Investing and Markets
Alternative Trading System
An alternative trading system is a non-exchange trading venue that matches buyers and sellers of securities under ATS rules.
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Investing and Markets Terms
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74 published definitions in this topic.
Investing and Markets
American Depositary Receipt
An American depositary receipt is a U.S.-traded certificate representing shares of a non-U.S. company held by a depositary bank.
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Asset Allocation
Asset allocation is the intentional mix of asset classes (such as stocks, bonds, and cash) in a portfolio according to goals, horizon, and risk tolerance.
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Balance Sheet
A balance sheet is a snapshot of a company’s assets, liabilities, and equity at a specific date, showing what it owns and owes.
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Best Execution
Best execution is a broker’s duty to seek the most favorable terms reasonably available for a customer order under applicable rules.
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Bond
A bond is a debt security where an issuer borrows money and typically pays interest and principal according to stated terms.
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Book Value
Book value is the accounting carrying amount of equity (assets minus liabilities), not the market price of the stock.
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Broker-Dealer
A broker-dealer is a firm that brokers securities transactions for customers, deals for its own account, or both, typically under registration and conduct rules.
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Call Option
A call option gives the holder the right to buy the underlying at the strike price within the contract’s terms.
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Cash Flow Statement
A cash flow statement classifies cash inflows and outflows into operating, investing, and financing activities over a period.
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Channel Stuffing
Channel stuffing is pushing excess product into distributors or retailers to inflate near-term sales, often reversing later through returns or weak sell-through.
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Circuit Breaker
A circuit breaker is a market-wide or single-stock trading halt triggered by large price moves to pause trading and recalibrate orders.
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Contract for Difference
A contract for difference is a derivative that pays the difference in an asset’s price between open and close without transferring the underlying.
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CUSIP
A CUSIP is a nine-character identifier assigned to U.S. and Canadian securities for clearing and settlement identification.
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Dark Pool
A dark pool is a private trading venue that matches orders without displaying pre-trade quotes publicly like a lit exchange.
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Day Trading
Day trading is buying and selling the same security within the same trading day, often repeatedly.
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Debt-to-Equity Ratio
The debt-to-equity ratio compares interest-bearing (or total) debt to shareholders’ equity as a simple leverage indicator.
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Diluted Earnings Per Share
Diluted earnings per share shows EPS as if convertible securities, options, and similar instruments that could increase share count were exercised.
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Discounted Cash Flow
Discounted cash flow estimates value by projecting future cash flows and discounting them to present value at a chosen rate.
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Diversification
Diversification means spreading investments across assets or risks that do not move in perfect lockstep to reduce concentration risk.
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Dividend
A dividend is a distribution of cash or stock that a company pays to shareholders from earnings or reserves when declared.
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Dollar-Cost Averaging
Dollar-cost averaging is investing fixed amounts at regular intervals regardless of price, which averages purchase prices over time.
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Earnings Per Share
Earnings per share allocates net income to each share of common stock, usually as basic EPS and diluted EPS.
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EBITDA
EBITDA is earnings before interest, taxes, depreciation, and amortization—a non-GAAP operating proxy, not cash in the bank.
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Electronic Communication Network
An electronic communication network is an electronic system that automatically matches buy and sell orders for securities.
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Enterprise Value
Enterprise value estimates the total value of a firm’s operating business, typically equity market value plus net debt and other claims.
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Exchange-Traded Fund
An exchange-traded fund is an investment fund that issues shares trading on an exchange throughout the day, typically tracking an index or strategy.
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Federal Funds Rate
The federal funds rate is the interest rate U.S. depository institutions charge each other for overnight reserve balances; the Federal Reserve sets a target range.
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Forex
Forex (foreign exchange) is the market for trading currencies against one another.
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Form 10-K
Form 10-K is a U.S. annual report that many public companies file with the SEC covering business, risk factors, and audited financial statements.
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Form 10-Q
Form 10-Q is a U.S. quarterly report with unaudited financials and updates filed by many public companies between annual 10-Ks.
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Form 8-K
Form 8-K is a U.S. current report used to disclose specified material events on a faster timeline than periodic reports.
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Free Cash Flow
Free cash flow is a non-standardized estimate of cash generated after operating needs and capital expenditures, used to gauge discretionary cash.
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Futures Contract
A futures contract is a standardized exchange-traded agreement to buy or sell an asset at a future date for a price agreed today, marked to market daily.
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Goodwill
Goodwill is an intangible asset recorded when an acquirer pays more than the fair value of identifiable net assets in a business combination.
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Gross Margin
Gross margin is gross profit as a percentage of revenue, showing how much remains after direct costs of goods or services sold.
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High-Frequency Trading
High-frequency trading uses algorithms and low-latency infrastructure to send large volumes of orders over very short timescales.
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Income Statement
An income statement summarizes revenues, expenses, and profit or loss over a reporting period.
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Initial Public Offering
An initial public offering is a company’s first sale of shares to the public in a registered offering, typically followed by exchange listing.
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Investment
An investment is an allocation of money or capital with the expectation of future income or appreciation, subject to risk of loss.
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ISIN
An ISIN is a twelve-character international securities identification number used to uniquely identify a security globally.
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Margin of Safety
Margin of safety is the gap between estimated intrinsic value and purchase price that a cautious investor seeks as a buffer against error.
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Market Maker
A market maker is a firm that continuously quotes bids and offers to provide liquidity in a security, often under exchange or regulatory obligations.
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Moving Average
A moving average smooths past prices over a chosen window to highlight trend direction and reduce short-term noise.
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Mutual Fund
A mutual fund pools investor money to buy a portfolio of securities and typically prices shares once per day at NAV.
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National Best Bid and Offer
The national best bid and offer is the best displayed buy and sell prices available across protected U.S. market centers at a moment in time.
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Net Asset Value
Net asset value is the per-share value of a fund’s assets minus liabilities, used to price mutual fund shares and as a reference for ETFs.
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Non-GAAP Earnings
Non-GAAP earnings are company-defined profit measures that adjust GAAP results by adding back or excluding selected items.
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Option
An option is a contract giving the right, but not the obligation, to buy or sell an underlying asset at a set price before or at expiration.
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Over-the-Counter Market
The over-the-counter market is trading of securities that occurs off a traditional exchange, often through dealer networks or quotation systems.
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Pattern Day Trader
Pattern day trader is a U.S. brokerage designation for accounts that execute frequent day trades and face elevated equity requirements.
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Payment for Order Flow
Payment for order flow is compensation a broker receives for routing customer orders to a particular market maker or venue.
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Penny Stock
A penny stock is a low-priced, often thinly traded equity that may trade OTC and carries elevated fraud and volatility risk.
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Pip
A pip is a standardized unit of price movement in forex, traditionally one ten-thousandth for many currency pairs.
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Price-to-Earnings Ratio
The price-to-earnings ratio compares a company’s share price to its earnings per share, expressing how much the market pays per unit of earnings.
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Prospectus
A prospectus is a disclosure document describing a securities offering, including risks, fees, and business information for prospective investors.
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Put Option
A put option gives the holder the right to sell the underlying at the strike price within the contract’s terms.
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Quantitative Easing
Quantitative easing is a monetary-policy tool in which a central bank buys longer-term securities at scale to ease financial conditions when policy rates are already low.
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Relative Strength Index
The relative strength index is a momentum oscillator that summarizes recent price gains versus losses on a scaled 0–100 range.
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Return on Equity
Return on equity measures net income relative to shareholders’ equity, expressing how much profit was generated on book equity.
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