144 terms

Dictionary: A

A-book: Broker practice of hedging a client's trade in the external market, so the broker earns spread or commission and carries no directional risk.
Abandoned baby: A rare three-candle reversal where a doji gaps clear of the candles on both sides, with no overlap of shadows at all.
Abgeltungsteuer: Germany: a flat withholding tax plus solidarity surcharge and any church tax applies to investment income and capital gains, usually deducted at source by a German bank or broker.
Absolute priority rule: The bankruptcy principle that each class of claim must be paid in full before the class below it receives anything, placing common stock last in line.
Accelerated share repurchase: A deal where a bank delivers most of a buyback's shares to the company immediately and borrows stock to cover, settling up later at an average price.
Account abstraction: Protocol support for accounts that are programmable contracts, enabling recovery, batching, session keys and fees paid by someone else.
Account currency: The currency your broker keeps your balance in, and the one every profit, loss, swap and commission is finally converted into.
Account model: An accounting design where each address has a running balance and a counter, rather than a set of discrete unspent outputs.
Accountability level: A softer threshold than a hard position limit: exceed it and the exchange can ask questions and order you to stop adding.
Accountability partner: Another trader who sees your actual numbers and rule adherence on a regular schedule, which changes behaviour mainly because it is observed.
Accounts payable: Bills owed to suppliers for goods and services already received; effectively an interest-free loan from the supply chain.
Accounts receivable: Money owed by customers for goods already delivered; revenue that has been recognised but not yet collected in cash.
Accredited investor: A regulatory category of investors permitted to buy private offerings, defined by wealth, income, or professional qualification rather than by demonstrated skill.
Accretive versus dilutive: Whether a deal or issuance raises or lowers earnings per share for existing holders, the standard first test applied to any acquisition or financing.
Accruals: The difference between reported profit and cash flow, created by recognising revenue and expenses in periods other than when cash moves.
Accruals ratio: Net income minus cash flow, divided by average total assets; a screen for companies whose reported profit is unusually dependent on estimates.
Accrued interest: The coupon interest a bond has earned since the last payment date, which the buyer pays to the seller on top of the quoted price.
Accumulated other comprehensive income: The running balance of gains and losses that bypass net income, mainly currency translation, some hedges, and pension remeasurements.
Accumulating share class: A fund class that reinvests income inside the fund instead of paying it out, so the share price rises with income and no cash distribution is received.
Accumulation: A phase in which buyers build positions gradually inside a range after a decline, without pushing price up enough to reveal themselves.
Accumulation/distribution line: A cumulative volume measure weighted by where the close sits within each bar's range, rather than by whether the bar closed up or down.
Acquisition: One company buys control of another, either through an agreed deal with the target's board or directly from shareholders.
Action bias: The urge to do something - anything - when waiting is the correct play, usually because sitting still feels like wasting the session.
Active addresses: The count of distinct addresses sending or receiving on a chain in a period, used as a rough proxy for network usage.
Active share: The percentage of a portfolio's holdings that differ from its benchmark's holdings. 100% means no overlap with the index; 0% means the fund is a replica.
Activist investor: A fund that takes a sizable stake and publicly pushes for change: board seats, asset sales, buybacks, spin-offs, or a sale of the company.
Adaptive market hypothesis: A view that market efficiency is not fixed but evolves: edges appear when conditions change, get competed away as participants learn, and can return later.
Adding to losers: Increasing a losing position to improve the average price, which can be a planned strategy or a rescue attempt - and the two look identical from outside.
Address: The public identifier you send funds to, usually derived from a public key or a contract deployment.
Address poisoning: An attack that plants a lookalike address in your transaction history, hoping you copy it from there when sending next time.
Adjusted close: A historical closing price rewritten to account for splits and dividends so that returns computed from the series reflect what a holder actually earned.
Adjusted EBITDA: EBITDA after management's chosen add-backs: stock-based pay, restructuring, acquisition costs and anything else described as non-recurring.
Adjusted funds from operations: Funds from operations less recurring maintenance capital spending and adjusted for straight-lined rent; the closest REIT equivalent of free cash flow.
Adjusted option: A contract whose terms have been changed after a corporate action, so its deliverable is no longer a clean 100 shares.
Admin key risk: The exposure created when a team, multisig or single key can upgrade contracts, change parameters, mint tokens, or move user funds.
ADR pass-through fee: A small per-share charge the depositary bank deducts from ADR holders, usually taken out of dividends or billed directly once or twice a year.
