Accrued Interest
Interest that has been earned but not yet paid.
Algorithmic Trading
The use of computer algorithms to execute trades automatically based on predefined criteria.
American Depositary Receipt (ADR)
A certificate issued by a U.S. bank representing shares in a foreign company.
Arbitrage
The simultaneous purchase and sale of an asset to profit from a difference in price.
Ask Price
The price at which a seller is willing to sell a security.
Asset Allocation
The process of dividing investments among different asset categories to minimize risk.
At-the-Money
An option with a strike price that is equal to the current price of the underlying asset.
Average True Range (ATR)
A technical analysis indicator that measures market volatility.
Backtesting
The process of testing a trading strategy using historical data.
Balance Sheet
A financial statement that reports a company’s assets, liabilities, and shareholders’ equity.
Bear Market
A market condition where prices are falling or expected to fall.
Bid Price
The price at which a buyer is willing to purchase a security.
Blue-Chip Stock
A stock of a well-established, financially stable, and historically secure company.
Bollinger Bands
A technical analysis tool that defines upper and lower price bands around a moving average.
Breakout
A price movement through a support or resistance level.
Broker
An individual or firm that acts as an intermediary between buyers and sellers, typically charging a commission.
Bull Market
A market condition where prices are rising or expected to rise.
Candlestick Chart
A type of price chart used in technical analysis that displays the high, low, open, and close prices for a period.
Capital Gain
The profit from the sale of an asset.
CFD (Contract for Difference)
A financial contract that pays the difference in the settlement price between the open and closing trade.
Commission
A fee charged by a broker for executing a trade.
Commodity
A basic good used in commerce that is interchangeable with other goods of the same type.
Correlation
A statistical measure that describes the extent to which two assets move in relation to each other.
Day Trading
The practice of buying and selling securities within the same trading day.
Debt-to-Equity Ratio
A financial ratio that indicates the relative proportion of shareholders’ equity and debt used to finance a company’s assets.
Derivative
A financial security whose value is dependent upon or derived from an underlying asset or group of assets.
Diversification
A risk management strategy that involves spreading investments across different assets to reduce exposure to any single asset.
Dividend
A payment made by a corporation to its shareholders, usually as a distribution of profits.
Drawdown
The peak-to-trough decline during a specific period for an investment, trading account, or fund.
Earnings Per Share (EPS)
A company’s profit divided by the number of outstanding shares of its common stock.
Economic Indicator
A statistic about economic activity that allows analysis of economic performance and predictions of future performance.
Exchange-Traded Fund (ETF)
A type of investment fund that is traded on stock exchanges, much like stocks.
Execution
The completion of an order to buy or sell a security.
Fibonacci Retracement
A technical analysis tool used to identify potential support and resistance levels.
Financial Statement
A formal record of the financial activities and position of a business, person, or other entity.
Fundamental Analysis
The analysis of economic, financial, and other qualitative and quantitative factors to evaluate a security’s value.
Futures Contract
A legal agreement to buy or sell a particular commodity asset, or security at a predetermined price at a specified time in the future.
Gross Domestic Product (GDP)
The total value of goods produced and services provided in a country during one year.
Hedge Fund
An investment fund that employs various strategies to earn active return for its investors.
Hedging
A strategy used to offset potential losses by taking an opposite position in a related asset.
Index Fund
A mutual fund or ETF designed to follow certain preset rules so that the fund can track a specified basket of underlying investments.
Inflation
The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.
Initial Public Offering (IPO)
The process of offering shares of a private corporation to the public in a new stock issuance.
Intrinsic Value
The perceived or calculated value of an asset, investment, or company.
Investment Portfolio
A collection of investments held by an individual or institution.
Leverage
The use of borrowed funds to increase one’s trading position beyond what would be available from their cash balance alone.
Limit Order
An order to buy or sell a security at a specified price or better.
Liquidity
The ability to buy or sell an asset quickly without causing a significant impact on its price.
Long Position
A trading position where the trader buys a security, expecting the price to rise.
Lot
A standardized quantity of a financial instrument, such as a currency or commodity.
Margin
The amount of money required to open and maintain a leveraged trading position.
Market Capitalization
The total market value of a company’s outstanding shares of stock.
Market Order
An order to buy or sell a security immediately at the best available current price.
Moving Average
A statistical calculation used to analyze data points by creating a series of averages of different subsets of the full data set.
Mutual Fund
An investment program funded by shareholders that trades in diversified holdings and is professionally managed.
Net Asset Value (NAV)
The value per share of a mutual fund or an ETF on a specific date or time.
Option
A financial derivative that represents a contract sold by one party to another, offering the buyer the right, but not the obligation, to buy or sell a security at an agreed-upon price during a certain period or on a specific date.
Over-the-Counter (OTC)
Trading done directly between two parties, without the supervision of an exchange.
P/E Ratio (Price-to-Earnings)
A ratio for valuing a company that measures its current share price relative to its per-share earnings.
Pip
The smallest price movement in the exchange rate of a currency pair, usually equal to 0.0001.
Portfolio Diversification
The practice of spreading investments across various financial instruments, industries, and other categories to reduce risk.
Position Sizing
The process of determining the number of units to trade, based on risk management principles.
Price Action
The movement of a security’s price plotted over time.
Quote Currency
The second currency listed in a currency pair, used to determine the value of the base currency in Forex trading.
Relative Strength Index (RSI)
A momentum oscillator that measures the speed and change of price movements.
Resistance Level
A price point where an asset faces selling pressure, making it difficult for the price to increase further.
Return on Investment (ROI)
A measure used to evaluate the efficiency of an investment or compare the efficiency of several investments.
Risk Management
The identification, assessment, and prioritization of risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events.
Scalping
A trading strategy that involves making numerous small-profit trades within a very short time frame.
Sector
A distinct subset of the economy made up of companies that provide a similar product or service.
Securities and Exchange Commission (SEC)
A U.S. government agency that oversees securities transactions, activities of financial professionals and mutual fund trading to prevent fraud and intentional deception.
Short Position
A trading position where the trader sells a security, expecting the price to fall.
Slippage
The difference between the expected price of a trade and the price at which the trade is actually executed.
Speculation
The act of trading in an asset, or conducting a financial transaction, that has significant risk of losing value but also holds the expectation of a significant gain.
Spread
The difference between the bid price and the ask price of a security or currency.
Stock Split
An action taken by a company to divide its existing shares into multiple shares.
Stop-Loss Order
An order placed to buy or sell a security when it reaches a certain