supermarket

A financial institution or company that offers a wide range of financial products and services, often across multiple categories such as banking, insurance, investments, and loans.

Financial year-end

The last day of a company's financial year, typically the date on which financial statements are prepared and finalized for external reporting and auditing purposes.

An economic theory that suggests there is a relationship between nominal interest rates, inflation rates, and real interest rates.

Five Cs of credit

A framework used by lenders to evaluate the creditworthiness of borrowers, including factors such as character, capacity, capital, collateral, and conditions.

Fixed annuities

An insurance product that provides regular payments or income to the annuitant over a specified period or for the annuitant's lifetime, with a fixed interest rate or return.

A long-term tangible asset with a useful life of more than one year that is used in the production or operation of a business, such as property, plant, and equipment.

A cost that remains constant regardless of the level of production or sales, such as rent, salaries, or insurance premiums.

Fixed income market

A financial market where fixed income securities, such as bonds, notes, and debentures, are bought and sold.

A set or predetermined premium amount paid for an insurance policy or contract, typically on a regular basis.

A price that is set or agreed upon in advance and does not change, regardless of market conditions or fluctuations.

Fixed-rate loan

A loan or debt instrument with an interest rate that remains fixed or unchanged for the entire term of the loan.

The quoted or agreed-upon price of a security or financial instrument, excluding any accrued interest, dividends, or other adjustments.

A tax system in which all individuals or entities are taxed at the same flat rate, regardless of income level or tax bracket.

A short-term investment strategy that involves buying an asset, such as real estate or securities, with the intention of quickly selling it at a higher price to generate a profit.

The total number of shares of a company's stock that are available for trading in the open market, excluding restricted shares held by insiders, institutional investors, or other locked-in shares.

A type of bond or debt security with a variable interest rate that is periodically adjusted based on a benchmark rate, such as LIBOR or a specific index.

Debt or financial obligations that do not have a fixed interest rate or maturity date, often consisting of short-term loans, lines of credit, or variable-rate bonds.

Floating exchange rate

An exchange rate regime in which the value of a country's currency is determined by the foreign exchange market based on supply and demand conditions, without significant government intervention or fixed parity.

Floating exchange rate system

A monetary system where the exchange rate between currencies is allowed to fluctuate freely based on market forces, without fixed exchange rate arrangements or significant government intervention.

A lower limit or threshold, often used in the context of financial transactions, options contracts, or derivative instruments to establish a minimum price or protection against downside risk.

A member of a securities exchange who executes orders on behalf of other market participants on the trading floor, typically representing brokerage firms or institutional clients.

An exchange employee responsible for maintaining orderly trading, enforcing exchange rules, and resolving disputes or issues on the trading floor.

An individual who trades securities or commodities on the trading floor of an exchange, typically using their own capital to take positions and profit from short-term price fluctuations.

The movement of money or funds between various sectors, institutions, or entities within an economy, reflecting the allocation, transfer, and utilization of financial resources.

A list of securities or investments that an investment firm or analyst considers as the focus of its research, analysis, or investment recommendations, often based on specific criteria or objectives.

Foreign banking market

The market or industry segment that deals with banking services provided by foreign banks or financial institutions operating in a country or jurisdiction other than their home country.

A bond issued by a foreign entity or government in a currency other than the domestic currency of the country where it is issued, often to access international capital markets or attract foreign investors.

Foreign bond market

A financial market where foreign bonds, issued by foreign entities or governments, are bought and sold by investors, typically denominated in a currency other than the local currency.

Foreign corporation

A corporation or business entity that is incorporated or registered in a country or jurisdiction other than the one in which it conducts its primary operations or business activities.

Foreign currency forward contract

A financial derivative contract that obligates the parties involved to exchange a specified amount of two different currencies at a predetermined exchange rate on a future date.

Foreign currency futures contract

A standardized, exchange-traded contract that obligates the parties involved to buy or sell a specific amount of a foreign currency at a predetermined price on a future date.

Foreign currency option

A financial derivative that gives the holder the right, but not the obligation, to buy or sell a specified amount of a foreign currency at a predetermined exchange rate within a specified period.

Foreign currency translation

The process of converting the financial statements or financial figures of a foreign subsidiary or branch into the reporting currency of the parent company or consolidated entity.

Foreign direct investment (FDI)

The investment by a company or individual from one country into business interests or assets located in another country, with the aim of establishing a lasting interest or control.

