trading glossary // 377 terms · plain language · worked numbers

The trading dictionary that shows its math

377 terms across day trading, options, fundamentals, technicals, orders, and risk. Each one defined in plain language with a worked example — and connected to the free calculator that puts it to work.

Day Trading · 38 Orders & Execution · 20 Options · 26 Fundamentals · 110 Technical Analysis · 32 Market Structure · 55 Risk & Psychology · 31 General Investing · 65

0-92 terms

0DTE (Zero Days to Expiration)A 0DTE option expires the same day it trades. Once reserved for the occasional Friday, the category exploded after SPX and the major index ETFs listed expirations for every trading day; by 2023-2024, 0DTE contracts made up roughly 40-50% of all SPX option volume.Options 401(k)A 401(k) is an employer-sponsored retirement account that lets employees contribute a portion of pretax salary, often with an employer matching contribution up to a set percentage. Contributions and investment growth are tax-deferred until withdrawal in retirement, when withdrawals are taxed as ordinary income.General Investing

A17 terms

Accounts PayableAccounts payable is the mirror image of receivables: money the company owes its suppliers for goods and services it has received but not yet paid for. It sits in current liabilities and functions as an interest-free loan from vendors.Fundamentals Accounts ReceivableAccounts receivable is the money customers owe a company for goods or services already delivered but not yet paid for. It sits on the balance sheet as a current asset, because those invoices are supposed to convert to cash within the payment terms, typically 30 to 90 days.Fundamentals Accredited InvestorAn accredited investor is someone who meets SEC income or net worth thresholds (currently $200,000 in annual income, $300,000 jointly, or $1 million in net worth excluding a primary residence) that qualify them to invest in unregistered securities like hedge funds, private placements, and many venture deals.Market Structure Activist InvestorAn activist investor buys a meaningful stake in a public company specifically to pressure management into changes, such as cutting costs, selling a division, replacing executives, or returning cash to shareholders. Activists typically disclose their stake and their demands publicly to build support from other shareholders.Market Structure After-Hours TradingAfter-hours trading is the 4:00 p.m. to 8:00 p.m. ET electronic session that follows the regular close. It exists mostly to price the news that companies deliberately release after 4:00 — the bulk of earnings reports hit between 4:01 and 4:30 p.m.Day Trading AlphaAlpha is the excess return an investment or portfolio generates relative to its benchmark, after adjusting for the risk taken (typically measured by beta) to get there. A positive alpha means a manager or strategy beat what you would have expected given the amount of market risk involved; a negative alpha means it fell short.Fundamentals Altman Z-ScoreThe Altman Z-Score is a bankruptcy-prediction model that combines five financial ratios into a single distress gauge. Edward Altman published it in 1968, and the original formula for public manufacturers is: Z = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E, where A = working capital / total assets, B = retained earnings / total assets, C = EBIT / total assets, D = market value of equity / total liabilities, and E = sales / total assets.Fundamentals Analyst RatingAn analyst rating is a sell-side research firm's summary opinion on a stock, usually on a buy/hold/sell scale or a house variant like overweight/equal-weight/underweight or outperform/neutral/underperform. Each rating ships with a price target and an estimate model behind it.Fundamentals Annual ReportAn annual report is a company's yearly summary of its financial performance and operations, sent to shareholders, typically including a letter from the CEO, financial statements, and a discussion of the business's results and outlook. Publicly traded companies are required to produce one.Fundamentals ArbitrageArbitrage is the practice of simultaneously buying and selling related securities to profit from a temporary price discrepancy, with little or no net risk if executed correctly. Classic arbitrage exploits the same asset trading at two different prices in two different places at the same instant.General Investing AskThe ask (or offer) is the opposite side of the quote from the bid: the lowest price at which any seller is currently willing to part with shares, posted with a size. It is the price a market buy order pays.Orders & Execution Asset AllocationAsset allocation is the split of a portfolio across asset classes, stocks, bonds, cash, and sometimes real estate or commodities, expressed as target percentages like the classic 60/40 stock/bond mix. Landmark attribution studies found allocation explains the large majority of a diversified portfolio's return variability over time, dwarfing security selection.General Investing Asset ClassAn asset class is a group of investments that share similar characteristics and behave similarly in the market: stocks, bonds, cash and cash equivalents, real estate, and commodities are the major traditional categories. Assets within a class tend to move together more than assets across classes do.General Investing AssignmentAssignment is when an option seller is required to fulfill the contract: deliver 100 shares at the strike on a short call, or buy 100 shares at the strike on a short put. Exercise is the buyer's action; assignment is what lands on the seller, allocated by the OCC among the short holders.Options At the Money (ATM)At the money means the option's strike sits at or nearest to the current stock price. With a stock at $100.20, the 100 strike is the ATM line for both calls and puts.Options Authorized SharesAuthorized shares are the maximum number of shares a company's corporate charter permits it to issue, set by the board and shareholders and only changeable by amending that charter. It is a ceiling, not a current count; a company can have far more authorized shares than it has actually issued.Fundamentals Average True Range (ATR)Average true range measures how much a security typically moves per bar, averaged over 14 periods by default. Each bar's true range is the largest of three values: high minus low, the absolute gap between the high and the prior close, and the absolute gap between the low and the prior close, so overnight gaps count toward the reading.Technical Analysis

B29 terms

BacktestingBacktesting is running a precisely defined set of trading rules against historical data to measure how it would have performed. The output worth keeping is a trade distribution — win rate, average win and loss, expectancy, maximum drawdown — not a single equity-curve number.Risk & Psychology Bag HolderA bag holder is a trader left holding a position far below cost after the move that attracted them has died, now waiting indefinitely to "get back to even." The term is standard market vocabulary, usually applied to buyers who arrived late in a pump or a fading momentum name and never took the stop.Risk & Psychology Balance SheetThe balance sheet is the financial statement showing what a company owns (assets), what it owes (liabilities), and the difference (shareholders' equity) at a single point in time. It always balances by construction: assets = liabilities + equity.Fundamentals Basis Point (bps)A basis point is one one-hundredth of a percentage point (0.01%), used throughout finance to describe small changes in interest rates, yields, and fees without the ambiguity that can come from saying "percent of a percent." 100 basis points equal 1 percentage point.Fundamentals Bear FlagA bear flag is the downside continuation pattern: a steep decline (the pole) followed by a weak upward drift (the flag), resolved by a breakdown that extends the decline. The feeble bounce is the point; sellers are so much in control that the relief rally cannot even retrace much of the drop.Technical Analysis Bear MarketA bear market is a decline of 20% or more from a recent high, typically accompanied by pessimism about earnings or the economy and often (but not always) a recession. It is the mirror image of a bull market and the phase most buy-and-hold plans are actually tested against.Market Structure Bear TrapA bear trap is the mirror of a bull trap: a breakdown below support that quickly reverses back above the level, trapping traders who shorted the break and stopping out longs at the exact low. The reclaimed level then flips into a springboard, because trapped shorts covering are forced buyers.Technical Analysis Behavioral FinanceBehavioral finance studies how psychological biases and emotions cause investors to make decisions that deviate from purely rational, self-interested behavior, and how those deviations show up in market prices. It challenges the assumption, central to classical finance theory, that investors always act rationally.Risk & Psychology Beneish M-ScoreThe Beneish M-Score estimates the probability that a company is manipulating its reported earnings, using eight year-over-year ratios that tend to distort when the books are being stretched. Professor Messod Beneish published the model in 1999; a score above -1.78 flags a likely manipulator, and more negative scores are cleaner.Fundamentals BetaBeta measures how much a stock tends to move relative to the overall market: a beta of 1.0 moves with the market, 1.5 amplifies it by half, and 0.5 dampens it by half. Statistically it is the covariance of the stock's returns with the market's, divided by the variance of the market — the slope of the regression line through their paired returns, typically computed over 2-5 years of weekly or monthly data.General Investing BidThe bid is the highest price a buyer is currently posting for a stock, always paired with a size: a bid of $18.42 x 500 means someone will pay $18.42 for up to 500 shares right now. It is the price a market sell order receives.Orders & Execution Bid-Ask SpreadThe bid-ask spread is the distance between the best bid and the best ask: a large ETF quoted $452.30 x $452.31 has a 1-cent spread (about 0.002%), while a $4.00 small cap quoted $4.02 x $4.10 has an 8-cent spread, a full 2% of the stock price. The spread is the market's posted price for immediacy.Orders & Execution Black Swan EventA black swan event is a rare, extreme, and largely unpredictable occurrence with severe consequences, a term popularized by Nassim Nicholas Taleb, that is only widely understood as significant in hindsight. The 2008 financial crisis and the initial 2020 pandemic market crash are commonly cited examples.Risk & Psychology Blue Chip StockA blue chip stock is shares of a large, well-established, financially sound company with a long history of reliable performance, often (though not always) paying a dividend. The term borrows from poker, where the blue chip carries the highest value at the table.General Investing Blue Sky LawsBlue sky laws are state-level securities regulations that require companies offering securities to register the offering and disclose meaningful information, aimed at preventing fraudulent investment schemes. The name comes from early 20th-century concern about promoters selling securities backed by nothing more than "the blue sky."Market StructureBollinger BandsBollinger Bands are a volatility envelope consisting of a 20-period simple moving average plus an upper and lower band set 2 standard deviations above and below it. Because the bands are built from standard deviation, they widen automatically when price swings expand and contract when the market goes quiet.Technical Analysis BondA bond is a loan an investor makes to a borrower, government or corporate, in exchange for periodic interest payments (the coupon) and repayment of the original amount (the principal, or face value) at a set maturity date. Bonds are the core building block of fixed-income investing.General Investing Book ValueBook value is a company's total assets minus total liabilities — the accounting net worth that belongs to shareholders, identical to shareholders' equity on the balance sheet. Divide by shares outstanding to get book value per share.Fundamentals Borrow FeeThe borrow fee is the annualized interest rate a short seller pays to borrow shares, charged daily against the position's market value. Easy-to-borrow large caps cost 0.25-1% a year — background noise. Hard-to-borrow squeeze names have printed rates of 100-700% at peak demand.Market Structure BreakdownA breakdown is the bearish mirror of a breakout: price falls through a support level that held on multiple prior tests, and the selling continues instead of bouncing. The buyers who defended that floor are done, and everyone who bought against it is now underwater.Day Trading BreakoutA breakout is a push through a price level that has repeatedly capped a stock, usually a prior high or well-tested resistance, on volume heavier than the sessions that built the level. The level matters because sellers defended it before; the volume matters because it shows those sellers are finally absorbed.Day Trading BrokerA broker is a licensed firm or individual that executes buy and sell orders on behalf of clients, acting as the intermediary between an investor and the exchange or market maker on the other side of the trade. Every retail trade in the US passes through a broker, whether the client ever thinks about that layer or not.Market Structure Brokerage AccountA brokerage account is the account you open with a broker to hold cash and securities and to place trades. A standard cash account requires paying for securities in full; a margin account lets you borrow against your holdings to buy more than your cash balance alone would allow.Market Structure Buffett IndicatorThe Buffett Indicator divides the total market capitalization of a country's stock market by its GDP, gauging how large equity valuations have grown relative to the economy beneath them. For the US, the numerator is typically the Wilshire 5000 total market index; Warren Buffett called the ratio "probably the best single measure of where valuations stand at any given moment" in a 2001 Fortune article.General Investing Bull FlagA bull flag is a continuation pattern: a sharp advance (the pole) followed by a tight, downward-drifting consolidation (the flag), with the expectation that a breakout from the flag resumes the advance. The pattern is only valid after a genuine pole; a mild uptick followed by chop is just chop.Technical Analysis Bull MarketA bull market is a sustained period of rising prices, most often defined as a broad index climbing 20% or more from its low without a comparable reversal. It reflects optimism about earnings, the economy, or both, and it feeds on itself: rising prices draw in more buyers, which pushes prices higher still.Market Structure Bull TrapA bull trap is a breakout above resistance that fails almost immediately, reversing back below the level and stranding the buyers who chased the break. The failed move often accelerates the reversal: trapped longs selling their stopped-out positions become the fuel for the drop.Technical Analysis Buyback YieldBuyback yield is the percentage of a company's market cap it spent on net share repurchases over the past year — the buyback counterpart to dividend yield. Net is the operative word: repurchases minus new shares issued, because a company that buys back $2B while issuing $2B of stock compensation has returned nothing.Fundamentals BuyoutA buyout is the purchase of a controlling interest in a company, often taking it entirely private in the process. Buyouts can be financed with cash, debt, or a combination, and can be initiated by the company's own management (a management buyout) or by an outside private equity firm.Fundamentals

