Glossary

• Abenomics – the name given to a suite of measures introduced by Japanese prime minister Shinzō Abe after his December 2012 re-election to the post he last held in 2007. His aim was to revive the sluggish economy with "three arrows": a massive fiscal stimulus, more aggressive monetary easing from the Bank of Japan, and structural reforms to boost Japan's competitiveness. (Shinzō Abe resiged for health reasons on Aug 28, 2020.)
• ADR –  An American depositary receipt (ADR) is a negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock traded on a U.S. exchange.
• Alpha – Measure of risk-adjusted performance. Alpha takes into account the volatility of a particular portfolio and matches the risk-adjusted performance of that portfolio against a benchmark index. (Or, return greater than the market.)
• Ascending triangles – a bullish formation that anticipates an upside breakout. Descending triangles are a bearish formation that anticipates a downside breakout. Symmetrical triangles, where price action grows increasingly narrow, may be followed by a breakout to either side, up or down.
• Baltic Clean Tanker Index (BCTI) –  index that tracks average industry rates for chartering "clean" tankers transporting refined petroleum products (petrol , diesel , fuel oil or kerosene).  Baltic Dirty Tanker Index ( BDTI) tracks tankers that carry  that transport crude oil.   
• Basis Point –  A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument.
• Benchmark – An unmanaged group of securities whose performance is used as a standard to measure investment performance. Commonly known as a market index. Some commonly used benchmarks are the Dow Jones Industrial Average and the S&P 500.
• Beta – The measure of a fund's or a stock's risk in relation to the market or to an alternative benchmark. A beta of 1.5 means that a stock's excess return is expected to move 1.5 times the market excess returns. E.g., if market excess return is 10%, then we expect, on average, the stock return to be 15%. Beta is referred to as an index of the systematic risk due to general market conditions that cannot be diversified away.
• Big Mac Index – a way of measuring Purchasing Power Parity (PPP) between different countries, invented by The Economist in 1986.
• Black Swan – low probability high impact event.
• Blockchain – a distributed ledger technology (DLT) that serves as the backbone of cryptocurrencies such as bitcoin. The technology remains in its formative stages but it may revolutionize some aspects of the financial services industry.
• Blue chips – giant companies with solid reputations. Think of General Electric, Intel, Visa, Wal-Mart and Walt Disney — financially fit corporations with dependable earnings, usually paying additional income to investors in the form of dividends.
• Bonds – loans to governments and corporations.  Investors are repaid their money with interest over time.  The total value of U.S. stocks is about $20 trillion, while the bond market is more than $40 trillion.  Anyone at or near retirement should consider bonds as part of a fixed-income portfolio designed to deliver regular paychecks.
• Brexit – An abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of the United Kingdom's withdrawal from the European Union.
• Breakout – The action by a stock when it surpasses its resistance level: usually a price ceiling at which the stock has previously encountered selling. In many cases, but not always, that resistance level is the highest point in a "handle" portion of a base pattern.
• BRICS – a grouping acronym that refers to five major emerging national economies: Brazil, Russia, India, China and South Africa.. In 2001, Jim O’Neill, a British economist formerly of Goldman Sachs, grouped these countries to represent the economic shift away from developed countries toward emerging nations. He came up with the bold prediction that “by 2041 (later revised to 2039, then 2032) the BRICs would overtake the six largest western economies in terms of economic might.”(The grouping was originally known as "BRIC" before the inclusion of South Africa in 2010.) (also see: MINT)
• Buyside – professional investors
• CAN SLIM® – Acronym for William J. O'Neil's investment strategy. CAN SLIM® is based on the seven common characteristics found in his study of the greatest stock market winners of the last 45 years. A thorough discussion of CAN SLIM® can be found in William J. O'Neil's book, How to Make Money in Stocks.  C = Current Earnings Growth A = Annual Earnings Growth N = New Products, New Services, New Management, New Price Highs S = Supply & Demand L = Leader or Laggard I = Institutional Sponsorship M = Market
• Carried interest – a rule in the tax code that lets the managers of some types of private investment funds—hedge, private equity, venture capital, real estate and other types of vehicles—pay a lower rate than most individuals.
• Carry Trade – Borrowing of a currency of a low interest rate country, such as the US, converting it to a currency in a higher interest rate country and investing it in high yielding assets of that country and elsewhere.
• CL (ticker symbol ) – NYMEX WTI Light Sweet Crude Oil futures , the world’s most liquid and actively traded crude oil contract.  NYMEX WTI trades nearly 1.2 million contracts a day, with each contract equal to 1,000 barrels and valued at roughly $44,740.  WTI (West Texas Intermediate) is a light, sweet crude oil blend. ‘Light’ refers to its low density and sulfur content, ideal for conversion to gasoline and diesel fuel. The contract’s ticker symbol, CL, refers to “Crude Light.”
