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Stock Market Dictionary

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10-KA financial statement that shows the results for the whole year, including the periods covered by the preceding 10-Q filings as well as the fourth ...
10-QThe 10-Q is a quarterly report filed with the SEC by a public registrant that provides an overview of the most recent quarter and year-todate ...
4-2 AnalysisThe method by which one determines whether a private offering is exempt from registration with the SEC because the issuer is involved with a nonpublic ...
504Rule 504 of Regulation D provides an exemption from the registration requirements of the federal securities laws for some companies when they offer and sell ...
52 Week HighIdentifying a stock's 52 week trading range and where it is trading currently can provide a great deal of information. If the stock is trading near ...
52 Week LowIdentifying a stock's 52 week trading range and where it is trading currently can provide a great deal of information. If the stock is trading near ...
8-KThe 8-K, or current report, is filed by a public registrant to report the occurrence of material corporate events or changes ("triggering event") that are ...
Accelerated FilerA company that has a market value of more than $75 million. This type of company must abide by shorter deadlines for the filing of ...
Accredited InvestorAs defined in Rule 501 under Regulation D, refers to the type of investor that is not required to receive detailed offering materials in a ...
Accrued InterestApplying mainly to convertible securities, interest that has accumulated between the most recent payment and the sale of a bond or other fixed-income security. ...
Acid TestA stern measure of a company's ability to pay its short term debts, in that stock is excluded from asset value. The acid-test ratio is ...
AcquisitionWhen one firm buys another firm. ...
Active AccountRefers to a brokerage account in which many transactions occur. Brokerage firms may charge a fee for an account that does not generate an adequate ...
Actively Managed FundsIn most actively managed funds, the fund manager makes specific investments with the goal of outperforming a benchmark index. Managers do this by trying to ...
AftermarketTrading activity of a stock immediately following the event by which an operating business's stock becomes publicly tradable. More commonly referred to in connection with ...
Algorithmic TradingTrading bymeans of an automated computer program. ...
All or None(AON) - This order says that the client will not accept less than the entire quantity in the order, but there isno rush to get ...
Alternate Price Projection(APP) Compares the price range of swings in the same direction. The most frequently used percentage alternate price projections are 62 percent, 100 percent, and ...
Alternate Time Projection(ATP) Compares the time range of swings in the same direction. The most frequently used percentage alternate time projections are 62 percent, 100 percent, and ...
Alternative Public Offering(APO) Somewhat misleading term used to refer to the variety of methods of going public other than an IPO. The term generally describes reverse mergers, ...
American Stock Exchange(AMEX) - Securities exchange that handles approximately 20% of all securities trades within the USA. ...
American-StyleAn options contract that settles American-style can be exercised at any time prior to expiration. Stock options settle American-style. ...
AmortizationA process that expenses the value of an intangible asset over time. ...
AnalystA person with expertise in evaluating financial investments; he or she performs investment research and makes recommendations to institutional and retail investors to buy, sell, ...
Announcement DateThe date on which particular news concerning a given company is announced to the public. ...
Annual Percentage Rage(APR) The periodic rate times the number of periods in a year. ...
Annual ReportA financial disclosure of the results of a company for the past year, although it is usually a marketing piece to entice shareholders. ...
Annualized DividendThis field is a calculated value and uses the last dividend paid multiplied by the frequency. It is the amount of a dividend paid to ...
Annualized return The return on investment calculated on a full-year basis, meaning increasing the rate if held less than one year, or reducing the rate if ...
AnnuitiesAnnuities are products, usually offered by insurance companies, that provide payments to you for a guaranteed period in return for a premium that you pay ...
ArbitrageThe purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market, in order to take advantage ...
AskThe lowest price acceptable to a prospective seller of a security. ...
AssetA balance sheet item expressing what an individual or a corporation owns. ...
Asset AllocationA form of diversification, in which emphasis is placed on dividing capital among separate markets (stocks, bonds, real estate, money markets). ...
AssignmentRefers to the option writer's (seller's) obligation to sell or buy a stock or other financial instrument at the strike price for which the writer ...
AssignmentThe receipt of an exercise notice by an option writer that requires him or her to sell (in the case of a call) or purchase ...
At The Close(CLO) - Designed to take advantage of market action accompanying a moment in time. At the close orders may be entered any time prior to ...
At-The-Money(ATM): When the strike price of an option is the same as the current price of the underlying instrument. An option is at-the-money if the strike ...
Authorized SharesNumber of shares authorized for issuance by a firm’s corporate charter. ...
Automatic ExerciseAn exercise by the clearing firm in which the firm automatically exercises an in-the-money option at expiration. ...
Average Daily Trade VolumeA stock's average daily trade volume is the very first thing consider. ...
Averaging downBuying more of a share as it's price falls in order to establish a lower overall average entry price. ...
Back SpreadA back spread is essentially an inverted ratio spread.When constructing a back spread, you are selling an option closer to the underlying market or even ...
Backdoor RegistrationA method by which a company's shares can become publicly tradable through a merger directly with a public shell, after which the private operating company ...
BackspreadA spread where more options (calls or puts) are bought than sold (the opposite of a Ratio Spread). ...
Balance SheetThe balance sheet, also called statement of financial position, portrays the financial position of the public company by showing what the company owns and what ...
Bankrupt ShellA public shell that has been created either through issuance of shares following a bankruptcy (these shares are publicly tradable under a provision of the ...
Bar ChartA type of chart that consists of four significant points: the high and the low prices, which form the vertical bar; the opening price, which ...
BasisIn simple terms, your cost of the asset. ...
BearAn investor who believes that a security or the market is falling or is expected to fall. ...
Bear Call SpreadA strategy in which a trader sells a lower strike call and buys a higher strike call to create a trade with limited profit and ...
Bear MarketA declining stock market over a prolonged period, usually lasting at least six months and normally not more than 18 months. Any market in which ...
Bear MomentumWhen a momentum indicator is negative. In a two-line indicator, the fast line is below the slow line. A basic part of the high probability ...
Bear Put SpreadA strategy in which a trader sells a lower strike put and buys a higher strike put to create a trade with limited profit and ...
BearishRefers to the attitude of an investor as being pessimistic; a pessimistic outlook. ...
Bearish ReversalWhen momentum changes from a bullish to a bearish trend. With two-line indicators, when the fast line crosses below the slow line. A momentum bearish ...
Best Efforts OfferingAn IPO in which an investment bank will not guarantee any proceeds to the firm, but will instead make its best efforts to raise capital. ...
BetaA means of measuring the volatility of a security or portfolio of securities in comparison with the market as a whole. ...
BidThe bid is the highest price a prospective buyer is prepared to pay for a trading unit of a specified security. If there is a high ...
Bid-Asked SpreadThe difference between bid and offer prices. The difference between what buyers are willing to pay and what sellers are asking for in terms of price. ...
Black MondayRefers to October 19, 1987, when the Dow Jones Industrial Average fell 508 points after sharp drops the previous week. ...
Blank CheckAs defined in SEC Rule 419, a development stage company with no business plan or whose business plan is to merge with or acquire an ...
Blind PoolTerm used by some in the industry to refer to a blank check which is raising or which has raised money. ...
Blow off TopA large rise in price followed by a quick drop. Often accompanied with high volume. Usually a technical indicator for the end of a bullish ...
Blue Sky LawsSecurities laws and regulations in each of the fifty states, regulating the offering of securities in that state. In addition to the requirement to respect ...