Foreign exchange

The decentralized market or system where currencies are traded, converted, or exchanged against one another, facilitating international trade, investment, and currency conversion.

Foreign exchange broker

A financial intermediary or firm that facilitates currency trading and foreign exchange transactions between buyers and sellers, often charging a commission or spread for their services.

Foreign exchange controls

Government-imposed restrictions, regulations, or policies that govern or limit the buying, selling, or exchange of foreign currencies or the flow of capital across national borders.

Foreign exchange market

The global decentralized market where currencies are bought and sold by participants, including banks, financial institutions, corporations, governments, speculators, and individual traders.

Foreign exchange rate

The rate at which one currency can be exchanged or converted into another currency, representing the value or price of one currency relative to another in the foreign exchange market.

Foreign exchange reserves

The foreign currencies held by a central bank or monetary authority as part of its financial assets, used to support the country's exchange rate, monetary policy, or international obligations.

Foreign exchange risk

The potential for financial loss or adverse effects on business operations arising from fluctuations in foreign exchange rates, affecting the value of foreign currency-denominated assets, liabilities, or cash flows.

Foreign exchange swap

A financial derivative instrument that involves the simultaneous exchange of two different currencies at an agreed-upon exchange rate for a specific period, often used to manage foreign exchange risk or liquidity needs.

Foreign investment risk matrix (FIRM)

A framework or tool used to assess and rank the political, economic, and financial risks associated with foreign investments or business operations in different countries or regions.

A market or economy outside the domestic market or country of a company, often referring to international markets where goods, services, or investments are bought, sold, or traded.

Foreign market beta

A measure of the sensitivity or volatility of a stock or portfolio's returns to movements in a foreign market index, indicating the level of systematic risk associated with exposure to that particular market.

Foreign public borrower

A foreign entity, such as a government or public agency, that issues debt securities or borrows money in international financial markets by selling bonds or other debt instruments to foreign investors.

A financing technique in international trade where a forfaiting company purchases a seller's accounts receivable or trade receivables at a discount, providing immediate cash flow to the seller while assuming the collection risk.

A trade finance technique that involves the purchase of medium- to long-term receivables or promissory notes from an exporter by a forfeiting company, providing the exporter with immediate cash while assuming the collection and credit risks.

A foreign exchange transaction or contract that allows a party to lock in an exchange rate for a future date to mitigate the risk of adverse currency movements in international trade or transactions.

Forward delivery

The contractual agreement in a forward contract or transaction to deliver the underlying asset, currency, or commodity at a specified future date or within a predetermined time window.

Forward differential

The difference or spread between the spot price and the forward price of a currency or commodity, representing the market's expectation of future changes in the price or value of the asset.

Forward discount

A situation where the forward exchange rate of a currency is lower than the spot exchange rate, indicating market expectations of a depreciation or decline in the currency's value in the future.

Forward exchange

The exchange or conversion of one currency into another at a future date or within a specified time period, typically agreed upon through a forward contract or other derivative instrument.

Forward exchange rate

The exchange rate agreed upon today between two parties for the future delivery or exchange of currencies at a specified future date or within a predetermined time window.

Forward interest rate

An interest rate determined in a forward rate agreement (FRA) or other derivative contract that establishes the interest rate to be paid or received on a future loan or investment.

A financial market where participants can enter into forward contracts or agreements to buy or sell currencies, commodities, or other assets at a future date or within a specified time window.

The agreed-upon interest rate in a forward rate agreement (FRA) or other derivative instrument that will be applicable to a future loan or investment, based on the prevailing market conditions at that time.

Forward start option

A type of financial option that grants the holder the right, but not the obligation, to enter into a forward contract or other derivative transaction at a specified future date or within a predetermined time window.

Forward yield curve

A graphical representation or curve that shows the relationship between the yields or interest rates of bonds or other fixed-income securities and their respective maturities, based on the prevailing market conditions.

Fractional share

A share or ownership interest in a company that represents less than one full share, often resulting from stock splits, dividend reinvestment plans, or fractional share investing services.

Free cash flows

The cash generated by a company's operations that is available for distribution to investors, debt repayment, capital expenditures, or other uses after accounting for operating expenses, taxes, and working capital requirements.

The portion of a company's shares that is available for trading in the open market, excluding shares held by insiders, controlling shareholders, or strategic investors, often used to determine market capitalization or index weighting.

Funds or reserves held by a financial institution, such as a bank, that are not required to be held as reserves against deposits or regulatory requirements, available for lending, investments, or other purposes.

