Financial Dictionary

643 terms. Plain-English definitions, worked examples, and formulas for every key investing and finance concept.

0DTETrading 1031 exchangeReal Estate 10b5-1 planMarkets 13D filingMarkets 4% rulePersonal Finance 401(k)Personal Finance 401(k)Personal Finance 401(k)Personal Finance 529 PlanPersonal Finance ABSFixed Income Active shareInvesting Activist investorMarkets ADP employmentMacro Adverse selectionTheory AllocatorInvesting AlphaInvesting Alpha generationInvesting AMMMarkets AmortizationBanking AmortizationAccounting AMTTaxes AnchoringTheory Annual report (10-K)Accounting Anti-dilutionMarkets APRBanking APYBanking ArbitrageTrading Asset allocationInvesting Asset allocationInvesting Backdoor RothPersonal Finance BackwardationTrading Balance sheetAccounting Balance sheetAccounting Bank runBanking Bank Term Funding ProgramBanking Banking sectorMarkets Basel IIIBanking Basis point (bp)Markets Bayesian updatingTheory BDCInvesting Bear marketMarkets Bear marketMarkets Behavior gapTheory Behavioral financeTheory Beige BookMacro Beige BookMacro BenchmarkInvesting BetaInvesting BetaInvesting Beta arbitrageInvesting Beta tailInvesting Beta tiltInvesting Beveridge curveMacro Bid-ask spreadMarkets Bid-ask spreadMarkets BitcoinMarkets Black swanTheory Black-LittermanTheory Black-ScholesTheory BondFixed Income Book valueAccounting BootstrapInvesting Borrow rateMarkets Box spreadTrading Breadth (FLAM)Investing Brent crudeMacro BridgeMarkets Bridge loanBanking Brokered CDBanking Building permitsMacro Bull marketMarkets Bull marketMarkets Butterfly spreadTrading Buy and holdInvesting Buy-sideMarkets BuybackCorporate Finance Buyback yieldValuation CAGRInvesting Calendar spreadTrading Call optionTrading Call optionTrading Call optionTrading Calmar ratioInvesting Cap rateReal Estate Cap rateReal Estate Cap tableMarkets Capacity utilizationMacro CapExAccounting Capital accountMacro Capital bufferBanking Capital gainsTaxes Capital gains taxTaxes CAPMTheory Carried interestInvesting Carried interestInvesting Carry tradeTrading Carry trade unwindMarkets Carve-outMarkets Case-ShillerMacro Cash flow statementAccounting Cash flow statementAccounting Cash-on-cash returnReal Estate Cash-secured putTrading Catastrophic lossInvesting CBOEMarkets CCARBanking CDOFixed Income Cheapest-to-deliverFixed Income CLOFixed Income Closed-end fundInvesting CMBSFixed Income CMEMarkets Combined ratioBanking Compound interestInvesting Concentration riskInvesting Confirmation biasTheory ContangoTrading ContangoTrading Continuing jobless claimsMacro Convenience yieldTrading Convertible bondFixed Income Convertible noteMarkets ConvexityFixed Income Convexity (options)Trading Convexity hedgingFixed Income Convexity hedgingFixed Income Core inflationMacro CorrelationInvesting Cost of carryTrading CouponFixed Income Covered callTrading Covered interest parityTheory CPIMacro CPI shelterMacro CPI shelter lagMacro Crack spreadTrading Credit spreadFixed Income Cross rateMarkets Cross-currency basisMarkets Current accountMacro Current ratioAccounting CVaRInvesting Cyclical sectorsInvesting DAOMarkets Dark poolMarkets Day tradingTrading Days to coverMarkets DCFValuation DCFValuation Dealer gammaTrading Debt-to-equity (D/E)Accounting Defensive sectorsInvesting DeFiMarkets DeflationMacro DeflationMacro DeltaTrading DepreciationAccounting DepreciationAccounting DerivativeTrading DEXMarkets DilutionMarkets Direct listingMarkets Discount rateMacro Discount windowBanking DisinflationMacro Disposition effectTheory Diversifiable riskInvesting DiversificationInvesting DiversificationInvesting DividendInvesting Dividend coverageInvesting Dividend reinvestment planInvesting Dividend Reinvestment Plan (DRIP)Investing Dollar rollFixed Income Dollar SmileMacro Dollar-cost averagingInvesting Dollar-cost averaging (DCA)Investing Dollar-weighted returnInvesting DovishMacro DrawdownInvesting DrawdownInvesting DSCRReal Estate DSCRReal Estate Dual mandateMacro DurationFixed Income DurationFixed Income EARBanking Earnings per share (EPS)Accounting Earnings yieldValuation EBITAccounting EBITDAAccounting EBITDAValuation EBITDAAccounting Effective durationFixed Income Efficient frontierInvesting Efficient market hypothesisTheory Efficient Market HypothesisTheory EndowmentInvesting Enterprise value (EV)Valuation EquityAccounting Equity durationInvesting Equity researchBanking Equity risk premiumInvesting Equity risk premium (ERP)Theory ESGInvesting Estate taxTaxes ETFInvesting ETFInvesting EthereumMarkets