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Trading & investing glossary
Plain-English definitions for the market and analysis terms you'll come across as you invest.
- Buy on Margin
- Borrowing funds from your broker to buy stocks, using your securities as collateral.
- Earnings per Share (EPS)
- Net income divided by outstanding shares; helps assess whether a stock's price is reasonable.
- Free / Public Float
- Publicly issued shares available for trading on the stock exchange.
- FY (Fiscal Year)
- A one-year period used for financial reporting.
- Limit Order
- An order to buy or sell only at a price you specify; it executes when the market reaches that price.
- Market Capitalization
- Share price multiplied by total outstanding shares; indicates a company's overall market value.
- Market Order
- An order to buy or sell immediately at the best available price; fast, but without a guaranteed price.
- MFY & QFY
- Month and Quarter of the Financial Year — specific fiscal periods.
- QoQ (Quarter-on-Quarter)
- A comparison of figures across consecutive quarters.
- Quick Ratio
- Cash plus receivables divided by current liabilities; a ratio of 1 or more signals good short-term health.
- Real Return
- Investment return after adjusting for inflation — the stated return minus the inflation rate.
- Relative Strength
- A stock's price performance versus others, ranked 1–100, with 100 being the strongest.
- Revenue
- All money a company receives, including sales and income from assets; a broad measure of income.
- Short Selling
- Betting on a price decline by borrowing shares to sell, hoping to repurchase them cheaper later.
- Stock Splits
- When a company increases its share count to lower the price per share; market capitalization is unaffected.
- Stockholders' Equity
- Company assets minus liabilities; useful for valuation.
- Stop Loss (SL) Order
- An order that helps minimize losses if the market moves against your position.
- Take Profit (TP) Order
- An order that automatically closes a profitable trade at a predetermined target price.
- Total Annualized Return
- A yearly return projection with daily compounding; converts short-term returns into an annual rate.
- Turnover Ratio
- Purchases or sales divided by average monthly assets; indicates how frequently a fund trades.
- Working Capital
- Current assets minus current liabilities; shows a company's short-term ability to meet its obligations.
- YoY (Year-on-Year)
- A comparison of figures across the same period in different years.
- YTD (Year-to-Date)
- The period from the start of the year to the present.
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