Glossary

Simultaneous purchase and sale of an asset in different markets to profit from the price difference.

The lowest price a seller is willing to accept for a security.

An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance, and investment horizon.

A market condition characterized by a sustained period of falling prices, typically 20% or more from recent highs.

The highest price a buyer is willing to pay for a security.

A stock of a large, well-established, and financially sound company with a long history of reliable performance.

A technical analysis tool consisting of a set of lines plotted two standard deviations away from a simple moving average of a security's price.

A debt security where the issuer owes the holders a debt and is obliged to pay interest (the coupon) and/or to repay the principal at a later date.

A market condition characterized by a sustained period of rising prices, typically 20% or more from recent lows.

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

An order to buy a security when its price rises to a specified level.

A contract that gives the buyer the right, but not the obligation, to purchase an asset at a specified price on or before a certain date.

The profit realized from the sale of a capital asset, such as stocks or bonds, that has increased in value.

The loss incurred when a capital asset is sold for less than its purchase price.

An institution that manages a state's currency, money supply, and interest rates, and oversees the commercial banking system.

A mechanism designed to halt trading temporarily in a security or the entire market when prices fall by a certain percentage, preventing excessive volatility.

A basic good used in commerce that is interchangeable with other goods of the same type.

The process of determining the economic worth of a business or asset.

A statistical measure that describes the extent to which two variables change together.

The annual interest rate paid on a bond, expressed as a percentage of the bond's face value.

A strategy where an investor writes (sells) call options on a stock they already own.

The exchange rate between two currencies when neither is the U.S. dollar.

A digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.

A financial ratio that measures a company's ability to pay short-term obligations with its short-term assets.

A stock whose price tends to move with the business cycle.

The practice of buying and selling financial instruments within the same trading day.

The process of distributing control and decision-making from a central authority to a distributed network.

A financial contract whose value is derived from an underlying asset, index, or security.

A risk management strategy that mixes a wide variety of investments within a portfolio.

A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

An investment strategy in which an investor invests a fixed amount of money at regular intervals, regardless of the security's price.

A stock market index representing 30 large, publicly owned companies in the U.S.

A pattern of declining prices in a market or security over a period of time.

Consumer goods that have a long lifespan, such as appliances and cars.

A piece of economic data that is used to interpret current or future economic activity of a country or region.

The annual rate of interest that accounts for compounding.

A country with a developing economy that is becoming increasingly integrated into the global economy.

A type of security that tracks an index, sector, commodity, or other asset, but which can be purchased or sold on a stock exchange the same as a regular stock.

The date on or after which a buyer of a stock is not entitled to receive a previously declared dividend.

The price at which a trade order is completed.

The current market price of a security, or the price at which a transaction would occur between willing parties.

Government-issued currency that is not backed by a physical commodity, such as gold or silver.

The completion of a buy or sell order for a security.

The use of borrowed money to increase the potential return of an investment.

A formal record of a company's financial activities, including the income statement, balance sheet, and cash flow statement.

Investments that pay a fixed rate of return, such as bonds.

Predicting future price movements or economic conditions based on historical data and analysis.

The global market where currencies are traded.

A customized contract between two parties to buy or sell an asset at a specified price on a future date.

A standardized legal contract to buy or sell something at a predetermined price at a specified time in the future.

A branch of mathematics that studies strategic decision-making in situations where the outcome depends on the choices of multiple participants.

Another term for financial leverage, referring to the use of borrowed funds to increase investment returns.

A negotiable financial instrument issued by a depositary bank in one country, representing a specified number of shares of a foreign company's stock.

A monetary system where a country's currency or paper money has a value directly linked to gold.

A stock of a company that is expected to grow at a faster rate than the overall market.

A pooled investment fund that uses complex strategies and often leverage to generate high returns.

A strategy used to offset potential losses or gains that may be incurred by a companion investment.

A type of algorithmic trading characterized by high speeds, high turnover rates, and high order-to-trade ratios.

An individual or entity that owns a security or asset.

The length of time an investment is held before it is sold.

The inability to easily convert an asset into cash without a significant loss in value.

A type of mutual fund or ETF that aims to replicate the performance of a specific market index.

A general increase in prices and fall in the purchasing value of money.

A fundraising method used by cryptocurrency startups, analogous to an initial public offering (IPO).

The process by which a private company can go public by selling shares of stock to the public for the first time.

Trading stocks or other securities using material, non-public information.

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.

The perceived value of an asset based on fundamental analysis, independent of its market price.

An ETF designed to deliver the opposite return of its benchmark index.

A financial institution that provides services such as underwriting, M&A advice, and trading to corporations and governments.

A unique numerical label assigned to each device connected to a computer network that uses the Internet Protocol for communication.

A high-yield bond that pays higher interest rates than safer bonds but carries a greater risk of default.

In candlestick charting, a line representing the price movement of a security over a specific period, showing the open, high, low, and close prices.

A macroeconomic theory that advocates for active government intervention in the economy to stabilize it.