Blue-Chip CompanyUsed in the context of general equities, a large and creditworthy company; a company renowned for the quality and wide acceptance of its products/services, and ...
Blue-Chip StocksBlue-chip stocks refer to companies with a long history of sustained earnings and dividend payments. These established companies have developed leadership positions in their respective ...
Bollinger BandsBollinger Bands are a type of envelope (or trading band) plotted at standard deviation levels above and below a moving average. Plus or minus two ...
BondA debt obligation issued by a government (i.e., Treasury bond) or corporation (i.e., corporate bond) that promises to pay its bondholders periodic interest at a ...
Bond traderAn individual who works for a firm and buys and sells bonds for clients. ...
Bonus issueWhen the company gives to each stock holder, free of charge, a number of new stocks for each stock they already own. ...
Break even pointThe price at which, if you exit your position, you will neither gain nor lose money on the trade. It is roughly your entry price ...
Breakaway GapA type of gap in trading in which the price range moves above or below the previously established trading range, including a space between a ...
BreakevenThe point where a position shows no profits and no losses. ...
BreakoutA movement by a stock or commodity above an established resistance zone or below an established support, or above an established previous top or below ...
BrokerAn individual or firm that charges a fee or commission for executing buy and sell orders submitted by another individual or firm. ...
Broker-DealerA firm engaged in the business of effecting securities and other transactions for the accounts of others. They are required to be registered with the ...
Brokerage FeesWhether you buy (and sell) funds or individual securities, the broker you use to execute your trades deserves a fee or commission for this service. ...
BullAn investor who believes that a security or the market is rising or is expected to rise. ...
Bull Call SpreadA strategy in which a trader buys a lower strike call and sells a higher strike call to create a trade with limited profit and ...
Bull MarketA rising stock market over a prolonged period, usually lasting at least six months and normally not more than 18 months. Any market in which ...
Bull MomentumWhen a momentum indicator is positive. In a two-line indicator, the fast line is above the slow line. A basic part of the high probability ...
Bull Put SpreadA strategy in which a trader sells a higher strike put and buys a lower strike put to create a trade with limited profit and ...
Bulletin Board ShellA blank check or shell company whose securities trade on the Over-the-Counter Bulletin Board. ...
BullishRefers to the attitude of an investor as being optimistic; an optimistic outlook. ...
Bullish ReversalWhen momentum changes from a bearish to a bullish trend. With two-line indicators, when the fast line crosses above the slow line. A momentum bullish ...
ButterflyThe sale (or purchase) of two identical options, together with the purchase (or sale) of one option with an immediately higher strike and one option ...
Butterfly SpreadA 3-leg option strategy using all calls or all puts. ...
BuyTo purchase an asset. ...
Buy Limit OrderA conditional trading order that indicates a security may be purchased only at the designated price or lower. ...
Buy on CloseAn order stipulating to buy the security at the close of the trading session. ...
Buy on MarginBorrowing to buy additional shares, using the shares as the collateral. ...
Buy on OpenAn order stipulating to buy the security at the opening of the trading session. ...
Buy OrderAn order to a broker to purchase a specific quantity of a security. ...
Buy StopA buy order where the price stipulated is higher than the current price. The rationale here is when the buyer believes that if the security ...
Buy Stop LimitThis says, “Don’t buy the stock unless it hits 65 or more, but I won’t pay more than 67.”Used by traders who believe that if ...
Buy Stop OrderAn order to buy that is not to be executed until the market price rises to the stop price. Once the security breaks through that ...
Buy-and-HoldA passive investment strategy with no active buying and selling of stocks. A long position. ...
Buyers MarketA market in which the supply exceeds the demand, creating lower prices. ...
BylawsSet of rules governing many aspects of a corporation's business, including the process of electing officers and directors, calling and conducting meetings, and defining protocols ...
Calendar SpreadApplying to derivative products, a strategy in which there is a simultaneous purchase and sale of options of the same class at different strike prices, ...
CallAn option contract that gives the holder the right, but not the obligation, to buy a specified amount of an underlying security at a specified ...
Called AwayWhen a call or put option is exercised against the stockholder. ...
Candlestick ChartA price chart that displays the high, low, open and close for each day over a specified period of time. ...
CapitalThe amount of money you have invested. When your investing objective is capital preservation, your priority is to try not to lose any money. When your objective is ...
Capital ExposureThe amount of capital (money) that may be lost if a trade moves against the initial position. In other words, the potential cost to find ...
Capital GainThe profit realized when a capital asset is sold for a higher price than the purchase price. Your costs (when you buy) include the commission you ...
Capital LeaseAfter a lease term expires, a company may get ownership in the underlying property if it meets a variety of criteria (although this is beyond ...
Capital LossWhen a stock is sold below cost; the difference between the net cost of a security and the net sales price, if the security is ...
CapitulationWhen investors en masse have completely given up hope on an investment or market. Capitulation often occurs on heavy, panic type selling, and is followed ...
Cash CommodityThe actual physical commodity, as distinguished from a futures contract. ...
Cash DividendsA cash dividend is a dividend paid in cash. To be able to pay cash dividends, companies need to have not only sufficient earnings but ...
Cash EquivalentA very liquid asset.That means it's available right now or is in an account with a maturity no longer than three months. ...
Cash FlowRepresents earnings before depreciation, amortization, and non-cash charges; sometimes called cash earnings. This indicates the ability to pay dividends. ...
Cash Flow StatementA financial statement that adjusts the balance sheet and income statement to see how much money a company has generated or spent during a certain ...
Cash-and-Carry ShellA shell company whose owners wish to sell most or all of the shell's ownership for cash, rather than participate as equity holders in a ...
CBOECBOE interest-rate products are based on the underlying assets of U.S. Treasury bills, 5-year U.S. Treasury notes, 10-year U.S. Treasury notes, and 30-year U.S. Treasury ...
CBOTCBOT products are futures-based products trading on U.S. Treasury bills, 2-year U.S. Treasury notes, 5-year U.S. Treasury notes, 10-year U.S. Treasury notes, and 30-year U.S. ...
CeilingThe highest price, interest rate, or other numerical factor allowable in a financial transaction. ...
Certificate of IncorporationThe filing with a U.S. state's government (typically the Department of State) to create a corporation. Some states use the term articles of incorporation, and ...
Chapter 11Provides a company a breather to attempt to turn things around. ...
Chapter 7The filing a company makes when it decides to liquidate its operations. ...
Chicago Board Options Exchange(CBOE): Established in 1973, the CBOE was the first organized options exchange in the United States. ...
Clean ShellA shell company which has no liabilities or other negative attributes as perceived by an operating business seeking to merge with it. ...
ClearinghouseAn institution established separately from the stock exchanges that ensures that the payment and delivery of stocks or options is handled accurately and efficiently. ...
CloseThe period at the end of the trading session; sometimes used to refer to the closing price. ...
Close-GapAnother term for "lap." A lap up occurs when the next day?s low is greater than the previous day?s close. ...
Closed PositionExposure in foreign currencies that no longer exists. ...
Closed-Ended FundsClosed-ended funds, like their more populous and popular open-ended cousins, are investment companies set up to own securities portfolios. But unlike traditional funds, closed-ended funds trade ...
Closing PriceThe price of the last transaction of a particular stock completed during a day’s trading session on an exchange. ...
Closing QuoteThe last bid and offer prices of a particular stock at the close of a day’s trading session on an exchange. ...