ADR ratio: The number of underlying foreign shares each depositary receipt represents, chosen so the receipt trades in a familiar dollar price range.
Adrenaline dump: The surge that hits when a position moves hard against or for you - hands shaky, tunnel vision, urgency - and the poor decisions that follow it.
Advance-decline line: A running total of advancing stocks minus declining stocks each day, used as the basic measure of how broad a market move is.
Adverse selection: The systematic cost of being filled mainly by counterparties who know something you do not, so your passive fills cluster just before the price moves against you.
Affect labelling: Putting a feeling into words, which reliably reduces its intensity - saying I am frustrated works better than trying not to be frustrated.
After-hours session: Trading from 16:00 until as late as 20:00, the window where most earnings reports are digested before the next regular session opens.
Agency bond: Debt issued by a government-sponsored enterprise such as Fannie Mae, Freddie Mac or the Federal Home Loan Banks; near-Treasury credit with a small yield pickup.
Airdrop: A free distribution of tokens to qualifying wallets, used to bootstrap users, decentralise supply or reward early activity.
Airdrop farming: Deliberately generating on-chain activity across protocols in the hope of qualifying for future token distributions.
Algorithmic order: An instruction handed to a program that decides how, when and where to trade the size, rather than sending it to the market in one piece.
Algorithmic stablecoin: A token that tries to hold a peg through minting and burning rules or a paired volatile token rather than through held reserves.
All-cash deal: An acquisition where target shareholders receive a fixed cash amount per share, giving a certain payout but a taxable event on closing.
All-or-none (AON): A condition that forbids partial fills: the order executes in full or not at all, though it may keep working across the session.
All-stock deal: An acquisition paid in acquirer shares rather than cash, so the target holder's payout moves with the acquirer's share price until closing.
All-weather portfolio: The concept of building a mix that holds up across four broad macro environments: rising growth, falling growth, rising inflation and falling inflation.
Allowance for doubtful accounts: A contra-asset reducing receivables to the amount the company actually expects to collect, based on its estimate of customer defaults.
Alpha: Return that is not explained by a portfolio's exposure to its benchmark or to known risk factors. Positive alpha is the residual after paying for the risks you took.
Alpha decay: The tendency of a profitable strategy to weaken over time as competitors find it, capital crowds in, or the market structure changes.
Altcoin: Any cryptocurrency other than Bitcoin; a category ranging from major networks to thousands of tokens with no liquidity.
Alternative delivery procedure (ADP): A privately negotiated substitute for standard delivery, agreed after a delivery notice is matched, where the two parties settle on their own terms and inform the clearing house.
Alternative trading system (ATS): A non-exchange venue that matches buyers and sellers under SEC rules, including most dark pools and some electronic crossing networks.
Altseason: A phase where a broad range of alternative coins outperform bitcoin, usually late in a cycle and usually brief.
AM settlement: Settlement based on a special opening calculation on expiration morning, so the final price is not one you can trade at.
Ambiguity aversion: Preferring a known risk to an unknown one, so traders avoid unfamiliar markets even when the opportunity there is better.
American depositary receipt: A US-listed certificate representing shares of a foreign company held by a depositary bank, letting US investors trade a foreign stock in dollars during US hours.
American premium: The extra value an American option carries over an otherwise identical European one, because of the right to exercise early.
American-style option: An option the holder can exercise on any business day up to and including expiration; the standard for listed stock and ETF options.
Amortisation: Depreciation's equivalent for intangible assets: spreading the cost of patents, customer lists or acquired technology across their useful lives.
Analysis paralysis: Being unable to act because too many indicators, timeframes, or opinions produce conflicting signals.
Analyst coverage: Published research on a stock by sell-side analysts, carrying ratings, estimates, and price targets that shape the consensus a company is measured against.
Anchored VWAP: A VWAP calculated from a chosen starting point such as an earnings gap or a swing low, rather than from the session open.
Anchored walk-forward: A walk-forward where the fitting window always starts at the beginning of history and only its end moves forward.
Anchoring bias: Letting an arbitrary first number - your entry price, a round figure, a headline target - set the frame for every judgement that follows.
Anchoring to entry: Managing a position relative to the price you paid, a number that has no meaning to anyone else in the market.
Andrews pitchfork: Three parallel lines projected from a swing point through the midpoint of the following swing, used to frame a trend channel geometrically.
Annual general meeting: The yearly shareholder meeting where directors are elected and proposals are voted on, with eligibility set by a record date weeks earlier.
Annual recurring revenue: The annualised value of subscription contracts in force at a point in time, excluding one-off fees, services and usage overages.