The price difference of Bitcoin observed between South Korean exchanges and the rest of the world.

A technical indicator that uses past price data to predict future price movements.

An order to buy or sell a security at a specific price or better.

The ease with which an asset can be converted into cash without affecting its market price.

A situation where interest rates are low and savings rates are high, rendering monetary policy ineffective.

A position established by buying a security with the expectation that the price will rise.

The total market value of a company's outstanding shares.

A firm or individual who quotes prices for securities they are willing to buy or sell.

An order to buy or sell a security immediately at the best available current price.

The current price at which an asset is trading in the open market.

The overall attitude of investors toward a particular security or financial market.

A strategy of buying and selling securities based on predictions of future market movements.

Actions undertaken by a central bank to manipulate the money supply and credit conditions to stimulate or restrain economic activity.

A segment of the financial market where short-term debt instruments are traded.

A calculation used to analyze data points by creating a series of averages of different subsets of the full data set.

A type of financial vehicle made up of a pooling of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets.

A relationship between two assets where their prices move in opposite directions.

The per-share market value of a mutual fund.

The total value of an individual's or entity's assets minus their liabilities.

The stated interest rate before taking inflation into account.

A key economic indicator that measures the number of paid, full-time, or part-time employees working in any non-agricultural business.

An order for fewer than 100 shares of a stock.

The lowest price at which a seller is willing to sell a security.

The total number of outstanding derivative contracts that have not been settled.

An order to buy or sell that remains active until it is filled or canceled.

A mutual fund that issues and redeems shares on a continuous basis.

The potential benefit an investor misses out on when choosing one investment over another.

A contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a certain date.

A record of all outstanding buy and sell orders for a particular security.

A decentralized market where financial instruments are traded directly between two parties without the supervision of an exchange.

A technical condition indicating that a security has had a rapid rise in price and may be due for a pullback.

A technical condition indicating that a security has had a rapid fall in price and may be due for a bounce.

A valuation ratio that compares a company's stock price to its earnings per share.

The practice of trading financial instruments using virtual money to simulate real trading conditions.

The face value of a bond or stock, typically the amount repaid at maturity for a bond.

A stock that typically trades for less than $5 per share.

A collection of financial investments such as stocks, bonds, commodities, cash, and cash equivalents.

The art and science of making decisions about investment mix and policy, matching investments to objectives, allocating assets, and balancing risk versus performance.

A relationship between two assets where their prices tend to move in the same direction.

Rare and valuable metals, such as gold, silver, and platinum.

A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock.

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

The movement of a security's price over time, often analyzed without the use of technical indicators.

The process by which the market determines the appropriate price of a security or asset.

A brokerage firm that provides a wide range of services to hedge funds and other large institutional clients.

The original amount of a loan or investment, excluding any interest or fees.

Capital investment made into companies that are not publicly traded.

The likelihood of a specific event occurring.

A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period.

A predetermined price level at which a trader intends to sell a profitable position.

The use of computer programs to execute a large number of orders simultaneously.

A formal legal document required by and filed with the SEC that provides details about an investment offering for sale to the public.

A temporary decline in the price of a security or market after a period of increases.

A contract that gives the buyer the right, but not the obligation, to sell an asset at a specified price on or before a certain date.

A monetary policy tool used by central banks to inject liquidity into the economy by purchasing assets.

A financial report filed by public companies every three months, providing an update on their financial performance.

The current bid and ask prices for a security.

A theory that stock market prices evolve according to a random walk and thus cannot be predicted.

The difference between the highest and lowest prices of a security over a specified period.

The gain or loss on an investment over a period of time, expressed as a percentage of the initial investment.

Property consisting of land and the buildings on it, along with its natural resources.

The interest rate at which the nominal rate of interest is set, minus the expected rate of inflation.

The process of buying or selling assets in a portfolio to maintain the desired asset allocation.

The date by which an investor must own a security to be entitled to receive a dividend or other distribution.

The act of an investor selling shares back to a mutual fund or ETF.

The risk that changes in laws or regulations will negatively impact an investment.

A company that owns, operates, or finances income-generating real estate.

A short-term borrowing arrangement where a dealer sells securities and agrees to repurchase them later at a higher price.

A price level at which a security has historically had difficulty rising above.

A temporary reversal of a price trend.

A measure of a company's profitability relative to its shareholders' equity.

The total amount of income generated by the sale of goods or services related to the company's primary operations.

A corporate action where a company reduces the number of its outstanding shares.

The possibility of losing money on an investment.

The process of identifying, assessing, and controlling threats to an organization's capital and earnings.

The theoretical rate of return of an investment with zero risk.

A momentum oscillator used in technical analysis that measures the speed and change of price movements.

A stock market index tracking the performance of 500 of the largest companies listed on stock exchanges in the United States.

A trading order that, upon execution, liquidates a position and immediately enters an opposite position.

A trading style that attempts to profit from small price changes by entering and exiting trades quickly.

