Glossary
Every term the library defines, with a one-line definition and a link to the article that explains it properly. These are the same definitions that appear when you hover a linked term anywhere in the library.
A
- Adjusted priceCharting
- Historical prices restated so splits and dividends do not appear as real moves. Full explanation →
- ADXIndicators
- A 0-100 measure of how strongly a market is trending, without saying which way. Full explanation →
- After-hours tradingMarkets
- Trading between the 4:00 p.m. ET close and the end of the extended session. Full explanation →
- Ascending trianglePatterns
- A flat ceiling met by a rising series of lows, compressing price into the corner. Full explanation →
- At-the-market offeringMarkets
- A registered facility letting a company drip new shares into the open market over time. Full explanation →
- Average True RangeIndicators
- The average size of a bar's full range, including gaps - a plain measure of volatility. Full explanation →
B
- Balance sheetFundamentals
- A snapshot of what a company owns, what it owes and what is left for shareholders on one date. Full explanation →
- BetaIndicators
- How much a stock has historically moved for a one-percent move in the broad market. Full explanation →
- Bid-ask spreadMarkets
- The gap between the highest price a buyer will pay and the lowest a seller will accept. Full explanation →
- Bollinger BandsIndicators
- A moving average with bands a set number of standard deviations above and below it. Full explanation →
- BondMarkets
- A tradable loan: the issuer pays interest on a stated principal and repays it at maturity. Full explanation →
- BreakoutPatterns
- Price moving decisively beyond the boundary of a range or pattern. Full explanation →
- Bull flagPatterns
- A sharp advance followed by a shallow, orderly pullback against that move. Full explanation →
C
- Call optionMarkets
- A contract giving its holder the right to buy shares at a set strike price before expiry. Full explanation →
- CandlestickPatterns
- A bar drawn from a period's open, high, low and close, with a body and two wicks. Full explanation →
- Capital expenditureFundamentals
- Cash spent on long-lived assets such as plant, equipment and data centres. Full explanation →
- Cash conversion cycleFundamentals
- How many days pass between paying for inventory and collecting cash from the sale. Full explanation →
- Cash flow statementFundamentals
- The statement reconciling profit to the cash that actually moved, in three sections. Full explanation →
- Common stockMarkets
- A unit of ownership in a company, carrying a residual claim on its assets and earnings. Full explanation →
- Confirmation biasPsychology
- Seeking and believing evidence that supports a position already held. Full explanation →
- ConsolidationPatterns
- A pause where price moves sideways in a contained range after a directional move. Full explanation →
- Consumer Price IndexMacro
- The monthly measure of price change in a fixed basket of consumer goods and services. Full explanation →
- Contango and backwardationMarkets
- Whether a commodity's futures price sits above or below its spot price. Full explanation →
- CorrelationRisk
- How closely two holdings move together, which decides whether they diversify anything. Full explanation →
- Cost of revenueFundamentals
- The direct cost of producing what was sold, subtracted from revenue to give gross profit. Full explanation →
- CouponMarkets
- The fixed interest rate a bond pays on its face value each year. Full explanation →
- Cup and handlePatterns
- A rounded recovery to a prior high, followed by a small drift lower before the retest. Full explanation →
- Currency pairMarkets
- A quote of one currency priced in another, such as EUR/USD. Full explanation →
D
- DEF 14AFilings
- The proxy statement covering the shareholder vote, board and executive pay. Full explanation →
- Delayed dataCharting
- Market data published on a lag rather than at the moment of the trade. Full explanation →
- Depreciation and amortizationFundamentals
- The accounting spread of an asset's cost across the years it is used. Full explanation →
- DilutionMarkets
- The reduction in each existing share's claim on the company when new shares are issued. Full explanation →
- Discounted cash flowValuation
- Valuing a business as the present value of the cash it is expected to produce. Full explanation →
- Dividend yieldValuation
- Annual dividends per share divided by the share price. Full explanation →
- DojiPatterns
- Named single- or two-bar candle shapes that describe a session's balance between buyers and sellers. Full explanation →
- Dollar indexMarkets
- A measure of the dollar against a basket of major currencies, widely watched as a risk barometer. Full explanation →
- Dot plotMacro