Shares of a company that are distributed to existing shareholders as a bonus or dividend, often in addition to or instead of a cash dividend, providing additional ownership or value to the shareholders.

A sales charge or fee imposed on an investor when purchasing shares or units of a mutual fund or investment product, typically deducted upfront from the amount invested.

Full disclosure

The principle or practice of providing all relevant and material information, data, or facts to investors, shareholders, or the public, ensuring transparency and completeness in financial reporting and communications.

The complete or total price of a product, service, or investment, including all associated costs, fees, taxes, and charges, often used to distinguish it from discounted or promotional prices.

Full trading authorization

A level of authorization or permission granted to an individual or entity to execute trades, transactions, or investment activities on behalf of another party, often requiring a power of attorney or legal agreement.

Fully diluted earnings per share

A financial measure that represents the earnings per share of a company's common stock, calculated by dividing the company's net income attributable to common shareholders by the weighted-average number of fully diluted shares outstanding.

A term used to describe a situation where an investment portfolio has allocated all of its available funds to investments, leaving no cash or idle capital available for further investments or new opportunities.

Fully modified pass-throughs

Mortgage-backed securities that have undergone certain modifications, such as changing the maturities or interest rates of the underlying mortgages, often done to create different tranches or classes of securities with varying risk and return characteristics.

A term used to describe a security, asset, or market that is perceived to be trading at its fair value or intrinsic worth, indicating that further price appreciation or undervaluation is unlikely in the near term.

An individual or company responsible for managing and overseeing the investment activities of a mutual fund, hedge fund, pension fund, or other investment vehicle, making decisions on asset allocation, security selection, and portfolio strategy.

An investment strategy or vehicle that pools together capital from multiple investors to invest in a diversified portfolio of other investment funds, rather than investing directly in individual securities or assets.

Fundamental beta

A measure of the sensitivity of a stock or portfolio's returns to changes in fundamental factors, such as earnings, sales, or other financial metrics, providing an indication of the stock's or portfolio's exposure to systematic risk.

Fundamental forecasting

A method of predicting or estimating future financial performance, market trends, or economic conditions by analyzing and interpreting fundamental factors, such as earnings, sales, industry dynamics, or macroeconomic indicators.

Debt or borrowings that require regular interest payments and repayment of principal over a specified period, typically backed by specific assets or collateral and senior to other forms of debt in priority of repayment.

A ratio or measure used to assess the financial health or sustainability of a pension fund or retirement plan by comparing the fund's assets to its projected liabilities or obligations to pay future benefits to retirees.

The risk or potential for an institution or entity to encounter difficulties or challenges in obtaining or accessing funding or capital to support its operations, activities, investments, or financial obligations.

Future investment opportunities

Potential investment opportunities or projects that are expected to arise in the future, offering the potential for positive returns, growth, or value creation for investors or organizations with available capital.

Futures commission merchant (FCM)

A financial intermediary or brokerage firm that is registered with the Commodity Futures Trading Commission (CFTC) and is authorized to facilitate and execute futures and options contracts on behalf of clients.

A derivative instrument that gives the holder the right, but not the obligation, to buy or sell a futures contract at a specified price (strike price) on or before a predetermined future date.

The price at which a futures contract for a commodity, currency, or financial instrument can be bought or sold on a futures exchange, determined by the interaction of supply and demand in the market.

A risk management strategy that involves taking positions to offset or hedge against potential losses arising from a price gap between the closing price of a security or asset and the opening price of the next trading session.

A significant price difference or jump between the closing price of a security or asset and the opening price of the next trading session, usually caused by news events, market gaps, or overnight developments.

A slang term used to describe a brokerage firm or investment bank that acts as a market maker or intermediary for securities, facilitating trades and providing liquidity to the market.

Global Depositary Receipt (GDR)

It is a negotiable financial instrument representing ownership in a company's shares that are held by a foreign depositary bank, allowing investors to trade the GDRs on international stock exchanges.

A financial ratio that measures the level of a company's debt relative to its equity capital or shareholders' funds, indicating the degree of financial leverage or risk assumed by the company.

Growing Equity Mortgage (GEM)

A type of mortgage loan that starts with lower initial payments and gradually increases over time, typically linked to the borrower's expected income growth, allowing for easier affordability in the early years.

General account

In insurance and annuity contracts, the general account refers to the insurer's portfolio of investments and assets that support the company's obligations and provide the potential for investment returns.

