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Trading Terms

Trading Terms encompass terminology and phrases commonly used in financial markets, including terms like bid, ask, liquidity, and volatility.

ASBA
ASBA, or Application Supported by Blocked Amount, is a valuable tool created by SEBI for individuals looking to invest in IPOs, Rights issues, and FPS. This application enab...
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After Market Order
. In the world of finance, an investor's ability to place orders outside of market hours is a valuable tool known as After Market Order. This feature allows for transactions...
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Alphabet Stock
Alphabet Stock is a noteworthy type of common stock that signifies a company’s ownership in its subsidiary. This type of stock is often issued by large corporations to hold ...
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Arbitrator
Arbitrage is the practice of buying and selling assets simultaneously to profit from price differences. An individual with a keen understanding of finance, known as an arbi...
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Ask
The lowest price at which a security is offered for sale is known as the ask price. This is essentially the minimum amount that a seller is willing to accept in exchange for...
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Balanced Schemes
Balanced funds, also known as Balanced Schemes, offer a unique blend of equity and debt investments. This allows for diversification of portfolios, which is essential for mi...
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Bearer Stocks
One may own two types of stocks - registered and bearer. Registered stocks require the issuing authority to register the owner and track ownership transfers, while bearer st...
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Bearish View
This is typically the result of a pessimistic outlook on the economy or a specific company. On the other hand, a bullish view is a trend that predicts an upward trajectory in...
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Bid
The maximum value that a potential buyer is willing to pay for a share of stock is known as the bid price. This amount represents the highest offer in the market, reflecting...
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Block Deal
In finance, a block trade refers to a large-scale transaction involving a minimum quantity of 500,000 or a value of at least Rs. 5 crores. These trades are conducted through...
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Board Lot
It helps to ensure efficient trading and price stability in the market. A crucial concept in finance is the board lot. Essentially, this refers to a standardized number of s...
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Bull Market
A bullish market is characterized by a positive trend in stock prices, indicating a strong demand for stocks and an overall optimistic outlook on the economy. This can be att...
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Bullish View
This viewpoint is often held by investors who believe that the market will continue to rise and are therefore more likely to invest in stocks. It is the opposite of a bearish...
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Capital Market
As a professor of finance, it is essential to understand the intricacies of the capital market, a fundamental aspect of the financial world. Considered as a conduit between ...
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Capital Protection Fund
A Capital Protection Fund, also known as a hybrid fund, combines elements of both debt and equity investments. Its purpose is to provide investors with a safety net for pote...
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Cash/Equity Market
This allows for immediate transaction and delivery, as opposed to a futures market where delivery and payment are made at a specified future date. In the world of finance, ...
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Certificate of Deposit
The longer the term of the CD, the higher the interest rate. A Certificate of Deposit, or CD, is a financial tool that allows individuals to deposit a specific amount of mon...
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Churning
Churning refers to the unethical and excessive trading of securities in a customer's account for the sole purpose of earning commissions or profits, without taking into accou...
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Closed Position
This is done to realize profits or losses depending on the market movement. In the world of finance, when an individual decides to terminate or end a current position in the...
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Commodities Market
Commodities Market, a bustling hub for investors, offers a diverse range of trading options such as precious metals, energy, natural gas, crude oil, and spices. In India, th...
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Common Stock
Shares are essential components of a company's capital structure, representing an individual's ownership stake in the organization. They are issued to investors in exchange ...
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Contra Funds
An equity mutual fund is a type of investment where the fund manager strategically allocates funds towards companies that may not be performing well in the short term. The g...
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Currencies
Currencies are a fundamental aspect of finance, serving as the primary medium of exchange in a country. These monetary units, in the form of notes and coins, hold significan...
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Cyclical Stocks
Cyclical stocks refer to companies whose stock prices are significantly affected by the fluctuations in the overall economy. These are typically companies that produce non-e...
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Dawn Raid
Early morning trading involves buying a large quantity of stocks in a company at the beginning of the trading day. This is known as "opening the market" and can potentially ...
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Day Order
It is also referred to as a Regular Order A Day Order, also called a Regular Order, is a type of stock market order that can be executed at any time during the trading hours...
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Debt Market
A crucial aspect of the financial world, the debt market is a platform where various debt securities, including bonds, government bonds, certificates of deposits, debentures...
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Defensive Stock
Defensive Stock refers to a collection of investment coupons that provide a consistent and reliable stream of income through dividends, regardless of the fluctuations in the...
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Demerger
This is known as divestiture. Divestiture is a crucial business tactic that involves dividing a company or business into smaller entities to function independently, sell as...
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Derivatives Market
The Derivatives Market is a crucial component of the financial world, where financial instruments such as futures contracts and options are traded. These instruments derive ...
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Discretionary Account
A discretionary account is an arrangement where a broker or trader can make transactions on your behalf without prior notification. This is only allowed after you have signe...
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Diversified Debt Funds
This is often considered a safer option for investors, as it reduces the risk of losing all their investment. In the realm of finance, we are familiar with the concept of d...
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Diversified Equity Funds
Diversified Equity Funds are a type of investment vehicle that aims to maximize returns for investors by investing in companies of various sizes and industries. This type of...
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Domestic Institutional Investors
. Investors from India who allocate their funds in the Indian financial sector are referred to as Domestic Institutional Investors, or DIIs. This term encompasses individual...
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Equity
Equity, in simpler terms, represents the worth that shareholders would receive if a company's assets were sold and all debts were settled. It is a crucial indicator of a com...
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Equity Index
In the world of finance, we often use a tool called the stock index to gauge the performance of a group of stocks in the market. This index is a weighted average, meaning th...
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Equity Investment
This is known as equity Equity, my dear students, is a form of investment where individuals and firms put their money into the stock market, hoping to receive dividends and...
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Exchange-Traded Fund (ETF)
ETFs offer investors a diverse portfolio of assets with lower fees and easier trading compared to traditional mutual funds. Additionally, ETFs can provide more flexibility fo...
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Exchange-traded Market
The prevailing market, often referred to as the "hub" of market transactions, serves as the vital link connecting buyers and sellers. This intermediary plays a crucial role ...
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Forward Price
When discussing forward contracts, it is important to understand the concept of Forward Price. This term refers to the cost of delivering a financial asset or currency to the...
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Fresh Purchase
When we talk about fresh purchase, we are referring to the initial purchase orders made for a particular scheme. This term is often used in the world of finance, specificall...
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Front-running
Front-running, also known as insider trading, refers to the unethical practice of a broker using privileged information about an upcoming transaction to gain an advantage in...
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Fund
It is managed by a professional or a team of experts who make decisions on where to invest the funds to generate returns. These returns can come in the form of dividends, int...
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Funded Debt
Funded debt is a crucial aspect of a company's financial structure and should be carefully managed. Funded debt is a term used to describe a type of debt that has a longer m...
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Funds Available
As a financial professional, it is crucial to understand the concept of buying power. This refers to the total amount of funds that an investor or trader has available in th...
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Futures Market
These contracts are used to hedge against the risk of price fluctuations in commodities, currencies, and financial instruments. The price of a futures contract is determined ...
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Gamma Hedging
This technique involves the use of derivative instruments, such as options, to adjust the portfolio's exposure to changes in the underlying asset's volatility. It is a common...
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Gap Analysis
It involves identifying any discrepancies and developing strategies to bridge the gap. The Gap Analysis process is a powerful tool for organizations seeking to optimize the...
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Gold ETFs
Gold Exchange Traded Funds, or ETFs, are a valuable asset for investors looking to diversify their portfolio with the precious metal. These funds are a type of investment to...
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Goods Till Triggered (GTT) Order
A key concept in the world of finance is the GTT order. This stands for Good-Til-Trigger, and essentially means that the order will only be executed if the market price of a...
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Haircut
This is a crucial concept to understand when dealing with securities, such as stocks, bonds, and derivatives. A higher haircut means a larger difference between the market va...
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Hybrid Funds
They offer diversification and risk management. Hybrid Funds, often referred to as balanced funds, are a type of mutual fund that invests in a diverse range of asset classes...