- The chart of where each FOMC participant expects rates to sit in coming years. Full explanation →
- Double bottomPatterns
- Two lows at a similar price separated by a rally, or the same shape inverted at a high. Full explanation →
- DrawdownRisk
- The decline from a peak to the following trough, in percent. Full explanation →
- DurationMarkets
- How much a bond's price moves for a one-percent change in rates, in years. Full explanation →
E
- Earnings per shareFundamentals
- Net income divided by shares, the per-share slice of profit. Full explanation →
- EBITDAFundamentals
- Operating profit with depreciation and amortization added back, used as a rough cash proxy. Full explanation →
- EDGARFilings
- The SEC's public database of every filing a US registrant submits. Full explanation →
- Enterprise valueValuation
- Market capitalization plus net debt: what it would cost to buy the whole business outright. Full explanation →
- ETFMarkets
- A fund whose shares trade on an exchange all day like a stock. Full explanation →
- EV/EBITDAValuation
- Enterprise value over EBITDA, a capital-structure-neutral way to compare two companies. Full explanation →
- ExpectancyRisk
- The average result per trade implied by a win rate and the sizes of wins and losses. Full explanation →
- Expense ratioMarkets
- The annual percentage of assets a fund deducts to cover its own costs. Full explanation →
- Exponential moving averageIndicators
- A moving average that weights recent closes more heavily, so it turns sooner than an SMA. Full explanation →
F
- Federal funds rateMacro
- The overnight rate banks charge each other, and the lever the Fed actually sets. Full explanation →
- Federal ReserveMacro
- The US central bank, charged with stable prices and maximum sustainable employment. Full explanation →
- Fibonacci retracementIndicators
- Horizontal levels drawn at conventional fractions of a prior move, used to frame pullbacks. Full explanation →
- Flat basePatterns
- A tight, shallow sideways range that holds after an advance rather than giving it back. Full explanation →
- FloatMarkets
- The portion of shares outstanding actually available for the public to trade. Full explanation →
- FOMCMacro
- The committee that sets the federal funds target range, meeting eight times a year. Full explanation →
- FOMOPsychology
- Entering late because a move is already happening rather than because a plan said to. Full explanation →
- Form 10-KFilings
- The audited annual report, including the business description, risk factors and full statements. Full explanation →
- Form 10-QFilings
- The unaudited quarterly report, filed for the first three quarters of a fiscal year. Full explanation →
- Form 13FFilings
- The quarterly disclosure of US-listed equity positions by managers over the reporting threshold. Full explanation →
- Form 144Filings
- Notice of an intended sale of restricted or control stock, filed before the sale. Full explanation →
- Form 4Filings
- An insider's report of a change in their own holdings, due within two business days. Full explanation →
- Form 8-KFilings
- The current report announcing a material event between periodic filings. Full explanation →
- Form S-1Filings
- The registration statement a company files to sell securities publicly for the first time. Full explanation →
- Forward P/EValuation
- The same ratio computed on forecast earnings rather than reported ones. Full explanation →
- Free cash flowFundamentals
- Operating cash flow minus capital spending - the cash a business generates after staying alive. Full explanation →
G
- GAAPFundamentals
- The standardised US accounting rules a filed statement must follow. Full explanation →
- GapPatterns
- A bar that opens away from the prior close, leaving an untraded space on the chart. Full explanation →
- Golden cross and death crossIndicators
- The 50-day moving average crossing above or below the 200-day. Full explanation →
- Gross domestic productMacro
- The total value of goods and services an economy produces in a period. Full explanation →
- Gross marginValuation
- Gross profit as a percentage of revenue - what survives the direct cost of the product. Full explanation →
H
- Head and shouldersPatterns
- Three peaks with a higher middle one, measured against the line joining the troughs. Full explanation →
- Heikin-AshiCharting
- A candle variant built from averaged prices, which smooths a chart at the cost of true levels. Full explanation →
I
- Implied volatilityMarkets
- The volatility an option's market price implies for the underlying between now and expiry. Full explanation →
- Income statementFundamentals
- The statement showing revenue, costs and profit over a reporting period. Full explanation →
- Index fundMarkets
- A fund holding a rules-based basket that tracks a published index rather than picking holdings. Full explanation →
