500+ financial terms,
explained simply

Excess return of an investment vs. its benchmark after adjusting for risk.

Sustained decline of 20%+ from a recent peak.

Volatility of an asset relative to the overall market.

Distributed, immutable ledger recording transactions across computers.

Volatility bands placed 2 standard deviations above and below a 20-day MA.

Sustained period of rising prices, typically 20%+ off a trough.

Right (not obligation) to buy an asset at a strike price before expiry.

Profit from selling an asset; taxed differently by holding period.

Second-derivative of bond price vs. yield; curvature of duration.

The periodic interest payment made by a bond.

Consumer Price Index; main US inflation gauge.

Assessment of a bond issuer's ability to repay debt.

Digital currency using cryptography and blockchain, no central authority.

Decentralized Finance; financial services on public blockchains.

Sustained decrease in the general price level.

Change in option price for a $1 move in the underlying.

Tendency to sell winners too early and hold losers too long.

Spreading investments to reduce risk.

Annual dividend per share divided by stock price.

Sensitivity of a bond's price to interest rate changes.

A basket of securities that trades like a single stock.

The date an option contract becomes void.

Overnight rate banks charge each other; set by the Federal Reserve.

Horizontal support/resistance levels based on Fibonacci ratios.

Change to a blockchain's protocol, splitting the chain.

Rate of change of delta for a $1 move in the underlying.

Fee paid to process a transaction on a blockchain.

Total value of goods and services produced in a country.

Sensitivity measures of option price to various inputs.

Total computational power securing a Proof-of-Work blockchain.

Market's forecast of future volatility, derived from option prices.

Trading on material non-public information; illegal under SEC rules.

First sale of a company's stock to the public.

High-yield bond rated below investment grade (BB+ or lower).

Using borrowed capital to increase position size.

Order to buy/sell at a specified price or better.

How easily an asset can be bought/sold without moving the price.

Cognitive bias where losses hurt ~2x as much as equivalent gains feel good.

Moving Average Convergence Divergence; trend-following momentum indicator.

Borrowed money from a broker to amplify positions.

Total value of a company's outstanding shares.

Average of past prices over a window; smooths trends.

Pooled investment vehicle priced once daily.

Stock price divided by annual earnings per share.

Right (not obligation) to sell an asset at a strike price before expiry.

Central bank buys long-term securities to inject liquidity and lower rates.

Significant decline in economic activity across the economy.

Price level where sellers tend to emerge, halting advances.

Change in option price for a 1% change in interest rates.

Momentum oscillator from 0-100; overbought/oversold gauge.

US Securities and Exchange Commission; primary markets regulator.

Risk-adjusted return: excess return per unit of volatility.

Borrowing shares to sell, hoping to buy back lower.

Difference between bid and ask prices.

Cryptocurrency pegged to a stable asset, usually the US dollar.

Stagnant growth + high inflation + high unemployment.

Order to sell once price hits a threshold, limiting losses.

The price at which an option can be exercised.

Price level where buyers tend to step in, halting declines.

Daily decay of an option's value as expiration approaches.

US government debt; considered the risk-free benchmark.

Maximum expected loss over a time horizon at a confidence level.

Change in option price for a 1% change in implied volatility.

How much and how fast prices move; measured by standard deviation.

Selling a security at a loss and rebuying within 30 days; loss disallowed.

Graph of yields across bond maturities.