C30 terms

D31 terms

Dark PoolA dark pool is a private trading venue that matches orders without displaying them beforehand. No quotes appear on Level 2; the trade only becomes public after it executes, printing to the consolidated tape through a Trade Reporting Facility (TRF).Orders & Execution Day OrderA day order dies at the 4:00 pm ET close if it has not filled, in contrast to a GTC order that keeps working across sessions. It is the default time-in-force at nearly every broker: submit a limit order without touching the duration field and this is what you sent.Orders & Execution Days Inventory Outstanding (DIO)Days inventory outstanding answers one question: how long does product sit before it sells? DIO = (inventory / cost of goods sold) x 365, the average shelf time in days.Fundamentals Days Payable Outstanding (DPO)Days payable outstanding is the flip side of DSO: the average number of days a company takes to pay its own suppliers. DPO = (accounts payable / cost of goods sold) x 365.Fundamentals Days Sales Outstanding (DSO)Days sales outstanding is the average number of days a company waits to collect payment after making a sale: DSO = (accounts receivable / revenue) x 365. Lower means faster cash.Fundamentals Days to CoverDays to cover is short interest divided by average daily trading volume — the number of typical trading days it would take every short seller to buy back their position. Ten million shares short in a stock that trades two million shares a day is 5 days to cover.Market Structure Dead Cat BounceA dead cat bounce is a brief, sharp recovery inside an ongoing decline that fails and gives way to new lows. The mechanics behind the pop are short covering and dip buyers anchoring to recent higher prices — neither of which is the sustained demand a real bottom requires.Market Structure Death CrossA death cross occurs when the 50-day moving average crosses below the 200-day moving average, marking the point where intermediate-term weakness has dragged below the long-term trend. It is the bearish counterpart to the golden cross.Technical Analysis Debt-to-EBITDADebt-to-EBITDA states leverage in years: how many years of pre-interest, pre-tax, pre-depreciation earnings it would take to pay off the debt load. Lenders live on this ratio — most credit agreements carry a covenant that trips if it crosses a set line, commonly somewhere in the 3.0-4.5x range.Fundamentals Debt-to-Equity RatioA debt-to-equity ratio of 1.0 means a company finances itself with exactly as much borrowed money as owner money: total debt divided by shareholders' equity, both straight off the balance sheet. At 0.3 the balance sheet is conservative; at 2.5 the lenders own most of the risk.Fundamentals Defensive StockA defensive stock belongs to a company whose products or services see relatively stable demand regardless of the economic cycle, common in sectors like utilities, consumer staples, and healthcare. People keep buying groceries, electricity, and medicine in a recession even as they cut back on cars and vacations.Fundamentals Deferred RevenueDeferred revenue is cash a company has collected for products or services it has not yet delivered. It sits on the balance sheet as a liability — the company owes the customer performance, not money — and it converts into recognized revenue only as the goods or service are actually provided.Fundamentals DeltaDelta measures how much an option's price changes for a $1 move in the underlying stock. A 0.40-delta call gains about $0.40 when the stock rises $1; puts carry negative deltas, so a -0.40 put gains about $0.40 when the stock falls $1.Options Depreciation & Amortization (D&A)Depreciation and amortization spread the cost of a long-lived asset across the years it gets used, instead of expensing it all at purchase. Depreciation applies to physical assets (machines, buildings, vehicles); amortization applies to intangible ones (acquired patents, customer lists, software).Fundamentals DilutionDilution is the reduction in each existing shareholder's ownership percentage — and claim on earnings — when a company issues new shares. Same company, more slices, each slice smaller.Fundamentals Dip BuyA dip buy is a long entry into a pullback within a stock that is trending up, rather than a chase of the highs. The dip buyer wants strength on sale: a momentum name that ran from $5 to $7 and has pulled back to $6.40 at a logical support — VWAP, a prior breakout level, a round number.Day Trading Direct Market Access (DMA)Direct market access lets a trader route orders straight to a chosen exchange, ECN, or dark pool instead of letting the broker decide where the order goes. The order you send is the order that hits the venue's book, under the broker's membership and risk checks.Orders & Execution Discounted Cash Flow (DCF)A discounted cash flow valuation prices a business as the sum of all the cash it will ever generate, with each future dollar shrunk back to present value at a discount rate. A dollar arriving in year three at a 10% discount rate is worth $1 / 1.10^3 = $0.75 today; a DCF just runs that arithmetic across every projected year plus a terminal value for everything beyond the forecast window.Fundamentals DivergenceDivergence is a disagreement between price and an indicator: price makes a new high or low, but the oscillator tracking it does not. Bearish divergence is a higher price high with a lower indicator high; bullish divergence is a lower price low with a higher indicator low.Technical Analysis DiversificationDiversification is spreading a portfolio across enough different holdings that no single position, sector, or country can sink it. Its power comes from imperfect correlation: assets that do not move together smooth each other's swings, cutting portfolio volatility without cutting expected return proportionally.General Investing DividendA dividend is a cash payment a company makes to shareholders out of its profits, typically quarterly in the US and quoted per share. Own 500 shares of a stock paying $0.50 per quarter and $250 lands in your account every three months.Fundamentals Dividend AristocratA Dividend Aristocrat is an S&P 500 company that has increased its dividend every year for at least 25 consecutive years, a formal designation tracked by S&P Dow Jones Indices. The list currently runs to several dozen companies across a range of industries.General Investing Dividend Growth RateDividend growth rate is the annualized pace at which a company raises its per-share dividend, usually quoted as a 3-year, 5-year, or 10-year compound annual growth rate. For income investors it is the second half of the return equation: starting yield tells you what the position pays now, growth rate tells you what it will pay later.General Investing Dividend YieldDividend yield is the annual dividend per share divided by the share price — the cash return you earn just for holding the stock, before any price change. A $50 stock paying $2.00 a year yields 4%.Fundamentals DojiA doji is a candlestick whose open and close land at nearly the same price, leaving a body so thin it looks like a cross or plus sign. The wicks can be long or short; the defining feature is the near-zero body.Technical Analysis Dollar-Cost Averaging (DCA)Dollar-cost averaging is investing a fixed dollar amount on a fixed schedule regardless of price, so the same $500 buys more shares when the price is low and fewer when it is high. The mechanical result: your average cost per share lands below the average of the prices you bought at whenever prices moved at all.General Investing Double BottomA double bottom is a reversal pattern in which price makes two lows at roughly the same level, separated by a bounce, then breaks above the high between them: the W shape. The second low proves that the sellers who broke the first low could not find follow-through at the same price, and the break of the interim high confirms buyers have taken over.Technical Analysis Double TopA double top is a reversal pattern in which price hits roughly the same high twice, separated by a pullback, and then breaks below the low between the peaks. The two failures at one level show that supply reliably appears there; the break of the interim low shows demand has stopped defending the range.Technical Analysis Dow Jones Industrial Average (DJIA)The Dow is a price-weighted index of 30 large, established US companies, first published in 1896 and still one of the most quoted market benchmarks despite covering far fewer companies than the S&P 500. Price-weighted means a $500 stock moves the index more than a $50 stock, regardless of which company is actually larger.Market Structure DrawdownDrawdown is the decline from an account's equity peak to its subsequent low, quoted as a percentage of that peak. An account that grows to $50,000 and falls to $40,000 is in a 20% drawdown even if it started at $30,000.Risk & Psychology DRIP (Dividend Reinvestment Plan)A DRIP is a dividend reinvestment plan: instead of receiving cash dividends, the payout automatically buys more shares (including fractional shares) of the same stock or fund, usually commission-free. Each dividend then earns its own dividends, which is compounding running on autopilot.General Investing