EurodollarBanking Eurodollar futuresBanking EVValuation EV / Enterprise valueValuation EV/EBITDAValuation EV/EBITDAValuation EVAAccounting Existing home salesMacro ExpirationTrading Factor premiaTheory Family officeInvesting Fat tailTheory FDICBanking Fed Funds futuresBanking Fed Funds rateMacro Fed Funds RateMacro Fed minutesMacro Fed modelTheory Federal ReserveMacro FINRAMarkets FloatMarkets FOMCMacro FOMC dot plotMacro FOMOTheory Forward guidanceMacro Forward guidanceMacro Forward outrightMarkets Forward P/EValuation Forward rateMarkets Free cash flowValuation Free cash flow (FCF)Accounting Free cash flow (FCF)Accounting Free cash flow yieldValuation Fund of fundsInvesting G-SIBBanking GammaTrading Gamma squeezeTrading GARCHTheory Gas feeMarkets GatingInvesting GDPMacro GDPMacro GDP per capitaMacro Geometric meanInvesting Gift taxTaxes Glide pathPersonal Finance Glide pathInvesting Glidepath riskInvesting Going privateMarkets GoodwillAccounting Goodwill impairmentAccounting GreeksTrading Greeks deepTrading GreenshoeMarkets Greenshoe optionMarkets Gross marginAccounting Gross marginAccounting Growth at reasonable price (GARP)Investing Growth investingInvesting Growth investingInvesting Half-tickMarkets HalvingMarkets Hard dataMacro Hard to borrowMarkets HawkishMacro HedgeInvesting HedgeInvesting Hedge fundInvesting Hedge fundInvesting Hedge fundInvesting HerdingTheory High-yield ETFFixed Income Housing startsMacro HSAPersonal Finance HSAPersonal Finance HSAPersonal Finance Hurdle rateInvesting HyperinflationMacro Iceberg orderTrading Idiosyncratic riskInvesting Impermanent lossMarkets Implied moveTrading Implied volatilityTrading Implied volatility (IV)Trading Income statementAccounting Income statementAccounting Index fundInvesting Index inclusion effectMarkets Index investingInvesting Industrial productionMacro InflationMacro InflationMacro Inflation breakevenFixed Income Information coefficientInvesting Information ratioInvesting Initial jobless claimsMacro Insider buyingMarkets Insider sellingMarkets Insurance floatBanking Interest rateBanking Interval fundInvesting Intrinsic valueValuation Investment bankingBanking Investment factorInvesting Investment gradeFixed Income IOERBanking IPOMarkets IPOMarkets Iron condorTrading IRRInvesting Junk bondFixed Income Junk bondFixed Income Kelly criterionTheory KurtosisInvesting Labor force participation rateMacro Layer 1Markets Layer 2Markets LCRBanking Leading economic indicatorsMacro LeverageInvesting LeverageInvesting LIBORBanking Limit orderTrading Limit orderTrading Limit orderTrading Liquidation preferenceMarkets LiquidityMarkets LiquidityMarkets Liquidity poolMarkets Liquidity premiumMarkets Living willBanking Lock-up periodMarkets LockupInvesting Loss aversionTheory Low volatility factorTheory Low-vol anomalyInvesting LTVReal Estate LTV (loan-to-value)Real Estate M&AMarkets M0Macro M1Macro M2Macro MarginTrading MarginTrading Margin callTrading Margin of safetyValuation Market capMarkets Market makerMarkets Market orderTrading Market orderTrading Market orderTrading Market timingInvesting Maximum Sharpe portfolioInvesting MBSFixed Income Mean reversionTrading Mean reversion (statistical)Investing MEVMarkets Mezzanine debtInvesting MiningMarkets MLPInvesting MoatInvesting Modern Portfolio TheoryTheory Momentum (factor)Investing Momentum factorTheory Momentum strategyTrading Money market fundBanking Monte Carlo simulationTheory Monte Carlo simulationInvesting Moral hazardTheory MortgageReal Estate MortgageReal Estate Moving averageTrading Multifactor modelTheory Multiple compressionMarkets Multiple expansionMarkets Multiples valuationValuation Municipal bondFixed Income Mutual fundInvesting Mutual fundInvesting NAIRUMacro NasdaqMarkets NAVInvesting NBBOMarkets NDFMarkets Net debtAccounting Net incomeAccounting Net interest incomeBanking Net interest marginBanking Net marginAccounting Net worthPersonal Finance New home salesMacro NFTMarkets NOIReal Estate Non-diversifiable riskInvesting Nonfarm payrollsMacro NOPATAccounting NSFRBanking NYSEMarkets OASFixed Income OCO orderTrading On-the-run vs off-the-runFixed Income OPECMacro Open-end mutual fundInvesting Operating cash flowAccounting Operating marginAccounting Operating marginAccounting OpexTrading Opportunity costTheory OptionsTrading OracleMarkets Order bookMarkets Output gapMacro P/B ratioValuation P/B ratioValuation P/E ratioValuation P/E ratioValuation P/S ratioValuation P/S ratioValuation Pairs tradeTrading Payment for order flowMarkets Payout