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Immediate or Cancel (IOC) Order
In finance, an IOC (Immediate or Cancel) order is a type of trade execution where the entire order must be fulfilled immediately or it will be canceled. This means that if o...
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Intraday Trading
It is a high-risk, high-return investment strategy that requires a thorough understanding of market trends and the ability to make quick decisions. Day traders often utilize ...
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Limit Order
It helps you control the maximum price you are willing to pay for a security or the minimum price you are willing to accept for selling it. This is a useful tool for investor...
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MF SIP
A key investment tactic in the world of finance is the Mutual Fund Systematic Investment Plan (SIP). This approach requires investors to consistently invest a fixed amount o...
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Margin
It is expressed as a percentage of the total purchase amount. Margin, my dear students, is a crucial concept in the world of finance. It refers to the funds that an investor...
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Margin Pledge
In the world of finance, Margin Pledge serves as a valuable tool for individuals looking to increase their margin. This involves utilizing securities held in one's Demat acc...
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Margin Trading
This practice involves borrowing funds from a broker to make trades. Margin Trading is a common practice in the world of finance, where traders can leverage their investme...
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Market Order
This is a critical term in the world of finance, as it allows traders to execute transactions quickly and efficiently without specifying a specific price. Market orders are t...
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Money Market
In the realm of finance, we often encounter complex terms that can be intimidating. However, one important concept to understand is the Money Market, where short-term fina...
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NFO (New Funds Offer)
A new fund offering, or NFO, is essentially a way for an asset management company (AMC) to gather funds from the market and invest them in various securities. It can be seen...
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Open Position
An open position refers to a trade that has been initiated but has not yet been closed by an opposing trade. This can occur in various financial markets, such as stocks or c...
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Order
It specifies the type of security, the amount to be bought or sold, and the price at which the transaction should take place. Orders can be market orders, which are executed ...
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Order Book
It is an essential tool for traders and investors as it provides real-time information about market demand and supply, allowing them to make informed trading decisions. In ad...
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Over-the-counter Market
The financial market is a complex system where various products are traded between two parties through over the counter transactions. This entails the parties entering into ...
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Penny Stocks
Penny stocks, also known as microcap stocks, are defined by their low market capitalization and low trading prices. These stocks are considered highly illiquid due to their ...
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Position
A long position is the purchase of a security with the expectation of its value rising, while a short position is the sale of a security with the anticipation of its value de...
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Preferred Stock
Let's delve into the world of finance and explore the concept of Preferred Stock. This investment is often described as a hybrid, possessing qualities of both bonds and comm...
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Primary Market
This is also referred to as the "new issue market" or "initial public offering (IPO) market." It is an essential part of the financial system as it allows companies to raise ...
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Robo Order
A Robo Order is a type of multi-leg order that utilizes automated processes to execute the buying or selling of securities. This occurs when a predetermined trigger price or...
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SIP
This strategy allows for cost averaging, as the same amount of money is invested regardless of market fluctuations. It is a popular and effective way to build long-term wealt...
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Secondary Market
This market allows investors to buy and sell securities that are already on the market. In finance, the Secondary Market, also referred to as the Aftermarket, plays a vital ...
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Security Holdings
As a knowledgeable professor of finance, it is crucial to understand the concept of security holdings. These are essentially the securities that have been bought or sold by ...
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Short Position
On the other hand, a long position is when an investor buys an asset with the expectation of selling it at a higher price in the future. Short selling can be a high-risk stra...
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Short Selling
In the world of finance, there is a strategy known as short selling. This involves borrowing shares from the owner through a brokerage and then selling them on the market at...
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Stock SIP
Stock SIP, also known as Systematic Investment Plan, is a strategic approach to investing in stocks. It allows investors to purchase a predetermined amount or quantity of st...
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Stop Loss Order
A crucial aspect of managing your investments is the implementation of stop loss orders. These orders allow you to buy or sell a stock at a predetermined price, minimizing p...
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Zigzag
The Elliott three-wave pattern, commonly seen in a bull market, can also appear in a bear market with an inverted structure. This pattern is characterized by a 5-3-5 subdivi...
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Zero-Coupon Government Bonds
As a finance professional, you may come across government bonds that are sold at a significant discount and do not provide any cash dividend, unlike traditional bonds. These...
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Yield interest rate
In finance, yield is the true interest rate, expressed as a percentage per year, that is associated with the net income or expenditure. In order to convert yields to discoun...
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Window
A crucial aspect in analyzing market indicators is to establish a specific time frame, commonly referred to as a lookback period. This period allows us to track the performa...
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Wasting
The concept of time decay refers to the gradual decline in value of an option as time passes. This is due to the fact that with each day that goes by, a portion of the optio...
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Warrant
A stock option is a certificate provided by a company that grants the holder the right to purchase shares of stock at a predetermined price during a specific time period. Th...
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Volume Price Trend (VPT)
A key concept in finance is the use of running sums, which track the total volume of a market over time. This approach involves adding the day's total volume to the existing...
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Vega
Option sensitivity to changes in volatility is known as "vega." As volatility increases, the price of an option will also increase, making it more expensive to purchase. Thi...
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Variable-Length Moving Average
A proficient understanding of financial concepts includes the use of moving averages, which are instrumental in gauging trends and forecasting future stock prices. In partic...
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Value Averaging
One of the fundamental concepts in finance is the calculation of an average. This involves taking the sum of a set of values and dividing it by the number of values in the s...
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Value at Risk (VaR)
In the world of finance, it is important to understand the concept of exposure within a portfolio. This refers to the level of risk associated with the securities included i...
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Value Area
The majority of trades on the CBOT Market Profile take place within a specific price range, typically around 70% of the day's activity. This range is known as the value area...
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Usance draft (usance bill)
A time draft is a type of financial document that requires payment at a predetermined future date. It is essentially a written request for payment that is not due immediatel...
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Univariate
When we talk about a financial term being "univariate," we are referring to a situation where there is only one variable involved. This means that the outcome of a certain f...
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Unitisation
Freight consolidation is a strategic method of combining multiple smaller shipments into one larger unit for transportation. This approach not only saves time and resources, ...
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Unfair calling insurance
In the world of finance, it is important to understand the concept of insurance coverage for demand guarantees and bonds. This coverage serves to protect principals who have...
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Underlying Instrument
A derivative is a financial instrument that allows the holder to buy or sell an underlying asset at a specific price in the future. When the holder exercises the option to p...
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Uncovered Option
Options trading includes buying or selling an option without having a position in the underlying futures contract. This is also referred to as a naked option. It is a common...
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Triangular Moving Average
A valuable tool in finance, the weighted moving average assigns a gradually increasing weight to each day's data until it reaches a peak value. From there, the weight decrea...
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Trendless
Market volatility refers to the fluctuation in prices that prevents a clear trend from being established. It is a measure of the unpredictability and risk present in the mar...
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Trend-Following
As we delve into the world of finance, it's important to understand the concept of trend following. This refers to the practice of aligning one's investment decisions with t...
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Trend Day
When a futures contract's price moves away from the opening range and does not return before the close, we refer to it as a "trend day." This term is commonly used in the fi...
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Trend Channel
In finance, we often refer to a parallel probable price range as the area between the base trendline and the reaction trendline. This range is centered around the most likel...
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Transform
Transform function refers to the process of converting raw data into a more organized and easily interpretable form. This can be seen in the use of filters, such as the simp...
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Transferable credit
A transferable credit is a type of credit that grants the beneficiary the power to direct the bank to make payment or acceptance on their behalf. This can also extend to oth...
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Transfer Response
The term "frequency response" is used to describe the shape of a wave as it passes through a filter. This shape is compared to the original shape of the wave before entering...
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Trailing Stop
A stop-loss order is a risk management tool used in trading that automatically sells a security once it reaches a predetermined price. When implementing this strategy, it is...
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Trading Bands
As a professor of finance, I want to discuss with you the concept of price envelopes. These are lines that are plotted around the price structure, providing valuable insigh...
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Trade finance
In the world of finance, trade finance refers to the essential funding needed for day-to-day operations. It involves the financing of goods, services, and expertise, and is ...