E22 terms

Earnings BeatAn earnings beat is a reported result that comes in above the consensus analyst estimate, most commonly measured on EPS. Beats are the norm, not the exception: in a typical quarter roughly 70-75% of S&P 500 companies beat the consensus EPS number, because companies guide low and analysts follow.Fundamentals Earnings MissAn earnings miss is a reported result below the consensus analyst estimate, on EPS, revenue, or both. Because roughly three quarters of large caps beat in a normal quarter, a miss is a rarer and louder event than a beat, and the market punishes it accordingly.Fundamentals Earnings Per Share (EPS)Earnings per share is net income divided by the number of shares outstanding — the slice of annual profit attached to each individual share. A company earning $250M with 100M shares out earns $2.50 per share.Fundamentals Earnings Power Value (EPV)Earnings power value prices a business on one deliberately brutal assumption: current earnings, properly normalized, continue forever with zero growth. Columbia professor Bruce Greenwald built it as EPV = adjusted after-tax operating earnings / cost of capital — a perpetuity with no forecast, no terminal-value guess, and no credit for a future that has not happened.Fundamentals Earnings SeasonEarnings season is the four-to-six-week stretch after each calendar quarter ends when most public companies report results, kicking off in mid-January, mid-April, mid-July, and mid-October. The big banks traditionally open it, megacap tech lands two to three weeks in, and small caps straggle through the tail.Fundamentals Earnings YieldEarnings yield flips the P/E ratio upside down: earnings per share divided by price, expressed as a percentage. A stock at a P/E of 20 has an earnings yield of 5% — the company earns five cents a year for every dollar of stock you own.Fundamentals EBITEBIT is earnings before interest and taxes: profit measured after all operating costs, including depreciation and amortization, but before the effects of debt and tax jurisdictions. In most companies it lands within rounding distance of operating income; technically EBIT starts from net income and adds back interest and taxes, so it also captures non-operating items that operating income excludes.Fundamentals EBITDAEBITDA is earnings before interest, taxes, depreciation, and amortization — operating profitability measured before financing costs, tax rates, and non-cash asset charges. You build it by starting from net income and adding those four items back.Fundamentals ECN (Electronic Communication Network)An ECN is an electronic system that matches buy and sell orders directly against each other, with no dealer in the middle. Orders rest in a visible book, and when a buy price crosses a sell price the ECN pairs them automatically — the model that Island and Archipelago pioneered in the late 1990s and that modern venues like NYSE Arca and Nasdaq inherited.Orders & Execution Effective Tax RateThe 21% U.S. statutory corporate rate is not what most companies actually pay — the effective tax rate is: income tax expense divided by pretax income, as reported. Foreign income taxed at lower rates, R&D credits, stock-compensation deductions, and loss carryforwards routinely pull large companies' effective rates into the mid-teens or lower.Fundamentals Efficient Market Hypothesis (EMH)The efficient market hypothesis holds that asset prices fully reflect all available information at all times, which implies it should be impossible to consistently beat the market through stock picking or market timing, since any advantage would already be priced in. It comes in weak, semi-strong, and strong forms depending on what kind of information is assumed to be reflected.General Investing Engulfing CandleAn engulfing candle has a body that completely covers the prior candle's body: a bullish engulfing closes above the previous open after opening below the previous close, and a bearish engulfing does the reverse. The wicks do not need to be engulfed, only the open-to-close body.Technical Analysis Enterprise Value (EV)Enterprise value is the theoretical takeover price of a whole business: market cap plus total debt minus cash and equivalents. A buyer acquiring the company inherits its debt and pockets its cash, so EV captures what the operation actually costs.Fundamentals EquityEquity is ownership: a claim on an asset after all debts against it are subtracted. For a public company, equity is its stock; for a homeowner, it is the home's value minus the remaining mortgage; on a balance sheet, shareholders' equity is total assets minus total liabilities.General Investing ETF (Exchange-Traded Fund)An ETF is a fund that holds a basket of assets and trades on an exchange like a single stock — buy SPY and you own a sliver of all 500 S&P companies with one ticker, tradable any second the market is open.Market Structure EV/EBITDAEV/EBITDA compares enterprise value — market cap plus net debt — to earnings before interest, taxes, depreciation, and amortization, valuing the whole business rather than just its equity. Because both sides are capital-structure neutral, it lets you compare a debt-heavy company against a debt-free one, which P/E cannot do: interest expense distorts the E while debt is invisible in the P.Fundamentals Ex-Dividend DateThe ex-dividend date is the first trading day a stock trades without the right to its upcoming dividend. Buy the shares any time before the ex-date and you collect the payment; buy on the ex-date or later and the dividend goes to the seller.Market Structure ExpectancyExpectancy is the average amount a trading approach makes or loses per trade: expectancy = (win rate x average win) - (loss rate x average loss). A positive number means the edge is real; a negative number means more trades just lose money faster.Risk & Psychology Expense RatioAn expense ratio is a fund's annual fee expressed as a percentage of assets, deducted continuously from the fund's returns rather than billed to you. Broad index ETFs now charge 0.03-0.20%; actively managed mutual funds commonly charge 0.50-1.00% or more for the same asset class.General Investing Expiration DateThe expiration date is the last day an option contract exists; after it, the option is either exercised or gone. Standard monthly equity options expire on the third Friday of the month, and liquid names also list weeklies expiring every Friday. Major indexes like SPX now expire every trading day.Options Exponential Moving Average (EMA)An exponential moving average weights recent prices more heavily than older ones, using a smoothing multiplier of 2 / (N + 1) applied to each new close. The formula is: today's EMA = prior EMA + multiplier x (today's close - prior EMA). Old data never fully drops out; its influence just decays toward zero.Technical Analysis Extrinsic ValueExtrinsic value is everything in an option's price that is not intrinsic value — the premium paid for time remaining and for implied volatility. It is also called time value, and it is the part of the option that melts.Options

F23 terms

FadeTo fade a move is to trade against it: shorting a vertical spike or buying a panic flush on the bet that the move is overextended and will snap back toward a mean, often VWAP. The fade trader is selling to the chasers and buying from the panickers.Day Trading Failure to Deliver (FTD)A failure to deliver happens when the seller of a security does not hand over the shares by the settlement date — under the US T+1 cycle, one business day after the trade. The buyer paid, the shares never arrived, and the trade sits unsettled on the books of the clearing system.Market Structure FakeoutA fakeout is a break of a key level that fails almost immediately, trapping the traders who entered on the move and stopping out the ones positioned against it. Price pokes through resistance or support just far enough to trigger orders, then reverses back inside the range.Day Trading Fed Funds RateThe fed funds rate is the interest rate the Federal Reserve targets for overnight loans between banks, and it is the primary lever the Fed uses to tighten or loosen financial conditions across the whole economy. The Fed sets a target range, not a single number, and adjusts it at scheduled policy meetings roughly eight times a year.Market Structure Federal Reserve (The Fed)The Federal Reserve is the US central bank, tasked by Congress with a dual mandate of stable prices and maximum employment. It carries out that mandate mainly by setting short-term interest rates and, at times, by buying or selling large quantities of bonds.Market Structure Fibonacci RetracementFibonacci retracement is a charting tool that divides a completed price move into standard fractions, 23.6%, 38.2%, 50%, 61.8%, and 78.6%, to project where a pullback might stall. The trader anchors the tool to the swing low and swing high, and the levels print as horizontal lines inside that range.Technical Analysis FiduciaryA fiduciary is legally required to act in a client's best interest, ahead of their own financial interest, when giving advice or managing money. Registered investment advisors are generally held to a fiduciary standard; many brokers historically operated under a lower "suitability" standard, which only required recommendations to be appropriate, not necessarily optimal.General Investing FillA fill is the execution of an order: the moment shares actually change hands, stamped with a price, a size, and a time. Until an order is filled it is an intention; the fill is the trade.Orders & Execution Fiscal YearA fiscal year is the 12-month period a company uses for financial reporting and budgeting, which does not have to match the calendar year. Most US companies use a calendar fiscal year ending December 31, but many, especially retailers, use a fiscal year ending in January or another month that better fits their business cycle.Fundamentals Float (Public Float)A company's float is the number of shares actually available for public trading, calculated as total shares outstanding minus shares held by insiders, large strategic holders, and other restricted or closely-held stakes. Float, not total shares outstanding, is what determines how easily a stock can be bought or sold without moving the price.Fundamentals Float RotationFloat rotation is when a stock's cumulative volume for the day exceeds its float — on paper, every freely tradable share has changed hands at least once. Traders count rotations as a live gauge of how crowded and fast a momentum name is trading.Day Trading FOMOFOMO — fear of missing out — is the urge to buy a stock because it is already running and everyone else seems to be getting paid. The entry is driven by the pain of watching, not by a setup, which is why FOMO buys cluster near short-term tops.Risk & Psychology Form 10-KA Form 10-K is the audited annual report every US public company must file with the SEC, covering a full fiscal year of financial statements, risk factors, and management commentary. Filing deadlines run 60 days after fiscal year end for large accelerated filers, 75 for accelerated filers, and 90 for everyone else.Fundamentals Form 10-QA Form 10-Q is the quarterly version of the 10-K: financial statements and updated disclosures filed with the SEC for each of the first three fiscal quarters, due within 40 days of quarter end for large accelerated and accelerated filers and 45 days for smaller companies. The fourth quarter has no 10-Q; it folds into the annual 10-K.Fundamentals Form 13FA Form 13F is the quarterly SEC filing where institutional investment managers with at least $100 million in qualifying US securities disclose their long equity holdings, due within 45 days of quarter end. It is how the public sees what hedge funds and asset managers actually own.Fundamentals Form 4A Form 4 is the SEC filing corporate insiders must submit within two business days of buying or selling their company's stock. It covers Section 16 insiders: officers, directors, and holders of more than 10% of the shares.Fundamentals Form 8-KA Form 8-K is the SEC filing companies use to disclose material events between scheduled reports, generally due within four business days of the event. Earnings releases arrive as 8-Ks under Item 2.02, executive departures under Item 5.02, and major contracts under Item 1.01.Fundamentals Forward P/EForward P/E prices a stock against earnings that have not happened yet: current share price divided by consensus estimated EPS for the next twelve months or next fiscal year. A fast grower that looks expensive at 40x trailing earnings might show 25x forward, because the denominator already includes the growth everyone expects.Fundamentals Free Cash Flow (FCF)Free cash flow is the cash a business generates from operations minus capital expenditures — the money actually left over after running and maintaining the business. FCF = operating cash flow - capex, both pulled straight from the cash flow statement.Fundamentals Free Cash Flow YieldA 5% free cash flow yield means every $100 of market value is backed by $5 of annual free cash flow: FCF divided by market cap, the inverse of price-to-free-cash-flow. Some analysts run it against enterprise value instead, which is the stricter version for indebted companies — the equity-only version can make a levered business look deceptively cheap.Fundamentals Fundamental AnalysisFundamental analysis evaluates a security's intrinsic value by studying the underlying business: financial statements, revenue and earnings trends, competitive position, management quality, and the broader industry and economy it operates in. The goal is to estimate what a company is actually worth, independent of its current stock price.Fundamentals Funds From Operations (FFO)Funds from operations is the REIT industry's earnings measure: net income with real estate depreciation added back and gains or losses from property sales stripped out. It exists because GAAP net income is close to useless for REITs — accounting rules depreciate buildings toward zero over decades while well-maintained real estate often holds or gains value, so reported earnings systematically understate what a REIT actually generates.Fundamentals Futures ContractA futures contract is a standardized, exchange-traded agreement to buy or sell an asset (a commodity, an index, a currency, or an interest rate) at a set price on a set future date. Unlike options, both parties to a futures contract are obligated to complete the transaction, not just given the right to.General Investing