CollarAn upper and lower limit on the interest rate on a floating-rate note or an adjustable-rate mortgage. ...
CollateralAn asset than can be repossessed if a borrower defaults. ...
Combination StrategyA strategy in which a put and call with the same strike price and expiration are either both bought or both sold. ...
CommissionThe fee paid to a broker to execute a trade, which is based on the number of shares, bonds, options, and/or their dollar value. ...
CommodityAny bulk good traded on an exchange or in the cash market; examples include metals, grains, and meats. ...
Common GapA trading gap, or space between one day’s close and the next day’s opening price, which occurs periodically and not necessarily as part of a ...
Common Stock RatioThe percentage that common stockholders' equity reduced by intangible assets bears to total tangible capitalization (the sum of shareholders' equity and long-term debt reduced by ...
Compound ReturnThe return on investment (ROI) including reinvested dividends used to purchase additional partial shares, so that each quarter’s dividend return is based on a greater ...
Confidentiality AgreementA confidentiality agreement (CA) is a legally binding contract between the target and each prospective buyer that governs the sharing of confidential company information. The ...
Consensus RatingThe average of analysts recommendations for a single entity. As many brokers have different ratings systems, their recommendations must be standardized so that a consensus ...
Consumer Price Index(CPI) - It is a measure of price changes in consumer goods and services such as gasoline, food, and automobiles. ...
Contingency OrderWhen you place a stock or option order you can choose to place contingencies on that order, meaning that the order will be filled only ...
ContractA unit of trading for a financial or commodity future; the actual bilateral agreement between the buyer and seller of a transaction as defined by ...
Contrarian InvestingA strategy involving making decisions contrary to the prevalent opinion, due to an observation that in the market, the majority is wrong more often than ...
Convertible SecuritiesConvertible securities can be exchanged or converted into common shares. Examples are convertible preferred stock, convertible bonds and the like. Such securities are deemed to be ...
CoverThe purchase of a contract to offset a previously established short position. ...
Covered CallA strategy that involves buying stock shares and selling calls. If the calls are assigned, the investor must relinquish the shares. The covered call can be ...
Covered Call SpreadThe covered call employs a strategy similar to the one used for a short put, counting on statistical long-term gains in the market, with some ...
Covered OptionA position offset by an equal and opposite position in the underlying security. ...
Covered PutA put option position in which the option buyer is also short the corresponding stock or has deposited cash or cash equivalents equal to exercising ...
CPRAn abbreviation for a Closing Price Reversal, a short-term price action. ...
CreditAmount that is added to the trading account when an options trader collects a premium for selling options. ...
Credit SpreadThe difference in value of two options, where the value of the one sold exceeds the value of the one purchased to create a net ...
Current LiabilitiesDebts that must be paid off within a company's operating cycle or within one year, whichever is greater. ...
CUSIPCommittee on Uniform Securities Identification Procedures. The committee which supplies a unique nine-character identification, called a CUSIP number, for each class of security approved for ...
Cyclical StocksCyclical stock prices move with the economy. Cyclical stocks often reach their high and low points before the respective peaks and troughs of the economy.When ...
Daily Price LimitThe level at which many commodity, futures, and options markets are allowed to rise or fall in a day. ...
Day OrderWhen you place a Day Order you give your broker a price at which you are willing to buy or sell a stock or option ...
Day TraderA very short-term trader who is usually glued to the monitor during market hours and enters and exits a trade during one trading day. The ...
Day TradingEstablishing and liquidating the same position or positions within one day’s trading. ...
DealerAn individual or firm that acts as a principal or counterparty to a transaction. ...
DebitThe amount that is subtracted from a trader?s account when a trade involves the net purchase of options contracts. ...
Debit SpreadThe difference in value of two options, where the value of the long position exceeds the value of the short position to create a net ...
Debt to EquityThis old standard is commonly used to get a feel for indebtedness, particularly in comparison with the rest of an industry. How to calculate debt to ...
Deep In the Money(DITM) Calls: where the price of the underlying security is far greater than the call Strike price. Puts: where the price of the underlying security is far ...
Defensive StocksDefensive stocks are the stocks of companies that tend to hold their price levels when the economy declines.Generally, these stocks resist downturns in the economy ...
Deferred ChargesDeferred charges are expenditures for items that will benefit future periods beyond one year from the balance sheet date; for example, costs for introduction of ...
Definitive AgreementThe definitive agreement is a legally binding contract between a buyer and seller detailing the terms and conditions of the sale transaction. In an auction, the ...
Delayed QuoteA stock or bond quote that shows the bid and ask prices 15, sometimes 20 minutes after a trade takes place. ...
Delayed Time QuotesQuotes which are delayed from real time. ...
DeltaThe amount by which the price of an option changes for every dollar move in the underlying instrument. Delta measures the sensitivity of the option’s ...
Delta HedgeA strategy designed to protect the investor against directional price changes in the underlying asset by engineering the overall position delta to zero. ...
Delta NeutralRefers to an options position constructed so that the profitability of the position relies on the magnitude of the move - not the directional bias; ...
Depressed MarketMarket in which supply overwhelms demand, leading to weak and lower prices. ...
DerivativesDerivatives are financial instruments whose value is based on the market value of an underlying asset such as a stock, bond, or commodity. ...
DevaluationThe deliberate downward adjustment of a currency’s price, normally by official announcement. ...
Directional TradeA trade that requires the underlying asset to move in one direction in order to produce profits. To make a profit, the trader must determine ...
DirectionlessRefers to an investment that lacks direction and is not trending higher or lower. Certain options strategies work well when the underlying asset is not ...
Discount BrokerA brokerage house featuring relatively low commission rates in comparison to a full-service broker. A brokerage firm that offers lower commission rates than a full-service broker, ...
DivergenceA term used to describe a difference in the behavior of two instruments, or an instrument and an indicator based on that instrument. ...
DiversificationSpreading one's assets across a wide variety of investments within a portfolio to minimize the impact of any one security on overall portfolio performance and ...
Diversification RuleDo not invest more than 30 percent of the total value of your portfolio in any one sector and no more than 20 percent of ...
DividendWhen companies pay part of their profits to shareholders, those payments are called dividends. A portion of a company’s profit paid to common and preferred ...
Domestic MarketA nation’s internal market for issuing and trading securities of entities domiciled within that nation. ...
Double DiagonalsDouble diagonals are a favorite among professional index option traders.The double diagonal capitalizes perfectly on the moderate range of the index versus singular components by ...
Dow Jones Industrial Average(DOW) The best known U.S. index of stocks. A price-weighted average consisting of 30 actively traded blue-chip stocks, primarily industrial, including stocks traded on the ...
DowntickA new price quote at a price lower than the preceding quote. A downward price movement in a particular stock. A trade occurring at a lower ...
DownturnThe transition point between a rising, expanding economy to a falling, contracting one. ...
Dual listingThe situation that arises when a security is registered for trading on more than one exchange. ...
Earned IncomeIncome that is paid as a salary from a job or passed through from a schedule C or a partnership that you materially participated in ...
EarningsNet income for a company during a period. ...
Earnings per Share(EPS) The amount of profits of an organization divided by the number of outstanding shares. ...
Earnings Per Share ProgressionLook at the last four quarters of EPS growth to see if the company's earning capacity is improving or weakening. Earnings are a reflection of good ...
Earnings SurprisesPositive or negative differences from the consensus forecast of earnings by institutions. ...