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Trade acceptance
In the realm of finance, a bill of exchange refers to a written order issued by a seller or exporter to a purchaser or importer for the payment of goods sold. This written d...
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Time Series
Time series data refers to a series of data points that are recorded and indexed in chronological order. This type of data allows us to analyze patterns and trends over time...
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Time Limit Order
In the world of finance, the term "Time Limit Order" may sound unfamiliar, but it is a crucial concept that every investor must understand. Also known as "Time in Force" ord...
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Time draft (time bill)
A promissory note is a type of financial instrument that requires payment on a set date in the future. This could be a specific date or a certain period of time, such as 30,...
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Time Domain
Understanding the concept of variation in a time series requires analyzing the influence of an autocorrelation function and other related time series. These factors are cruc...
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Tick Indicator
This is known as the uptick/downtick ratio. The uptick/downtick ratio, also referred to as the number of stocks with an uptick or downtick as their last trade, is an importan...
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Term of a forward exchange contract
The forward exchange rate is the agreed upon rate at which two currencies will be exchanged in the future. A crucial concept in finance, the forward exchange contract has a...
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SWIFT payment
Welcome to the world of finance, where we navigate through complex terms and processes to understand the global economy. Today, we will explore the topic of international el...
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Swaps
Securities substitution refers to the process of selling one security and using the proceeds to buy another security with similar features. This allows investors to make cha...
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Surrendered bill of lading liability (SBL)
Welcome to our lesson on finance terms. One important concept to understand is a term import documentary credit. In this arrangement, the bank receives the documents from th...
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Surcharge
Understanding the complexities of ocean freight charges is essential for anyone involved in finance. These fees, which include bunker, currency fluctuation, congestion, port...
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Support Line
A professor of finance would define a horizontal support level as a graphical representation of a price point where a downward trend has halted and the price has either st...
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Struck
When an option is exercised, it means the holder is choosing to buy or sell the underlying securities at a predetermined price. This is known as the strike price. It is set...
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Strips
One strategy that investors often use in the world of finance is known as a "straddle". This involves purchasing a call option and two put options for the same security, all...
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Straight bill of lading
A crucial document in the world of trade is a non-negotiable bill of lading. This document serves as a contract between the carrier and the consignee, dictating that the goo...
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Straddle
A common strategy in the world of finance is the use of options. One particular strategy is known as a straddle, which involves simultaneously buying or selling an equal num...
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Stops
In the world of finance, there are various terms and concepts that are crucial to understand. One such term is "buy stops" and "sell stops". These are orders that are placed...
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Stop-Running
Let's talk about market trends and trading ranges. As markets change, they often enter a trading range and tend to trade towards levels where stop-loss orders have been set....
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Stop and Reverse (SAR)
A key term to remember in finance is the stop order, which serves as a signal to switch from a long to a short trading position. This is commonly referred to as a reversal s...
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Stepwise Regression
Regression analysis is a powerful tool used in finance to determine the most influential factors on a given outcome. This method involves carefully selecting independent var...
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Step Function
A simple function, also referred to as a piecewise constant function, is defined on an interval and can be partitioned into a finite number of subintervals. Within each subi...
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Stationary Time Series
A stationary time series lacks any discernible trend. It is characterized by a consistent mean and variance throughout its data points. This term is used to describe a time ...
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Stationarity
A constant distribution refers to a consistent allocation of a quantity that remains unchanged over a period of time. This term is commonly used in the field of finance to d...
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Standardized Unanticipated Earnings
This is known as the earnings surprise prediction model. Understanding a company's average earnings surprise can provide valuable insights into its financial performance. B...
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Stair-stepping
Market activity can be identified by a pattern of a trend, followed by periods of sideways movement, and then another trend, followed again by sideways movement. This is kno...
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Spring
In the world of finance, we often come across terms that may seem complex or confusing. Today, we will delve into the concept of a "bearish harami" pattern. This pattern occ...
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Spread Rolls
A spread order is a powerful tool in the world of finance. It allows investors to simultaneously close a current position and open a new one. This strategy is useful for min...
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Spot rate
Foreign exchange rates are determined by the price at which a currency can be bought or sold for immediate delivery and payment. This rate of exchange is crucial for business...
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Spot Prices
This is often used in financial markets. A fundamental concept in finance, the same as cash price denotes the current selling price of a commodity at a specific time and lo...
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Spectrum
In finance, the frequency decomposition of time series data is a crucial tool for identifying cyclic patterns in past price data. By analyzing these periodic fluctuations, we...
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Specialist
In the world of finance, a trader is someone who is responsible for executing orders on the market floor. They are assigned to fill bids or orders for a specific stock from ...
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Special documentary credit liability (SPECIAL DOC L/C)
As we delve into the world of finance, it's important to understand the concept of documentary credits. These credits may offer the option for a negotiable set of documents ...
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Slippage
Transaction costs are an important concept in finance that can greatly impact investment decisions. When considering costs associated with buying or selling an asset, estima...
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Significance
In the world of finance, we often rely on statistical tests and hypotheses to make decisions. One key aspect to consider is the probability of rejection. This refers to the ...
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Signal Line
Welcome to our lesson on finance terminology. Today, we will be discussing the concept of a "signal line" in the context of moving averages. In simple terms, a signal line i...
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Signal
When examining stock or commodity time series historical data, it is important to note that this data typically consists of daily or weekly prices. This information allows u...
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Sight draft (sight bill)
A crucial aspect of understanding financial instruments is recognizing the concept of demand or presentation. Essentially, this refers to the requirement for the holder of t...
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Sight a bill
In finance, the process of issuing a bill at a specified time after it is seen by the drawee and securing their approval is known as acceptance. This involves indicating the...
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Short-form bill of lading (B/L)
A Bill of Lading (B/L) is a crucial document in the transportation of goods. It serves as a receipt of the goods being transported and also acts as a contract between the ca...
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Short Interest
Short selling refers to the practice of borrowing shares from a broker and selling them in the hopes of buying them back at a lower price in the future. This is done with th...
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Short (oversold) position
A term commonly used in finance is "short" which refers to the excess of sales over purchases or of foreign currency assets over liabilities. It is the opposite of "long" or...
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Shareholder of Record
As a finance expert, it's crucial to understand the concept of share ownership in a company. This is essentially the ownership of stock, which is recorded in the company's fi...
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Shapiro-Wilkes Test
A fundamental concept in finance is the use of statistical tests to evaluate the likelihood that a set of simulated net returns follows a normal distribution. This is known a...
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Shading
A common term used in finance is "narrowing the spread," which refers to the act of reducing the difference between the buying and selling rates of exchange for foreign curr...
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Settlement
The term "mark-to-market" refers to the process of determining the value of all open positions in a stock or commodity. This is typically done at the end of each trading day...
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Serially Independent
A significant term in finance is the concept of "disconnected numbers" which refers to a number that has no correlation or connection to the preceding number in a particular...
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Serial Correlation
Understanding the linear dependency between consecutive data points in a time series is crucial in finance. This relationship, known as autocorrelation, indicates the extent...
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Sensitivity
Let's dive into one of the fundamental concepts in finance: the rate of change of the moving average. This refers to how quickly the moving average responds to the fluctuati...
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Selling Short
Short selling is a common practice in the world of finance that involves selling a security and then borrowing it with the intention of replacing it at a lower price. This s...
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Security Selection Ratio
The success rate of trades in a specific account, measured by the percentage of profitable liquidations. This is a crucial metric in the world of finance, as it reflects the...
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Sector Rotation
In the world of finance, there exists a phenomenon known as sector rotation. This occurs when a group of knowledgeable investment professionals choose to divest from one ind...
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Scalp
Commodity trading involves buying and selling equal amounts of a particular asset to avoid having a net position at the end of the day. This is known as a "round trip" trade...
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Scallop
One of the key concepts in finance is the cup and handle pattern that occurs in chart formations. This occurs when the price momentarily dips, forming a cup-like shape, befo...
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Savings and Loan Investment Contracts (SLICs)
A customized deposit arrangement, typically offered by a savings and loan, which allows for negotiation of the terms and conditions. This type of deposit is designed to meet...
