Finance Terms

  • Above Par

    Above Par is a term used when the amount of money you pay for a bond (Principal Amount) is the greater than the amount of money you get back when the bond matures (Face Value). A bond that trades “above par” is called a Premium Bond.

  • Adjustable Rate Preferred Stock

    Adjustable Rate Preferred Stock or ARPS is a type of preferred stock where the dividend is not a fixed amount, but it changes based upon a pre-determined formula.

  • Annual

    Annual means every year.

  • ARPS

    ARPS is the abbreviation for Adjustable Rate Preferred Stock, which is a type of preferred stock where the dividend is not a fixed amount, but it changes based upon a pre-determined formula.

  • Ask

    Ask is the price where a trader will sell a stock, bond or other financial investment. Offer is another word for Ask.

  • Asset

    An asset is anything that has value. A stock, bond, house, painting and jewlery are all examples of assets.

  • Bankrupt

    Bankrupt means when an institution or individual legally declares it doesn’t have enough money to pay its debts.

  • Bankruptcy

    Bankruptcy is a legal process. When an instiution or individual can’t pay its debts, all their assets (anything that has value) that can be liquidated (turned into cash) will be used to pay back its creditors (people that loaned them money) and possibly shareholders (if there is enough money left).

  • BEA

    BEA is the abbreviation for The US Bureau of Economic Analysis. The BEA is an agency of the Department of Commerce. It produces economic data, which provides insights into the performance of the US economy. Statistical data include GDP, US savings rate and Consumer spending.

  • Beat the Market

    Beat the Market means your stock portfolio performed better than one of the major indices, such as the DJIA or S&P500. Another way to say this is that you “outperformed the market.”

  • Below Par

    Below Par is a term used when the amount of money you pay for a bond (Principal Amount) is the less than the amount of money you get back when the bond matures (Face Value). A bond that trades “below par” is called a Discount Bond.

  • Bid

    A bid is the the price where a trader will buy a stock, bond or other financial investment.

  • Black Monday

    Black Monday (October 19, 1987) is considered one of the worst performance days on Wall Street. The Dow Jones Industrial Average plunged in value by 508 points or 22.6%.  At the time this was the biggest stock market decline Wall Street had ever seen.

  • Board of Directors

    A Board of Directors is a group of people who are elected by shareholders to oversee corporoate policy. They have a fiduciary responsibility, which means they have to act in good faith for the shareholders.

  • Bond

    A bond is a type of security (investment that trades easily in the market) where you loan money to an institution in return for interest payments from that institution, and the institution has to pay you back at a later date.

  • Bondholder

    A Bondholder is someone who owns a bond.

  • Borrower

    A Borrower is an institution or individual who borrowed money. An institution borrows money by issuing bonds or taking out a loan. Another word for Borrower is Obligor.

  • Budget

    A budget is the amount of money you can spend based upon a plan.

  • Bureau of Labor Statistics

    The Bureau of Labor Statistics (BLS) is an agency within the U.S. Department of Labor. It is responsible for measuring the US labor market and providing economic information.  For example, the BLS calculates and publishes the monthly US unemployment rate.

  • Callable

    Callable is when an institution has the right to redeem, or take back, from investors their institution’s stock or bonds at a specific price and on specific dates

  • Callable Preferred Stock

    Callable Preferred Stock is a type of preferred stock where the company has the right buy back their preferred stock at a pre-determined price.

  • Capital

    Capital means money or the equivalent of money.

  • Capital Markets

    The Capital Markets is a general term used for the place were stocks and bonds trade.

  • Cheap

    Cheap is a term used when you believe an investment seems less expensive relative to other similar investments.

  • Circuit Breaker

    A Circuit Breaker halts stock trading when a market index falls a certain percentage within a specific period of time. This prevents panic selling and gives investors time to evaluate the situation.

  • Closed Position

    Having a Closed Position means you no longer have an investment that can be affected by the market. Selling a stock you owned is a closed position.

  • Common Shareholder

    A Common Shareholder is someone who owns common stock.

  • Common Stock

    Common Stock is a type of stock. Common stock usually has voting rights, can get paid a dividend (but is not guaranteed one) and is the last to get any money back if the company goes bankrupt.  When someone refers to “stock” they are usually referring to common stock.

  • Convertible Preferred Stock

    Convertible Preferred Stock is a type of preferred stock where you have the right to change, or convert, your preferred stock into common stock under certain circumstances.

  • Corporate

    A company is a non-government institution that is engaged in some type of business.

  • Corporate Bond

    A corporate bond is a specific type of bond where the institution issuing the bond and borrowing the money is a company. The company is responsible for paying you interst on the bonds as well as paying you back when the bond matures.

  • Coupon

    Coupon is the annual interest rate on a bond that is paid to bond holders.

  • Credit Rating

    A Credit Rating is a grade given to a company that is suppose to indicate the financial health, or the creditworthiness, of a company. In other words, it’s suppose to tell you how likely the institution will be able to pay its debts.

  • Creditor

    A Creditor is a person or company that is owed money.

  • Creditworthiness

    Creditworthiness is a term used to describe an institution’s ability to pay its debts. The more likily, the higher the company’s creditworthiness. The less likely, the lower the company’s creditworthiness.

  • Cumulative Preferred Stock

    Cumulative Preferred Stock is a type of preferred stock where the preferred shareholders are entitled to all dividend payments, even if the company misses a scheduled dividend payment. In other words, if a company doesn’t pay a dividend, the company must keep track of all the dividends it missed, and pay them to cumulative preferred shareholders at a later date.

  • Current Population Survey

    The Current Population Survey (CPS) is a survey conducted by The Bureau of Labor Statistics (BLS), which determines the number of people in the US that are employed, unemployed and not in the labor force. The results of the CPS are used to calculate the US unemployment rate.

  • Day Order

    A Day Order is a type of order that must be completed by the end of the trading day or it expires.

  • Debt

    Debt is when you owe someone money. A bond is a type of debt for an institution because it owes bondholders money.

  • Debt Ceiling

    Debt Ceiling is the total amount of money the US government is legally allowed to borrow.

  • Discount Bond

    A bond is a Discount Bond when the amount of money you pay for a bond (Principal Amount) is the less than the amount of money you get back when the bond matures (Face Value). A Discount Bond is said to trade “Below Par.”