• Climax Top –  When a stock suddenly advances at a much faster rate for one or two weeks after an advance of many months. Generally occurs in the final "stages" of a stock's price advance, indicating a leveling off or decrease in future price movements. Often accompanied by a gap up in price. Based on William J. O'Neil's research, many big market leaders top in this fashion. (Also, see Gap and Exhaustion gap)
• Contango – a situation in which futures prices are meaningfully above current spot levels.
• CoCo bond –  A contingent convertible capital instrument, or CoCo, is a type of bond designed by regulators after the financial crisis. The bonds allow banks to skip interest payments without defaulting, and they’re designed to convert to common equity or suffer a principal writedown if a bank runs into trouble. This provides a buffer in times of stress while inflicting losses on CoCo investors.
• Correlation –  A statistical measure of how two securities move in relation to each other. A measure of 1 means the securities are highly correlated and move in conjunction. A measure of 0 means the securities are not at all correlated and do not move in conjunction.
• COT –  Commitments of Traders Report. The report is issued on Thursday evenings by the Commodity Futures Trading Commission.  It breaks down the amount of buying and selling done by three groups: Commercials, Large Traders, and Small Traders.
• Crack spread –  the difference between crude oil’s cost and prices of refined products (gasoline, jet and ship fuel, heating oil, etc.).
• Crude oil inventory – The American Petroleum Institute reports weekly inventory levels of US crude oil, gasoline and distillates stocks. The figure shows how much oil and product is available in storage.The indicator gives an overview of US petroleum demand.
• Crude oil trading hours (on the CME Globex electronic platform): 6:00 PM until 5:15 PM, Sunday through Friday with a 45-minute break each day between 5:15 PM (current trade date) and 6:00 PM (next trade date), New York Time. Open Outcry (pit session): 9:00 AM until 2:30 PM, New York Time.  (crude oil futures - WSJ)
• Crush spread – a commodity trading strategy in which the trader takes a long position in soybean futures against short positions in soybean meal futures and soybean oil futures to establish a processing margin.
• Cup with handle – Technical charting pattern coined by IBD founder William J. O'Neil. It is one of three positive chart patterns to look for when doing technical analysis of a stock. It is named such because it resembles the outline of a coffee cup with a handle.  The pattern can last from seven weeks to as long as a year, but most are three to six months. The decline is usually 12% to 35% from the stock's high. The handle area should slant lower as the last remaining sellers exit the stock. The buy point is 10 cents above the high point of the handle.
• DAX –  A stock index that represents 30 of the largest and most liquid German companies that trade on the Frankfurt Exchange. The DAX was created in 1988 with a base index value of 1,000. (live 4-month chart)
• Direct listing –  A direct listing to go public is a process in which no new shares are created. A direct listing helps companies save millions of dollars in underwriting fees.
• Discount window –  The Fed routinely makes short-term, even overnight, loans to banks. These loans are referred to as "overnight lending" or "open market operations." The mechanism is referred to as the Fed's "discount window."   These open market operations are there to provide short-term liquidity to qualified banks to help them settle daily transactions.
• Dividend Aristocrats –  a rarefied list of the S&P 500 stocks that have boosted their dividends for at least 25 years. Several of the members, including 3M (MMM), Coca-Cola (KO), Colgate-Palmolive (CL), Dover (DOV), Emerson Electric (EMR), Genuine Parts (GPC), Johnson & Johnson (JNJ) and Procter & Gamble (PG) have raised their dividends for at least 60 straight years.
• Doctor Copper –  Copper is frequently used as the leading indicator of economic growth.  Traders joke that the base metal is reputed to have a Ph.D. in economics because of its ability to predict turning points in the global economy.
• Dogs of the Dow –  an investment strategy popularized by Michael B. O'Higgins in a 1991 book and his Dogs of the Dow website. It attempts to beat the Dow Jones Industrial Average (DJIA) each year by leaning portfolios toward high-yield investments. The general concept is to allocate money to the 10 highest dividend-yielding, blue-chip stocks among the 30 components of the DJIA. This strategy requires rebalancing at the beginning of each calendar year.
• Downstream – oil companies involved in drilling; upstream – companies involved in refining, selling, etc.
• Drawdown  –  The measure of the decline from a peak during a specific period of an investment, fund or commodity. A drawdown is usually quoted as the percentage between the peak and the trough.