- Interest coverageFundamentals
- Operating profit divided by interest expense - how many times over the interest bill is covered. Full explanation →
L
- LeverageFundamentals
- How much of a company's balance sheet is funded with borrowed money rather than equity. Full explanation →
- Limit orderMarkets
- An instruction to trade only at a stated price or better, guaranteeing a price but not a fill. Full explanation →
- LiquidityRisk
- How much can be traded quickly without moving the price much. Full explanation →
- Logarithmic scaleCharting
- A price axis where equal vertical distances mean equal percentage moves, not equal dollars. Full explanation →
- Loss aversionPsychology
- The documented tendency to feel a loss more than an equivalent gain, which delays exits. Full explanation →
M
- MACDIndicators
- The gap between two exponential moving averages, plotted with its own signal line. Full explanation →
- Market capitalizationMarkets
- Share price multiplied by shares outstanding - the market's price for the whole company. Full explanation →
- Market makerMarkets
- A firm that quotes both a bid and an ask continuously, earning the spread for supplying liquidity. Full explanation →
- Market orderMarkets
- An instruction to trade immediately at whatever price is available, guaranteeing a fill but not a price. Full explanation →
- MD&AFilings
- The section where management explains the results in its own words. Full explanation →
N
- NBBOMarkets
- The best bid and best ask available across all US exchanges at a moment in time. Full explanation →
- Net incomeFundamentals
- What is left after every cost, including interest and tax, has been subtracted from revenue. Full explanation →
- Non-GAAP measureFundamentals
- A company's own adjusted figure, which must be reconciled to the GAAP number it departs from. Full explanation →
- Nonfarm payrollsMacro
- The monthly count of jobs added or lost, released with the unemployment rate. Full explanation →
O
- OHLCPatterns
- The four prices that define a bar: open, high, low and close. Full explanation →
- On-balance volumeIndicators
- A running total that adds a bar's volume on an up close and subtracts it on a down close. Full explanation →
- Operating incomeFundamentals
- Profit from running the business, before interest and tax. Full explanation →
- Operating marginValuation
- Profit as a percentage of revenue, measured before or after interest and tax. Full explanation →
- Order bookMarkets
- The live list of resting buy and sell limit orders at each price for a security. Full explanation →
- OTC marketMarkets
- Trading in securities not listed on a national exchange, quoted through dealer networks. Full explanation →
- Overbought and oversoldIndicators
- Oscillator readings at a conventional extreme, describing stretch rather than predicting a turn. Full explanation →
- OvertradingPsychology
- Taking more trades than an edge or a plan supports, usually after a win or a loss. Full explanation →
P
- Payout ratioValuation
- The share of earnings paid out as dividends rather than retained. Full explanation →
- PCE price indexMacro
- The Fed's preferred inflation gauge, which lets the basket shift as people substitute. Full explanation →
- Peer groupValuation
- The set of similar companies a valuation multiple is judged against. Full explanation →
- PEG ratioValuation
- The P/E divided by an earnings growth rate, an attempt to price growth alongside profit. Full explanation →
- Pivot pointsIndicators
- Reference levels computed from the prior period's high, low and close. Full explanation →
- Position sizingRisk
- Deciding how many shares to trade so a given loss costs a planned amount. Full explanation →
- PremarketMarkets
- Trading before the 9:30 a.m. ET open, in thinner and wider markets than the regular session. Full explanation →
- Price-to-book ratioValuation
- Market capitalization divided by shareholders' equity as carried on the balance sheet. Full explanation →
- Price-to-earnings ratioValuation
- Share price divided by earnings per share - what the market pays for a dollar of profit. Full explanation →
- Price-to-sales ratioValuation
- Market capitalization divided by revenue, used where a company has no profit yet. Full explanation →
- Prospectus supplementFilings
- The filing that sets the final terms of a specific sale under an existing registration. Full explanation →
- Put optionMarkets
- A contract giving its holder the right to sell shares at a set strike price before expiry. Full explanation →
Q
- Quantitative easingMacro
- Central bank purchases or run-off of bonds, used to ease or tighten beyond the policy rate. Full explanation →
R
- Relative strengthIndicators
- How a stock performs against a benchmark, rather than in isolation. Full explanation →