  • Disposable Income

    Disposable Income is the amount of money you actually have to spend or save after you pay taxes on your personal income.

  • Dividend

    A Dividend is a portion of the company’s profits that is given to shareholders.

  • Dow Jones Industrial Average

    The Dow Jones Industrial Average, also called the Dow, is a stock index that contains 30, well-diversified, stable stocks. The performance of the index is suppose to represent the performance of the US stock market.

  • Downgrade

    A downgrade is when an institution’s credit rating (financial health score) is lowered, which usually happens when an institution is financially worse than it was before.

  • Emergency Fund

    An Emergency Fund is money you save that you will only use for emergencies.

  • Employed

    Employed means you currently have a job.

  • Equity

    Equity means ownership in something. Stock is equity because stock is ownership in a company.

  • Equity Market

    The Equity Market is the place where stocks are traded.

  • Exchange

    An exchange is a physical or virtual place where buyers and sellers of stocks and bonds are matched together so they can trade.

  • Execution

    Execution means to do a trade. If you buy a stock, you executed a stock trade.

  • Expense

    Expense is the cost of something.

  • Face Value

    Face Value is the amount of money that the Issuer (institution that borrowed money) of a bond pays you when the bond expires (Maturity Date).

  • Fill-or-Kill

    A Fill-or-Kill is an instruction to complete an Order immediately or cancel it.

  • Finance

    Finance is a general term used for all things that have to do with money, such as the industry, study and management of money.

  • Financial Instrument

    A Financial Instrument is a broad term used to describe any investment that can be traded, such as stocks, bonds, derivatives, commodities and currencies.

  • Financial Markets

    Financial Markets is the general term used for the place where all financial instruments, such as stocks, bonds, commodities, and currencies trade.

  • Fixed

    Fixed is something that doesn’t change.  The opposite of fixed is variable.

  • Good-til-Canceled Order

    A Good-til-Canceled Order is a type of order that remains in effect until the order is completed or canceled.

  • Government Bond

    A Government Bond is a bond that is issued by a government entity. In the US, this is also called a US Treasury Bond.

  • Greenback

    Greenback means money.  Paper money was first introduced in the US during the Civil Was, and it was called Greenback because the back of the paper was the color green.

  • Guarantee

    A Guarantee is a formal promise or assurance that certain conditions will be met or fulfilled.

  • High Risk

    High Risk means that the potential to lose money on an investment is high.

  • Hit-the-Bid

    Hit-the-Bid is when you sell a stock, bond or other investment at the price where a trader is willing to buy it.

  • Holding Period

    Holding Period is the amount of time between when you buy an investment, such as a stock or bond, and sell it.

  • Index

    An Index is a group of stocks or bonds whose performance is suppose to represent all or part of a specific market.

  • Initial Public Offering (IPO)

    Initial Public Offering or “IPO” is when a private company sells its stock to the public for the first time.

  • Insider

    An Insider is anyone who has non-public information about a company.

  • Institution

    Institution is a broad term used for an organization that has a specific purpose.

  • Institutional Investor

    A Institutional Investor is an institution who buys and sells stocks, bonds or other financial investments for the institutions own personal account or on behalf of others.  Hedge funds, money managers, banks and insurance companies are examples of institutional investors.

  • Interest Rate

    Interest Rate is the amount of money, expressed as a percentage of the Face Value (money owed at maturity), that a borrower pays you for loaning them money.  For the borrower, it’s the cost to borrow money.

  • Investing

    Investing is the buying and selling of stocks and bonds over a long period of time, such as months or years.

  • Investment Return

    The amount of money you make, or your profit, on an investment before you pay taxes on it.

  • IPO

    IPO is an abbreviation for Initial Public Offering, which is when a private company sells it’s stock to the public for the first time.

  • Issuer

    An Issuer is an institution that borrowed money by selling new bonds to investors.

  • Job Market

    The Job Market is a general term used for the physical or virtual place where both employers are looking to hire people and where people are looking for a job.

  • Kill

    Kill means to cancel a stock or bond Order immediately.

  • Labor Force

    The Labor Force is the total number of people that are employed and unemployed.

  • Large Cap

    Large Cap refers to a company whose market capitalization or market value is generally greater than $10 billion. However, there is no specific rule that defines the exact size of a Large Cap company, so investors may have different views on what defines a Large Cap company.

  • Lender

    A Lender is an institution or individual who loaned money to another institution or individual.

  • Lift-the-Offer

    Lift-the-Offer means to buy a stock, bond or other investment at the price where a trader is willing to sell it.

  • Limit Order

    A Limit Order is a type of Order that instructs the trader to buy or sell a stock, bond or other financial instrument at a specific price or better.

  • Liquid

    Liquid is a term used when a bond, stock or other financial investment can be easily bought and sold in the market.

  • Liquidate

    Liquidate means when you take an asset, such as a stock, bond, house or jewelry and sell it for cash.

  • Long Position

    A Long Position means that your investment benefits when prices go up. Owning a stock is a long position.

  • Low Risk

    Low Risk means that the potential to lose money on an investment is low.

  • Make a Market

    When a trader “Makes a Market,” he/she is giving you prices where he/she will both buy and sell a stock, bond or other investment.  If a trades makes a market of $50 / $60, that means the trader will buy (bid) at $50 and sell (offer) at $60.

  • Market Cap

    Market Cap is an abbreviation for Market Capitalization.

  • Market Capitalization

    Market Capitalization is the market value of a company. In other words it tells you how much it would cost you to buy every public share of a company at its current share price. Market Capitalization is often referred to as Market Cap.

  • Market Maker

    A Market Maker is a type of trader that provides prices where he/she is willing to both buy (bid) or sell (offer) a stock, bond or other investment.

  • Market Order

    A Market Order is a type of Order that instructs the trader to buy or sell a specific stock, bond or other financial instrument at the current market price.

  • Market Value

    Market Value is the price where you could buy an asset, such as stock, company or house today.

  • Market Weighted Index

    A Market Weighted Index is a type of stock index whose value is calculated using a formula that takes into account the market capitalizations of each individual stock in the index.  Companies with higher market capitalizations are given more weight and therefore have a greater impact on the value of the index.