• Dual Listing – Listing of a security on more than one exchange, thus increasing the competition for bid and offer prices, the liquidity of the securities, and the length time the stock can be traded daily (if listed on both the east and west coasts).
• FAANG –  A further extension of the acronym FANG (which originally did not include Apple when first coined in 2013), five of the most popular and best-performing tech stocks listed on NASDAQ – Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Alphabet (GOOG) (GOOGL).
• Feeder cattle – steers (castrated males) or heifers (females) mature enough to be placed in a feedlot where they will be fattened prior to slaughter.
• Financial vs. banking stocks – banking industry is most concerned with direct saving and lending while the financial services sector incorporates investments, insurance, the redistribution of risk, and other financial activities.
• Flash crash – an extremely rapid decline in the price of one or more commodities or securities, typically one caused by automated trading.
• FOMC minutes – released three weeks after the date of the policy decision. See FOMC calendar.  Federal Open Market Committee (the FOMC) holds 8 regularly scheduled meetings during the year. The minutes of regularly scheduled meetings are released 3 weeks after the date of the policy decision.
• FTSE 100 – an index of blue-chip stocks on the London Stock Exchange. (live 4-month chart)
• Gold standard – a monetary system where a country's currency or paper money has a value directly linked to gold. The gold standard is not currently used by any government. Britain stopped using the gold standard in 1931 and the U.S. followed suit in 1933 and abandoned the remnants of the system in 1973.
• Grexit – the possibility that Greece might exit the Euro Zone.
• Ichimoku Cloud – a versatile indicator that defines support and resistance, identifies trend direction, gauges momentum and provides trading signals. The Ichimoku Cloud was developed by Goichi Hosoda, a Japanese journalist, and published in the late 1960s.
• Index – Statistical composite that measures changes in the economy or in financial markets, often expressed in percentage changes from a base year or from the previous month. Indexes measure the ups and downs of stock, bond, and some commodities markets, in terms of market prices and weighting of companies in the index.
• Insider trading – The longest insider-trading sentence of 12 years was given to attorney Matthew Kluger in 2012 for a $37 million scheme. The second-longest of 11 years was imposed upon Galleon Group LLC co-founder Raj Rajaratnam for a $72 million scheme.
• Inversion – A (tax) inversion is when a larger U.S. company buys a smaller foreign-based company and relocates overseas in order to lower its tax bill. The company still has to pay U.S. taxes on U.S. income, but it can avoid paying U.S. taxes on overseas income. What’s more, most companies doing inversions relocate to countries with lower corporate tax rates than the U.S.   For example, Ireland, where many companies are based after such deals, has one of the lowest corporate tax rates on the planet at 13.5% .
• Island Reversal – features a grouping of days separated on either side by gaps in the price action. This price pattern suggests that prices may reverse whatever trend they are currently exhibiting, whether from upward to downward or from downward to upward.  (Also see: outside day)
• Keynesian economics – an economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression.
• Key reversal – A key reversal occurs when the market jumps up at the open to a new high and then closes below the previous day's lows. It tells us that something happened during the day to cause a sea change in mood for the worse.
• LEAPS  (or Long-term Equity AnticiPation Securities) – derivative instruments (options) for stocks and indices with expiration dates set as far as three years into the future. They were first introduced in 1990. Equity LEAPS always expire in January. For example, if today were November 2017, one could buy a Microsoft January call option that would expire in 2018, 2019, or 2020. The latter two are LEAPS.
• Long/Short Equity – An investing strategy of taking long positions in stocks that are expected to appreciate and short positions in stocks that are expected to decline. A long/short equity strategy seeks to minimize market exposure, while profiting from stock gains in the long positions and price declines in the short positions. 
• Market capitalization – The total dollar value of all outstanding shares. Computed as shares times current market price. Capitalization is a measure of corporate size.
• Master Limited Partnerships, or MLPs –  publicly traded partnerships in the natural resources, commodity or real estate industries. They own, operate, and build energy infrastructure assets such as pipelines, storage facilities, and processing plants.  They've attracted investor attention for their generous dividends. There are 75 master limited partnerships listed on U.S. exchanges with market capitalization of $500 million or more.
• Meme stocks – stocks that see sudden and dramatic surges thanks to social media hype (primarily Reddit, Twitter and Tik Tok).
• Millennial generation (millennials) – loosely defined as those born between 1980 - 2000. Millennials comprise one-quarter of the US population, making them the largest population subset. In all, they may spend more the $200 billion each year.