Annualised rate (SAAR): A short-period change scaled up to what it would be if maintained for a full year; standard for GDP, housing and monthly inflation comparisons, and a magnifier of noise.
Annualised return: A return rescaled to a one-year equivalent, which is essential for comparison and routinely abused on short samples.
Anti-dilution provision: A contract term that adjusts an investor's conversion price or share count downward if the company later issues stock more cheaply, shifting dilution onto everyone else.
Anti-martingale: Increasing size after wins and decreasing it after losses, the structure behind almost every survivable sizing rule.
Anti-money laundering (AML): The framework of laws and firm programs designed to stop financial institutions being used to disguise the proceeds of crime, built on identification, monitoring and reporting.
Anticipated regret: The imagined future pain of missing out or being wrong, felt in advance and strong enough to override a plan.
Ape in: To buy a position quickly and without research, usually a large one, on enthusiasm or a tip.
API rate limit: The cap a broker or exchange places on how many requests you may send per interval. Exceeding it gets you throttled or disconnected, usually at the worst moment.
API trading: Sending orders and consuming data through a broker or exchange programming interface rather than a graphical platform, usually over REST, WebSocket or FIX.
Apophenia: The general tendency to perceive meaningful connections between unrelated things - the parent effect behind most chart pareidolia.
Appreciation: A rise in a currency's market value against another under a floating regime, the mirror image of depreciation.
Arbitrage: In the strict sense, simultaneously buying and selling equivalent exposures to capture a price difference with no net risk. In practice, the term covers trades with small but genuine residual risks.
Arbitrage bot: Automated software that buys an asset where it is cheap and sells where it is dear, keeping prices aligned across venues and pools.
ARIMA: A classical linear time-series model combining autoregressive terms, differencing, and moving-average terms. Useful for well-behaved series, rarely useful for predicting returns.
Arithmetic return: The simple average of periodic returns, which overstates what you actually earned whenever returns vary.
Arithmetic vs geometric return: The average of your period returns is always at least the compounded rate you actually earned, and the gap grows with volatility.
Aroon indicator: Two lines measuring how many bars have passed since the highest high and the lowest low of the lookback window, scaled to 0 to 100.
Arousal regulation: Actively steering your level of activation toward the band where you decide well, rather than letting the market set it.
Arrival price: The market price at the moment an order reaches the trading desk or algorithm; the reference point for measuring execution cost.
Arrival price benchmark: The difference between the price when you decided to trade and the price you actually achieved, including the cost of anything you failed to execute.
Ascending triangle: A flat resistance level with a rising series of lows beneath it, traditionally read as buyers becoming more aggressive.
Asian financial crisis (1997): The chain of currency collapses that began when Thailand floated the baht in July 1997, spreading through Southeast Asia and Korea and ending several dollar pegs.
Asian session (Tokyo): The Asia-Pacific trading hours, roughly 7 p.m. to 4 a.m. Eastern; usually the quietest session for major pairs.
ASIC leverage caps: Australia's product intervention order, in force from 2021, limiting retail CFD leverage to 30:1 on major currency pairs and lower on other classes, with close-out and negative balance requirements.
Ask (offer): The lowest price a seller is currently willing to accept for an asset.
Asset allocation: The split of a portfolio across asset classes such as equities, bonds, cash, commodities and property. For most long-horizon investors it drives more of the outcome than security selection.
Asset location: Deciding which account type holds which assets, so that the most heavily taxed holdings sit in sheltered accounts and tax-efficient ones sit in taxable accounts.
Asset swap spread: The spread over a floating benchmark such as SOFR that an investor earns by buying a fixed-rate bond and swapping its coupons into floating.
Asset-backed security (ABS): A bond backed by a pool of consumer or business receivables such as car loans, credit cards, equipment leases or student loans, sliced into tranches by seniority.
Assets: Resources the company controls that are expected to produce future economic benefit, carried at historical cost or fair value depending on the type.
Assignment: When an option seller is required to fulfill the contract: deliver shares on a short call or buy shares on a short put.
Assignment allocation: How an exercise notice is matched to a specific short account: randomly, or first in first out, depending on the clearing firm.
At the money (ATM): An option whose strike is at or very near the current stock price.
At-the-market offering: A program letting a company drip new shares directly into the open market at prevailing prices, day by day, instead of pricing one large block.
At-the-money volatility: The implied volatility of the strike nearest the forward price; the reference point from which the rest of the surface is quoted.