  • Material Information

    Material Information is information that could have a significant impact on the price of a stock.

  • Maturity Date

    Maturity Date is the date a bond expires and the bond Issuer has to pay the Face Value of the bond to bondholders.

  • Mid Cap

    Mid Cap refers to a company whose market capitalization or market value is generally between $2 billion and $10 billion.  However, there is no specific rule that defines the exact size of a Mid Cap company, so investors may have different views on what defines a Mid Cap company.

  • Monthly

    Monthly means every month.

  • Muni Bond

    Muni Bond is an abbreviation for a Municipal Bond.

  • Municipal Bond

    A Municipal Bond is a specific type of bond where the institution issuing the bond and borrowing the money is a state, city or other government entity. The state, city or other government entity is responsible for paying you the interest rate (or coupon) on the bonds as well as paying you back when the bond expires.

  • Municipality

    A Municipality is a government or government entity at the state, city, town or district levels that governs their specific local area.

  • NASDAQ

    NASDAQ is an electronic exchange where stocks and bonds are traded. The stock and bonds of many technology companies trade on the NASDAQ.  NASDAQ stands for National Association of Securities Dealers Automated Quotations.

  • National Association of Securities Dealers Automated Quotations

    National Association of Securities Dealers Automated Quotations, more commonly called the NASDAQ, is an electronic exchange where stocks and bonds trade.  The stock and bonds of many technology companies trade on the NASDAQ.

  • New Issue

    A New Issue is when an institutions sells a new bond for the first time.

  • New York Stock Exchange

    New York Stock Exchange is an exchange where stocks and bonds are traded. It’s one of the most well known stock exchanges in the world. The abbreviation for New York Stock Exchange is NYSE.

  • Non-Cumulative Preferred Stock

    Non-Cumulative Preferred Stock is a type of preferred stock where preferred shareholders are not entitled to any missed dividend payments.  In other words, if a company doesn’t pay a dividend, non-cumulative preferred shareholders will not be owed any of these missed dividends in the future.

  • Nontaxable

    Nontaxable means that you are not required to pay taxes on the money you receive from a specific investment.

  • Not in the Labor Force

    Not in the Labor Force means you are not employed or unemployed. Examples include students, retirees and stay-at-home parents.

  • NYSE

    NYSE is the abbreviation for New York Stock Exchange, which is an exchange where stocks and bonds are traded.

  • NYSE American

    NYSE American is an electronic exchange where stocks and bonds of small to mid-sized companies trade. It was previously known as the American Stock Exchange until it was bought by NYSE.

  • Obligor

    An Obligor is an institution or individual who owes money to another institution or individual. Another word for Obligor is Borrower.

  • Offer

    An Offer is the price where a trader will sell a stock, bond or other financial instrument. Another word for Offer is Ask.

  • One Sided Market

    A One Sided Market is when a trader will only give you a buy OR sell price.

  • Open Position

    Having an Open Position means you have an investment that can be affected by the market. Owning a stock is an open position because the value of your stock investment will change based upon the market.

  • Order

    An Order is a set of instructions given by an investor to a trader to buy or sell a specific stock, bond or other financial instrument on his/her behalf, often with restrictions on price and timing.

  • Outperform the Market

    Outperform the Market means your stock portfolio performed better than one of the major indices, such as the DJIA or S&P 500. Another way to say this is that you “Beat the Market.”

  • Outstanding Shares

    Outstanding shares is the total number of public shares of a company owned by investors and employees.

  • Overvalued

    Overvalued means the price of an investment is greater than its perceived worth or value.

  • Par

    Par is when the amount of money you give a bond issuer to buy the bond (principal amount) is the same amount that the Issuer agrees to pay you (face value) when the bond expires (maturity date). It’s when the principal amount is the same as the face value.

  • Par Bond

    A bond is a Par Bond when the amount of money you pay for a bond (Principal Amount) is the same as the amount of money you get back when the bond matures (Face Value).

  • Participatory Preferred Stock

    Participatory Preferred Stock is a type of preferred stock where you get a fixed dividend and an additional dividend if certain conditions are met.

  • PCE

    PCE is the abbreviation for Personal Consumption Expenditure. PCE measures how much consumers spend on goods and services, such as buying cars, groceries, clothes, and electricity.

  • Personal Consumption Expenditure

    The Personal Consumption Expenditure (PCE) measures how much consumers spend on goods and services, such as buying cars, groceries, clothes, and electricity.

  • Personal Income

    Personal Income is the amount of money you earn before taxes from all of your sources of income. For example, the salary from your job, rental property income and stock dividends are all sources of income.

  • Preferred Shareholder

    A Preferred Shareholder is someone who owns preferred stock.

  • Preferred Stock

    Preferred Stock is a type of stock. Preferred stock usually does not have voting rights, gets paid a fixed dividend (and is guaranteed one if the company pays a dividend) and gets money back before common stock if the company goes bankrupt.

  • Premuim Bond

    A bond is a Premium Bond when the amount of money you pay for a bond (Principal Amount) is the greater than the amount of money you get back when the bond matures (Face Value). A Premium Bond is said to trade “Above Par.”

  • Price Weighted Index

    A Price Weighted Index is a type of stock index whose value is calculated using a formula that takes into account the prices of each individual stock in the index.  Companies with higher stock prices are given more weight and therefore have a greater impact on the value of the index.

  • Primary Market

    Primary Market is the market where new stock and bonds are issued by an institution and distributed directly to investors.

  • Principal Amount

    Principal Amount is the amount of money you pay for a bond.

  • Priority of Payments

    Priority of Payments is the order in which investors get paid if an institution goes bankrupt.  Creditors get paid first, then preferred shareholder and then common shareholders.

  • Profit

    Profit is the amount of money you make after you take into account your expenses. For example, if you buy a stock at $20 (Expense) sell a stock for $50 (Revenue), you make a profit of $30.

  • Program Trading

    Program Trading is a type of trading where a computer buys and sells stocks, usually at pre-determined prices. Program trading speeds up the trading process, which means large quantities of stock can be bought or sold very quickly.

  • Q1

    Q1 is the first quarter of the year, which is January 1st through March 31st.

  • Q2

    Q2 is the second quarter of the year, which is April 1st through June 30th.