ratioAccounting Payout ratioInvesting PCEMacro PEG ratioValuation PEG ratioValuation Pension fundInvesting PFOF (deep)Markets Phillips CurveMacro PinningTrading PipMarkets PIPEMarkets PMIReal Estate PMIMacro PPIMacro Preferred stockFixed Income Present valueValuation Primary dealerBanking Prime brokerageBanking PrincipalBanking Private equityInvesting ProductivityMacro Profitability factorTheory Profitability factorInvesting Put optionTrading Put optionTrading Put optionTrading Put-call parityTheory Quality factorTheory Quality factorInvesting Quantitative easing (QE)Macro Quantitative easing (QE)Macro Quantitative tightening (QT)Macro R-squaredInvesting Random walkTheory Real returnInvesting Real yieldFixed Income Realized volatilityTrading RebalancingInvesting RebalancingInvesting Recency biasTheory RecessionMacro RecessionMacro Recovery timeInvesting ReflationMacro Reg NMSMarkets ReinsuranceBanking REITReal Estate REITReal Estate RepoBanking Reserve currencyMacro ReshoringMacro RestakingMarkets Retail salesMacro Return on assets (ROA)Accounting Return on equity (ROE)Accounting Reverse conversionTrading Reverse repoBanking Risk parityInvesting Risk parityInvesting Risk premiumInvesting Risk-free rateInvesting RMDPersonal Finance ROAAccounting ROICAccounting Roll yieldTrading Roth IRAPersonal Finance Roth IRAPersonal Finance Roth IRAPersonal Finance Rule 606Markets Rule of 72Investing S&P 500Markets SAFEMarkets Sahm RuleMacro Sales and tradingBanking Secondary saleMarkets Sector rotationInvesting Sell-sideMarkets Sentiment indicatorsMacro Sequence-of-returns riskInvesting Shareholder yieldValuation Sharpe ratioInvesting Short interestTrading Short interestMarkets Short sellingTrading Short sellingTrading Short sellingTrading Side pocketInvesting SIFIBanking SignalingTheory Single-stock riskInvesting SIPCMarkets Size factorTheory SkewTrading SkewnessInvesting SlashingMarkets SlippageTrading SLRBanking Smart betaInvesting Smart contractMarkets Smart-money flowMarkets SOFRBanking SOFR futuresBanking Soft dataMacro Soft landingMacro Sortino ratioInvesting Sortino ratioInvesting Sortino vs SharpeInvesting Sovereign wealth fundInvesting SPACMarkets Special dividendMarkets SpinoffMarkets Spot marketMarkets Spot rateMarkets SpreadMarkets Spread durationFixed Income StablecoinMarkets StagflationMacro StagflationMacro StagflationMacro StakingMarkets Standard deviationInvesting Standard deviationInvesting Step-up in basisTaxes Stock buybackMarkets Stock splitMarkets Stock splitMarkets Stock-based compensationAccounting Stop lossTrading Stop-loss orderTrading StraddleTrading StrangleTrading Strategic asset allocationInvesting Stress testBanking Stress test (CCAR)Banking Strike priceTrading Sum of the partsValuation Swing tradingTrading Synthetic stockTrading Systematic riskInvesting Tactical asset allocationInvesting Tape readingTrading TariffMacro Tax-loss harvestingTaxes Tax-loss harvestingTaxes TBA marketFixed Income Tender offerMarkets Term premiumMacro Term structure of volTrading ThetaTrading Tick sizeMarkets Tier 1 capitalBanking Time depositBanking Time value of moneyValuation Time-weighted returnInvesting TIPSFixed Income TLACBanking Total returnInvesting Tracking errorInvesting Tracking stockMarkets Trade balanceMacro Trade warMacro Traditional IRAPersonal Finance Traditional IRAPersonal Finance Trailing stopTrading Treasury auctionFixed Income Treasury billFixed Income Treasury bondFixed Income Treasury breakeven rateFixed Income Treasury futuresFixed Income Treasury noteFixed Income Treasury securitiesFixed Income Twin deficitsMacro Underwater curveInvesting ValidatorMarkets ValuationValuation Value factorTheory Value investingInvesting Value investingInvesting VaRInvesting VegaTrading VelocityMacro Velocity of moneyMacro Venture capitalInvesting Vertical spreadTrading VIXMarkets VolatilityInvesting VolatilityInvesting Volatility dragInvesting Volatility risk premiumTheory Volatility smileTheory VWAPTrading WACCValuation WACCValuation WalletMarkets Wash saleTaxes Watermark (high)Investing Withdrawal ratePersonal Finance Working capitalAccounting Working capitalAccounting Working capital changesAccounting WTI crudeMacro YieldFixed Income Yield curveFixed Income Yield curveFixed Income Yield curve flatteningMacro Yield curve inversionMacro Yield curve steepeningMacro Yield farmingMarkets Yield to call (YTC)Fixed Income Yield to maturity (YTM)Fixed Income Yield to maturity (YTM)Fixed Income Yield-to-maturity (YTM)Fixed Income YoYMacro Z-spreadFixed Income