G17 terms

GAAP vs Non-GAAPGAAP earnings follow Generally Accepted Accounting Principles, the standardized US rulebook auditors sign off on; non-GAAP (or "adjusted") earnings are the company's own recut that excludes items management deems non-representative, most commonly stock-based compensation, restructuring charges, and amortization of acquired intangibles.Fundamentals GammaGamma is the rate at which delta changes per $1 move in the stock — the acceleration behind delta's speed. An option with a 0.50 delta and 0.08 gamma has a 0.58 delta after the stock rises $1, and 0.42 after it falls $1.Options Gamma SqueezeA gamma squeeze is a rally driven by options dealers hedging the calls they sold. When traders buy large volumes of call options, market makers who sold those calls buy shares to stay delta-neutral; as the stock rises, gamma pushes each call's delta higher, forcing dealers to buy even more stock, which lifts price again.Day Trading Gap and GoGap and go is a momentum setup where a stock gaps up on a catalyst and continues higher after the open instead of fading. The entry is early — often the break of the premarket high or the first opening range high — on the thesis that a strong gap with a hard catalyst attracts a full day of follow-on buying.Day Trading Gap DownA gap down is an open below the prior session's close, with no trades printed in between. Sellers absorbed overnight news — an earnings miss, an offering, a downgrade — and the first print of the day already reflects it.Day Trading Gap UpA gap up is an open above the prior session's close, leaving a stretch of prices where no shares traded. The gap exists because news landed while the market was closed and buyers repriced the stock before the opening bell rather than after it.Day Trading GapperA gapper is any stock set to open sharply away from its prior close — the trader's shorthand for the names a premarket scanner surfaces each morning. Most desks filter for a minimum gap (say 5%+), minimum premarket volume, and a price band that fits their strategy.Day Trading Golden CrossA golden cross occurs when the 50-day moving average crosses above the 200-day moving average, signaling that intermediate-term price strength has overtaken the long-term trend. It is the standard chart definition of a shift from a bearish or neutral regime to a bullish one.Technical Analysis Good Til Canceled (GTC)A good til canceled (GTC) order stays working session after session until it fills or you cancel it, though most brokers impose a ceiling of 60-180 days before purging it. It is the time-in-force for orders built around price levels rather than around today.Orders & Execution GoodwillGoodwill is the premium an acquirer pays above the fair value of a target's identifiable net assets, parked on the balance sheet as an intangible asset. Buy a company for $500M whose nameable assets minus liabilities are worth $320M, and $180M of goodwill appears — the accounting residue of whatever justified the price: brand, synergies, or optimism.Fundamentals Graham NumberThe Graham Number is the square root of 22.5 x EPS x book value per share — a ceiling price a defensive investor should pay for a stock under Benjamin Graham's rules. The 22.5 is not arbitrary: Graham capped the P/E at 15 and price-to-book at 1.5, and 15 x 1.5 = 22.5, so the formula blends both limits into one number.General Investing Green-to-Red MoveA green-to-red move is an intraday cross from positive to negative against the prior close — a stock that was up on the day loses the entire gain and goes red. It is the bearish mirror of red-to-green, and on gapped-up momentum names it is a primary short trigger: the cross confirms that everyone who bought the open is now underwater.Day Trading Gross Domestic Product (GDP)GDP is the total dollar value of all goods and services produced within a country over a given period, and it is the broadest single measure of economic size and growth. Quarterly GDP growth (or contraction) is the headline number used to describe whether the economy is expanding, stalling, or shrinking.Market Structure Gross MarginGross margin is gross profit as a percentage of revenue: (revenue - cost of goods sold) / revenue. It measures what the company keeps from each sale before overhead, marketing, R&D, interest, or taxes.Fundamentals Gross ProfitRevenue minus cost of goods sold equals gross profit: the dollars left after paying for the product itself, before any operating cost. Everything below it on the income statement — R&D, marketing, interest, taxes — gets paid out of this pool.Fundamentals Growth InvestingGrowth investing focuses on companies expected to grow revenue and earnings faster than the market average, often paying a premium valuation (a high P/E or P/S ratio) for that expected growth rather than looking for statistically cheap stocks. The bet is that future earnings growth will eventually justify today's higher price.General Investing GuidanceGuidance is management's own forecast for upcoming revenue, earnings, or margins, usually issued with quarterly results. The reported quarter is history; guidance is the number the stock actually trades on.Fundamentals

H8 terms

HammerA hammer is a candlestick with a small body near the top of its range and a lower wick at least twice the body's height, printed after a decline. The shape shows sellers pushing price sharply lower intraday and buyers reclaiming almost all of it by the close.Technical Analysis Hard to Borrow (HTB)Hard to borrow describes a stock with so little lendable supply that brokers restrict or surcharge short selling in it. The opposite designation is easy to borrow (ETB), where shares are plentiful and the locate is automatic and near-free.Market Structure Head and ShouldersA head and shoulders is a topping pattern made of three peaks: a left shoulder, a higher head, and a right shoulder that fails to reach the head's high, all connected underneath by a support line called the neckline. The pattern completes only when price closes below the neckline; before that it is just three bumps.Technical Analysis Hedge FundA hedge fund is a pooled investment vehicle for wealthy individuals and institutions that uses a wider toolkit than a typical mutual fund, including short selling, leverage, and derivatives, in pursuit of returns that are not simply tied to a rising market. Despite the name, many hedge funds take large directional bets rather than hedging in the literal sense.Market Structure HedgingHedging is holding an offsetting position so that a loss in one holding is partly or fully canceled by a gain in another. Common equity hedges include buying puts against long stock, shorting a correlated name or index ETF against a long book, and collaring a position with options.Risk & Psychology High of DayHigh of day (HOD) is the highest price a stock has printed in the current regular session. It doubles as the most-watched intraday resistance level, because every long who sold there and every short who entered there is anchored to it.Day Trading Hostile TakeoverA hostile takeover is an acquisition attempt made directly to a target company's shareholders, over the objection of its board of directors, typically through a tender offer (a public offer to buy shares directly from shareholders) or a proxy fight (trying to replace the board with directors who will approve the deal).Fundamentals HotkeysHotkeys are keyboard shortcuts that fire pre-configured orders instantly: one keystroke to buy 1,000 shares at the ask, another to flatten the entire position, no mouse and no order ticket. Active trading platforms exist largely because of this feature.Orders & Execution

I22 terms

Implied MoveThe implied move is the size of the swing the options market expects from an upcoming event, estimated as the at-the-money straddle price divided by the stock price, using the first expiration after the event. It is quoted as a percentage and read as plus-or-minus: direction unspecified, magnitude priced.Options Implied Volatility (IV)Implied volatility is the amount of future movement the options market is pricing into a stock, expressed as an annualized percentage and backed out from option prices themselves. IV of 40% on a $100 stock implies roughly a one-standard-deviation range of +/- $40 over a year, or about +/- 2.5% on a typical day (40% divided by the square root of 252 trading days).Options In the Money (ITM)An option is in the money when it has intrinsic value: a call with the stock above its strike, a put with the stock below it. The deeper in the money, the more the option trades like the stock itself.Options Income InvestingIncome investing prioritizes generating regular cash flow from a portfolio, through dividends, bond interest, or other distributions, over pursuing capital appreciation. It is common among retirees and others who need a portfolio to fund ongoing expenses rather than simply grow over decades.General Investing Income StatementThe income statement is the financial report showing a company's revenue, costs, and resulting profit over a period — a quarter or a year. It reads as a waterfall: revenue at the top, then successive subtractions down to net income at the bottom.Fundamentals IndexA stock index is a calculated number that tracks the combined performance of a defined basket of stocks, serving as the market's scoreboard. The S&P 500 tracks roughly 500 large US companies; the Nasdaq-100 tracks the biggest non-financial Nasdaq names; the Dow tracks 30 blue chips.Market Structure Index FundAn index fund is a mutual fund or ETF built to replicate the holdings and weighting of a specific benchmark, like the S&P 500, rather than trying to beat it through active stock picking. Because there is no research team trying to outsmart the market, index funds charge dramatically lower fees than actively managed funds.General Investing InflationInflation is the rate at which prices for goods and services rise across the economy, eroding the purchasing power of a fixed amount of money over time. The Federal Reserve targets roughly 2% annual inflation as consistent with healthy growth; sustained readings well above that erode savings and pressure the Fed toward higher interest rates.Market Structure Insider OwnershipInsider ownership is the percentage of a company's shares held by its officers, directors, and beneficial owners of more than 10% — the people the SEC formally classifies as insiders. The data is public by law: holdings appear in the annual proxy statement, and every change is disclosed on a Form 4 within two business days.General Investing Insider TradingInsider trading covers two very different things: the legal buying and selling of company stock by its own officers, directors, and large holders, disclosed on Form 4 within two business days, and the illegal act of trading on material nonpublic information (MNPI), whether by an insider or anyone they tip.Fundamentals Institutional InvestorAn institutional investor is an organization, rather than an individual, that pools large amounts of capital to invest: pension funds, mutual funds, hedge funds, insurance companies, and endowments. Institutions account for the large majority of daily US equity trading volume.Market Structure Institutional OwnershipInstitutional ownership is the percentage of a company's shares held by institutions: mutual funds, hedge funds, pensions, banks, and insurers, tallied mostly from quarterly 13F filings. Large-cap US names typically run 70-90% institutional; microcaps can sit below 20%.Fundamentals Intangible AssetsIntangible assets are the non-physical assets on a balance sheet: patents, trademarks, licenses, customer relationships, acquired software, and goodwill. They mostly arrive through acquisitions — accounting rules force an acquirer to value what it bought, while the same assets built in-house (a brand, a codebase) usually never appear on the books at all.Fundamentals Interest Coverage RatioInterest coverage divides EBIT by interest expense to answer a blunt question: can the company pay the interest on its debt out of operating profit? A ratio of 4x means operating earnings cover the interest bill four times over; a ratio near 1x means nearly every operating dollar goes to lenders.Fundamentals Interest RateAn interest rate is the cost of borrowing money, or the return earned on lending it, expressed as an annual percentage. It is the single input that touches nearly every corner of markets at once: bond prices, mortgage rates, corporate borrowing costs, and the present value of future stock earnings.Market Structure Intrinsic ValueIntrinsic value is what an option would be worth if exercised this instant: max(0, stock price - strike) for a call, max(0, strike - stock price) for a put. It can never be negative — an option that is unfavorable to exercise simply has zero intrinsic value.Options Inventory TurnoverInventory turnover counts how many times a company sells through its entire stock in a year: cost of goods sold divided by average inventory. A turnover of 6 means the shelves clear out six times annually, roughly every 61 days.Fundamentals Investment GradeInvestment grade describes a bond rated BBB-/Baa3 or higher by the major credit rating agencies, signaling a relatively low risk of default. Many pension funds, insurance companies, and conservative bond funds are restricted by their own rules to holding only investment-grade debt.General Investing IPO (Initial Public Offering)An IPO is the first sale of a company's shares to the public, converting a private company into one listed on an exchange. Investment banks underwrite the deal: they build the order book from institutional investors, set the offering price, and typically earn fees around 4-7% of the proceeds.Market Structure IRA (Individual Retirement Account)An IRA is a tax-advantaged retirement account individuals can open independently of an employer, with annual contribution limits set by the IRS. A traditional IRA offers a tax deduction on contributions, with withdrawals taxed as ordinary income in retirement.General Investing Iron CondorAn iron condor sells an out-of-the-money put spread and an out-of-the-money call spread on the same expiration, collecting two credits for a bet that the stock stays inside a range. The long wings cap the risk on both sides, making the max loss known at entry.Options IV CrushIV crush is the sharp drop in implied volatility the moment a known event passes, deflating option prices even when the stock moves in the buyer's favor. The uncertainty premium built up ahead of earnings or a binary catalyst vanishes overnight because the question it was pricing has been answered.Options

J1 terms

Junk Bond (High-Yield Bond)A junk bond is a corporate bond rated below investment grade (BB+ or lower at S&P, Ba1 or lower at Moody's), issued by a company with a higher perceived risk of default. To compensate for that risk, junk bonds pay meaningfully higher yields than investment-grade debt from more stable issuers.General Investing

K1 terms

Kelly CriterionThe Kelly criterion is a formula for the bet size that maximizes long-run compound growth: Kelly fraction = edge / odds. In trading form, f = W - (1 - W) / R, where W is the win rate and R is the ratio of average win to average loss.Risk & Psychology