  • Q3

    Q3 is the third quarter of the year, which is July 1st through September 30th.

  • Q4

    Q4 is the fourth and last quarter of the year, which is October 1st through December 31st.

  • QTD

    QTD is the abbreviation for Quarter-to-Date.

  • Quarter

    A Quarter is three 3 months in a calendar year.  There are four quarters in a year starting in January.  Public companies disclose their earnings for each quarter.

  • Quarter-To-Date

    Quarter-to-Date is the time period from the start of the current quarter to the current date.  Its abbreviation is QTD.

  • Quarterly

    Quarterly means every three months in the calendar year.  There are four quarters in the calendar year starting in January.

  • Redeem

    Redeem is when an institution buys back its own bond or preferred stock at a predetermined price from investors.

  • Restricted Stock

    Retricted Stock is a type of stock, usually owned by company executives, which cannot be traded until certain requirements are met.

  • Retail Investor

    A Retail Investor is an individual who buys and sells stocks, bonds or other financial investments for his/her own personal account.

  • Revenue

    Revenue is the amount of money you receive when you sell a product or service.

  • Reward

    Reward is the amount of money you make from an investment.  The term is primarily used when comparing the risk of an investment to its potential reward.  For example, the higher the risk, the higher the potential reward.

  • Rich

    Rich is a term used when you believe an investment is more expensive relative to other similar investments.

  • Risk

    Risk is the possibility of loosing money from an investment.  The term is often used when comparing the risk of an investment to its potential reward.  For example, the higher the risk, the higher the potential reward.

  • Risk Free Rate

    Risk Free Rate is the interest rate that the US government pays when it borrows money.

  • Savings Rate

    The Savings Rate is the amount of money you save as a percentage of your disposable income.

  • Secondary Market

    The Secondary Market is the market where previously issued stock and bonds trade between investors.

  • Securities

    Securities is a general term for stocks and bonds that trade in the capital markets.

  • Security

    A Security is a general term for a stock or bond that trades in the capital markets.

  • Selling Short

    Selling Short is a type of investing strategy. Selling Short is when you borrow a stock (or bond) you don’t own and then sell it with the expectation of buying it later at a lower price.

  • Semi-Annually

    Semi-Annually means every 6 months or 1/2 year.

  • Share

    A Share is one unit of ownership in a company or fund.  Usually one stock is one share.

  • Share Price

    Share Price is the price of a stock or a share of a fund.

  • Shareholder

    A Shareholder is someone who owns a stock.

  • Short Covering

    Short Covering is when you buy back a stock (or bond) that you had shorted (sold before you owned it).

  • Short Position

    A short position means that your investment benefits when prices go down. Selling short a stock is a short position.

  • Shorted

    Shorted means that you borrowed a stock (or bond) that you didn’t own and sold it with the expectation of buying it back later at a lower price.

  • Small Cap

    Small Cap refers to a company whose market capitalization or market value is generally less than $2 billion. However, there is no specific rule that defines the exact size of a Small Cap company, so investors may have different views on what defines a Small Cap company.

  • Specialist

    A Specialist is a specific trader who is a member of a stock exchange and is a Market Maker for a designated stock.

  • Spread

    The Spread is the difference between the price where a trader will buy (bid) and the price where a trader will sell (offer). The spread of a $50 (bid) / $60 (offer) market is $10.

  • Stock

    A Stock is an ownership interest in a company. When you buy a stock, you become an owner in the company.

  • Tax Exempt

    Tax Exempt means that you are not required to pay taxes on the money you received from a specific investment.

  • Taxable

    Taxable means that you are required to pay taxes on the money you receive from a specific investment.

  • Taxes

    Taxes is money that you are required to pay state and federal governments.

  • The Employment Situation

    The Employment Situation is a monthly news release issued by The Bureau of Labor Statistics, which contains information about the US labor market, such as the US unemployment rate.

  • Ticker

    A Ticker is the unique set of letters that identifies a publicly traded stock or bond.

  • Tight Market

    A Tight Market is when the price where a trader will buy a stock or bond is close to the price where the trader will sell a stock or bond.

  • Time Value of Money

    Time Value of Money is the underlying principle that a dollar in hand today can be invested and turned into more money in the future. In other words, the sooner you start saving and investing your money, the more potential money you can make.

  • Trading

    Trading is the frequent buying and selling of stocks and bonds over a short period of time.

  • Trading Capital

    Trading Capital is the money you use to trade stocks, bonds or other financial investments.

  • Trading Day Game

    Our fun, free mobile game that helps players learn to trade stocks.

  • Trading Halt

    Trading Halt is a temporary trading suspension of a stock usually because of impending news or extreme trading volatility in the stock.

  • Transaction

    A transaction is the buying and/or selling of a stock or bond.

  • Treasury Bond

    A Treasury Bond is a specific type of bond where the institution issuing the bond and borrowing the money is a government. The government is responsible for paying you the interest rate (or coupon) on the bonds as well as paying you back when the bond expires.

  • Underperform the Market

    Underperform the Market means your stock portfolio performed worse than one of the major indices, such as the DJIA or S&P 500.

  • Undervalued

    Undervalued means the price of an investment is less than its perceived worth or value.

  • Unemployed

    Unemployed means you don’t have a job, you are available to work and you are actively looking for a job.

  • Upgrade

    An upgrade is when an institution’s credit rating (financial health score) goes up, which usually happens when an institution is financially better than it was before.

  • US Bureau of Economic Analysis

    The US Bureau of Economic Analysis (BEA) is an agency of the Department of Commerce. It produces economic data, which provides insights into the performance of the US economy. Statistical data include GDP, US savings rate and Consumer spending.

  • US Consumer

    US Consumer is a person in the United States that buys goods and services, such as groceries, cars, electricity, and gas.

  • US Personal Savings Rate

    The US Personal Savings Rate is the amount of money US consumers save as a percentage of their disposable income.

  • US Treasury Bond

    A US Treasury Bond is a specific type of bond where the institution issuing the bond and borrowing the money is the US government. The US government is responsible for paying you the interest rate (or coupon) on the bonds as well as paying you back when the bond expires.

  • US Unemployment Rate

    The US Unemployment Rate is the percentage of people that are unemployed in the US labor force.