EBITDAEarnings before interest, taxes, depreciation, and amortization. ...
Econometric AnalysisUsing mathematical formulas or models to make trading decisions with fundamental information and data. ...
Economic IndicatorA government-issued statistic that indicates level of current economic growth and stability. ...
EDGARThe Electronic Data Gathering, Analysis, and Retrieval database run by the U.S. Securities and Exchange Commission (SEC). ...
Employee Stock FundA firm-sponsored program that enables employees to purchase shares of the firm’s common stock on a preferential basis. ...
End MarketsA company's end markets refer to the broad underlying markets into which it sells its products and services. For example, a plastics manufacturer may ...
Entry StrategyThe strategy to determine the entry conditions and specific entry and initial stop-loss prices. ...
EquityA synonym for a stock, or the interest or value, which an owner has in an asset. ...
Equity OptionsThe same as stock options. ...
European-StyleAn option contract that can be exercised only on the expiration date. ...
ExchangePlace where a stock or an option, a future, or other derivative is bought and sold. ...
Exchange-Traded Fund(ETF) A fund that tracks an index, but can be traded like a stock. Many ETFs have options available allowing traders to profit from moves ...
ExecutionThe process of completing an order to buy or sell a security. Once a trade is executed, it is reported in a confirmation report. ...
ExerciseTo implement the right of the holder of an option to buy (in the case of a call) or sell (in the case of a ...
Exercise LimitsRules that are similar to the Position Limits. The idea here is prevent an investor (or group using same advisor) from disrupting the orderly trading ...
Exercise PriceThe price at which the security underlying a future or options contract may be bought or sold. ...
Exit StrategyThe conditions to exit an open trade. The exit strategy must be determined before the trade is entered. ...
ExpirationThe time an option contract lapses. ...
Expiration DateThe day when the options contract expires. ...
Expiration DayPractically, it is the close of business on the third Friday of the month because we are not allowed to trade options of current expiration ...
Extension DateThe day on which the first option either expires or is extended. ...
Extraordinary CallsThere are extraordinary mandatory and extraordinary optional calls. This means that some sort of extraordinary event has occurred, and as a result the issuer ...
Extrinsic Value(Time Value) - The price of an option less its Intrinsic Value. Out of the Money (OTM) options are made up entirely of Extrinsic (or ...
Fair Market ValueAn asset’s value under normal circumstances. ...
Fair ValueThe theoretical value calculation of an option using a pricing formula such as the Black-Scholes Options Pricing Model. ...
FASBFinancial Accounting Standards Board (FASB) ...
Fast MarketA market is fast when it is hit with a large volume of orders over a short period of time. ...
FDICFederal Deposit Insurance Corporation (FDIC). The regulatory agency responsible for administering bank depository insurance in the United States. ...
Federal ReserveThe U.S. central bank that is responsible for monetary policy. ...
Fibonacci RetracementWhere prices on a chart move off their latest tops or bottoms in swings of 38.2%, 50%, or 61.8% from their previous bottoms or tops ...
FIFOFirst In, First Out (FIFO) ...
FillThe execution of an order; also, the price at which an order is executed. ...
Fill or Kill(FOK) - An order where a precise number of contracts must be filled or the order is cancelled.This order says that the client will not ...
Financial AdviserA professional who offers financial advice to clients for a fee and/or commission. ...
Financial AnalysisAn analysis of a company’s financial statement, often done by financial analysts. ...
Financial AnalystA professional who analyzes financial statements, interviews corporate executives, and attends trade shows of companies in order to write reports recommending either purchasing, selling, or ...
Financial LeverageFinancial leverage relates a company's long-term debt and preferred stock to the company's common equity. ...
Fire SaleOccasionally companies experience deep price declines due to actual or anticipated news or announcements. These declines can get out of hand, as more and more ...
Fiscal PeriodsBecause not all companies have the same fiscal year end, we, in cooperation with I/B/E/S, use FY1, FY2, etc., to identify unique fiscal periods for ...
Flexible Mutual FundA fund that invests in a variety of securities in varying proportions in order to maximize shareholder returns while maintaining a low level of risk. ...
FloatThe initial raising of capital by putting a company's stocks on offer to the public. The total number of outstanding shares available to the public ...
Floor BrokerA member of an exchange who is paid to execute orders. ...
Floor TraderAn exchange member who trades on the floor of the exchange for their own account. ...
FluctuationA price or interest rate change. ...
Foating StopAn automated trailing stop. ...
ForecastingMaking projections about the future performance of a stock on the basis of historical and current conditions data. ...
Foreign Direct InvestmentThe acquisition by an investor in one country of an asset in another country With the intent to manage that asset. In most cases, both ...
Foreign Exchange(FOREX, FX) The simultaneous buying of one currency and selling of another. ...
FOREXForeign Exchange (FOREX, FX). The simultaneous buying of one currency and selling of another. ...
Full-Service BrokerA type of stockbroker who provides more than stock quotes and order execution, including (and not limited to) portfolio planning and management, investment ideas, and ...
Fully InvestedUsed to describe an investor whose assets are totally committed to investments, typically stock. ...
Fund ManagerThe person responsible for the allocation of pooled money invested in a particular mutual fund. He/she is charged with investing the money to attain the returns ...
Fundamental AnalysisA method of predicting the behavior of a company's stocks by looking at fundamental information about the company such as financial health, sales and earnings ...
FuturesA term used to designate all contracts covering the purchase and sale of financial instruments or physical commodities for future delivery on a commodity futures ...
Futures ContractsAgreement to buy or sell an underlying security at a predetermined date at an agreed price. The difference between futures and options is that with ...
Futures OptionAn option on futures contracts. ...
GainA profit on a securities transaction recognized by selling a security for more than the security originally cost. The gain is the difference between the buy ...
GammaThe speed by which delta changes compared with the speed by which the underlying asset is moving.Gamma is a second order of delta, meaning that ...
GapWhere the opening bar of a price chart opens and stays beyond (lower or higher) that of the spread of the previous bar. Gaps can be ...
Go LongTo buy securities, options, or futures with the intent to profit from a rise in the price of the assets. ...
Go ShortTo sell securities, options, or futures with the intent to profit from a drop in the price of the assets. ...
Good Till Cancelled(GTC) - A GTC order authorizes the broker to buy or sell a position at a particular price at any time prior to cancellation of ...
Gross ProfitSales minus the cost of the goods sold. ...
Gross Profit MarginThe gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. ...
Growth OpportunityOpportunity to invest in profitable projects. ...
Growth StocksGrowth stocks are issued by companies expected to have sustained high rates of growth in sales and earnings. These companies generally have high price/earnings (P/E) ...
Guerrilla TraderSimilar to a scalper, but trades in bursts of several trades, then recedes to the sidelines. ...
Guts SpreadAn expensive strategy where the trader buys OTM calls and puts to replicate the risk profile of a Strangle. Far cheaper to trade the Strangle. ...
HedgeA term for reducing the risk of one position by taking other positions with options, futures or other derivatives. A transaction that reduces the risk of ...
Hedge FundA private investment partnership that can use leverage and derivatives, take both long and short positions, and invest in many markets. ...
HedgerA trader who enters the market with the intent to protect a position in the underlying asset; an investor who uses the futures market to ...
HedgingA strategy designed to reduce investment risk using call options, put options, short-selling, or futures contracts. Its purpose is to reduce the volatility of a ...
Held OrderAn order that must be executed without hesitation or if the stock can be bought or sold at that price in sufficient quantity. ...