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Sales Load
A mutual fund incurs various expenses, one of which is a service charge. This charge is added to the overall costs of owning a stake in the fund. It is essentially a fee for...
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Sales Growth
In the world of finance, sales growth is a crucial metric that reflects a company's revenue. It measures the increase in sales over a specific period, typically a year. This...
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Running Market
In the world of finance, there exists a phenomenon known as a "one-way market". This is a market in which prices are constantly moving in one direction, with little to no mo...
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Rotation
In the ever-changing landscape of the stock market, it is crucial to understand the concept of sector rotation. This refers to the strategic reallocation of investments from...
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Roll-over
Foreign exchange transactions refer to the buying and selling of currencies in the global market, while currency deposits and loans involve the lending and borrowing of curre...
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Roll
When we talk about rolling options, we are referring to the process of replacing a near option with a far option on the same underlying instrument at the same strike price. ...
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Reward-Risk Ratio
Let's take a look at a metric that is crucial in the world of finance - the monthly excess return to risk comparison. This is a ratio that measures the performance of a part...
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Reward-Risk Rank
Let's delve into the concept of reward-risk ratio in the world of finance. This ratio is used to assess the potential gain in a stock compared to the potential risk involved...
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Revolving credit
A revolving letter of credit is a financial instrument commonly used in international trade. It allows the buyer to make multiple draws against the credit, as long as the to...
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Revocable documentary credit
A vital distinction exists between an irrevocable credit and this financial instrument, aptly named the revocable credit. Unlike an irrevocable credit, this type of instrume...
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Reverse Exponential Moving Average
A REMA, or reverse exponential moving average, is a powerful tool in financial analysis. Unlike a standard EMA, which looks forward in time, a REMA works backward through a ...
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Reversal Stop
A stop order, when triggered, prompts a change in the existing trading position, transitioning from a long to a short position. This is commonly referred to as a stop and re...
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Reversal Gap
In the realm of finance, there exists a technical analysis tool known as the Bullish Piercing Pattern. This pattern is characterized by a low on the last day that surpasses ...
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Return on Equity
Profit margin is a financial ratio that measures a company's profitability by dividing its net earnings by its equity. It is an important indicator of a company's financial ...
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Return on Assets
Return on assets is often used as a measure of profitability. Return on assets, or ROA, is a financial metric that evaluates a company's profitability by calculating its ne...
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Resting Order
A limit order is a conditional buy or sell order that has not yet been fulfilled. This type of order allows an investor to specify a specific price at which they are willing...
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Response
When discussing finance, it's important to understand how the average value of an investment can fluctuate based on external factors. This change in value is often referred t...
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Resistance Line
This is known as a 'resistance level'. A 'resistance level' is a crucial concept in finance, depicted on a chart as a horizontal line where rising prices have reached a pla...
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Residual Value
The unexplained portion of the monthly return refers to the random fluctuation in returns that cannot be attributed to any specific factors. The standard deviation, a measur...
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Relative Return Standard Deviation
The relative return standard deviation is a measure of the variability in relative return. A high standard deviation suggests that the relative return experienced during the...
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Red clause L/C
A crucial component of a letter of credit is the red clause, which enables the beneficiary to obtain partial advance payments. This provision, traditionally set in red ink, ...
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Recursive
In the world of finance, there exists a term known as "iterative process". This process is characterized by its repetitive nature, where the results of each repetition are d...
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Rectangle
Let's delve into a concept known as a trading channel, which is essentially an area bounded by horizontal, or near horizontal, lines. This pattern can indicate either a reve...
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Recourse
A bill of exchange entitles the holder to demand payment from someone other than the initial acceptor, known as the right of recourse. This can be done through endorsement, ...
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Reconciliation
As a part of financial management, it is crucial to understand the concept of reconciliation in the context of international transactions. Simply put, it involves comparing ...
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Realized/Unrealized P/L
In the world of finance, there exists a key distinction between trading revenues. On one hand, we have those that are the result of offset and closure of positions. On the o...
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Reaction
A brief downturn in value, often caused by market fluctuations and investor sentiment. This can lead to a temporary decrease in stock prices and overall market performance. ...
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Ratio
This is referred to as proportion Proportion, in finance, refers to the relationship between two quantities of the same nature in terms of size or numerical value. It is a ...
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Rally Tops
A key concept in the world of finance is the term "rally top", which refers to the peak level of a short-term upswing within a larger trend. This phenomenon is commonly obse...
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Quick Ratio
One term frequently used in the world of finance is the current ratio. This ratio reveals a company's financial prowess by comparing its cash and equivalents to its current ...
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Quarterly Net Profit Margin
Understanding financial terms is crucial for success in the world of finance. One such term is net operating earnings after taxes, which is calculated by dividing the earnin...
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Quarterly Earnings Change
In the realm of finance, we often encounter the term "historical earnings change". This refers to the difference between the most recently reported earnings and those of the...
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Qualified acceptance
Acceptance of a bill of exchange can take on various forms, each with their own unique conditions and implications. A conditional acceptance is one where payment is dependent...
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Pyramid
A key strategy for investors to bolster their holdings is by utilizing the maximum buying power offered through a margin account, which can result in both paper and realized ...
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Promissory note
In the realm of finance, we often come across the term 'promissory note', a written commitment to pay a specified amount on demand or on a specified date to a specific indiv...
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Profit Taking
As a finance expert, one must understand the concept of disposing of appreciated tradables in order to capitalize on their increased value. This involves selling assets that...
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Profit Margin Expansion
A key metric in finance, the net profit margin is an indicator of a company's profitability. In the long-term, it reflects the ratio of a company's net profit margin in the ...
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Probability Density Function
In finance, we often use graphs to visually represent data. One type of graph commonly used in the field is a probability graph. This graph displays the likelihood of a spec...
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Price/Earnings Ratio
Understanding the concept of price-to-earnings ratio (P/E ratio) is crucial in the world of finance. This ratio is calculated by dividing the stock price by the annual earnin...
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Price to Sales Ratio
This metric is used to determine the value of a company's stock in relation to its sales performance. One important measure used in evaluating a company's stock is the pric...
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Presentation
When we talk about finance, one important term that comes to mind is 'presentment'. This refers to the process of submitting a bill of exchange or any relevant documents for...
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Preprocessing
Understanding how to manipulate data is crucial for traders in the financial market. This involves techniques such as smoothing, reducing unwanted data, and removing trends ...
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Position Management Ratio
Understanding the profit-loss ratio is crucial in the world of finance. It refers to the comparison between the gains made from successful transactions and the losses incurr...
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Point/pip
When discussing exchange rates, it is important to mention the last decimal place, also known as the pip. This refers to the smallest unit of measurement used in determining...
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Phasor
Frequency, amplitude, and phase are key terms in understanding the characteristics of a signal. Frequency refers to the number of cycles per second, amplitude is the strengt...
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Phase Delay
In finance, we often refer to the delay that occurs between pre-filtered data and the filter itself as the "time lag". This time lag is a crucial concept to understand, as i...
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Pessimistic Rate of Return
As a knowledgeable professor in finance, allow me to introduce you to a useful measure called the Ulcer Index. This statistic takes into account the worst return from tradin...
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Performance bond (guarantee)
A performance bond is a contractual agreement that serves as a form of security for one party's performance. In the event that the principal fails to fulfill their obligatio...
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Paying bank (or paying agent)
In the world of finance, there is a crucial role played by the bank that reviews and verifies the documents submitted by the exporter. This bank then takes on the responsibi...
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Packing list
As a finance expert, it is crucial to thoroughly understand the components of an export package. These include weight, volume, content, and packaging. Each aspect plays a si...
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Overshoot
As we delve into the world of finance, it is important to understand the concept of surpassing a predetermined benchmark. This means exceeding a particular threshold or leve...
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Overfitting
A model is an analytical tool designed to accurately predict future outcomes based on historical data. These models are often developed with specific rules and parameters in...
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Overdue
This is important to understand as it affects the legal rights and responsibilities of the parties involved. As a knowledgeable professor of finance, I want to clarify the ...