• MINT – a grouping acronym that refers to the countries of Mexico, Indonesia, Nigeria and Turkey. (also see: BRIC)
• Misery Index – The US Misery Index is released by the Bureau of Labor Statistics. This metric is calculated by adding the US inflation rate and the US unemployment rate. The misery index can be used as a gauge at how the economy is doing. 
• Moat, economic moat – a term coined by Warren Buffett that refers to the ability to maintain a competitive advantage well into the future.
• Nasdaq is NASDAQ Exchange. Nasdaq Composite index covers all stocks listed on the Nasdaq Exchange. The stocks traded on the Nasdaq Exchange and listed on other Exchanges are not covered by the Nasdaq Index.
• Nasdaq Composite Index ($COMPQ) – market capitalization-weighted index of approximately 3,000 common equities listed on the Nasdaq stock exchange. Its composition is heavily weighted towards information technology companies. The NASDAQ 100 ($NDX), whose components are a subset of the NASDAQ Composite's, accounts for over 90% of the NASDAQ Composite's movement, and there are many ETFs tracking its performance.
• Nikkei  – Short for Nikkei 225 Stock Average, a price-weighted index comprised of Japan's top 225 blue-chip companies on the Tokyo Stock Exchange. The index has been calculated since Sept 1950.  (live 4-month chart)
• NYSE Arca – An all-electronic U.S trading platform that provides fast execution with open, direct and anonymous market access.
• Open interest –  the total number of derivative contracts, like futures and options, that have not been settled in the immediately previous time period for a specific underlying security. A large open interest indicates more activity and liquidity for the contract.  An increase in open interest along with an increase in price confirms an upward trend.
• Outside day – occurs when the low of the day is lower than the previous day’s low and the high of the day is higher than the previous day’s high. Candlestick or OHLC chart displays make it easy to see. Depending on where it occurs on the chart, this may signify a bullish or bearish key technical reversal
• Over-the-counter (OTC) market – shares that don’t have listings on the New York Stock Exchange or the Nasdaq Stock Market
• Penny stock – a low-priced, speculative security of a very small company, regardless of market capitalization or whether it trades on a securitized exchange or an "over the counter" listing service.
• Pivot Point (or Buy Point) –  Optimal buy point of a stock as it emerges from a sound and proper basing area or chart pattern (the most common of which include the 'cup with handle,' 'flat base' and 'double bottom') and breaks out into a new high in price. This is the point of least resistance and has shown, through William J. O'Neil's research, to have the greatest chance of moving substantially higher based on its current and historical price and volume activity.
• Positive divergence –  A positive divergence occurs when the price of an asset makes a new low while an indicator, such as money flow, starts to climb. Conversely, a negative divergence is when the price makes a new high but the indicator being analyzed makes a lower high.
• Proprietary trading – when a bank, brokerage or other financial institution trades on its own account rather than on behalf of a customer.
• Quadruple witching – an expiration date that includes stock index futures, stock index options, stock options and single stock futures.  It occurs four times a year: the third Friday of March, June, September, December.  Can lead to higher volatility for markets and more trading volume.
• Quantitative Easing (QE) –  Between 2008 and 2015, the US Federal Reserve in total bought bonds worth more than $3.7 trillion.  The UK created £375bn ($550bn) of new money in its QE program between 2009 and 2012.   
• Quantitative Tightening (QT) –  the shrinking of the U.S. Federal Reserve balance sheet that has quintupled from less than $900 million in 2008 to as much as $4.5 trillion in 2014.
• Rare earths – 17 minerals used to build weapons and electronics. China is the world’s largest producer and has threatened to stop exporting these minerals to the United States.
• Resistance –  In technical analysis, a price level at which a stock has a tendency to stay below. When a stock moves above such a level on high volume, it is sometimes viewed as a bullish indication.
• S&P 500 (or SPX) – a stock market index containing the stocks of 500 American Large-Cap corporations. The index is owned and maintained by Standard & Poor's, a division of McGraw-Hill. The S&P 500 is often quoted using the symbol SPX or INX, and may be prefixed with a caret (^) or with a dollar sign ($).
• S&P 500 Equal Weight Index –  the equal-weight version of the widely-used S&P 500. The index includes the same constituents as the capitalization weighted S&P 500, but each company in the S&P 500 EWI is allocated a fixed weight - or 0.2% of the index total at each quarterly rebalance.
• SDR (or XDR) – Special drawing rights are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). Their value is based on a basket of key international currencies reviewed by IMF every five years. Currently U.S. dollars represent around 40% of SDRs.
• Shakeout –  situation in which many investors exit their positions, often at a loss, because of uncertainty or recent bad news circulating around a particular security or industry.