High-Frequency TradingTrading very frequently; scalping. A high-frequency trader uses tick data. ...
High-Tech StockStocks of companies operating in high-technology fields. ...
Historic VolatilityCalculated by using the standard deviation of underlying asset price changes from close-to-close of trading going back 21 to 23 days. A measurement of how much ...
Hit The BidAcceptance of purchasing at the offer or selling at the bid. ...
Hold To maintain ownership of a security over a long period of time. The recommendation of an analyst who is not positive enough on a stock ...
Hostile TakeoverA company or person that tries to buy a controlling amount of stocks in a company in order to control it. Usually this is not ...
Hunch TradingHunch stock market trading is not a logical trading decision, but purely a gut feeling. As hunch or intuition may turn out to be misleading, ...
IASBInternational Accounting Standards Board (IASB) ...
IdayAn abbreviation for "inside day" which occurs whenever a day?s range is within the range of the previous day. ...
Immediate Or Cancel(IOC) - Similar to the Fill or Kill (FOK) in that it has to be done immediately, but an IOC order allows for a partial ...
Implied VolatilityThe volatility computed using the actual market prices of an option contract and one of a number of pricing models. ...
In the Money(ITM) If you were to exercise an option and it would generate a profit at the time, it is known to be in-the-money. A put ...
Income StocksIncome stocks have high dividend payouts, and the companies are typically in the mature stages of their industry life cycles. Stocks of companies that have ...
IndexA group of assets (often in a similar class of sector or market capitalization) which can be traded as a single security. ...
Index FundsAn index fund is a fund that follows a passive investing strategy, meaning that the fund managers attempt to match an identified benchmark index, not ...
IndicatorUsed in the context of general equities, a technical or fundamental measurement used to forecast the market’s direction, such as investment advisory sentiment, stock trading ...
Individual Retirement Accounts(IRA) Tax deferred accounts individuals can contribute to as long as they have earned income. See retirement investing for more information on IRAs. ...
Initial MarginThe initial deposit of collateral required to enter into a position as a guarantee on future performance. ...
Inside InformationRelevant information about a company that has not yet been made public. It is illegal for holders of this information to make trades based on ...
Insider TradingMaking investment decisions based on information that is not yet public. Although trading based on this type of inside information does occur, it is against ...
InsidersDirectors and senior officers of a corporation; those who have access to inside information about a company; someone who owns more than 10% of the ...
Interest RateThe cost of borrowing money. The rate at which borrowed money is charged by the lender, usually annualized into a percentage figure. ...
Interest-Bearing SecurityA type of investment on which earnings bear interest. ...
Intrinsic ValueThis is a measure of any real value to the option. The amount by which an option is in-the-money. Out-of-the-money options have no intrinsic value. ...
Investment IncomeThe revenue from a portfolio of invested assets. ...
Investment ManagerThe individual who manages a portfolio of investments; also called a portfolio manager or money manager. ...
Investment MemorandumA letter that commits an individual to acquire a company's securities and describes the terms of the deal. ...
Investment SecuritiesInvestments in debt securities are carried at amortized cost only when they qualify as 'held-to-maturity.'' To so qualify, the investor must have the positive intent ...
Investment StrategyA strategy an investor uses when deciding how to allocate capital among several options, including stocks, bonds, cash equivalents, commodities, and real estate. See trading strategies ...
InvestmentsFinancial securities, such as stocks and bonds. ...
InvestorA person whose principal concern in the purchase of a security is the minimizing of long-term risk, compared to the speculator who is prepared to ...
Iron ButterflyA 4-leg option strategy using calls and puts together. ...
Japanese CandlesticksA popular method of visually depicting price bars where the open, high, low, close are shown explicitly. Upward moving price bars are hollow. Downward moving price bars ...
Junior SPACProposed type of SPAC raising a minimal amount of money to qualify for a Rule 419 exemption, and avoiding shareholder reconfirmation of investment, short time ...
Keogh PlanA type of pension account in which taxes are deferred. Available to those who are self-employed. ...
Key RateInterest rate fixed by the Federal Bank for the issuance of Federal Bank money. ...
King Kong SyndromeThe emotional high that overtakes traders when they do exceptionally well for a period of time, such asmaking a dozen consecutive winning trades. ...
LEAPSLong-Term Equity Anticipation Securities - or LEAPS - are call or put options that can be purchased for extended periods of time, some as much ...
LegOne side or component of a spread. ...
Leg InWhen a trader enters each part of a spread separately instead of entering the trade as one order with his or her broker. Legging into ...
Let OutLegging out of a spread entails the opposite whereby you exit your spread one component part at a time with the intention of completing the ...
LeverageEnables a trader to buy or sell a security or derivative and receive fair value for it using borrowed capital to increase investment return. ...
LiabilityA legal obligation to pay a debt owed. Current liabilities are debts payable within 12 months. Long-term liabilities are debts payable over a period of more ...
Limit OrderAn order to buy a stock at or below a specified price or to sell a stock at or above a specified price. Normally written ...
LiquidationWhen the assets within a portfolio are sold or cashed out. ...
LiquidityThe ease with which an asset can be converted to cash in the marketplace. A large number of buyers and sellers and a high volume of ...
LongBuying an investment security. Traders will go long when they expect the instrument to increase in value. ...
Long CallThe purchase of a call option in anticipation that the underlying asset will rise in price. ...
Long ComboEssentially the same as a long straddle, except that the strike prices are different. ...
Long PositionA position that appreciates in value if market prices increase. When the base currency in the pair is bought, the position is said to be ...
Long PutThe purchase of a put option in anticipation that the underlying asset will decline. ...
Long StockA bullish strategy that involves buying and holding shares of stock. ...
Long StraddleA long straddle is the simultaneous purchase of a put and a call on the same stock, with the same expiration date and the same ...
Long strangleThe purchase of an OTM call and an OTM put with the same expiration date. ...
Loss Comfort Zone"Loss comfort zone” is the percentage of loss you can experience on a single trade and not lose sleep at night. Every investor has a ...
Mandatory CallsThe issuer has a mandated savings account (the sinking fund) and is required to make deposits into that account. Every so often—as detailed in the ...
MarginA deposit made by a trader with a clearinghouse to ensure that he/she will fulfill any financial obligations resulting from his or her trades. Margin ...
Margin AccountAn account in which stocks can be purchased for a combination of cash and a loan. The loan in the margin account is collateralized by ...
Margin CallThe brokerage's demand that a customer deposit a specified amount of money or securities when a purchase is made in a margin account; the amount ...
Margin RequirementsThe amount of cash or marginable securities (for example, blue chip stocks) that an account holder must have in his account to write uncovered (or ...
Marginable SecurityAn investment that can be used as collateral in a margin account. ...
Mark to MarketProcess of reevaluating all open positions with the current market prices. The daily adjustment of margin accounts to reflect profits and losses in such a ...
Market CapitalizationThe number of outstanding shares multiplied by the value per share. ...
Market if TouchedMarket if Touched (MIT) order - An order that becomes a market order if the price specified is reached. ...
Market MakerA dealer willing to accept the risk of holding a particular security in his or her own account to facilitate trading in that security. ...
Market OrderAn order to buy or sell securities at the price given at the time the order reaches the market. Buy or sell at the best ...
Market SurveillanceThe department responsible for investigating and preventing abusive, manipulative, or illegal trading practices on The NASDAQ Stock Market. Considerable resources are devoted to surveilling The ...