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Overbought/Oversold Indicator
In the world of finance, there is a key indicator that serves as a warning sign when prices have experienced a rapid and extreme movement, leaving them susceptible to a pote...
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Outside Reversal Month
When a month's trading range surpasses the range of the previous month and ends in the opposite direction of the previous month's close, it is known as an outside month. Thi...
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Outright
It An outright (forward) is a financial transaction that involves buying or selling foreign currency for delivery at a future date, typically beyond two working days. This e...
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Outlier
In the world of finance, we often come across the concept of outliers. An outlier is a value that is significantly different from others, to the point where it cannot be exp...
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Outdata
When conducting statistical tests, we often come across a result that is the outcome of our analysis. This result is a singular value that helps us draw conclusions about ou...
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Out Trade
Let's discuss a common occurrence in the world of finance known as a "mismatched trade". This refers to a situation where two traders in the trading pit have a disagreement ...
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Oscillator
In the realm of finance, there exists a valuable tool known as a technical indicator. This tool serves to identify price regions that are either overbought or oversold. Addit...
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OR
Understanding the concept of owner's risk is crucial in the field of finance. It refers to the potential loss or damage that an owner may face while handling their own asset...
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Optional Term Contracts
A key concept in finance is the forward exchange contract, which typically includes a 15 to 30 day option period. This contract allows parties to lock in a future exchange r...
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Optional Cash Purchase
Investors can choose to purchase more shares through a dividend reinvestment account, also known as a DRIP. This allows for the automatic reinvestment of dividends into addi...
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Option
A financial agreement granting the choice, but not the obligation, to purchase or sell a predetermined quantity of a security during a designated timeframe. This type of con...
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Optimization
Let's discuss the concept of data-driven system development. This approach involves creating a system with specific rules that are designed to closely match the data being a...
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Opportunity Costs
Opportunity cost refers to the loss of potential income when resources are invested in an alternative venture. This concept is a fundamental principle in finance, as it emph...
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Opening Range
As a financial expert, it is crucial to understand the concept of price ranges in the stock market. Within the initial 30 seconds to five minutes of trading, prices can fluc...
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Opening Call
The initial phase of a futures market, known as the opening period, is a crucial time when the price for each contract is determined through open outcry. This is a tradition...
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Open Trades
As a finance professor, it's important to understand the concept of active trades in a customer's account. These are trades that have not yet been closed or settled, and are...
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Open policy (OP)
An open policy is a form of insurance that offers coverage for multiple future shipments, with no set limit. This type of policy remains active until either the insurer or i...
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Open account
Trade transactions often involve a method of payment called open account. This is when a supplier sends goods to a buyer and the buyer credits the supplier's account with th...
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On-Balance Volume
In finance, we often use a line graph to track cumulative volume, which represents the total volume of a day's trading. A higher close compared to the previous day is given ...
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Offered (selling) rate
In the world of finance, the exchange rate is the value at which traders are willing to sell foreign currency in the market. This rate also determines the rate at which pote...
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Off Farm
Let's talk about the concept of nonproducer stocks in the world of finance. These are the stocks that are held by individuals or organizations who are not directly involved ...
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Observer
Radar research has introduced a crucial concept that can be applied in the world of trading. It deals with the frequency and method of achieving detection or radar contact. ...
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Noting
A vital document in the world of finance is the Notary Public's note on a dishonoured bill of exchange. The Bills of Exchange Act stipulates that this note must be made with...
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Notice Day
When a futures contract holder receives a notice of intent to deliver, it marks a significant point in the contract's lifespan. This notice signifies that the party who sold...
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Notary public
A notary public is a highly regarded official responsible for authenticating and certifying various legal documents, such as deeds and bills of exchange. This includes notar...
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Normalized
When dealing with time series data in finance, it is important to understand the concept of normalization. By adjusting a time series to fit within a specific normal, standar...
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Normal Distribution
The standard deviation measures the variability of net returns around the average. In statistical testing, simulated net returns are assumed to follow a specific distributi...
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Non-Trend Day
During a narrow range day, the market experiences little to no movement in either direction. This may be due to factors such as low trading volume or lack of significant new...
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Non-Seasonal Autocorrelation
In finance, autocorrelation can indicate a relationship between past and future values of a variable. This phenomenon is not limited to a specific time interval, as it can a...
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Nominated bank
A vital aspect of a documentary credit is the designated bank, responsible for making payments or issuing deferred payment undertakings. This bank, also known as the nominat...
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Noisy Signal
A signal that cannot be ignored due to the impact of unpredictable factors. These factors, known as random influences, can greatly affect the validity and reliability of the...
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No-Load
Mutual funds, a popular investment vehicle, are sold at net asset value without any sales charge. This value represents the total worth of the fund's assets, divided by the ...
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Net Asset Value
In the world of finance, we often come across the term "net asset value" or NAV. This refers to the total market value of all securities held within a mutual fund. Essenti...
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Negative Amortization
When a payment is not enough to cover the interest on a debt, it is called negative amortization. This leads to a situation where the overall debt increases instead of decre...
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Neckline
In finance, a trendline is a visual tool that connects the support or resistance points of different patterns, such as head and shoulder or double and triple top/bottom form...
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Near-the-Money
A "near-the-money" option is one with a strike price that is very close to the current price of the underlying asset. This type of option is often considered to have a highe...
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Moving Window
A time series is a sequence of data points collected at regular intervals over a period of time. It is often used in finance to analyze trends and make predictions. When we ...
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Moving Average Crossovers
In the field of finance, we often refer to the crossover as the point where the different moving average lines meet on a moving average price bar chart. This particular occu...
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Money Stop
A crucial concept in finance is stop loss, which refers to the predetermined amount of money that an investor would lose if a certain market event occurs. This amount is fix...
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Mean P/L
This is calculated by taking the total profits and losses from all trades and dividing it by the starting account balance. As an esteemed professor of finance, it is essenti...
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Mean Deviation
One important concept in finance is the absolute deviation, which measures the average distance between a set of numbers and their mean. This is useful for understanding the...
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Markov Chain
The concept of Markov chains involves a series of calculations in which the likelihood of an upcoming state is influenced by the current state. This mathematical approach is...
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Market Sentiment
Crowd psychology refers to the collective sentiment of investors and traders, which can have a significant impact on financial markets. It is often used as a gauge to determ...
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Market on Close
A crucial aspect of trading in finance is the concept of order specifications. These specifications dictate that brokers must strive to obtain the most optimal price during ...
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Market If Touched
A resting order may be placed with a floor broker, which will then become a market order that is executed once the trigger price is traded. This allows for a more controlled...
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Marked to Market
In the world of finance, it is important to understand the concept of open positions in brokerage accounts. These positions are subject to daily crediting or debiting of fun...
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Margin/spread
Understanding the intricacies of foreign exchange quotations and deposits can be daunting. Particularly, the discrepancies between buying and selling rates or the difference...
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Margin or Forward margin
In finance, we often come across the phrase "premium or discount". This refers to the difference between the current exchange rate and the rate agreed upon in a forward exch...
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Mapping
A vital concept in finance is a function, which refers to the relationship between different values. This relationship is crucial in understanding financial principles and m...
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Mandelbrot Set
Fractals, the complex yet ordered patterns generated by iteratively feeding the output of an equation back into itself, exhibit a property known as self-similarity. This mea...
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Major Auction
When we talk about the market, we often refer to its overall trend, which can be depicted on a bar chart. This chart shows the performance of a particular market over a give...
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Low Pass Frequency Filter
In the world of finance, a data smoother or filter plays a crucial role in analyzing trends and patterns. This tool allows for the passage of low frequency trend sinusoids, ...
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Lookback Interval
The time span of historical data utilized for observation and computation is known as the number of periods. This crucial aspect plays a significant role in providing insigh...
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Locked Limit
In the world of finance, there exists a unique market that operates outside the bounds of traditional price equilibrium. This market, if left unrestricted, would naturally s...
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LISP
Artificial intelligence applications heavily rely on a programming language that is grounded in predicate logic. This language, known as Prolog, is widely used in the field o...