  • USD

    USD is the abbreviation for US Dollar.

  • UST

    UST is the abbreviation for US Treasury.

  • Value

    Value is the monetary worth of a stock, bond or other financial investment.

  • Variable

    Variable is something that changes.  The opposite of variable is fixed.

  • Voting Rights

    Voting Rights is the right of a shareholder to vote on important company issues, such as electing the Board of Directors or selling the company.

  • Wage

    Wage is the amount of money someone earns before paying taxes.

  • Wall Street

    Wall Street is a general term used for the businesses and people that are involved in the financial markets. It’s also the name of an actual street in New York City.

  • Year-to-Date (YTD)

    Year to date is the time period from January 1st of the current year to the current date.

  • Yearly

    Yearly means every year.

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Above Par

Above Par is a term used when the amount of money you pay for a bond (Principal Amount) is the greater than the amount of money you get back when the bond matures (Face Value). A bond that trades “above par” is called a Premium Bond.

Adjustable Rate Preferred Stock

Adjustable Rate Preferred Stock or ARPS is a type of preferred stock where the dividend is not a fixed amount, but it changes based upon a pre-determined formula.

Annual

Annual means every year.

ARPS

ARPS is the abbreviation for Adjustable Rate Preferred Stock, which is a type of preferred stock where the dividend is not a fixed amount, but it changes based upon a pre-determined formula.

Ask

Ask is the price where a trader will sell a stock, bond or other financial investment. Offer is another word for Ask.

Asset

An asset is anything that has value. A stock, bond, house, painting and jewlery are all examples of assets.

Bankrupt

Bankrupt means when an institution or individual legally declares it doesn’t have enough money to pay its debts.

Bankruptcy

Bankruptcy is a legal process. When an instiution or individual can’t pay its debts, all their assets (anything that has value) that can be liquidated (turned into cash) will be used to pay back its creditors (people that loaned them money) and possibly shareholders (if there is enough money left).

BEA

BEA is the abbreviation for The US Bureau of Economic Analysis. The BEA is an agency of the Department of Commerce. It produces economic data, which provides insights into the performance of the US economy. Statistical data include GDP, US savings rate and Consumer spending.

Beat the Market

Beat the Market means your stock portfolio performed better than one of the major indices, such as the DJIA or S&P500. Another way to say this is that you “outperformed the market.”

Below Par

Below Par is a term used when the amount of money you pay for a bond (Principal Amount) is the less than the amount of money you get back when the bond matures (Face Value). A bond that trades “below par” is called a Discount Bond.

Bid

A bid is the the price where a trader will buy a stock, bond or other financial investment.

Black Monday

Black Monday (October 19, 1987) is considered one of the worst performance days on Wall Street. The Dow Jones Industrial Average plunged in value by 508 points or 22.6%.  At the time this was the biggest stock market decline Wall Street had ever seen.

Board of Directors

A Board of Directors is a group of people who are elected by shareholders to oversee corporoate policy. They have a fiduciary responsibility, which means they have to act in good faith for the shareholders.

Bond

A bond is a type of security (investment that trades easily in the market) where you loan money to an institution in return for interest payments from that institution, and the institution has to pay you back at a later date.

Bondholder

A Bondholder is someone who owns a bond.

Borrower

A Borrower is an institution or individual who borrowed money. An institution borrows money by issuing bonds or taking out a loan. Another word for Borrower is Obligor.

Budget

A budget is the amount of money you can spend based upon a plan.

Bureau of Labor Statistics

The Bureau of Labor Statistics (BLS) is an agency within the U.S. Department of Labor. It is responsible for measuring the US labor market and providing economic information.  For example, the BLS calculates and publishes the monthly US unemployment rate.

Callable

Callable is when an institution has the right to redeem, or take back, from investors their institution’s stock or bonds at a specific price and on specific dates

Callable Preferred Stock

Callable Preferred Stock is a type of preferred stock where the company has the right buy back their preferred stock at a pre-determined price.

Capital

Capital means money or the equivalent of money.

Capital Markets

The Capital Markets is a general term used for the place were stocks and bonds trade.

Cheap

Cheap is a term used when you believe an investment seems less expensive relative to other similar investments.

Circuit Breaker

A Circuit Breaker halts stock trading when a market index falls a certain percentage within a specific period of time. This prevents panic selling and gives investors time to evaluate the situation.

Closed Position

Having a Closed Position means you no longer have an investment that can be affected by the market. Selling a stock you owned is a closed position.

Common Shareholder

A Common Shareholder is someone who owns common stock.

Common Stock

Common Stock is a type of stock. Common stock usually has voting rights, can get paid a dividend (but is not guaranteed one) and is the last to get any money back if the company goes bankrupt.  When someone refers to “stock” they are usually referring to common stock.

Convertible Preferred Stock

Convertible Preferred Stock is a type of preferred stock where you have the right to change, or convert, your preferred stock into common stock under certain circumstances.

Corporate

A company is a non-government institution that is engaged in some type of business.

Corporate Bond

A corporate bond is a specific type of bond where the institution issuing the bond and borrowing the money is a company. The company is responsible for paying you interst on the bonds as well as paying you back when the bond matures.

Coupon

Coupon is the annual interest rate on a bond that is paid to bond holders.

Credit Rating

A Credit Rating is a grade given to a company that is suppose to indicate the financial health, or the creditworthiness, of a company. In other words, it’s suppose to tell you how likely the institution will be able to pay its debts.

Creditor

A Creditor is a person or company that is owed money.

Creditworthiness

Creditworthiness is a term used to describe an institution’s ability to pay its debts. The more likily, the higher the company’s creditworthiness. The less likely, the lower the company’s creditworthiness.

Cumulative Preferred Stock

Cumulative Preferred Stock is a type of preferred stock where the preferred shareholders are entitled to all dividend payments, even if the company misses a scheduled dividend payment. In other words, if a company doesn’t pay a dividend, the company must keep track of all the dividends it missed, and pay them to cumulative preferred shareholders at a later date.

Current Population Survey

The Current Population Survey (CPS) is a survey conducted by The Bureau of Labor Statistics (BLS), which determines the number of people in the US that are employed, unemployed and not in the labor force. The results of the CPS are used to calculate the US unemployment rate.