Married Put"Married put" is an equity term that does little to describe the position - buying or holding the outright shares, while purchasing a put ...
MaturityThe date on which a bond's principal is repaid to the investor and interest payments cease. Maturity is the number of years until the principal ...
Mercury ChartA modified bar chart used in commodity futures. Each bar shows the price range for a time unit and changes in open interest and volume ...
MomentumWhere a market direction (up or down) is established. ...
Momentum IindicatorMost price-based indicators are also called momentum indicators. In most cases, the momentum indicator represents the rate-of-change over the lookback period. The rate-of-change may reflect ...
Momentum InvestorSomeone who buys stocks or other securities that have had high returns over the past 3 to 12 months, and sells those that have had ...
Momentum ReversalA momentum reversal is when the momentum indicator reverses from bullish to bearish or from bearish to bullish. ...
Monetary StopsMonetary stops are universal in options trading strategies.For long neutral delta strategies like straddles and strangles, you will need to decide a spread premium in ...
MoneynessA term to define whether an options contract is in-the-money, at-the-money, or out-of-the-money. ...
Moving AverageAdded to stock charts, these indicators represent average price over time. By averaging prices, the indicator can smooth or eliminate the fluctuations in data and ...
Mutual FundsMutual funds are the most common type of pooled investment. Funds "slice and dice" many types of investments - stocks, bonds, money-market instruments, and other securities ...
NakedSelling naked options refers to a sold options contract with no hedge position in place. Such a position leaves the option seller (writer) exposed to ...
NASDNational Association of Securities Dealers: The American self-regulatory organization of the securities industry responsible for the regulation of Nasdaq and the over-the-counter markets. ...
NasdaqNational Association of Securities Dealers Automated Quotations system. This is a computerized system providing brokers and dealers with securities price quotes. ...
Near the Money(NTM) - Refers to an option with a strike price that is almost equal to the current market price of the underlying security. Where the ...
New York Stock Exchange(NYSE) - The largest stock exchange in the USA. ...
No Dealing Desk BrokerA No Dealing Desk (NDD) Broker provides a platform where liquidity providers such as banks can offer prices to the NDD platform. Incoming orders are ...
No Load FundMutual Fund offered by an open end investment company that imposes no sales charge (load) on its shareholders. Investors buy shares in no-load funds directly ...
Nontrade ReceivablesThe same as accounts receivable, but they are not from customers. Rather, they are from employees, officers, directors, and stockholders. The category also includes interest ...
Not Held(NH) - Allowing the floor broker working the order to exercise discretion. ...
NoteA short-term debt instrument. They normally mature in or less than five years. ...
OCCOptions Clearing Corporation: Established in 1973, the organization processes and guarantees the standardized options contracts that trade on the U.S. options exchanges. ...
OfferThe lowest price at which the market-maker is willing to sell. ...
Offsetting TransactionA trade that serves to cancel or offset some or all of the market risk of an open position. ...
On The Opening(OPG) - Designed to take advantage of odd market movements that might accompany the opening. If an order is not present in the trading crowd ...
Online brokerA brokerage firm that allows clients to trade over the Internet using Web-based trading platforms. ...
Open OrderAn order that will be executed when a market moves to its designated price. ...
Open PositionAn active trade with corresponding unrealized P/L, which has not been offset by an equal and opposite deal. ...
Open-end FundsAn open-end fund sells shares on a continuous basis. Mutual funds are the most conventional type of open-end fund. ...
Opportunity CostThe risk of an investment expressed as a comparison with another competing investment. ...
Option PremiumThe price of an option; the amount of money that the option holder pays for the rights and the option writer receives for the obligations ...
Option WriterThe seller of an option (naked). ...
Optional CallsThese are calls that may or may not happen. They may or may not be in part or in whole because nobody knows for sure ...
OptionsAn option is a type of derivative - its value is derived from an underlying asset, such as a stock. The party that buys the ...
Options CalculatorA tool used by options traders to compute theoretical prices, volatility, delta, and the other so-called Greeks. ...
Options ContractOptions are sold in contracts; 1 contract is equal to 100 shares. The quoted price of an option is "per share". ...
Options Expiration DayOptions cease trading on the third Friday of their expiration month and expire at 11:59AM Central Time on the Saturday after the third Friday of ...
Out of the MoneyRefers to an options contract that has no intrinsic value; for instance, a call option whose exercise price is above the current market price of ...
Over The Counter(OTC) Used to describe any transaction that is not conducted over an exchange. ...
Paper TradingSimulating a trade without actually putting up the money, usually done for the purpose of gaining additional trading experience. ...
ParThe nominal value of a bond that is paid back to the bondholder at maturity. ...
Partial FillsA partial fill occurs when a trader places an order for a certain number of shares, let’s say for 2,000 shares of stock, and instead ...
Payable DateThe date on which a declared stock dividend or a bond interest payment is scheduled to be paid. ...
Penny StocksPenny stocks are speculative, low-priced stocks that generally trade on the over-the-counter markets and pink sheets. [The pink sheets provide the listings, the quotes (bid ...
Performance IncentiveA performance incentive - where the advisor gets paid based on how well your investments perform (the more money you get, the more money the ...
PipThe smallest unit of price for any foreign currency. ...
PivotWhen a market is rallying and today?s low is less than the low of the highest day in the rally, that high becomes a pivot, ...
PortfolioA selection of stocks chosen according to the investors individual goals. ...
Position DeltaThe sum of all positive and negative deltas within a hedged trade position. ...
Position LimitsEach stock is assigned a numerical limit based on its trading volume. The exam will give you the limit, i.e. 7,500 contracts. The idea is ...
Position TraderTrades longer-term trends lasting from several days to several weeks. Trades for points, not for ticks. ...
Preferred StockA security that is a hybrid of a bond and stock. A preferred typically has a fixed amount it pays in dividends, but has a ...
PremiumThe amount of cash that an option buyer pays to an option seller. ...
Premium Discount BrokersA premium discount broker could be a firm like Fidelity or Charles Schwab. The commission rates are somewhere between the discount brokers and the full-service brokers. ...
Pretzel ChartA price chart connecting the open, high, low, and close in such a fashion that it resembles a pretzel with two closed three-sided spaces connected ...
Price BarThe visual representation of a securities price fluctuations for a set period of time. Price bars can be for as little as one minute (or ...
Price to SalesPer dollar of shareholder value, how much business does this company generate? Price to sales (P/S) is a straightforward way to answer this question. Here's the ...
Price-Earnings Ratio(P/E) Ratio: A tool for comparing the prices of different common stocks by assessing how much the market is willing to pay for a share ...
PrincipalThe purchase price of a bond. ...
Privileged informationInformation that is not available to the public. ...
Producer Price Index(PPI) - A family of indices that measures the average change over time in selling prices received by domestic producers of goods and services. PPIs ...
Property DividendsA property dividend is a dividend paid in a form other than cash or the company's own stock. ...
ProspectusA legal document issued by a company wanting to issue shares to the public (listing), outlining the history, operations and financial situation of the company. ...
Proxy StatementA proxy statement is a document that a public company sends to its shareholders prior to a shareholder meeting containing material information regarding matters on ...
PutAn option contract that gives the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified ...
Put OptionAn option contract giving the owner the right to sell a specified amount of an underlying security at a specified price within a specified time. ...
Put-Call RatioA ratio of the trading volume of put options to call options. It is used to gauge investor sentiment. A high volume of puts compared ...