L12 terms

Large-Cap StockA large-cap stock is generally defined as a company with a market capitalization above $10 billion, a threshold that includes most household-name businesses and the bulk of the S&P 500's total value. Large caps tend to be more stable and more heavily analyzed than smaller companies.General Investing Level 2Level 2 is the live order book display: every visible bid and offer at each price level, tagged with the market maker or ECN posting it and the size shown. Where Level 1 gives only the best bid and offer, Level 2 shows the depth stacked behind them.Day Trading LeverageLeverage is control of a position larger than the cash behind it, using borrowed money or derivatives, so that gains and losses are computed on the full position size rather than the equity. A 2:1 levered account moves twice as fast as the underlying stock, in both directions.Risk & Psychology Leveraged Buyout (LBO)A leveraged buyout is an acquisition financed mostly with borrowed money, using the target company's own assets and future cash flows as collateral for the debt. A private equity firm might put up only 20-30% of the purchase price in cash, financing the rest with debt the acquired company itself will have to repay.Fundamentals LIBORLIBOR (the London Interbank Offered Rate) was, for decades, the benchmark interest rate banks charged each other for short-term loans, and it underpinned trillions of dollars of mortgages, corporate loans, and derivatives worldwide. It was phased out after a rate-rigging scandal exposed that some banks had been submitting false rates to benefit their own trading positions.Market Structure Limit OrderA limit order flips the market order's trade-off: it guarantees your price but not your fill. A buy limit executes only at your limit price or lower; a sell limit only at your price or higher.Orders & Execution LiquidityLiquidity is how easily an asset can be bought or sold at a price close to its last traded price, without the act of trading itself moving that price. A stock trading millions of shares a day with a penny-wide bid-ask spread is liquid; a thinly traded small cap where a single order can move the price 5% is not.Market Structure Load FundA load fund is a mutual fund that charges a sales commission (the "load") on top of its ongoing expense ratio, either when you buy shares (front-end load) or when you sell them (back-end load, sometimes called a contingent deferred sales charge). Loads typically run from 3% to 6% of the amount invested.General Investing Lockup ExpirationLockup expiration is the date insiders and pre-IPO investors become free to sell shares they were contractually barred from selling after a company's debut — typically 90-180 days post-IPO. On that date, the supply of sellable stock can jump from the IPO float to several times that.Market Structure Loss AversionLoss aversion is the well-documented tendency for the pain of losing money to feel more intense than the pleasure of gaining the same amount, a core finding of behavioral economics research by Daniel Kahneman and Amos Tversky. Studies have suggested losses can feel roughly twice as psychologically powerful as equivalent gains.Risk & Psychology Low FloatA low float stock has a small supply of freely tradable shares — commonly defined as under 10-20 million, with the most explosive movers under 5 million. Float excludes insider holdings, restricted stock, and other locked-up shares, so it can be a fraction of shares outstanding.Day Trading Low of DayLow of day (LOD) is the lowest price printed in the current regular session, and the intraday support level the most eyes are on. Longs place stops just beneath it; short sellers watch it as the trigger for a fresh leg down.Day Trading

M18 terms

MACDMACD (moving average convergence divergence) is a momentum indicator built from three EMAs: the MACD line is the 12-period EMA minus the 26-period EMA, the signal line is a 9-period EMA of the MACD line, and the histogram plots the gap between the two. Standard notation is 12/26/9.Technical Analysis Magic FormulaThe Magic Formula ranks every stock twice — once on earnings yield (EBIT / enterprise value) and once on return on capital (EBIT / (net working capital + net fixed assets)) — then adds the two ranks and buys the best combined scores. Joel Greenblatt published it in The Little Book That Beats the Market (2005) as a mechanical way to buy good businesses (high return on capital) at cheap prices (high earnings yield).General Investing Maintenance MarginMaintenance margin is the minimum equity, as a percentage of position value, that a margin account must hold after a position is opened. FINRA sets the regulatory floor at 25% for long stock; brokers typically impose stricter house requirements of 30-40%, and raise them further on volatile or hard-to-borrow names.Risk & Psychology MarginMargin is money borrowed from a broker to buy securities, with the account's holdings as collateral. Under Regulation T, the initial margin requirement is 50%: a trader must put up at least half the purchase price in cash or equity, so $10,000 of equity supports at most $20,000 of stock.Risk & Psychology Margin CallA margin call is a broker's demand for more cash or securities after account equity falls below the maintenance margin requirement. Meeting it means depositing funds or closing positions; failing to meet it means the broker liquidates positions itself, at whatever prices the market offers.Risk & Psychology Market BreadthMarket breadth measures how many stocks are participating in a market move, as opposed to how far the index itself traveled. The core reading is advancers versus decliners: 2,400 NYSE stocks up against 500 down is broad strength; an index gain carried by five mega caps while decliners outnumber advancers is narrow.Market Structure Market CapMarket capitalization is the total market value of a company's equity: share price times shares outstanding. A company with 400M shares at $25 has a $10B market cap.Fundamentals Market MakerA market maker is a firm that continuously quotes both a buy price and a sell price in a stock, earning the difference between the two. Quote a bid of $50.00 and an ask of $50.02, buy from sellers at the bid, sell to buyers at the ask, and the $0.02 spread is the revenue — repeated thousands of times a day.Orders & Execution Market OrderA market order executes immediately at the best available price, consuming the order book level by level until the full size is filled. It guarantees the trade happens; it says nothing about the price you get.Orders & Execution Mega-Cap StockA mega-cap stock is a company with a market capitalization above roughly $200 billion, a tier occupied by only a handful of the largest companies in the world at any given time. Mega caps carry outsized weight in cap-weighted indexes like the S&P 500, so their moves can dominate the index's overall return.General Investing Merger & Acquisition (M&A)A merger combines two companies into one new or surviving entity, typically between roughly equal parties; an acquisition is one company buying and absorbing another, typically a larger company purchasing a smaller one. In practice, the two terms are used together ("M&A") because the legal and economic mechanics overlap heavily.Fundamentals Micro-Cap StockA micro-cap stock generally has a market capitalization between $50 million and $300 million, sitting just above penny stocks in size. Micro caps often trade on thin volume, carry wide bid-ask spreads, and file with the SEC but attract little to no analyst coverage, leaving investors to do their own research from primary filings.General Investing Mid-Cap StockA mid-cap stock generally falls between $2 billion and $10 billion in market capitalization, occupying the space between small, higher-growth companies and large, more mature ones. Mid caps are sometimes described as the sweet spot for growth: established enough to have survived the riskiest early years, but not yet so large that rapid growth becomes mathematically difficult.General Investing Minority InterestWhen a company owns more than 50% of a subsidiary but less than 100%, accounting rules force it to consolidate 100% of that subsidiary's revenue and profit into its own statements — minority interest, formally non-controlling interest (NCI), is the slice of those consolidated results that actually belongs to the subsidiary's outside shareholders.Fundamentals Momentum TradingMomentum trading buys strength and sells weakness — the bet that a stock already moving on volume will keep moving in the same direction, the direct opposite of mean-reversion strategies that fade extremes. Intraday, it means concentrating on the handful of stocks each day with a catalyst, outsized relative volume, and range.Day Trading Moving AverageA moving average is the average closing price of a security over the last N periods, recalculated as each new period completes so the value rolls forward with the chart. It smooths bar-to-bar noise into a single line that shows the direction and rough slope of the trend.Technical Analysis Municipal BondA municipal bond ("muni") is debt issued by a state, city, or local government agency, typically to fund public projects like schools, roads, or utilities. The defining feature is that interest income is usually exempt from federal income tax, and often from state and local tax if you live in the issuing state.General Investing Mutual FundA mutual fund pools money from many investors into a professionally managed portfolio, priced once per day at net asset value (NAV) after the close. Enter an order at 10 a.m. or 3:59 p.m. and you get the same price: that evening's NAV. There is no intraday trading.Market Structure

N7 terms

NASDAQNASDAQ is the second-largest US stock exchange, launched in 1971 as the first fully electronic market, with no physical trading floor. It became the natural home for technology companies, and its composite index is now dominated by a small number of mega-cap names.Market Structure NAV (Net Asset Value)NAV is the per-share value of a fund's holdings: total assets minus total liabilities, divided by shares outstanding. Mutual funds are priced and traded once a day at NAV, calculated after the market close.General Investing Net Current Asset Value (NCAV)Net current asset value is current assets minus total liabilities — what would be left for shareholders if a company's factories, patents, and goodwill were all worth zero and only the cash, receivables, and inventory counted. Benjamin Graham's "net-net" strategy bought stocks below two-thirds of NCAV per share, a discount so deep the liquidation value alone covered the purchase.General Investing Net IncomeNet income is the profit left after every expense — cost of goods, operating costs, interest, and taxes — has been subtracted from revenue. It is the literal bottom line of the income statement and the number that feeds earnings per share.Fundamentals Net Interest Margin (NIM)Net interest margin is a bank's core profit spread: interest earned on loans and securities minus interest paid on deposits and borrowings, divided by average earning assets. A bank earning 5% on its loan book while paying 1.8% for funding runs a NIM around 3.2% — and for a traditional lender, that spread is the business.Fundamentals Net MarginNet margin is net income as a percentage of revenue — the share of every sales dollar that survives all the way to the bottom line after every cost, including interest and taxes. A company earning $30M on $200M of revenue runs a 15% net margin.Fundamentals NYSE (New York Stock Exchange)The NYSE is the largest stock exchange in the world by the total market value of its listed companies, operating from Wall Street in New York since 1792. It uses a hybrid model that still assigns a Designated Market Maker to each listed stock alongside fully electronic trading.Market Structure

O13 terms

Open InterestOpen interest counts the option contracts that currently exist and remain open at a given strike and expiration — positions created but not yet closed, exercised, or expired. It is not volume: volume counts today's trades, while open interest is the standing tally, updated overnight.Options Opening Range BreakoutAn opening range breakout (ORB) trade enters when price clears the high or low of the session's first minutes — traders commonly define the range with the first 5, 15, or 30 minutes of trading. The premise: the opening auction and early two-way fight establish the day's initial value area, and a decisive escape from it often sets the day's direction.Day Trading Operating Cash FlowOperating cash flow is the cash a company's core business actually generated during the period, reported in the first section of the cash flow statement. It starts from net income and unwinds the accounting: non-cash charges like depreciation and stock-based compensation get added back, and changes in working capital get added or subtracted depending on whether they trapped or released cash.Fundamentals Operating IncomeOperating income is the profit a company earns from actually running its business: revenue minus COGS minus operating expenses, before interest and taxes. It ignores how the company is financed and where it is taxed, isolating the performance of the operations themselves.Fundamentals Operating LeverageOperating leverage is the multiplier that fixed costs place between revenue growth and profit growth. When a large share of costs — rent, salaries, data centers, factories — does not move with sales, each incremental revenue dollar arrives with little incremental cost attached, so profits swing much harder than the top line in both directions.Fundamentals Operating MarginOperating margin is operating income divided by revenue — the percentage of sales left after both cost of goods sold and operating expenses (R&D, sales and marketing, administration), but before interest and taxes. It measures how profitably the core business runs.Fundamentals Option PremiumThe premium is the price of an option — what the buyer pays and the seller collects, quoted per share. Multiply by 100 to get the actual cash: a $2.35 premium means $235 per contract.Options Order BookThe order book is the live ledger of resting limit orders in a stock, buyers stacked at descending prices below the market and sellers at ascending prices above it. Every quote you see is just the top row of this ledger; Level 2 is the window that shows the rest.Orders & Execution Out of the Money (OTM)An out-of-the-money option has zero intrinsic value: a call with its strike above the stock price, or a put with its strike below it. Its entire premium is extrinsic value, and it expires worthless unless the stock crosses the strike.Options OverboughtOverbought describes a market that has risen far enough, fast enough that momentum oscillators reach the top of their scales: RSI above 70 or the stochastic oscillator above 80 are the standard definitions. The label means the recent pace of buying is statistically stretched, not that the price is wrong or a decline is due.Technical Analysis OversoldOversold describes a market that has fallen hard enough that momentum oscillators hit the bottom of their scales: RSI below 30 or a stochastic reading below 20 by convention. It measures the speed of the recent selling, not whether the price has reached good value.Technical Analysis OvertradingOvertrading is taking substantially more trades than a strategy actually signals — filling dead hours with C-grade setups, re-entering after stops, trading for stimulation instead of edge. It is the most common leak in day trading P&L because each extra trade adds cost while adding no expectancy.Risk & Psychology Owner EarningsOwner earnings is Warren Buffett's definition of what a business truly earns for its owners: reported net income, plus depreciation, amortization, and other non-cash charges, minus the capital spending required to maintain the company's competitive position. He laid it out in his 1986 shareholder letter as the number that matters for valuation, calling reported earnings and cash flow both misleading on their own.Fundamentals