General cash offer

A public offering or tender offer made by a company to purchase the outstanding shares of another company directly from its shareholders, typically at a specified price and within a certain timeframe.

A directive or instruction issued by a regulatory authority or governing body, outlining specific rules, requirements, or procedures that market participants must adhere to in the operation of financial markets.

Global Equity Offering (GEO)

It refers to the process of issuing or selling shares of a company's stock on multiple international stock exchanges simultaneously.

A repurchase agreement or repo transaction in which the seller agrees to repurchase the securities from the buyer at a future date, often used to finance or hedge long-term assets or investments.

Global Financial Markets Association (GFMA)

It is an international association representing the interests of global financial market participants, including banks, securities firms, and asset management companies.

Global Industry Classification Standard (GICS)

It is a system for classifying and categorizing companies into industry sectors and groups, widely used in financial analysis, indexing, and investment research.

Bond Guaranty Insurance Corporation (BGIC)

It is a company that provides insurance and guarantees on various types of bonds, including municipal bonds and other fixed-income securities.

A term used to describe a stock or company that is highly favored or popular among investors due to its strong performance, growth prospects, or brand image, often characterized by a high valuation or premium.

Bonds issued in international markets by governments, supranational organizations, or corporations, often denominated in a currency other than the issuer's domestic currency, attracting investors from different countries.

Global Financial Markets Association

An international association representing the interests of global financial market participants, including banks, securities firms, and asset management companies.

A type of mutual fund or investment fund that invests in securities or assets from multiple countries or regions around the world, seeking to achieve broad diversification and exposure to global markets.

Going private buyout

The process by which a publicly traded company is acquired or taken private by a private equity firm or a group of investors, typically involving the purchase of all outstanding shares of the company's stock.

The process by which a private company offers its shares to the public for the first time, usually through an initial public offering (IPO), allowing the company's shares to be traded on a public stock exchange.

Going public through the backdoor

A method by which a private company becomes publicly traded without undergoing a traditional IPO process, often achieved through a merger or acquisition with an already public company.

A trading strategy in which an investor sells borrowed securities with the expectation that their price will decline, allowing the investor to repurchase the securities at a lower price and profit from the difference.

Going-concern value

The value of a business or company assuming it will continue to operate and generate cash flows in the foreseeable future, typically taking into account factors such as the company's assets, liabilities, profitability, and growth prospects.

A bond or debt security issued by a government or corporation and denominated in gold, where the principal and interest payments are made in gold.

Gold Carry Trade

A financial strategy in which an investor borrows gold at a low interest rate and sells it, using the proceeds to invest in other assets or instruments with potentially higher returns, aiming to profit from the interest rate differential.

Gold exchange standard

A monetary system in which the value of a country's currency is directly linked to a specified amount of gold, and the currency can be exchanged for gold at a fixed exchange rate.

The process of determining the daily benchmark price for gold through a conference call or electronic system involving representatives from major banks, used as a reference for pricing gold-related contracts and transactions.

Gold mutual fund

A mutual fund or investment fund that focuses on investing in gold-related securities, such as gold mining stocks, gold ETFs, or gold bullion, providing investors with exposure to the price movements of gold.

A monetary system in which the value of a country's currency is directly linked to a specified amount of gold, and the currency can be freely converted into gold at a fixed exchange rate.

A term used to describe an individual or investor who has a strong preference for gold as a store of value or investment, often displaying a distrust of fiat currencies and a belief in the stability and intrinsic value of gold.

A technical analysis pattern or signal that occurs when a short-term moving average crosses above a long-term moving average, indicating a potential bullish trend reversal or upward price movement in a security or market.

Goldilocks economy

A term used to describe an economy that is experiencing moderate economic growth, low inflation, and low unemployment, often considered an ideal or balanced economic environment.

Good 'til cancelled order (GTC)

A type of order in the financial markets that remains in effect until it is either executed or cancelled by the investor, typically used to specify a desired price or condition for buying or selling a security.

The process of delivering securities or assets in accordance with the specified terms and requirements of a contract or agreement, ensuring that the delivered securities meet the quality, quantity, and documentation standards set by the receiving party.

Good delivery and settlement procedures

The established procedures and guidelines for the transfer and settlement of securities or assets in financial markets, including the requirements for proper documentation, physical or electronic transfer, and the timing of settlement.

Good faith deposit

A deposit of money or collateral made by a buyer or bidder as a demonstration of their sincere intent and commitment to proceed with a transaction, often required in real estate purchases, auctions, or other high-value transactions.