PyramidingAdding to a position as the market moves up or down. ...
QuoteAn indicative market price, normally used for information purposes only. ...
Quote CurrencyThe second currency quoted in a FOREX currency pair. In a direct quote, the quote currency is the foreign currency itself. In an indirect quote, ...
RaidersA person or group of people that attempt to buy over 50% of the shares of a company in order to control the company by ...
RallyA recovery in price after a period of decline. ...
Ratio BackspreadA strategy using all puts or all calls whereby the trader buys OTM options in a ratio of 3:2 or 2:1 to the ITM options ...
Ratio Put SpreadA bullish strategy that involves the trader being short in more, lower Strike puts than those higher Strike puts he is long in, at a ...
Ratio SpreadsRatio spreads are an evolution of the bull call or bear put spread. They combine long purchased options with multiple short options. ...
Real-time DataA source of information that is updated live and changes instantaneously as prices change in the marketplace. ...
RecapitalizeTo use your closed out trading profits to increase the amount of contracts, options or stocks that you normally trade. ...
Regulation DUnder the Securities Act of 1933, any offer to sell securities must either be registered with the SEC or meet an exemption. Regulation D (or ...
Regulation FDSEC regulation adopted in 2000 that eliminated the practice of selective disclosure. ...
Reinvestment DateThe first day of the ex-dividend period. ...
Relative StrengthA ranking of near-term directional price movement. A technical indicator comparing a security’s price action as compared to that of an index or another stock. ...
RequotingThe practice of a broker-dealer filling an order at a price not seen on the public price feed. ...
Resistance LevelA term used in technical analysis indicating a specific price level at which analysis concludes people will sell. ...
Restricted StockStock which is acquired though an employee stock option plan or other private means and which may not be transferred. ...
Retail investorIndividual investor making decisions for a personal portfolio. In contrast to institutional investors who make decisions on behalf of financial institutions, retail investors represent individual ...
ReturnThe income earned or a capital gain made on an investment. ...
Return on EquityReturn on equity is the return generated by the company for each dollar of shareholder investment. This is a way to determine how effectively the ...
RevaluationAn increase in the exchange rate for a currency as a result of central bank intervention. ...
Reversal StopReversal Stop (or Stop and Reverse) order - A stop order which, when activated, reverses the current position from long to short (or vice versa). ...
Reverse Stock SplitA reverse stock split is defined by the SEC as a transaction that reduces the number of shares of company stock outstanding while simultaneously increasing ...
RhoRho is the measure of the sensitivity of the option to changes in interest rates.When interest rates are low, rho is not nearly as necessary ...
RiskThe potential financial loss inherent in an investment. ...
Risk Free RateThe interest chargeable on Treasury Bills (T-Bills) is generally known as the Risk Free Rate, and it is this rate that is used as a ...
Risk ManagementThe process of managing trades by hedging risk. ...
Risk ProfileThe graphic depiction of a trade, showing the potential Risk, Reward, and Breakeven Points as the underlying security price deviates within a range of prices. ...
Risk ReversalThe term risk reversal is used in a couple of different ways in trading:In foreign-exchange trading, risk reversal is the difference in delta and volatility ...
RolloverProcess whereby the settlement of a deal is rolled forward to another value date. The cost of this process is based on the interest rate ...
Root SymbolThe first part of an options symbol that represents the underlying security. ...
Running StopsThe practice of market makers entering orders for the purpose of hitting customer stop loss orders. ...
S-1The form for filing for an IPO. ...
Sales LoadThe sales fee that the buyer pays in order to acquire an asset. ...
ScripStock certificate that is evidence of ownership. ...
SeatMembership in a stock or futures exchange. ...
SECSecurities and Exchange Commission: A commission created by Congress to regulate the securities markets and protect investors. It is composed of five commissioners appointed by the ...
SEC FilingsAs a general rule, the banker uses SEC filings to source historical financial information for comparable companies. This financial information is used to determine historical sales, ...
SectorSector refers to the industry or markets in which a company operates (e.g., chemicals, consumer products, healthcare, industrials, and technology). A company's sector can be further ...
Securities and Exchange Commission(SEC) - Organization which regulates the US securities markets to protect investors. ...
SecurityAn instrument which can be traded (for example, stocks, bonds, and so on). ...
Sell StopTrade at the then best price, but ONLY IF a predetermined price level is met or exceeded. The order must first be triggered (or activated ...
Sell Stop-LimitThis is a version of the Sell Stop. This order says, “Don’t sell the shares unless they trade at 60 or less, but I won’t ...
Serial BondsThe issue is bought back in stages, usually an annual installment. This is the way municipal bonds are retired—a lot of money is borrowed in ...
SeriesAll option contracts of the same class that also have the same unit of trade, expiration date, and exercise price. Option contracts of the same ...
SettlementIn relation to stocks it is the arrangement between broking houses for the payment or receipt of cash or shares. ...
ShareA unit of equity in a company. ...
Share SplitIncreasing a companies shares outstanding by splitting the par value of existing shares and distributing additional shares pro rata to share holders. ...
ShortSelling an investment security in anticipation that the price will fall. ...
Short CallA bearish strategy that involves selling a call option to collect the premium. ...
Short PutA bullish strategy that involves selling a put option to collect the premium. ...
Short SellingA risky and speculative practice involving the sale of a stock that the seller doesn't possess. The seller is effectively betting that the price of ...
Short StockSelling shares of stock in anticipation that the price will go down. ...
Short StraddleA short straddle is the simultaneous sale of a put and a call on the same stock, with the same expiration date and the same ...
SkewA descriptive measure of lopsidedness in a distribution. ...
SlippageThe difference between estimated transaction costs and actual transaction costs. The difference is usually composed of price revisions or spread and commission costs. ...
Small-Cap StocksSmaller (and sometimes newer) companies associated with high risk and high potential rewards. Can be illiquid to trade with large bid–ask spreads. ...
Special Memorandum Account(SMA) - A holding place for available cash, a double bookkeeping entry.It increases when:A client’s portfolio goes to a new “all-time” high. Essentially SMA will ...
Speculative StocksSpeculative stocks have the potential for above-average returns, but they also carry above-average risk of loss if the company does poorly or goes bankrupt.Speculative stocks ...
SpeculatorAn investor or trader who is willing to take large risks for a chance to make large gains. ...
SpreadThe difference between the bid price and the ask price (buy price and sell price) ...
StochasticA technical indicator, which is an oscillator based on the relationship of the open, high, low, close of price bars. ...
StockA share of a company's stock translates into ownership of part of the company. Thus, when you own any shares of a company's stock, you ...
Stock SplitA stock split is when there is an increase in the number of outstanding shares without an increase in the shareholder equity. ...
Stop AlarmA "Stop Alarm" is held by the broker as well. The difference is, if the stock should trigger an alarm price, the broker is directed to ...
Stop LimitThis is an order that says once the stock's market price touches or goes below the stop limit order price, the stop limit order is ...
Stop LossIt is advisable to protect loss potential by entering an order that will "stop" the trade if the stock or option trades at a certain ...
Stop MarketThis type of stop loss order is known by various names, such as "stop," "stop loss," and "stop market." This is an order that says ...
Stop OrderA stop order is an order to buy or sell a stock once the price of the stock reaches a specified price, known as the ...
Stop-Loss OrderAn order to sell when the price of the stock declines to, or below, a stated price. The purpose of this is to reduce the ...