P25 terms

P/E RatioThe price-to-earnings ratio is a stock's share price divided by its earnings per share — the number of dollars the market pays for each dollar of annual profit. A $60 stock earning $3.00 per share trades at a P/E of 20.Fundamentals Paper TradingPaper trading is placing simulated trades with fake money against real market quotes, used to test a strategy or platform before risking capital. Every major broker offers a simulator, and it is the standard way to learn order entry without paying tuition to the market.Risk & Psychology Partial FillA partial fill occurs when the market can only supply some of your order's size at your price; you receive the shares that were available, and the remainder either keeps working or cancels, depending on the order's time-in-force and instructions. It is the routine outcome of placing size in a thin book.Orders & Execution Pattern Day Trader (PDT) RuleThe pattern day trader rule flags any margin account that places 4 or more day trades within 5 business days, when those day trades exceed 6% of the account's total trades in that window. Once flagged, FINRA rules require the account to maintain at least $25,000 in equity to continue day trading; below that, the broker restricts new day trades until the balance is restored.Day Trading Payment for Order Flow (PFOF)Payment for order flow is money a wholesale market maker pays a brokerage for routing customer orders to it instead of to an exchange. It is the engine behind zero-commission trading: the broker charges you nothing because the wholesaler pays for the right to trade against your order.Orders & Execution Payout RatioThe payout ratio is the share of earnings a company pays out as dividends: dividends per share divided by earnings per share. A company earning $5.00 and paying $2.00 has a 40% payout ratio.Fundamentals PEG RatioThe PEG ratio divides a stock's P/E by its expected earnings growth rate, scaling the multiple to the growth that is supposed to justify it. A stock at a P/E of 30 growing earnings 25% a year has a PEG of 30 / 25 = 1.2.Fundamentals Penny StockA penny stock is a low-priced stock, generally trading under $5 a share, often (though not always) a small or micro-cap company with thin trading volume and limited public information. The SEC's formal definition uses the $5 threshold; traders sometimes use the term more loosely for anything trading in the pennies to low single digits.Day Trading Peter Lynch Fair ValuePeter Lynch fair value is a heuristic, not a valuation model: it says a growth stock is fairly priced when its P/E equals its earnings growth rate, so fair value = growth rate x EPS. A company growing earnings 20% a year with $2.50 in EPS gets a fair value of 20 x $2.50 = $50 — the price at which its PEG ratio is exactly 1.0.General Investing Piotroski F-ScoreThe Piotroski F-Score grades a company 0 to 9, awarding one point for each fundamental test it passes across profitability, leverage, and efficiency. Accounting professor Joseph Piotroski published it in 2000 as a way to separate the survivors from the value traps inside a cheap-stock universe.Fundamentals Poison PillA poison pill is a defensive tactic a company's board adopts to make a hostile takeover prohibitively expensive or dilutive, most commonly a shareholder rights plan that lets existing shareholders (other than the hostile acquirer) buy additional shares at a steep discount once someone crosses an ownership threshold, diluting the would-be acquirer's stake.Fundamentals PortfolioA portfolio is the full collection of investments an individual or institution holds, considered together rather than position by position. Portfolio-level thinking is the basis of modern risk management: a single stock's volatility matters less than how that stock behaves relative to everything else you hold.General Investing Position SizingPosition sizing is the calculation that decides how many shares or contracts to trade so that a losing trade costs a fixed, predetermined slice of the account. The formula: shares = dollar risk per trade / (entry price - stop price). Size is an output of the stop distance, never a number picked first.Risk & Psychology Preferred StockPreferred stock pays a fixed dividend and ranks ahead of common shares in the capital stack, but it usually carries no voting rights and no claim on the growth of the business. It behaves like a bond wearing equity's clothes: the payout is set at issuance (typically a percentage of a $25 or $100 par value), and the price trades mostly on interest rates and credit quality rather than earnings.Market Structure PremarketPremarket is the 4:00 a.m. to 9:30 a.m. ET session where US stocks trade electronically before the official open. Most brokers enable a narrower window (often 7:00 or 8:00 a.m. start) and many accept only limit orders during it.Day Trading Price TargetA price target is an analyst's projected price for a stock, usually on a 12-month horizon, published alongside a rating. Targets come out of valuation models: discounted cash flow, price-to-earnings multiples on forward estimates, or sum-of-the-parts for conglomerates.Fundamentals Price-to-Book Ratio (P/B)Price-to-book compares a stock's price to its book value per share — the accounting net worth on the balance sheet. Below 1.0, the market values the company at less than its assets minus its liabilities; above 1.0, it is paying a premium over the accounting value.Fundamentals Price-to-Free-Cash-FlowPrice-to-free-cash-flow divides market cap by annual free cash flow — the multiple paid for each dollar of cash the business actually throws off after capex. It is P/E's harder-nosed sibling: earnings are an accounting opinion, while free cash flow is what is available to fund dividends, buybacks, and debt paydown.Fundamentals Price-to-Sales Ratio (P/S)Price-to-sales is market cap divided by annual revenue — how many dollars of market value the company carries per dollar of sales. A $5B company doing $1B in revenue trades at 5x sales.Fundamentals Price-to-Tangible-BookBank analysts quote valuations in price-to-tangible-book: share price divided by tangible book value per share. Below 1.0x, the market prices the bank's equity at less than the marked value of its net assets; the premium above 1.0x is what the market pays for the franchise — the deposit base, the lending relationships, the earnings power.Fundamentals Prime RateThe prime rate is the interest rate large commercial banks charge their most creditworthy corporate customers, and it moves in lockstep with the Fed funds rate, typically sitting about 3 percentage points above it. Consumer products like credit cards and home equity lines of credit are frequently priced as prime plus a spread.Market Structure ProspectusA prospectus is the legal document a company or fund must file and provide to investors before selling securities to the public, disclosing the business, the risks, the terms of the offering, and (for funds) the fees and past performance. It is the primary source document regulators require to make sure investors have the information to make an informed decision.General Investing Proxy StatementA proxy statement (SEC form DEF 14A) is the document companies send shareholders before the annual meeting, laying out board nominees, executive pay, auditor ratification, and any shareholder proposals up for a vote. It exists so shareholders who will not attend the meeting can vote by proxy.Fundamentals Pump and DumpA pump and dump is illegal market manipulation: promoters accumulate a thinly traded stock, inflate the price with coordinated hype and misleading claims, then sell their shares into the buying they created, leaving late buyers with a collapsing stock. It violates federal securities law, and the SEC and DOJ prosecute both the promoters and, increasingly, paid influencers who tout without disclosing compensation.Market Structure Put OptionA put option is the right to sell 100 shares of the underlying at the strike price before expiration. Puts gain value as the stock falls, which makes them the standard instrument for betting against a stock with defined risk or for insuring a long position.Options

Q2 terms

Quantitative Easing (QE)Quantitative easing is a central bank policy of buying large quantities of bonds (usually government bonds) to inject money into the financial system and push down longer-term interest rates, used when short-term rates are already near zero and conventional rate cuts have no more room to work.Market Structure Quick RatioThe quick ratio is the current ratio with inventory thrown out: (current assets - inventory) / current liabilities. Inventory gets excluded because it is the current asset most likely to disappoint — it can take months to sell, or require discounting to move at all.Fundamentals