- Relative Strength IndexIndicators
- A 0-100 oscillator comparing the size of recent gains to recent losses. Full explanation →
- Return on equityValuation
- Net income divided by shareholders' equity - profit earned on the owners' capital. Full explanation →
- Return on invested capitalValuation
- After-tax operating profit against all the capital funding the business, debt included. Full explanation →
- RevenueFundamentals
- What a company billed customers over the period, before any cost is subtracted. Full explanation →
- Reverse splitMarkets
- A consolidation that raises the share price by combining shares, leaving total value unchanged. Full explanation →
- Risk factorsFilings
- The filing section listing what management believes could go materially wrong. Full explanation →
- Risk-on and risk-offMacro
- Shorthand for markets rotating toward or away from assets that move most with growth. Full explanation →
- Risk-reward ratioRisk
- The distance to a target divided by the distance to a stop. Full explanation →
S
- Schedule 13D and 13GFilings
- Disclosures filed after crossing five percent of a class, one activist in tone and one passive. Full explanation →
- SEC comment letterFilings
- Correspondence in which SEC staff question a filing's disclosure, published once resolved. Full explanation →
- Secondary offeringMarkets
- A sale of additional shares by a company that is already public, usually to raise cash. Full explanation →
- Segment reportingFundamentals
- The required breakdown of results by business line or geography inside a filing. Full explanation →
- Shelf registrationFilings
- A registration that pre-clears securities so they can be sold later on short notice. Full explanation →
- Short interestMarkets
- The number of shares sold short and not yet covered, often expressed against the float. Full explanation →
- Short sellingMarkets
- Borrowing shares to sell them, intending to buy them back later and return them. Full explanation →
- Short squeezeMarkets
- A sharp rise driven partly by short sellers buying to close, which adds to the buying that started it. Full explanation →
- Simple moving averageIndicators
- The unweighted mean of the last N closes, redrawn each bar. Full explanation →
- SlippageRisk
- The difference between the price expected on an order and the price actually filled. Full explanation →
- Stochastic oscillatorIndicators
- Where the close sits inside the recent high-low range, expressed 0-100. Full explanation →
- Stock splitMarkets
- A division of each share into several, lowering the price without changing the company's value. Full explanation →
- Stop lossRisk
- A pre-decided exit level that caps what a trade is allowed to cost. Full explanation →
- Stop orderMarkets
- A resting instruction that becomes a live order only once price trades through a trigger level. Full explanation →
- Support and resistancePatterns
- Prices where buying or selling has repeatedly been heavy enough to stall a move. Full explanation →
T
- Technical analysisIndicators
- Studying price and volume history to describe supply and demand, rather than the business. Full explanation →
- Tender offerFilings
- A public offer to buy shares from holders, usually at a premium and for a limited window. Full explanation →
- TimeframeCharting
- How much time each bar on a chart represents, from one minute to one month. Full explanation →
- Treasury securityMarkets
- Debt issued by the US government, the reference against which other yields are quoted. Full explanation →
- TrendlinePatterns
- A straight line drawn through successive highs or lows to frame a trend's slope. Full explanation →
V
- VolatilityIndicators
- How widely returns have been dispersed around their average. Full explanation →
- Volatility contractionPatterns
- A sequence of successively shallower pullbacks, each on lighter volume than the last. Full explanation →
- VolumeIndicators
- The number of shares traded in a period - the participation behind a price move. Full explanation →
- VWAPIndicators
- The average price paid across the session, weighted by the volume traded at each price. Full explanation →
W
- Working capitalFundamentals
- Current assets minus current liabilities: the short-term cushion a business runs on. Full explanation →
Y
- YieldMarkets
- The return a bond delivers at its current price, which moves inversely to that price. Full explanation →
- Yield curveMarkets
- A plot of Treasury yields against maturity, from the one-month bill to the thirty-year bond. Full explanation →
- Yield curve inversionMacro
- Short-maturity Treasury yields sitting above long-maturity ones. Full explanation →
Educational definitions only. Nothing here is investment advice or a recommendation to buy or sell any security. See the Risk Disclosure. Browse the library.