StraddleA neutral trade that involves simultaneously buying a call and put at the same strike price and with the same Expiration Date.Requires the underlying asset ...
StrangleA "Strangle" is an option strategy that gives you the potential to profit in a trade no matter which way the stock moves. This is ...
Strike PriceA price at which the stock or commodity underlying a call or put option can be purchased (in the case of a call) or sold ...
Structured NotesA structured note, in its most popular form, is essentially a bond that’s structured so that it gives the holder (buyer) of the note a ...
SupportA price level at which a stock or market begins seeing increasing demand or buying interest. It serves as a floor to lower prices. ...
Swing ChartA form of charting connecting prices filtered by a minimum increment; similar to point and figure charts. ...
Swing TraderAn individual who makes short-term trades where a stock’s price movement is in one direction; swing trading is a type of trading strategy that attempts ...
SymbolA three-, four-, or five-letter sequence that denotes a stock, option, or futures contract. ...
TailgatingPurchase of a security by a broker after the broker places an order for the same security for a customer. The broker hopes to profit ...
Technical AnalysisUsing charts and charting techniques and indicators (such as prices, volume, moving averages, stochastics, etc.) to evaluate future likely price movement. ...
Ten BaggerAn investment which is worth ten times its original purchase price, and comes from baseball where "bags" or "bases" that a runner reaches are the ...
Term BondsThe entire issue is retired in one lump sum several years later.This is the way US Treasury bonds are retired—the money is borrowed in 1980 ...
Theoretical ValueThe Fair Value calculation of an option using a pricing formula such as the Black-Scholes Options Pricing Model. ...
Theta(decay) - The sensitivity of an option price to the variable of time to Expiration. Remember that options only have a finite life (until Expiration), ...
Thin SpreadsLarge gaps between the bids and offers caused by infrequent and illiquid trading. Thin spreads tend to move a great deal and will often move ...
TickThe least amount of price movement recorded in a security. ...
TicketThe details of a trade ? number of shares, type of order, prices ? that must be submitted for a trade to be executed. ...
Time valueThe amount by which the current market price of an option exceeds its intrinsic value. The intrinsic value of a call is the amount by which ...
TIPSTreasury inflation-protected securities (TIPS) are inflation-indexed bonds issued by the U.S. Treasury. The rate of return is adjusted to the consumer price index (CPI) as ...
TombstonesThe advertisments that are put out when a company goes public. ...
TraderSomeone who buys and sells frequently with the objective of short-term profit. ...
Trading HaltThe temporary suspension of trading in a NASDAQ security, usually for 30 minutes, while material news from the issuer is being disseminated over the news ...
Trading SecuritiesStock or bond holdings that a company intends to sell within a short period of time (usually less than one year). These are accounted for ...
Trading SessionMost commonly means one of the three eight-hour sessions forrntrading FOREX over a 24-hour period - Asian, European, and North American. ...
Trailing StopTrailing stops are designed to follow the market price of a stock by a percentage amount or fixed dollar amount. The higher the market price ...
Trailing Stop LossUsing a trailing stop loss allows the trader to maximize profits on a stock as it continues its trend. It is analogous to raising or ...
Treasury BillThe Treasury bill, or T-bill, is a zero coupon bond issued for terms of one month to one year.The T-bill is considered to be the ...
Treasury BondU.S. Treasury bonds, also known as long bonds, are issued in 30-year terms.The T-bond is a coupon bond like the T-note with interest ...
Treasury NoteTreasury notes are issued in terms of 2, 3, 5, 7, and 10 years. T-notes, like T-bills, are sold at auction to institutions ...
Treasury StockWhen a company buys its own stock back, that stock is recorded at cost and reported as treasury stock. Treasury stock is reported as a deduction ...
Triple Witching DayThe third Friday in March, June, September, and December when US stock options, index options, and futures contracts all expire at the same time. The effect ...
Ultra-High-Frequency TradingTrading extremely frequently, limited only by how fast you can click the mouse. ...
Uncovered OptionA short position where the writer does not have the underlying security (or call option) to hedge the unlimited risk position of his naked position. ...
Under WaterA stock option for which the option's grant price is higher than the current market price for the underlying stock. ...
Underlying SecurityThe security that may be bought with a call, or sold with a put. On Series 7 the underlying securities include:- 100 shares of a ...
UnderwriterA financial institution that assists in the issue of new securities by agreeing to purchase any unsold securities, thereby guaranteeing that they will be fully ...
UnrealizedA stock or other security has yet to be sold, even though the value of the security has changed. ...
Upper Indicators Choose from several popular technical indicators. The indicators are: - Bollinger Bands - Parabolic SAR - MA Envelopes - Volume by Price - Price Channel - ...
UpsideThe potential for a price to increase. ...
Value InvestingValue investing is buying shares of a business as though you were buying the business itself. Value investors emphasize the intrinsic value of assets and ...
Value StocksValue stocks are stocks that have lower prices relative to their fundamental values (growth in sales and earnings). Value stocks tend to have low P/E ...
Variation MarginFunds a broker must request from the client to have the required margin deposited. The term usually refers to additional funds that must be deposited ...
VegaThe sensitivity of an option price to volatility. Typically, options increase in value during periods of high volatility.Vega is the measurement of the sensitivity of ...
Vertical spreadA spread in which one option is bought and one option is sold, where the options are of the same type, have the same underlying, ...
VolatilityThe magnitude of price (or yield) changes over a predefined period of time. The amount by which an underlying instrument fluctuates in a given period ...
Volatility SkewWhereby deep OTM options tend to have higher Implied Volatilities than ATM options. This type of discrepancy again gives the trader the opportunity to make ...
Volatility StopsMonitoring implied volatility is critical in long neutral delta trading. Check the current volatility of the underlying asset regularly, and average the implied volatility of ...
VolumeThe amount of trading activity associated with a given security during a period of time. Stock volume is measured in shares, and options volume is ...
Volume of TradeThe number of contracts traded during a specified period of time. It may be quoted as the number of contracts traded or as the total ...
WarrantA certificate issued by a company giving the holder the right to purchase securities at a stipulated price within specific time limits or perpetually. ...
Wash SaleStock approved by the Federal Reserve and an investor's broker as being suitable for providing collateral for margin debt. ...
Wash TradingEntering into, or purporting to enter into, transactions to give the appearance that purchases and sales have been made, without incurring market risk or changing ...
Wasting AssetAn investment that loses value over time. ...
WedgeA chart pattern composed of two converging lines connecting peaks and troughs. In the case of falling wedges, the pattern indicates temporary interruptions of upward ...
Weighted AlphaThe Alpha is a measure of how much a stock has risen or fallen over a one-year period. ...
WhipsawGenerally a sideways market ("trading market" as opposed to "trending market") with high volatility in which prices move with you for a short time, then ...
White KnightA person or company that saves another company from an unwanted hostile takeover. ...
WingsA term to describe a portion of a butterfly or condor. In a long butterfly, for instance, the wings are the options that are purchased ...
Witching DayWhen two or more classes of options and futures contracts expire. ...
WriterSomeone who sells an option. ...
YieldRefers to the annual interest on a bond divided by the market price of that bond. ...
Yo-Yo StockA highly volatile stock that moves up and down like a yo-yo. ...
Z BondA bond on which interest accrues but is not currently paid to the investor but rather is added to the principal balance of the Z ...
ZetaAn option price’s sensitivity to Implied Volatility. ...


 




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