Day Order

A Day Order is a type of order that must be completed by the end of the trading day or it expires.

Debt

Debt is when you owe someone money. A bond is a type of debt for an institution because it owes bondholders money.

Debt Ceiling

Debt Ceiling is the total amount of money the US government is legally allowed to borrow.

Discount Bond

A bond is a Discount Bond when the amount of money you pay for a bond (Principal Amount) is the less than the amount of money you get back when the bond matures (Face Value). A Discount Bond is said to trade “Below Par.”

Disposable Income

Disposable Income is the amount of money you actually have to spend or save after you pay taxes on your personal income.

Dividend

A Dividend is a portion of the company’s profits that is given to shareholders.

Dow Jones Industrial Average

The Dow Jones Industrial Average, also called the Dow, is a stock index that contains 30, well-diversified, stable stocks. The performance of the index is suppose to represent the performance of the US stock market.

Downgrade

A downgrade is when an institution’s credit rating (financial health score) is lowered, which usually happens when an institution is financially worse than it was before.

Emergency Fund

An Emergency Fund is money you save that you will only use for emergencies.

Employed

Employed means you currently have a job.

Equity

Equity means ownership in something. Stock is equity because stock is ownership in a company.

Equity Market

The Equity Market is the place where stocks are traded.

Exchange

An exchange is a physical or virtual place where buyers and sellers of stocks and bonds are matched together so they can trade.

Execution

Execution means to do a trade. If you buy a stock, you executed a stock trade.

Expense

Expense is the cost of something.

Face Value

Face Value is the amount of money that the Issuer (institution that borrowed money) of a bond pays you when the bond expires (Maturity Date).

Fill-or-Kill

A Fill-or-Kill is an instruction to complete an Order immediately or cancel it.

Finance

Finance is a general term used for all things that have to do with money, such as the industry, study and management of money.

Financial Instrument

A Financial Instrument is a broad term used to describe any investment that can be traded, such as stocks, bonds, derivatives, commodities and currencies.

Financial Markets

Financial Markets is the general term used for the place where all financial instruments, such as stocks, bonds, commodities, and currencies trade.

Fixed

Fixed is something that doesn’t change.  The opposite of fixed is variable.

Good-til-Canceled Order

A Good-til-Canceled Order is a type of order that remains in effect until the order is completed or canceled.

Government Bond

A Government Bond is a bond that is issued by a government entity. In the US, this is also called a US Treasury Bond.

Greenback

Greenback means money.  Paper money was first introduced in the US during the Civil Was, and it was called Greenback because the back of the paper was the color green.

Guarantee

A Guarantee is a formal promise or assurance that certain conditions will be met or fulfilled.

High Risk

High Risk means that the potential to lose money on an investment is high.

Hit-the-Bid

Hit-the-Bid is when you sell a stock, bond or other investment at the price where a trader is willing to buy it.

Holding Period

Holding Period is the amount of time between when you buy an investment, such as a stock or bond, and sell it.

Index

An Index is a group of stocks or bonds whose performance is suppose to represent all or part of a specific market.

Initial Public Offering (IPO)

Initial Public Offering or “IPO” is when a private company sells its stock to the public for the first time.

Insider

An Insider is anyone who has non-public information about a company.

Institution

Institution is a broad term used for an organization that has a specific purpose.

Institutional Investor

A Institutional Investor is an institution who buys and sells stocks, bonds or other financial investments for the institutions own personal account or on behalf of others.  Hedge funds, money managers, banks and insurance companies are examples of institutional investors.

Interest Rate

Interest Rate is the amount of money, expressed as a percentage of the Face Value (money owed at maturity), that a borrower pays you for loaning them money.  For the borrower, it’s the cost to borrow money.

Investing

Investing is the buying and selling of stocks and bonds over a long period of time, such as months or years.

Investment Return

The amount of money you make, or your profit, on an investment before you pay taxes on it.

IPO

IPO is an abbreviation for Initial Public Offering, which is when a private company sells it’s stock to the public for the first time.

Issuer

An Issuer is an institution that borrowed money by selling new bonds to investors.

Job Market

The Job Market is a general term used for the physical or virtual place where both employers are looking to hire people and where people are looking for a job.

Kill

Kill means to cancel a stock or bond Order immediately.

Labor Force

The Labor Force is the total number of people that are employed and unemployed.

Large Cap

Large Cap refers to a company whose market capitalization or market value is generally greater than $10 billion. However, there is no specific rule that defines the exact size of a Large Cap company, so investors may have different views on what defines a Large Cap company.

Lender

A Lender is an institution or individual who loaned money to another institution or individual.

Lift-the-Offer

Lift-the-Offer means to buy a stock, bond or other investment at the price where a trader is willing to sell it.

Limit Order

A Limit Order is a type of Order that instructs the trader to buy or sell a stock, bond or other financial instrument at a specific price or better.

Liquid

Liquid is a term used when a bond, stock or other financial investment can be easily bought and sold in the market.

Liquidate

Liquidate means when you take an asset, such as a stock, bond, house or jewelry and sell it for cash.

Long Position

A Long Position means that your investment benefits when prices go up. Owning a stock is a long position.

Low Risk

Low Risk means that the potential to lose money on an investment is low.

Make a Market

When a trader “Makes a Market,” he/she is giving you prices where he/she will both buy and sell a stock, bond or other investment.  If a trades makes a market of $50 / $60, that means the trader will buy (bid) at $50 and sell (offer) at $60.

Market Cap

Market Cap is an abbreviation for Market Capitalization.

Market Capitalization

Market Capitalization is the market value of a company. In other words it tells you how much it would cost you to buy every public share of a company at its current share price. Market Capitalization is often referred to as Market Cap.

Market Maker

A Market Maker is a type of trader that provides prices where he/she is willing to both buy (bid) or sell (offer) a stock, bond or other investment.

Market Order

A Market Order is a type of Order that instructs the trader to buy or sell a specific stock, bond or other financial instrument at the current market price.

Market Value

Market Value is the price where you could buy an asset, such as stock, company or house today.

Market Weighted Index

A Market Weighted Index is a type of stock index whose value is calculated using a formula that takes into account the market capitalizations of each individual stock in the index.  Companies with higher market capitalizations are given more weight and therefore have a greater impact on the value of the index.