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Limit Up, Limit Down
In the world of finance, it is essential to understand the concept of commodity exchange restrictions. These restrictions dictate the maximum allowable price movements for a...
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Limit Move
A price shift that surpasses the predefined boundaries on the exchange where the contract is being traded is known as a limit move. This can occur due to various factors suc...
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Lighters
In the world of finance, barges play an important role in facilitating the unloading of sea vessels, especially in situations where traditional harbour facilities are not acc...
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Licensing
In the world of finance, there exists a valuable tool known as licensing. This is a contractual agreement where a company's patents, trademarks, copyrights, or know-how are ...
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Liability
A key concept in banking is the notion of liability. Put simply, a liability is a financial obligation that must be fulfilled. This can take two forms: direct or contingent....
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Leg Out
When it comes to rolling forward in futures, it's important to understand the process of liquidation. This involves closing out an existing position and establishing a new o...
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Leg
When discussing financial terms, it is important to understand the concept of a spread. This refers to the difference between the bid and ask prices of a security or asset. ...
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Least Squares Method
Curve fitting is a mathematical method used to approximate a curve that accurately represents a set of data points. This is achieved by minimizing the sum of the squared dif...
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Law of Series
In the realm of finance, the concept of randomness is often encountered through the analogy of flipping a coin. This refers to a series of unpredictable events that may occu...
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Latest Quarterly Earnings
When it comes to financial terms, one that is often mentioned is the percentage change in earnings. This refers to the difference between the latest earnings reported and the...
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Lag
A key factor in analyzing financial data is the number of data points a filter, such as a moving average, tracks in relation to the input price data. This is known as the fi...
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January Effect
As we delve into the realm of finance, it is important to understand the concept of the "January Effect". This phenomenon refers to the observed trend of securities prices b...
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Issuing (or opening) bank
A crucial aspect of international trade involves the buyer's bank, which is responsible for establishing a documentary credit upon the buyer's request. This credit is in fav...
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ISO 9000
As a finance professional, it is crucial to understand the significance of international production quality standards set by ISO (International Standards Organisation). Thes...
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IRA
An essential tool for retirement planning, the Individual Retirement Account or IRA is a popular choice among employees. It enables individuals to contribute a portion of th...
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Investment Clubs
Let's dive into the world of private organizations, where a collective of investors, often inexperienced, come together to expand their knowledge on different investment opp...
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Intermarket Analysis
When we analyze the fluctuations of a particular market in order to assess another market, it is known as cross-market analysis. This approach helps us understand the correl...
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Interest Rate Swaps
In finance, a popular arrangement involves two parties making payments to each other based on different interest rates. This type of transaction typically requires one side ...
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Instrument
A binding and official written contract, such as a bill of exchange, is a crucial element in the world of finance. This document serves as a legal proof of a financial trans...
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Inside Day
A term commonly used in finance is "inside day", which refers to a day where the highest and lowest stock prices fall within the range of the previous day's prices. This may...
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Initial Public Offering
A stock becomes available for public purchase through the process of an initial public offering (IPO). This is when a company decides to raise funds by offering shares of it...
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Initial Balance
The CBOT Market Profile's initial trading periods, typically lasting half an hour, are crucial for price convergence. These early auctions set the tone for the rest of the t...
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Inefficient Markets
Market prices can often deviate from their fundamental values due to the influence of frame dependence and heuristic bias. These factors can lead to irrational decision-maki...
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Inductive Logic
The transition from specific event-based statements to a broader, more encompassing statement is a fundamental aspect of financial understanding. As we delve into the world ...
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Indemnity
In financial terms, a contract where one party assumes responsibility for compensating another for any losses incurred as a result of a transaction with a third party is kno...
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Income Dividends
Mutual funds distribute earnings to shareholders in the form of dividends, interest, and short-term capital gains. These earnings are generated from the fund's portfolio sec...
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In Play
A stock that is at the center of a public bidding competition, such as in a takeover or bear raid, is known as a target stock. This term is commonly used in the world of fin...
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In bond
In the field of finance, the phrase 'in bond' is commonly used to refer to a process where the clearance of imported goods is deferred until they reach an inland customs poi...
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Impulse Wave
In the realm of finance, we often encounter the concept of a wave or a series of waves that propel the current trend in a certain direction. This phenomenon, known as a "tre...
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Impulse
A crucial aspect in understanding finance is identifying a significant shift in a set of data being analyzed, such as fluctuations in market prices or trading volume. This c...
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Implied Alpha
When considering the weight of a stock within a portfolio, it is essential to also assess the excess return that is expected from that stock. This excess return is the addit...
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Hook Day
In the world of finance, a trading day can be defined as one in which the opening price is either above or below the previous day's high or low. Furthermore, the closing pri...
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Holder in due course
A knowledgeable professor of finance would explain that when a person takes a bill, which is complete and regular on its face, they are considered a holder under certain con...
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Historical Data
As a finance professor, I want to impart my knowledge on market prices. These are a collection of daily, weekly, or monthly data points that reflect the opening, highest, lo...
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Historic Volatility
Contract price volatility refers to the degree of fluctuation in contract prices over a specific time frame. This is typically measured by calculating the standard deviation...
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High-Ticking
When making a financial transaction, it is important to understand the concept of paying the offered price. This refers to the price at which a good or service is being sold...
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Guaranteed Investment Contracts (GICs)
A popular investment option in the financial world, GICs (Guaranteed Investment Certificates) offer a fixed interest rate on a single lump-sum deposit until a predetermined ...
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Gross Domestic Product
Gross domestic product, or GDP, is a measure of the total economic output of a country. It takes into account the value of all goods and services produced within a country's...
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Glossary summary
Welcome to the Glossary, where we will delve into the world of finance-related terminology. As we journey through this manual and the world of trade business, it is importan...
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Give-up
In the world of finance, when a broker fulfills a transaction for a client of another broker, the commission is divided between the two parties. This arrangement does not re...
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Gap
A phenomenon known as an "outside day" occurs when the daily range of a financial instrument is entirely above or below the range of the previous day. This is an important t...
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Fuzzy Systems
Fuzzy systems are a valuable tool in the field of finance, as they provide a problem-solving approach that can be applied to various computational methods, including neural ...
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Future Volatility
As we delve into the realm of finance, it is crucial to understand the concept of volatility and how it affects the market. Volatility refers to the fluctuation in prices of...
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Funding
Foreign deposits refer to the practice of depositing funds in international accounts to fulfill a bank's day-to-day needs. This strategy allows banks to access additional fu...
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Fundamentals
In the world of finance, there exists a theory that suggests the behavior of the stock market can be anticipated by analyzing various factors. These include the performance ...
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Front-Loaded
When investing, it is important to understand the various costs involved before your money can start generating returns. One such cost is commission, which is a fee paid to ...
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Front Month
An expiration month refers to the month in which an option contract expires. It is the first month in a series of months that an option contract will expire. This is an impo...
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Frequency Response
Moving average is a crucial concept in finance that involves adapting the frequency of data, such as prices, to the frequency of its moving average. This helps in analyzing ...
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Frequency Domain
In the study of finance, we often come across the concept of time series. It refers to a sequence of data points collected at regular intervals over a period of time. Now, y...
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Frequency Distribution
A frequency chart is a visual representation of the occurrence of an event for various values of a variable. The y-axis represents the frequency, while the x-axis displays t...
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Frequency Component
A crucial component of a time series is its cycle, which can be defined as the recurring pattern that is observed over a period of time. This cycle is significant in understa...
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Framing or Frame Dependence
When making financial decisions, it is important to recognize our tendency to evaluate them within the context in which they are presented. This often leads to decisions bei...
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Fractals
In finance, we often use mathematical models to analyze data and identify patterns. These models are powerful tools that help us make informed decisions and predict future t...
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Fractal Dimension
Fractal geometry is used in finance to measure market volatility Fractal geometry, a branch of mathematics that describes the intricate patterns and irregularities found in...
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Forward-Rate Agreements (FRAs)
Understanding cash payments is crucial in the world of finance. These payments are made on a daily basis and are affected by the spot rate, which can either be above or belo...