R27 terms

R MultipleAn R multiple states a trade's outcome as a multiple of the amount risked at entry: R multiple = profit or loss / initial risk. If the planned risk (1R) was $200 and the trade made $500, the result is +2.5R; a full stop-out is -1R.Risk & Psychology Random Walk TheoryRandom walk theory holds that stock price changes are unpredictable and independent of past movements, meaning a stock's chart history contains no reliable signal for where the price goes next. It is closely related to the efficient market hypothesis and is most associated with Burton Malkiel's book "A Random Walk Down Wall Street."General InvestingRebalancingRebalancing is selling what has grown past its target weight and buying what has shrunk below it, restoring a portfolio to its intended allocation. Left alone, portfolios drift toward whatever ran hottest: a 60/40 mix left untouched through a long bull market quietly becomes 75/25, carrying far more equity risk than its owner signed up for.General Investing Receivables TurnoverRevenue divided by average accounts receivable gives receivables turnover: how many times per year a company converts its outstanding invoices into cash. A turnover of 10 means the receivables book collects and refills ten times a year.Fundamentals RecessionA recession is a significant, broad decline in economic activity lasting more than a few months, visible in GDP, employment, and industrial production. In the US it is formally dated after the fact by the National Bureau of Economic Research, not by the popular shorthand of two straight quarters of negative GDP growth.Market Structure Record DateThe record date is the day a company takes a snapshot of its shareholder register to determine who receives a declared dividend or gets to vote at a shareholder meeting. If your shares are settled in your name by the close of the record date, you are on the list.Market Structure Red-to-Green MoveA red-to-green move is an intraday cross from negative to positive against the prior session's close. A stock that opened down and fought back through yesterday's closing price flips every daily-change display from red to green at the same instant, and that shared reference point makes the cross a real momentum trigger rather than an arbitrary line.Day Trading REIT (Real Estate Investment Trust)A REIT is a company that owns, operates, or finances income-producing real estate, and trades on an exchange like a stock, giving investors a way to own real estate without buying property directly. To maintain their special tax status, REITs must distribute at least 90% of their taxable income to shareholders as dividends.General Investing Relative Volume (RVOL)Relative volume (RVOL) is current volume divided by the stock's average volume for the same point in the session; a reading of 3.0 means the stock has already traded three times its normal share count for that time of day. It is the standard screen for whether anything unusual is happening in a name.Day Trading ResistanceResistance is a price area where a rising stock has repeatedly stalled because sellers unload enough supply to cap the advance. It is the ceiling that mirrors support's floor.Technical Analysis Retail InvestorA retail investor is an individual who buys and sells securities for a personal account, as opposed to an institution trading on behalf of pooled client or company money. Retail investors typically trade in far smaller size and do not have the research staff, direct exchange access, or negotiated fees institutions command.Market Structure Retained EarningsEvery dollar of profit a company has ever earned and not paid out as a dividend accumulates in retained earnings. The account grows by net income and shrinks by dividends each period — a running total of everything earned and reinvested since inception, sitting inside shareholders' equity.Fundamentals Return on Assets (ROA)Return on assets is net income divided by total assets — profit generated per dollar of everything the company controls, regardless of whether it was funded by shareholders or lenders. Because assets always equal or exceed equity, ROA is always the same or lower than ROE.Fundamentals Return on Capital Employed (ROCE)Return on capital employed is ROIC's pre-tax cousin: EBIT divided by capital employed, where capital employed is total assets minus current liabilities. It answers the same question — how productively does the business use the capital locked inside it — but with two practical differences: the numerator is before tax, and the denominator comes straight off the balance sheet with no adjustments.Fundamentals Return on Equity (ROE)Return on equity is net income divided by shareholders' equity — the annual profit generated per dollar of the owners' capital in the business. A company earning $150M on $1B of equity runs a 15% ROE.Fundamentals Return on Invested Capital (ROIC)Return on invested capital measures the after-tax operating profit a company earns on every dollar tied up in the business: NOPAT (net operating profit after tax) divided by invested capital, meaning the sum of debt and equity actually deployed in operations. Unlike return on equity, it cannot be juiced with leverage — borrowing more grows both profit and the capital base it is measured against.Fundamentals Revenge TradingRevenge trading is jumping back into the market immediately after a loss to win the money back, typically with larger size and no qualifying setup. The trade is aimed at repairing the P&L and the ego, not at an edge, which is why it compounds the original damage more often than it fixes it.Risk & Psychology RevenueRevenue is the total money a company brings in from selling its products or services before any costs are subtracted. It sits on the top line of the income statement, which is why traders call it "the top line" — everything else on the statement is carved out of it.Fundamentals Reverse SplitA reverse split merges multiple shares into one, multiplying the price while leaving each holder's dollar value unchanged: in a 1-for-10, 1,000 shares at $0.40 become 100 shares at $4.00. Same $400, fewer shares, higher print.Market Structure Rights OfferingA rights offering gives existing shareholders the right to buy additional shares, usually at a discount to the current market price, in proportion to their existing ownership stake. Companies use rights offerings to raise capital while giving current shareholders first opportunity to maintain their percentage ownership.Fundamentals Risk of RuinRisk of ruin is the probability that losses drive an account down to a level it cannot recover from — either literal zero or the point where the trader can no longer size positions meaningfully. It is a function of three inputs: win rate, payoff ratio, and the fraction of equity risked per trade.Risk & Psychology Risk-Reward RatioThe risk-reward ratio compares what a trade can lose against what it can plausibly make: the distance from entry to stop versus the distance from entry to target. A trade risking $1 to make $3 has a 1:3 risk-reward ratio.Risk & Psychology Robo-AdvisorA robo-advisor is an automated investment service that builds and manages a diversified portfolio, usually of low-cost ETFs, based on an investor's goals and risk tolerance, with little or no human advisor involvement. Fees are typically a small percentage of assets annually, well below traditional human financial advisory fees.General Investing Roth IRAA Roth IRA is a retirement account funded with after-tax contributions, meaning there is no upfront tax deduction, but qualified withdrawals in retirement, including all investment growth, are entirely tax-free. It is the mirror image of a traditional IRA's tax treatment.General Investing RSI (Relative Strength Index)RSI is a momentum oscillator that measures the speed of recent price changes on a 0-100 scale, calculated over 14 periods by default. The formula is RSI = 100 - 100 / (1 + RS), where RS is the average gain divided by the average loss over the lookback window. Readings above 70 are conventionally labeled overbought and readings below 30 oversold.Technical Analysis Rule of 72The Rule of 72 is a quick mental-math shortcut for estimating how many years it takes an investment to double at a given annual rate of return: divide 72 by the rate. At 8% a year, money doubles in about 9 years (72 divided by 8); at 6%, about 12 years.General Investing Russell 2000The Russell 2000 tracks 2,000 small-cap US stocks and is the standard benchmark for small-cap performance, the way the S&P 500 is the standard for large caps. It is reconstituted once a year, when companies that have grown too large roll out and newly-qualifying small caps roll in.Market Structure

S36 terms

S&P 500The S&P 500 is a market-cap-weighted index of roughly 500 large US companies chosen by a committee to represent the broad economy, and it is the benchmark most US fund managers and retirement accounts are measured against. Larger companies (by float-adjusted market cap) move the index more than smaller ones.Market Structure ScalpingScalping targets many small gains — a few cents to a fraction of a percent per trade — with hold times measured in seconds to minutes. A scalper might take 30-100 trades in a session, exploiting micro-moves that longer-timeframe traders ignore entirely.Day Trading Secondary OfferingA secondary offering is a sale of stock by a company that is already public, priced and marketed like a mini-IPO. When the company issues new shares, the raise is dilutive — every existing holder owns a smaller slice. When existing insiders sell their own shares, the company gets nothing and the share count is unchanged, but a large holder is cashing out.Market Structure Sector RotationSector rotation is the strategy of shifting portfolio weight between different market sectors (technology, energy, financials, healthcare, and so on) based on where each sector sits in the economic cycle. Cyclical sectors tend to lead coming out of a recession, while defensive sectors tend to hold up better heading into one.General Investing ShakeoutUnlike a breakdown, which starts a new leg lower, a shakeout is a brief dip below support that reverses right back into the range once the stops beneath it are triggered. The dip ends because it accomplished its purpose: the weak hands are out and their shares changed owners.Day Trading Share BuybackA share buyback is a company repurchasing its own stock, shrinking the share count so each remaining share owns a larger slice of the business. The same net income spread over fewer shares mechanically raises earnings per share: retire 5% of the float and EPS climbs about 5% with zero operational improvement.Market Structure ShareholderA shareholder is anyone who owns at least one share of a company's stock, which makes them a partial owner of that company with a claim on its residual profits and assets after all other obligations are paid. Common shareholders typically get one vote per share on major corporate matters.Market Structure Shareholder YieldShareholder yield adds up every channel a company uses to return capital — dividends, net buybacks, and net debt paydown — and expresses the total as a percentage of market cap. The logic: a dollar of debt reduction is a transfer of enterprise value from creditors to shareholders just as surely as a dividend check, so counting only dividends understates what shareholders actually receive.Fundamentals Shares OutstandingShares outstanding is the total number of a company's shares currently held by all investors — insiders, institutions, and the public combined. It is the denominator in per-share math: EPS, book value per share, and market cap all depend on it.Fundamentals Sharpe RatioThe Sharpe ratio is excess return per unit of volatility: (portfolio return - risk-free rate) / standard deviation of returns. William Sharpe introduced it in 1966, and it remains the default answer to the question every raw return dodges — how much risk did it take to get that number?Risk & PsychologyShiller P/E (CAPE)The Shiller P/E divides an index's price by its average inflation-adjusted earnings over the trailing ten years, smoothing out the boom-bust earnings swings that make a single-year P/E lie at cycle turns. Robert Shiller and John Campbell built the measure — CAPE, for cyclically adjusted price-to-earnings — and Shiller's data on it runs back to 1881.General Investing Short InterestShort interest is the total number of a company's shares currently sold short and not yet bought back. It is usually quoted as a percentage of the float: 40 million shares short against a 100 million share float is 40% short interest.Market Structure Short SellingShort selling is selling shares you have borrowed, betting the price falls so you can buy them back cheaper, return them, and keep the difference. Sell borrowed stock at $30, buy it back at $22, and the $8 per share is profit minus borrow costs.Market Structure Short SqueezeA short squeeze is a rally amplified by forced buying from short sellers. As price rises, shorts sit on growing losses; when the pain or the margin department forces them to buy back shares, that covering is itself demand, which pushes price higher and squeezes the next tier of shorts.Day Trading Simple Moving Average (SMA)A simple moving average is the arithmetic mean of the last N closing prices: add the closes, divide by N, and roll the window forward one bar at a time. Every close in the window counts equally, so a 50-day SMA gives the close from 49 days ago the same weight as yesterday's.Technical Analysis SlippageSlippage is the gap between the price you expected and the price you actually received: pay an average of $10.06 on a market buy quoted at $10.02 and you slipped 4 cents a share, $40 on 1,000 shares. It is a real trading cost, as concrete as commissions and usually larger.Orders & Execution Sloan RatioThe Sloan ratio measures how much of a company's reported income is accruals — accounting entries — rather than actual cash, computed as (net income - operating cash flow - investing cash flow) / total assets. It grew out of Richard Sloan's 1996 research showing that earnings built on accruals are less persistent than earnings backed by cash, and that the market is slow to price the difference.Fundamentals Small-Cap StockA small-cap stock generally has a market capitalization between $300 million and $2 billion. Small caps offer more room for percentage growth than large caps (doubling a $500M company is a very different task than doubling a $500B one) but come with thinner trading volume, less analyst coverage, and more volatility.General Investing SOFR (Secured Overnight Financing Rate)SOFR is the US benchmark interest rate that replaced LIBOR, based on the actual cost of borrowing cash overnight using US Treasury securities as collateral. Unlike LIBOR, which relied on bank estimates, SOFR is derived from real, observable transactions, which makes it much harder to manipulate.Market Structure Sortino RatioThe Sortino ratio is the Sharpe ratio with one change: the denominator counts only downside volatility, so returns above the target do not count against the strategy. The formula is (portfolio return - risk-free rate) / downside deviation, where downside deviation penalizes only the below-target returns — above-target periods enter the calculation as zeros, not as risk.Risk & Psychology SPACA SPAC (special purpose acquisition company) is a shell corporation that IPOs with no business — just cash in trust, almost always $10.00 per share — and a mandate to merge with a private company, taking it public through the back door. The merger is called a de-SPAC.Market Structure Spin-offA spin-off is when a company separates part of its business into a new, independently traded public company, typically distributing shares of the new entity to existing shareholders of the parent. It is a way to unlock value from a division the market may be undervaluing when bundled inside a larger, more complex company.Fundamentals Standard DeviationStandard deviation measures how much an investment's returns vary around their average, and it is the most common statistical stand-in for volatility in finance. A higher standard deviation means returns swing more widely from period to period; a lower one means returns cluster more tightly around the average.Technical Analysis Stochastic OscillatorThe stochastic oscillator locates the current close within the recent high-low range, on a 0-100 scale. The main line, %K, is (close - lowest low) / (highest high - lowest low) x 100 over 14 periods; %D is a 3-period moving average of %K that serves as the signal line. Readings above 80 are labeled overbought and below 20 oversold.Technical Analysis Stock ExchangeA stock exchange is a regulated marketplace where buyers and sellers trade listed securities under a common set of rules: standardized contracts, published prices, and a central mechanism for matching orders. Listing on one requires meeting minimum standards for share price, market value, and financial reporting.Market Structure Stock SplitA stock split divides each existing share into multiple shares, cutting the price proportionally while leaving every holder's dollar value unchanged. In a 4-for-1 split, 100 shares at $400 become 400 shares at $100 — same $40,000 position, same ownership percentage, same market cap.Market Structure Stock-Based Compensation (SBC)Stock-based compensation is pay delivered in equity — options and restricted stock units — instead of cash. It is expensed on the income statement, then added back on the cash flow statement as a non-cash charge, which is exactly where the controversy starts.Fundamentals Stop LossA stop loss is a predefined exit that closes a losing position once price reaches a set level, capping the damage from a trade that did not work. Mechanically it is usually a stop order resting with the broker, which converts to a market order when the stop price trades.Risk & Psychology Stop OrderA stop order sits dormant until price touches a trigger you set, then converts into a market order. A sell stop below the market is the classic stop-loss; a buy stop above the market is how breakout traders automate entries and how short sellers cap losses.Orders & Execution Stop-Limit OrderA stop-limit order swaps the market order inside a plain stop for a limit order, capping how bad the exit price can get, at the cost of possibly not exiting at all. It carries two prices: the stop price that triggers it and the limit price that bounds the fill.Orders & Execution StraddleA straddle is a long call and a long put at the same strike and expiration, almost always at the money. It is a pure bet on movement: the position profits if the stock travels far enough in either direction to cover both premiums.Options StrangleA strangle pairs an out-of-the-money call with an out-of-the-money put on the same expiration — same wager as a straddle, movement over direction, but built with cheaper strikes set apart from the stock price.Options Strike PriceThe strike price is the fixed price at which an option contract converts into stock: the price a call holder pays to buy shares, or a put holder receives to sell them. It is set when the contract is listed and never changes, no matter where the stock trades.Options Sunk Cost FallacyThe sunk cost fallacy is the tendency to keep investing time or money into something because of what has already been invested, rather than evaluating the decision fresh based on its current merits. Money already spent or already lost is gone regardless of what you do next, but it still exerts a psychological pull on the next decision.Risk & Psychology SupportSupport is a price area where a falling stock has repeatedly stopped dropping because buyers step in with enough size to absorb the selling. It shows up on a chart as a floor the price bounces off two, three, or more times.Technical Analysis Systematic Risk (Market Risk)Systematic risk is the risk inherent to the entire market or economy, like a recession, a rate hike, or a geopolitical shock, that affects nearly every asset to some degree and cannot be eliminated through diversification. It is the risk you are left with even after building a well-diversified portfolio.Risk & Psychology