Material Information

Material Information is information that could have a significant impact on the price of a stock.

Maturity Date

Maturity Date is the date a bond expires and the bond Issuer has to pay the Face Value of the bond to bondholders.

Mid Cap

Mid Cap refers to a company whose market capitalization or market value is generally between $2 billion and $10 billion.  However, there is no specific rule that defines the exact size of a Mid Cap company, so investors may have different views on what defines a Mid Cap company.

Monthly

Monthly means every month.

Muni Bond

Muni Bond is an abbreviation for a Municipal Bond.

Municipal Bond

A Municipal Bond is a specific type of bond where the institution issuing the bond and borrowing the money is a state, city or other government entity. The state, city or other government entity is responsible for paying you the interest rate (or coupon) on the bonds as well as paying you back when the bond expires.

Municipality

A Municipality is a government or government entity at the state, city, town or district levels that governs their specific local area.

NASDAQ

NASDAQ is an electronic exchange where stocks and bonds are traded. The stock and bonds of many technology companies trade on the NASDAQ.  NASDAQ stands for National Association of Securities Dealers Automated Quotations.

National Association of Securities Dealers Automated Quotations

National Association of Securities Dealers Automated Quotations, more commonly called the NASDAQ, is an electronic exchange where stocks and bonds trade.  The stock and bonds of many technology companies trade on the NASDAQ.

New Issue

A New Issue is when an institutions sells a new bond for the first time.

New York Stock Exchange

New York Stock Exchange is an exchange where stocks and bonds are traded. It’s one of the most well known stock exchanges in the world. The abbreviation for New York Stock Exchange is NYSE.

Non-Cumulative Preferred Stock

Non-Cumulative Preferred Stock is a type of preferred stock where preferred shareholders are not entitled to any missed dividend payments.  In other words, if a company doesn’t pay a dividend, non-cumulative preferred shareholders will not be owed any of these missed dividends in the future.

Nontaxable

Nontaxable means that you are not required to pay taxes on the money you receive from a specific investment.

Not in the Labor Force

Not in the Labor Force means you are not employed or unemployed. Examples include students, retirees and stay-at-home parents.

NYSE

NYSE is the abbreviation for New York Stock Exchange, which is an exchange where stocks and bonds are traded.

NYSE American

NYSE American is an electronic exchange where stocks and bonds of small to mid-sized companies trade. It was previously known as the American Stock Exchange until it was bought by NYSE.

Obligor

An Obligor is an institution or individual who owes money to another institution or individual. Another word for Obligor is Borrower.

Offer

An Offer is the price where a trader will sell a stock, bond or other financial instrument. Another word for Offer is Ask.

One Sided Market

A One Sided Market is when a trader will only give you a buy OR sell price.

Open Position

Having an Open Position means you have an investment that can be affected by the market. Owning a stock is an open position because the value of your stock investment will change based upon the market.

Order

An Order is a set of instructions given by an investor to a trader to buy or sell a specific stock, bond or other financial instrument on his/her behalf, often with restrictions on price and timing.

Outperform the Market

Outperform the Market means your stock portfolio performed better than one of the major indices, such as the DJIA or S&P 500. Another way to say this is that you “Beat the Market.”

Outstanding Shares

Outstanding shares is the total number of public shares of a company owned by investors and employees.

Overvalued

Overvalued means the price of an investment is greater than its perceived worth or value.

Par

Par is when the amount of money you give a bond issuer to buy the bond (principal amount) is the same amount that the Issuer agrees to pay you (face value) when the bond expires (maturity date). It’s when the principal amount is the same as the face value.

Par Bond

A bond is a Par Bond when the amount of money you pay for a bond (Principal Amount) is the same as the amount of money you get back when the bond matures (Face Value).

Participatory Preferred Stock

Participatory Preferred Stock is a type of preferred stock where you get a fixed dividend and an additional dividend if certain conditions are met.

PCE

PCE is the abbreviation for Personal Consumption Expenditure. PCE measures how much consumers spend on goods and services, such as buying cars, groceries, clothes, and electricity.

Personal Consumption Expenditure

The Personal Consumption Expenditure (PCE) measures how much consumers spend on goods and services, such as buying cars, groceries, clothes, and electricity.

Personal Income

Personal Income is the amount of money you earn before taxes from all of your sources of income. For example, the salary from your job, rental property income and stock dividends are all sources of income.

Preferred Shareholder

A Preferred Shareholder is someone who owns preferred stock.

Preferred Stock

Preferred Stock is a type of stock. Preferred stock usually does not have voting rights, gets paid a fixed dividend (and is guaranteed one if the company pays a dividend) and gets money back before common stock if the company goes bankrupt.

Premuim Bond

A bond is a Premium Bond when the amount of money you pay for a bond (Principal Amount) is the greater than the amount of money you get back when the bond matures (Face Value). A Premium Bond is said to trade “Above Par.”

Price Weighted Index

A Price Weighted Index is a type of stock index whose value is calculated using a formula that takes into account the prices of each individual stock in the index.  Companies with higher stock prices are given more weight and therefore have a greater impact on the value of the index.

Primary Market

Primary Market is the market where new stock and bonds are issued by an institution and distributed directly to investors.

Principal Amount

Principal Amount is the amount of money you pay for a bond.

Priority of Payments

Priority of Payments is the order in which investors get paid if an institution goes bankrupt.  Creditors get paid first, then preferred shareholder and then common shareholders.

Profit

Profit is the amount of money you make after you take into account your expenses. For example, if you buy a stock at $20 (Expense) sell a stock for $50 (Revenue), you make a profit of $30.

Program Trading

Program Trading is a type of trading where a computer buys and sells stocks, usually at pre-determined prices. Program trading speeds up the trading process, which means large quantities of stock can be bought or sold very quickly.

Q1

Q1 is the first quarter of the year, which is January 1st through March 31st.

Q2

Q2 is the second quarter of the year, which is April 1st through June 30th.

Q3

Q3 is the third quarter of the year, which is July 1st through September 30th.

Q4

Q4 is the fourth and last quarter of the year, which is October 1st through December 31st.

QTD

QTD is the abbreviation for Quarter-to-Date.