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Forward rate
As a financial expert, I want to introduce you to the concept of forward transactions. Simply put, this involves buying or selling a foreign currency at a predetermined pric...
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Forward premium
A forward premium is a financial term used to describe the condition in which a foreign currency is priced higher for future trading compared to its current spot settlement ...
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Forward margin
When it comes to forward rates and spot rates, it's important to understand the concept of premium and discount. These terms refer to the difference between the forward rate...
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Forward exchange contract (FEC)
A foreign exchange forward contract is a mutual agreement between a customer and a bank. The customer agrees to purchase or sell a specific amount of foreign currency from o...
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Forward discount
A foreign currency is considered to have a forward discount when its value is lower for a future trade than its current spot settlement. This is beneficial for the buyer of ...
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Forward deal
In the world of finance, there exists a contract known as a forward exchange agreement. This agreement involves the buying or selling of foreign currency, either in relation...
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Forward contract -optional term
When an importer is unsure of the exact delivery date, they may encounter a situation where the contract rate is adjusted against them if they enter into a fixed term contra...
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Forward contract -fixed term
Welcome to our lesson on financial contracts! Today, we will be discussing a term that is commonly used in the world of finance - forward contracts. These contracts are a wa...
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Forfaiting
In the world of finance, a forfaiter is an individual or company that buys a business's accounts receivable. These receivables are typically based on negotiable instruments ...
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Foreign trade zone (also FTZ)
A foreign trade zone, also known as a free trade zone or bonded warehouse, is a designated area near ports of entry where imported goods can be stored and manipulated withou...
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Foreign sales agent
A foreign representative, also known as an export agent or export broker, is a person or company that acts as a liaison between a domestic supplier and foreign buyers. Their...
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Forecast Origin
When constructing a forecasting model, it is crucial to consider the most recent historical period for which data is available. This serves as the foundation for predicting ...
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Floor Traders
Employees of brokerage firms are often found working on exchange trading floors. These individuals are responsible for executing trades on behalf of their clients, buying an...
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Float
Let us discuss the concept of 'outstanding shares' - the total number of company shares that have been issued and are currently available for trading. When a company goes pu...
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Flash Fill
In the fast-paced world of finance, hand signals play a crucial role in facilitating timely and efficient order executions on the trading floor. These gestures, known as han...
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Fixed Term Contract
A Forward Exchange contract is a financial agreement that is set to expire on a predetermined date. It is ideal for individuals who desire a fixed delivery date. However, if...
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Filter Point
The moment when a portfolio insurance program executes a trade to rebalance itself is known as the rebalancing time. This is a crucial aspect of the program as it ensures th...
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Filter
A fundamental concept in finance is the notion of segmentation. This refers to the process of dividing data, signals, or information based on predetermined criteria. This ca...
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Fill Order
A term used in finance to describe an order that requires immediate execution or else it will be cancelled. This order is typically placed when the market is highly volatile...
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Feedforward Computation
A fundamental concept in finance is the neural network, where neurons solely receive input from the preceding layer and transmit output to the subsequent layer. This model h...
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Fast Market
In the fast-paced world of finance, it is not uncommon for market conditions to become chaotic, particularly in the futures pit. During these times, floor brokers may not be...
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Fair Values
An important concept in finance is the theoretical prices generated by an option pricing model. These models, such as the Black-Scholes model, use mathematical equations to ...
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Failure Swings
One of the key concepts in finance is price confirmation. This refers to the failure of a price to reach a new high during an uptrend or a new low during a downtrend. This c...
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Fade
One important concept in the world of finance is the ability to sell at a rising price or buy at a falling price. As a knowledgeable trader, you must understand the term "fa...
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Factoring
In the world of finance, there is a specialized service known as export factoring. This involves providing a cash advance to businesses that have accounts receivable from th...
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F Statistics
When evaluating the effectiveness of treatments, it is important to consider the ratio of explained variance to unexpected variance. This ratio provides insight into how muc...
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Export license
A crucial document that authorizes the 'Licensee' to export a designated amount of a particular commodity to a designated country. While some countries demand this license f...
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Export credit insurance
Export credit insurance is a crucial tool for exporters, providing protection against both commercial and political risks involved in international trade. This type of insur...
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Export broker
In the realm of finance, there exists a role that many may not be familiar with, yet it plays a crucial part in the buying and selling of goods and services. This role is th...
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Expiration
The expiration date, also known as the last trading date, is the final day on which an option can be bought or sold. It marks the end of the contract and any remaining value...
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Expert Systems
Expert systems are highly specialized systems that are driven by rules and are not able to adapt to new information. In contrast, neural networks have the ability to learn f...
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Exit
When a trader decides to end a trade, it is known as the exit point. This is a crucial step in the trading process as it determines the profits or losses made. The exit poin...
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Exchange-Traded Funds
A stock basket is a collection of stocks that can be bought and sold as a unit on various exchanges, including the American Stock Exchange, New York Stock Exchange, and Chic...
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Exchange rate/ foreign exchange rate
Foreign exchange rate refers to the value at which one currency can be exchanged for another currency. This rate is crucial for international trade and investments, as it de...
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Exchange control (EC)
Foreign exchange regulations are a crucial aspect of government policies that govern the flow of funds into and out of a country. These regulations aim to manage the exchang...
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Exception ratings
In finance, rates are often set at a certain percentage above the general commodity rates. This is because these rates apply to commodities that require special handling. Th...
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Evening Star Pattern
A bearish morning star pattern, known as a top reversal in finance, is a crucial indicator to consider during an uptrend. It is essential to act on this pattern as it can po...
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Eurodollar
Foreign banks often offer attractive rates for dollars deposited with them. This is reflected in the futures contract, which tracks the rates offered by top US banks and the...
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Eurocurrency
Foreign currency, also known as a foreign exchange or forex, refers to any currency that is used or traded outside the country of origin. This can include both physical curre...
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Estimated EPS Change
As we delve into the world of finance, let us examine the fluctuations in estimated mean earnings for the current fiscal year. This figure has undergone changes in the past ...
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ERISA
The Employee Retirement Income Security Act, or ERISA, is a federal law that sets standards for private sector retirement plans. It was enacted in 1974 to protect employees'...
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Equilibrium Market
A price equilibrium refers to a specific price range in which the demand and supply of a particular product or service are in a state of balance. This means that at this pri...
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Entry
The entry point, also known as the initiation point, refers to the moment when a trader establishes a position in the market. This crucial step marks the beginning of a trade...
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Electronic Data Interchange (EDI)
Electronic Data Interchange (EDI) is the process of electronically exchanging business documents between trading partners. This includes documents such as purchase orders, i...
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Electronic Communications Network
Brokerage firms often establish independent execution systems that match retail limit orders with existing compatible orders. This allows for more efficient and timely execu...
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Elasticity
The concept of being able to restore a previous state or layout is known as "recovering an original configuration." This term is commonly used in the field of finance, where...
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Efficient Market Theory
The market is a dynamic entity, influenced by the actions of its participants. As such, any information that is available is quickly incorporated into the market's pricing, ...
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Earnings Estimates
Also known as the bottom line, net income is a key measure of a company's profitability. Net income, or the bottom line, is a vital indicator of a company's profitability. I...
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Early Entry
Let's dive into the concept of gap, which refers to a significant change in price during the initial 15 minutes of a trading day. This movement can either be upwards or down...
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Dynamic Data Exchange
As we delve deeper into the world of finance, we come across the concept of automatic updates, where one application can update itself without any manual intervention from a...
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Dumping
Welcome to our lesson on dumping in the world of finance. This term refers to the practice of selling a product in a foreign market at an unfairly low price. This can give a...
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Due date
The maturity date refers to the specific day on which a bill of exchange or any other financial instrument must be paid in full. This deadline is predetermined and is typica...
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Drawee
The drawee is a crucial figure in the world of finance, whether for an individual or a business entity. This is the person or firm on whom a draft is drawn, with the respons...
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Drawdown
Margin call refers to the decrease in the value of an account due to a trade or multiple trades. This can occur when the value of securities held in the account falls below ...