ATR (Average True Range): The average size of a bar's full range over N periods, including gaps; a plain measure of how much an asset moves.
ATR position sizing: Using a multiple of average true range as the stop distance, so size adapts to each instrument's volatility.
ATR stop: A stop-loss placed a fixed multiple of average true range away from entry, so the distance adapts to current volatility.
Attentional bias: What you look at shapes what you trade, so scanners, watchlists, and feeds quietly decide your opportunity set before analysis begins.
Attestation: A report from an accounting firm stating what reserves a stablecoin issuer held on a given date. Weaker than a full audit and only a snapshot.
Auction tail: The gap between the yield an auction stops at and the yield the security traded at in the when-issued market just before; a positive tail means demand was weaker than expected.
Auction-only order: An order flagged to trade exclusively in an auction cross, never in continuous trading, even if a better price is available on the book.
Audit: A paid review of contract code by security specialists. Useful evidence of diligence, and never a guarantee that the code is safe.
Auditor opinion: The independent auditor's formal statement on whether the financial statements are fairly presented, printed at the front of the annual report.
Augmented Dickey-Fuller test: The standard test for whether a series has a unit root. The null is that it does; rejecting the null is evidence the series mean-reverts.
Aussie: The Australian dollar, and by extension the pair AUD/USD; treated by traders as a proxy for Chinese demand and global risk appetite.
Australian CGT discount: Australia: individuals holding an asset more than twelve months generally include only half the capital gain in assessable income; active traders may instead be taxed on revenue account.
Australian Securities and Investments Commission (ASIC): Australia's corporate, markets and financial services regulator, which licenses brokers through the AFS licence regime and caps retail CFD leverage at 30:1.
Australian Taxation Office (ATO): Australia's tax authority, which distinguishes investors eligible for the CGT discount from share traders taxed on revenue account, and matches broker and exchange data.
Authority bias: Weighting an opinion by the status of the person giving it instead of by the reasoning and evidence behind it.
Authorized participant: A large broker-dealer contracted with an ETF issuer to create and redeem shares in bulk; the only party that can transact directly with the fund.
Authorized shares: The maximum number of shares a company's charter allows it to issue; raising the limit requires a shareholder vote.
Auto-compounding: Automatically harvesting rewards and reinvesting them, turning a simple rate (APR) into a compounded one (APY).
Auto-deleveraging: A venue forcibly closing profitable traders' positions to cover losses it cannot otherwise absorb, used when the insurance fund is exhausted.
Auto-exercise threshold: The amount in the money at which a contract is automatically exercised at expiration; typically one cent, though brokers may set their own.
Auto-liquidation: The broker's automated closing of your positions the moment account equity breaches a risk threshold, with no call and no discretion.
Autocallable note: A structured note that redeems early with a fixed coupon if the underlying is at or above a set level on an observation date, and otherwise continues until maturity or a barrier is breached.
Autocorrelation: Correlation of a series with its own past. Positive at lag one means moves tend to continue; negative means they tend to reverse.
Automated market maker (AMM): A smart contract that quotes prices from a formula applied to its own token balances, letting anyone trade against a pool instead of an order book.
Availability heuristic: Judging how likely something is by how easily an example comes to mind, so vivid and recent events feel far more probable than they are.
Average cost basis: A method averaging the cost of all shares of a fund into a single per-share basis, generally available for mutual funds and some reinvestment plans rather than individual stocks. United States.
Average daily range: The mean distance between high and low over recent sessions, used to judge how much room a market typically gives in a day.
Average Directional Index: A Wilder indicator measuring the strength of a trend without saying which way it points, usually with 25 taken as the threshold for trending.
Average drawdown: The mean depth of all declines below prior peaks, which describes the routine experience better than the single worst one does.
Average fill price: The size-weighted mean price of every execution making up an order, which is the only price that matters for the position's actual cost basis.
Average hourly earnings (AHE): Average pay per hour from the establishment survey, released with payrolls; the fastest monthly read on wage pressure and a key input to service-sector inflation forecasts.
Average loss: The mean loss of losing trades, whose relationship to your planned risk shows whether stops are actually being honoured.
Average revenue per user: Revenue divided by the number of active users or accounts in a period; a way of separating growth from more users and growth from more spending.
Average win: The mean profit of winning trades, which is meaningless without the average loss and the win rate beside it.
Averaging down: Adding to a losing position to improve the average price, which increases risk on the trade you are currently wrong about.
Awesome Oscillator: A histogram of the difference between a 5 and a 34 period simple moving average of the bar midpoint, used to read momentum shifts.

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