A U.S. government agency responsible for regulating the securities industry and protecting investors.

A market where investors buy and sell securities that have already been issued.

A segment of the economy representing a group of similar companies.

A tradable financial asset, such as a stock or bond.

An order to sell a security at a specified price or higher.

An order to sell a security when its price falls to a specified level.

The date on which a trade is officially settled, meaning the buyer receives the security and the seller receives the cash.

A unit of ownership in a corporation.

An individual or institution that owns shares of stock in a company.

The sale of a security that the seller does not own, with the expectation that the price will fall so it can be bought back at a lower price.

A rapid increase in the price of a stock that occurs when there are not enough shares available to cover all short positions.

A regulatory mechanism that temporarily halts trading in a security when its price moves beyond a certain threshold.

An average of a security's closing prices over a specified number of periods.

A self-executing contract with the terms of the agreement directly written into code.

A currency that is expected to depreciate relative to other currencies.

A public commodity market where a commodity or security is traded for immediate delivery.

The difference between the bid price and the ask price of a security.

A period of high inflation, high unemployment, and slow economic growth.

A technical indicator that compares a closing price of a security to a range of its prices over a certain period.

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.

A marketplace where securities are bought and sold.

An order placed with a broker to buy or sell when the price reaches a certain level, intended to limit an investment loss or protect profit.

A strategy that involves buying both a call option and a put option on the same underlying asset with the same strike price and expiration date.

A strategy that involves buying a call option and a put option on the same underlying asset with different strike prices but the same expiration date.

A method of sampling in statistics where the population is divided into groups, and a random sample is taken from each group.

The price at which an option contract holder can buy or sell the underlying asset.

A currency that is expected to appreciate relative to other currencies.

A company experiencing financial difficulties and poor performance.

A cost that has already been incurred and cannot be recovered.

A long-term market trend that lasts for decades, often associated with major technological or economic shifts.

A price level at which a security has historically had difficulty falling below.

An investment approach that considers environmental, social, and governance (ESG) factors.

An agreement to exchange cash flows or liabilities from two different financial instruments.

A financial instrument designed to replicate the performance of another asset or portfolio.

Risk that cannot be diversified away, affecting the entire market.

An order used to automatically close a trade when it reaches a certain profit level.

A trading discipline employed to evaluate securities by analyzing statistics generated by market activity, such as past prices and volume.

The remaining time until a financial instrument matures.

The relationship between the interest rates and the time to maturity of debt securities.

An independent entity that holds assets on behalf of investors.

The smallest possible price movement for a security.

A market with narrow bid-ask spreads, indicating high liquidity.

The reduction in the value of an option contract as it approaches its expiration date.

A digital unit of value issued by a project on a blockchain.

The process of representing rights to an asset digitally on a blockchain.

An investment research method that starts with analyzing the overall economy, then the industry, and finally the individual company.

The overall gain or loss of an investment, including income and capital appreciation.

The buying or selling of a security or other asset.

The difference between a country's imports and exports.

An individual or entity that buys and sells financial instruments for profit.

A type of stop-loss order that is set at a percentage or dollar amount below the market price.

The expenses incurred when buying or selling a security, such as commissions and fees.

A short-term debt security issued by the U.S. Treasury with a maturity of one year or less.

The general direction in which a market or security's price is moving.

A trading strategy that aims to profit by identifying and following existing market trends.

A number equal to one thousand billion (1,000,000,000,000).

The expiration of stock index futures, stock index options, and stock options on the same day, typically the third Friday of March, June, September, and December.

A legal arrangement where one party holds assets on behalf of another.

A measure of how often assets within a portfolio are bought and sold over a period.

The asset upon which a derivative contract's value is based.

A security that is believed to be trading below its intrinsic value.

The percentage of the labor force that is unemployed and actively seeking employment.

An investment or company that does not use borrowed money.

The profit or loss on an investment that has not yet been sold.

A pattern of rising prices in a market or security over a period of time.

A sector of the economy that provides essential services like electricity, water, and gas.

The process of determining the current worth of an asset or company.

Financing that investors provide for startup companies and small businesses with perceived long-term growth potential.

The degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns.

The number of shares or contracts traded during a specific period.

The average rate a company expects to pay to finance its assets.

A digital tool used to store, send, and receive cryptocurrencies.

A sale of a security at a loss, followed by the purchase of a substantially identical security within 30 days before or after the sale.

A comprehensive and personalized financial service that managers investments and other financial planning aspects for affluent clients.

An individual or entity that holds a very large amount of cryptocurrency, capable of significantly influencing market prices.

A measure of the change over time in the prices of goods sold in bulk.

The income return on an investment, typically expressed as an annual percentage.

A line on a diagram that plots the interest rates of bonds having equal credit quality but differing maturity dates.

The total return anticipated on a bond if it is held until it matures.

A statistical measure indicating how many standard deviations an element is from the mean.

A bond that does not pay periodic interest but instead is sold at a discount to its face value and pays the full face value at maturity.