A term used to refer to currency or money that is widely accepted and recognized as a medium of exchange, unit of account, and store of value, typically issued and backed by a stable government or central authority.

Good through/until date order

A type of order in the financial markets that remains in effect until a specified date, after which it is automatically cancelled if it has not been executed, allowing investors to specify a desired time period for buying or selling a security.

Good-this-Month order (GTM)

A type of order in the financial markets that remains in effect for the current month, typically used to specify a desired price or condition for buying or selling a security within the ongoing month.

Government obligations

Debt securities or obligations issued by a national or local government entity to borrow money from investors, usually in the form of bonds or Treasury bills, with the promise to repay the principal and pay periodic interest to the bondholders.

Government securities

Debt instruments or securities issued by a government or government-sponsored entity, such as Treasury bonds, Treasury notes, or Treasury bills, often considered low-risk investments due to the creditworthiness and stability of the issuing government.

Growing Perpetuity Method (GPM)

It is a method used in financial valuation to estimate the present value of an investment or cash flow stream that is expected to grow indefinitely at a constant rate.

A specified period of time after a payment or deadline is due, during which the late payment or non-compliance is excused or allowed without penalty.

Graduated call writing

A strategy in options trading whereby an investor or trader sells call options on a security or asset they already own, with the strike price of the call options increasing incrementally over time.

Graham and Dodd method of investing

An investment approach or philosophy developed by Benjamin Graham and David Dodd, emphasizing the analysis of fundamental factors, value investing, and the concept of margin of safety in stock selection and portfolio management.

The date on which an employer or company awards stock options or other equity-based compensation to an employee or grantee, marking the beginning of the vesting period or other relevant terms and conditions.

Graveyard market

A slang term used to describe a market or sector that experiences a prolonged period of declining prices, low activity, or little investor interest, often resulting in a lack of trading opportunities or profitability.

In the context of mergers and acquisitions (M&A), a gray knight refers to a potential acquirer who enters the bidding process for a target company, often as an alternative to a hostile or unwelcome acquirer (black knight) or the original friendly acquirer (white knight).

A list or designation used to identify entities or individuals that are not fully compliant with certain standards, regulations, or requirements, often indicating a degree of non-compliance or risk but not imposing strict penalties or sanctions.

A market or trading activity that occurs outside of official or authorized channels, often involving the buying or selling of goods, securities, or currencies through unofficial or unregulated means.

Greater fool theory

An investment theory or belief that it is possible to profit by buying an overvalued asset and later selling it to a 'greater fool' at an even higher price, regardless of the asset's intrinsic value or fundamental characteristics.

A tactic used in corporate takeovers or hostile situations where an acquiring party buys a significant stake in a target company and threatens to launch a hostile takeover, forcing the target company to repurchase the shares at a premium to avoid the takeover.

Greenshoe option

An option granted by the underwriters of an initial public offering (IPO) that allows them to purchase additional shares from the issuer at the offering price, usually exercised if there is high demand for the shares shortly after the IPO.

Gross domestic product (GDP)

The monetary value of all final goods and services produced within a country's borders in a specific time period, usually a year. It is a widely used measure of economic activity and is used to gauge the size and growth rate of an economy.

Gross National Product (GNP)

The total value of all final goods and services produced by the residents of a country, both domestically and abroad, in a specific time period, usually a year. GNP takes into account the income generated by a country's residents regardless of their location.

A strategy in portfolio management where investments are shifted or rotated among different sectors or industries based on the analysis of market conditions, sector performance, or other factors.

Group rotation manager

A portfolio manager or investment professional responsible for implementing and managing a group rotation strategy, which involves shifting investments among different sectors or industries based on market conditions or other criteria.

Group Universal Life Policy (GULP)

A type of life insurance policy that provides both a death benefit and a savings or investment component. It is typically offered to employees as part of a group benefits package.

Growth and income fund

A type of mutual fund or investment portfolio that seeks to provide both capital appreciation and income by investing in a combination of growth-oriented securities and income-generating assets.

A portfolio manager or investment professional who specializes in selecting and managing investments that have the potential for significant capital appreciation or growth.

Growth opportunity

A favorable or promising business or investment opportunity that has the potential for significant growth in earnings, revenue, or market share.

A stock of a company that is expected to grow at an above-average rate compared to other stocks in the market. Growth stocks often reinvest earnings into the business to fuel further growth rather than paying dividends to shareholders.

Good This Month (GTM)

It is a type of order in securities trading that remains active until the end of the current month.