T17 terms

T+1 SettlementT+1 settlement means a securities trade becomes final one business day after the trade date: sell stock on Tuesday and the cash is officially yours Wednesday. The US moved from T+2 to T+1 on May 28, 2024, halving the window between execution and settlement.Market Structure Take ProfitA take profit is a resting order, usually a limit order, that closes a winning position automatically at a predetermined target price. Paired with a stop loss, it brackets the trade so both exits are decided before emotions get a vote.Risk & Psychology Tangible Book ValueTangible book value strips goodwill and intangible assets out of shareholders' equity, leaving the net worth backed by assets you could point at: cash, securities, receivables, inventory, property. The logic is conservative — goodwill is the premium paid in past acquisitions, and if those deals sour it gets written off, so tangible book asks what the equity is worth if the accounting optimism evaporates.Fundamentals Tape ReadingTape reading is inferring buyer and seller behavior from raw prints and quotes instead of chart patterns. The tape reader watches time and sales against the Level 2 book, asking one question continuously: is aggression coming from buyers lifting offers or sellers hitting bids, and is it growing or fading?Day TradingTax-Loss HarvestingTax-loss harvesting is selling an investment at a loss to realize that loss for tax purposes, then using it to offset capital gains elsewhere in the portfolio (and up to $3,000 of ordinary income per year), while staying invested by buying a similar (but not "substantially identical") replacement security.General Investing Technical AnalysisTechnical analysis studies historical price and volume patterns to forecast future price movement, on the premise that patterns in how a stock has traded tend to repeat because they reflect recurring crowd psychology: fear, greed, and herd behavior. It uses tools like chart patterns, moving averages, and momentum indicators rather than a company's financial statements.Technical Analysis ThetaTheta is the dollar amount an option loses to time decay each day, all else equal. A theta of -0.05 means the option sheds $0.05 per share overnight — $5 per contract — even if the stock does not move.Options Ticker SymbolA ticker symbol is the short letter code an exchange assigns to a listed security so it can be quoted and traded without spelling out the company name every time. US symbols run from one to five letters: AAPL for Apple, KO for Coca-Cola, GOOGL for Alphabet's class A shares.Market Structure Time and SalesTime and sales is the running record of executed trades — each print showing price, share size, timestamp, and venue. Traders call it the tape, and it is the ground truth of a session: quotes are intentions, prints are facts.Day Trading Total Addressable Market (TAM)Total addressable market is an estimate of the total revenue opportunity available to a company or product if it captured 100% of its potential market, used most often to argue how much room a growth company has left to expand. It is a ceiling, not a forecast of what the company will actually capture.General Investing Trading HaltA trading halt is a temporary pause in trading of a single stock, imposed either for pending news or for excessive volatility. News halts (code T1) let material information disseminate before trading resumes; volatility halts fire automatically under the Limit Up-Limit Down (LULD) mechanism.Day Trading Trailing StopA trailing stop follows price at a fixed distance, say $0.50 or 3%, ratcheting the trigger up as the stock rises but never lowering it. It converts an open-ended winner into a position with a defined maximum giveback.Orders & Execution Treasury Bill (T-Bill)A Treasury bill is short-term US government debt with a maturity of one year or less, sold at a discount to its face value rather than paying a periodic coupon: you buy it below par and it matures at par, with the difference being your return.General Investing Treasury BondA Treasury bond is a long-term debt security issued by the US federal government, with maturities of 20 or 30 years, paying interest every six months until maturity. Because it is backed by the full faith and credit of the US government, it is treated as one of the closest things to a risk-free asset in global finance.General Investing Treasury NoteA Treasury note is US government debt with a maturity between 2 and 10 years, paying interest every six months, sitting between the short-term T-bill and the long-term Treasury bond in maturity. The 10-year Treasury note yield in particular is one of the most closely watched numbers in all of finance.General Investing Treasury StockShares a company has repurchased and holds on its own books — that is treasury stock. Treasury shares are issued but no longer outstanding: they collect no dividends, carry no votes, and drop out of the share count used for EPS and market cap.Fundamentals Trend LineA trend line is a straight line drawn across successive swing lows in an uptrend or successive swing highs in a downtrend, marking the slope of the move. Two touches define the line; a third touch that holds is what gives it standing.Technical Analysis

U3 terms

Unsystematic Risk (Diversifiable Risk)Unsystematic risk is risk specific to a single company or industry, like a factory fire, a failed product launch, or a lawsuit, that does not affect the broader market. Unlike systematic risk, it can be substantially reduced or eliminated by holding a diversified portfolio of many unrelated positions.Risk & Psychology Unusual VolumeWhere relative volume puts a number on a volume spike, unusual volume is the broader flag: turnover far outside a stock's norm, often appearing before the reason for it is public. A sleepy name suddenly trading 10x its average is telling you someone knows or wants something.Day Trading Upgrade / DowngradeAn upgrade or downgrade is an analyst changing a stock's rating, up (hold to buy) or down (buy to hold), typically with a price target change attached. Rating changes drop premarket and are among the most common causes of morning gaps in otherwise quiet stocks.Fundamentals

V6 terms

Value InvestingValue investing is a strategy of buying stocks that appear cheap relative to their fundamentals (low P/E, low price-to-book, high dividend yield) on the theory that the market has temporarily mispriced them below their intrinsic worth. The approach was popularized by Benjamin Graham and later Warren Buffett.General Investing VegaVega measures how much an option's price changes when implied volatility moves one percentage point. An option with a vega of 0.12 gains $0.12 per share ($12 per contract) if IV rises from 40% to 41%, and loses the same if IV drops a point.Options Vertical SpreadA vertical spread buys one option and sells another of the same type and expiration at a different strike, capping both the cost and the payoff. The four flavors — bull call, bear call, bull put, bear put — all reduce to the same geometry: risk and reward are both limited to slices of the distance between the strikes.Options VIXThe VIX is Cboe's index of expected S&P 500 volatility over the next 30 days, computed from the prices of a strip of SPX options. A VIX of 20 translates to the options market pricing roughly a 20% annualized swing — about 1.25% expected daily moves (20 divided by the square root of 252 trading days).Market Structure VolatilityVolatility is the standard deviation of an asset's returns — a statistical measure of how widely results scatter around their average, quoted as an annualized percentage. A stock with 20% annualized volatility is expected to land within 20 percentage points of its mean return in roughly two out of three years, if returns behaved normally (they do not, quite — real markets produce more extreme days than the bell curve predicts).Risk & Psychology VWAPVWAP — volume-weighted average price — is the session's average trade price with every print weighted by its share size: cumulative (price x volume) divided by cumulative volume, reset each day at the open. A stock at $20.60 with a $20.25 VWAP is trading above the average dollar paid so far today.Day Trading

W6 terms

WACC (Weighted Average Cost of Capital)WACC is the blended rate a company pays for its capital, weighting the cost of equity and the after-tax cost of debt by their share of the capital structure. The formula: WACC = (E/V) x cost of equity + (D/V) x cost of debt x (1 - tax rate), where E is equity value, D is debt, and V is E + D.Fundamentals WarrantA warrant gives the holder the right, but not the obligation, to buy a company's stock at a set strike price before a set expiration date, similar to a call option. The key difference is that a warrant is issued directly by the company itself, and exercising it creates new shares, diluting existing shareholders, rather than transferring existing shares between two traders the way an option does.Fundamentals Wash Sale RuleThe wash sale rule is an IRS regulation that disallows a tax loss on a security if you buy the same or a substantially identical security within 30 days before or after the sale, a 61-day window counting the sale date itself. The rule exists to stop investors from harvesting a tax loss while never actually giving up the position.General Investing WashoutA washout is a fast, high-volume flush to the downside that runs stops, exhausts sellers, and often marks at least a short-term low. The move is indiscriminate: everyone with a resting stop or a weak stomach sells into the same few minutes.Day Trading Win RateWin rate is the percentage of trades that close at a profit — and by itself it says nothing about whether a trader makes money. A 90% win rate loses money if the rare losers are big enough, and a 30% win rate prints money if the winners run far enough.Risk & Psychology Working CapitalWorking capital is current assets minus current liabilities — the cushion between what a company can turn into cash within a year and what it owes within a year. Positive working capital means near-term obligations are covered; negative means the company depends on incoming cash arriving on schedule.Fundamentals

Y2 terms

Yield on CostYield on cost divides a stock's current annual dividend by the price you originally paid, rather than by today's price. Hold a dividend grower long enough and the two yields diverge dramatically — the position pays an ever-larger percentage of the capital you actually invested, even while new buyers see an ordinary current yield.General Investing Yield to Maturity (YTM)Yield to maturity is the total annualized return a bond will deliver if held until it matures and all coupon payments are reinvested at the same rate, accounting for the bond's current price, coupon, face value, and time remaining. It is the single number bond investors use to compare bonds with different coupons, prices, and maturities on an apples-to-apples basis.General Investing