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Draft
A draft, commonly known as a bill of exchange, is an unconditional written order, signed by the drawer (usually the buyer) and addressed to the drawee (typically a bank), i...
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Double-Smoothed
A price series can be effectively smoothed through the application of mathematical techniques, such as a moving average. This initial smoothed data is then subjected to a se...
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Documents against Payment (D/P)
A sight draft is a type of financial instrument in which the buyer or importer is required to make a cash payment before the documents that transfer ownership of goods are r...
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Documents against acceptance (D/A)
In finance, the transfer of ownership of goods is accompanied by the delivery of documents to the buyer, known as the drawee. These documents are only handed over once the b...
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Document of title
A bill of lading is a valuable instrument that grants the holder the authority to manage the specified property as if they were the rightful owner. It functions as a legal d...
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Dock receipt
A Bill of Lading is a crucial document used in international trade to confirm the receipt of goods by the carrier at the departure port. It serves as a contract between the ...
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Dividend Reinvestment Plan
A dividend reinvestment program (DRIP) is a scheme implemented by publicly traded companies which utilizes dividends to purchase additional shares of the company. This resul...
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Discrepancy
In the world of finance, understanding documentary credit is crucial. It refers to a payment method where a bank guarantees payment to a seller upon receipt of documents fro...
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Discount interest rate
Greetings, students. Allow me to enlighten you on the concept of discount in finance. This refers to the interest that is deducted from the face value of a bill of exchange ...
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Diffusion Equation
A crucial mathematical tool in finance, the partial differential equation is employed to solve complex random walk problems. Its application is integral in understanding var...
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Difference-in-Means Test
One of the most important tools in finance is a statistical test that measures the probability of observing a difference between two values, assuming that the true differenc...
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Devanning
As we delve into the world of finance, one must understand the concept of unloading goods from a container. This refers to the process of removing goods from a shipping cont...
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Detrend
When it comes to analyzing financial data, it is important to remove the overall trend or pattern over time. This process is known as detrending and involves adjusting the d...
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Deterministic System
In the realm of finance, there exists a concept known as a deterministic system. This system operates on the principle that the outcome can be accurately predicted through a...
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Deterministic
As we delve into the world of finance, it is crucial to understand the concept of exogenous variables. These are external factors, such as changes in the money supply, that ...
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Destuffing
As a finance expert, it is essential to understand the concept of unloading goods from a container. This refers to the process of removing items from a shipping container, wh...
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DEQ
In the world of finance, the term Delivered Ex Quay (DEQ) is used to describe an agreement between a buyer and seller in which the seller is responsible for delivering the g...
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Dependence
In the world of finance, we often encounter the concept of an indirect relationship between two variables. This refers to the scenario where the first variable may not have ...
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Demand Index
A key indicator of market and stock performance, the index is a result of precise calculations that consider both volume and price ratios. It offers valuable insights into t...
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Demand guarantee
A demand guarantee, often issued by a bank, is a form of guarantee that allows the beneficiary to receive payment simply by making a demand. This differs from conditional or...
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Demand draft
A bill of exchange refers to a written order issued by one party to another, directing the latter to pay a specific amount of money at a predetermined time. It can either be...
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Delay
In the world of finance, we often come across the concept of "lag time". This refers to the time it takes for an input event to cause a change in an output event or time seri...
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Degrees of Freedom
When conducting financial analysis, it is important to understand the concept of degrees of freedom. This refers to the number of independent observations, which is the tota...
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Deep-in-the-Money
When discussing options, it's important to understand the concept of being "in-the-money." A call option is considered deep-in-the-money when the strike price is significant...
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Deductive Logic
Expert systems rely on deductive reasoning, a logical approach that moves from a general principle to a specific conclusion. This method involves using known facts to reach ...
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Debit Spread
This can occur in many financial scenarios, such as with stock options, where the long position holds the right to buy a stock at a certain price, while the short position ho...
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Dealing
Foreign exchange, also known as forex, refers to the global marketplace where different currencies are bought and sold. This market is essential for international trade and ...
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Dead Cat Bounce
The term "rebound" refers to a phenomenon in the financial market where prices experience a recovery and increase to some extent. This could be a result of various factors s...
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DDU
In the world of finance, there are various terms that can be confusing to understand. One such term is Delivered Duty Unpaid (DDU). This term refers to a transaction where t...
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DDP
Delivered Duty Paid, commonly known as DDP, is an international trade term that signifies the seller's responsibility for delivering the goods to the buyer at the agreed upon...
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ddc (or DDC)
We often come across the term 'delivered destination charges', which encompasses a range of miscellaneous fees incurred at the port of destination. It can also pertain to th...
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Date draft
A term commonly used in finance is "draft", which refers to a type of financial instrument that matures after a specified number of days. This means that the holder of the d...
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Data Preprocessing
Data processing involves manipulating data in order to make it more suitable for analysis. This can include techniques such as smoothing, reducing noise or outliers, and rem...
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Daily Range
In the world of finance, one important concept to understand is the daily price range. This refers to the difference between the highest and lowest price of a stock or other ...
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DAF
Welcome to our discussion on finance related terms. As a knowledgeable professor, I am excited to share my insights with you. Today, we will dive into the world of finance a...
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D/S
In the realm of finance, we often come across the term "days after sight". This term is commonly used in the context of bank drafts and documentary credits. Essentially, it ...
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D/D
As an esteemed professor in the field of finance, it is my pleasure to share with you some key terms that are essential for understanding the complexities of this subject. A...
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Cycle
In finance, we refer to this phenomenon as a round trip. It occurs when an asset's price moves up and then returns to its original level. This can happen in various situatio...
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Cwt
The term hundredweight is a unit of measurement that is commonly used in the financial world. It is equivalent to 100 pounds and is often abbreviated as "cwt." This unit is ...
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CWO
Cash with order refers to a payment method where the buyer pays the full amount of the purchase upfront at the time of placing the order. This is commonly seen in business-t...
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Cutoff Frequency
When using a filter, such as a 10-day Simple Moving Average (SMA), it is important to note that it will not allow higher frequency cycles to pass through. This means that any...
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Customs broker
A licensed agent or broker plays a crucial role in navigating the complex process of customs clearance for importers. This involves ensuring that all necessary documentation...
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Customer Foreign Currency Account (CFCA)
Foreign currency accounts are records of funds that are held in a different currency by a Bank for a customer. This is done to facilitate international transactions and to c...
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CUSIP
Let's talk about the Committee of Uniform Security Identification Procedure, or CUSIP for short. This committee assigns a unique number to each security that appears on all...
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Curve-Fitting
To understand finance, we must first comprehend the intricate process of creating rules that correspond to certain conditions. These rules are essential for making informed ...
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Curve
The unit interval is a fundamental concept in finance, representing the continuous image of quantities within a specific range. It is often used to measure changes in financ...
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Current Ratio
A useful measure of a company's financial health is its current ratio, which is calculated by dividing its current assets by its current liabilities. This ratio provides an ...
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Currency future
A futures contract is a binding agreement between two parties to buy or sell a commodity, currency, or security at a predetermined date in the future. Unlike forward contrac...
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Cup and Handle
In bar charts, there is a pattern known as the accumulation pattern that is worth noting. This particular pattern usually spans from seven to 65 weeks and takes the shape of...
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CTI2
Commercial clearing members, also known as CCMs, play a crucial role in the market profile. They are responsible for clearing and settling trades for their clients. This dif...
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CSC
A key concept in the realm of finance is the concept of container service charge. This refers to the fees that are charged for the use of a container for shipping goods. It ...
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Cross Correlations
The correlation in revenue trends among traders in a company is known as intra-enterprise coherence. This phenomenon is frequently observed in the finance industry, where in...
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Credit risk insurance
is referred to as export credit insurance. It is a risk management tool that protects exporters from losses due to non-payment or delayed payment by the importer. This insura...
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Crack Spreads
Understanding the relationship between crude oil and its products - particularly heating oil and unleaded gasoline - is crucial for successful trading. This spread, or diffe...
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