Quarter

A Quarter is three 3 months in a calendar year.  There are four quarters in a year starting in January.  Public companies disclose their earnings for each quarter.

Quarter-To-Date

Quarter-to-Date is the time period from the start of the current quarter to the current date.  Its abbreviation is QTD.

Quarterly

Quarterly means every three months in the calendar year.  There are four quarters in the calendar year starting in January.

Redeem

Redeem is when an institution buys back its own bond or preferred stock at a predetermined price from investors.

Restricted Stock

Retricted Stock is a type of stock, usually owned by company executives, which cannot be traded until certain requirements are met.

Retail Investor

A Retail Investor is an individual who buys and sells stocks, bonds or other financial investments for his/her own personal account.

Revenue

Revenue is the amount of money you receive when you sell a product or service.

Reward

Reward is the amount of money you make from an investment.  The term is primarily used when comparing the risk of an investment to its potential reward.  For example, the higher the risk, the higher the potential reward.

Rich

Rich is a term used when you believe an investment is more expensive relative to other similar investments.

Risk

Risk is the possibility of loosing money from an investment.  The term is often used when comparing the risk of an investment to its potential reward.  For example, the higher the risk, the higher the potential reward.

Risk Free Rate

Risk Free Rate is the interest rate that the US government pays when it borrows money.

Savings Rate

The Savings Rate is the amount of money you save as a percentage of your disposable income.

Secondary Market

The Secondary Market is the market where previously issued stock and bonds trade between investors.

Securities

Securities is a general term for stocks and bonds that trade in the capital markets.

Security

A Security is a general term for a stock or bond that trades in the capital markets.

Selling Short

Selling Short is a type of investing strategy. Selling Short is when you borrow a stock (or bond) you don’t own and then sell it with the expectation of buying it later at a lower price.

Semi-Annually

Semi-Annually means every 6 months or 1/2 year.

Share

A Share is one unit of ownership in a company or fund.  Usually one stock is one share.

Share Price

Share Price is the price of a stock or a share of a fund.

Shareholder

A Shareholder is someone who owns a stock.

Short Covering

Short Covering is when you buy back a stock (or bond) that you had shorted (sold before you owned it).

Short Position

A short position means that your investment benefits when prices go down. Selling short a stock is a short position.

Shorted

Shorted means that you borrowed a stock (or bond) that you didn’t own and sold it with the expectation of buying it back later at a lower price.

Small Cap

Small Cap refers to a company whose market capitalization or market value is generally less than $2 billion. However, there is no specific rule that defines the exact size of a Small Cap company, so investors may have different views on what defines a Small Cap company.

Specialist

A Specialist is a specific trader who is a member of a stock exchange and is a Market Maker for a designated stock.

Spread

The Spread is the difference between the price where a trader will buy (bid) and the price where a trader will sell (offer). The spread of a $50 (bid) / $60 (offer) market is $10.

Stock

A Stock is an ownership interest in a company. When you buy a stock, you become an owner in the company.

Tax Exempt

Tax Exempt means that you are not required to pay taxes on the money you received from a specific investment.

Taxable

Taxable means that you are required to pay taxes on the money you receive from a specific investment.

Taxes

Taxes is money that you are required to pay state and federal governments.

The Employment Situation

The Employment Situation is a monthly news release issued by The Bureau of Labor Statistics, which contains information about the US labor market, such as the US unemployment rate.

Ticker

A Ticker is the unique set of letters that identifies a publicly traded stock or bond.

Tight Market

A Tight Market is when the price where a trader will buy a stock or bond is close to the price where the trader will sell a stock or bond.

Time Value of Money

Time Value of Money is the underlying principle that a dollar in hand today can be invested and turned into more money in the future. In other words, the sooner you start saving and investing your money, the more potential money you can make.

Trading

Trading is the frequent buying and selling of stocks and bonds over a short period of time.

Trading Capital

Trading Capital is the money you use to trade stocks, bonds or other financial investments.

Trading Day Game

Our fun, free mobile game that helps players learn to trade stocks.

Trading Halt

Trading Halt is a temporary trading suspension of a stock usually because of impending news or extreme trading volatility in the stock.

Transaction

A transaction is the buying and/or selling of a stock or bond.

Treasury Bond

A Treasury Bond is a specific type of bond where the institution issuing the bond and borrowing the money is a government. The government is responsible for paying you the interest rate (or coupon) on the bonds as well as paying you back when the bond expires.

Underperform the Market

Underperform the Market means your stock portfolio performed worse than one of the major indices, such as the DJIA or S&P 500.

Undervalued

Undervalued means the price of an investment is less than its perceived worth or value.

Unemployed

Unemployed means you don’t have a job, you are available to work and you are actively looking for a job.

Upgrade

An upgrade is when an institution’s credit rating (financial health score) goes up, which usually happens when an institution is financially better than it was before.

US Bureau of Economic Analysis

The US Bureau of Economic Analysis (BEA) is an agency of the Department of Commerce. It produces economic data, which provides insights into the performance of the US economy. Statistical data include GDP, US savings rate and Consumer spending.

US Consumer

US Consumer is a person in the United States that buys goods and services, such as groceries, cars, electricity, and gas.

US Personal Savings Rate

The US Personal Savings Rate is the amount of money US consumers save as a percentage of their disposable income.

US Treasury Bond

A US Treasury Bond is a specific type of bond where the institution issuing the bond and borrowing the money is the US government. The US government is responsible for paying you the interest rate (or coupon) on the bonds as well as paying you back when the bond expires.

US Unemployment Rate

The US Unemployment Rate is the percentage of people that are unemployed in the US labor force.

USD

USD is the abbreviation for US Dollar.

UST

UST is the abbreviation for US Treasury.

Value

Value is the monetary worth of a stock, bond or other financial investment.

Variable

Variable is something that changes.  The opposite of variable is fixed.

Voting Rights

Voting Rights is the right of a shareholder to vote on important company issues, such as electing the Board of Directors or selling the company.

Wage

Wage is the amount of money someone earns before paying taxes.

Wall Street

Wall Street is a general term used for the businesses and people that are involved in the financial markets. It’s also the name of an actual street in New York City.

Year-to-Date (YTD)

Year to date is the time period from January 1st of the current year to the current date.

Yearly

Yearly means every year.

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