• Short squeeze –   A short squeeze occurs when short sellers either panic or are compelled to buy stocks to cover those that were previously short sold. This leads to a lot of artificial buying that is not based on fundamentals. 
• Sin stocks – stocks representing companies that operate in ethically questionable industries such as tobacco, alcohol, or gambling.
• Selling Short – Selling a stock not actually owned. If an investor thinks the price of a stock is going down, the investor could borrow the stock from a broker and sell it. Eventually, the investor must buy the stock back on the open market. For instance, you borrow 1000 shares of XYZ on July 1 and sell it for $8 per share. Then, on Aug. 1, you purchase 1000 shares of XYZ at $7 per share. You've made $1000 (less commissions and other fees) by selling short.
• SPAC (Special purpose acquisition company) –  a type of investment fund that allows public stock market investors to invest in private equity type transactions, particularly leveraged buyouts. SPACs are shell or blank-check companies that have no operations but go public with the intention of merging with or acquiring a company with the proceeds of the SPAC's initial public offering (IPO).   (Reverse mergers, on the other hand, involve a private company buying a shell company that has no current operations but is publicly traded. While the shell becomes the surviving entity post-merger, the private company (and typically its management) become the operators.)
• SPY –  the first major and most popular ETF in the world. It's designed to mimic the exact movement of the S&P 500, the most significant stock market average for U.S. equities. The SPY index fund has roughly $253.5 billion in net assets, and each share in the fund represents a fraction of the holdings.
• Stagflation –  A combination of the words “stagnation” and “inflation,” it describes an economy with high unemployment and little to no growth even as prices are rising faster than normal. Iain Macleod, a British politician, coined the term in 1965. Plenty of economists once doubted stagflation was possible.
• Stealth rally – rally without widespread participation from either individual investors or professional money. 
• Too big to fail – The idea that a business has become so large and ingrained in the economy that a government will provide assistance to prevent its failure.
• Transaction tax –  On September 2nd, 2013 Italy became the first country in the world to extend its financial-transaction tax to high-frequency share trading. Such levies have been dubbed "Tobin taxes" after James Tobin, a Nobel Laureate in economics, who in 1972 first suggested taxing financial transactions.
• Treasury securities —including Treasury bills, notes, and bonds—are debt obligations issued by the U.S. Department of the Treasury. Treasury securities are considered one of the safest investments because they are backed by the full faith and credit of the U.S. government.
• Unicorn –  a startup with a valuation of $1 billion or more. New 2017 unicorn examples: social platform Reddit, bitcoin marketplace Coinbase and ride-hail company Careem.  Altogether there are now a total of 227 active unicorns, according to PitchBook. (Dec 2017)
• U.S. Dollar Index –  tracks the dollar against a basket of six major currencies. (marketwatch.com) The index isn’t trade-weighted and doesn’t include the yuan or other emerging-market currencies. In that regard, it is outdated and does not accurately reflect the true exchange-rate strength of the U.S. currency.
• Volume –  The number of shares or contracts traded in a security or an entire market during a given period of time. It is simply the amount of shares that trade hands from sellers to buyers as a measure of activity. If a buyer of a stock purchases 100 shares from a seller, then the volume for that period increases by 100 shares based on that transaction.
• VWAP –  volume-weighted average price
• Weeklys — options contracts with expirations that are shorter than regular options. In contrast to traditional options that expire monthly, these types of options expire weekly. They are particularly attractive for short-term traders who can target a more specific date and time period. These contracts are offered by the Chicago Board Options Exchange (CBOE). (The term Weeklys refers to the fact that the contracts are listed every week, not that they are a seven-day contract).
• Yieldco –  a dividend growth-oriented public company, created by a parent company (e.g., SunEdison), that bundles renewable and/or conventional long-term contracted operating assets in order to generate predictable cash flows.  Similar to master limited partnerships (MLPs) and real estate investment trusts (REITs), YieldCo’s are designed to be pass-through entities, pushing much of their cash flows back to investors via high distributions. 
• ZIRP –  Zero Interest Rate Policy –  a monetary policy maintaining nominal short-term interest rates at zero in an attempt to stimulate growth and to avoid deflation. It was first used in 1999 by the Bank of Japan in response to a collapse in the real estate market in Japan.  //  ZIRP was implemented in the U.S. in the aftermath of the collapse of Lehman Brothers in September 2008 and the subsequent U.S. and global financial markets meltdown. The start of ZIRP was December 16, 2008.  Was ZIRP free? No, it cost the Fed, or the American taxpayer, US $4+ trillion on its balance sheet to suppress interest on ordinary saving instruments over the same period via Quantitative Easing or QE.