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Jargon Library

Jargon Library

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z #


An arrangement by which a financial institution, such as a bank, accepts a customer’s financial assets and holds them in custody on the customer’s behalf.

“I wanted to start trading, so I opened a brokerage account.”


Usually, advice is what’s given to a client of a full-service bank brokerage or an investment firm when it comes to financial advice relating to investing.  A Registered Representative licensed to sell securities helps the client put together a suitable portfolio of investments.  This Registered Representative has a license to give third party advice to civilians. 

I received advice from the bank brokerage that I invest with.” 

After Hours Trading

Starts at 4 p.m. U.S. Eastern Time after the major U.S. exchanges close.  It’s usually a time when institutional traders unload their orders.  It’s not an ideal time to trade for retail investors. Be vigilant of the institutional players.  They are nimble and quick and they often settle trades in the after-hours.  This can land you with an out-of-the-market fill which puts you at a higher incidence of loss.  

“Hi, my name is Tim and I was able to buy some stocks last night after 4 p.m. thanks to after hours trading.  Thanks to after hours trading, I paid a large premium for the stocks.”  The moral of the story, is to NOT be like Tim and to wait for the market to open at 9:30am, the next day. 


When investing your money, being aggressive means taking on more risk in exchange for more potential profits.  When dealing with the big financial institutions, an aggressive mix tends to have more individual equities in the portfolio as opposed to bonds and other fixed income instruments.

“I’m usually a nice guy, unless I’m investing and then I can get aggressive.  Grr… I smell opportunity in this company!


In finance, allocating is the process of investing in certain assets or asset classes in your portfolio. Typically you allocate a certain dollar value or percentage of the assets in your portfolio to a certain asset class.

“I’m allocating a large portion of my portfolio into the North American market.

American Depository Receipt (ADR)

An ADR is an American Depository Receipt issued by a US bank or broker and represents one or more shares of the foreign company stock the bank or broker holds.

“I wanted to. invest in foreign companies without investing on foreign exchanges, so instead I found a foreign company that listed their shares on a U.S. exchange through an ADR.

Angel Investor

A truly divine specimen of human beings – Angel Investors are accredited investors.  They are private investors; typically people who has a lot of money and provide funding for start-ups or entrepreneurs. They are often compensated with a stake in the company and provide guidance and introductions to meaningful connections.

“Thanks to our angel investor, we have the funds to get our company up and running.”

Ankle biter

Can mean two different things: it either means a small cap firm (typically a company with a market capitalization of less than $500 million, though some exchanges may include firms with a market capitalization of up to $1 billion. It can also be a startup company that disrupts an industry and challenges incumbents.

“Investing in that firm is pretty risky, it’s an ankle biter.


A financial product that offers a guaranteed stream of income. They are used primarily by retired people to provide a source of income.  Annuities provide you with a higher payout the older you get and are evaluated on your age.

“Thanks to my annuity payments, I don’t have to worry about outliving my savings.” (Says the 80-year old in picture-perfect health.)


The increase in value of a financial asset.  It’s basically when you buy something and someone offers you a higher price for it, in the future.

“I sure hope my house goes up in value over the next five years!”

“Hopefully I can make some money in the form of appreciation of my investments.”


In trading, the ask is the lowest price someone is willing to sell a share.  This is a good concept to know when you are doing your own trading.  On the Level-2, you will see a BID and the ASK. When you hit the “buy” button, you will purchase this investment at the ASK.

“My trade won’t go through unless a buyer can meet my ASK price.”


An asset is anything that has tangible value, (i.e.: some “other” peep is willing to buy it off of you at any given time. ) Assets hold value and can be sold to put money in your pocket. It is typically property owned by you that has value and can be used to offset any debits you may have. Examples include, a house, money, crypto, life insurance policies, properties and companies.

“If you want to build your financial future, you must first build up your asset column.

Asset Allocation

A super fancy way of saying: “putting your money into different buckets of opportunity.” It’s the process of dividing investments among cash, income and growth buckets to optimize the balance between risk and reward based on investment needs.

“In order  to maximize my investments, I must have the proper asset allocation.” (Insert snooty voice.)

Asset Class

Securities with similar features and legal-structure characteristics. The most common asset classes are stocks, real estate, bonds and cash equivalents.

“I invest mostly in the stocks because that’s an asset class I’m familiar with.”


Backwardation is when the current price of an asset is higher than prices trading in the futures market. Backwardation occurs as a result of a higher demand for an asset currently than the contracts maturing in the coming months in the futures market. 

“I like Gold – the current prices of gold are higher than the prices of gold futures contracts for the next nine months. This is backwardation and indicates a current tight supply chain.”



Urban Investor Slang – An investor who fails to sell before the item’s price crashes.

“If you don’t sell those Gamestop shares soon, bro, you’re gonna end up a bagholder.”

Beginner Stock Market Investor

A beginner stock market investor is someone who has none to very little experience when it comes to investing or trading on the stock market.  In this use case, it is typically a retail investor who just opened up a new account to begin trading on their own.

I only just started investing a couple months ago, I’m definitely a beginner stock market investor.


A useful measure of the volatility of a security or portfolio.  A beta of “1”, usually represents the stock market.  The major indices are examples of the market having a beta of: “1.” If the stock’s beta is higher than “1”, it is usually riskier and subject to greater highs and lows, whereas a stock that has a beta, less than “1” is usually more stable when going up against volatility in the stock market.

“This stock has a beta close to 1, so it tracks the market quite closely.”


Ever hear of a bad-news-bear?  That’s what we are talking about here!  Bears profit off of bad results and companies experiencing hardship.  They are the grim-reapers of the investing world.  A bear is an investor who thinks that a certain security or the overall market is headed for a decline. They are typically pessimistic about the state of a given market and/or the economy as a whole. A bearish investor may take short positions in the market to profit off declining prices.

“You’re pretty pessimistic about the market, you must be a bear.”

Fun fact: Bear markets got the name from how a bear attacks, they strike their prey in a downwards motion with their paws.

Bear Market


A standard, usually an unmanaged index, used for comparative purposes in assessing performance of a portfolio or mutual fund. Benchmarks give you a reference point so that you can track how well you did compared with a similar investment. Beating the Benchmark is a big deal for portfolio managers because it means that they outperformed the basket of stocks that makes up the index.  You can track your performance against the Benchmark, too! Examples of indices include the New York Stock Exchange and the Toronto Stock Exchange.  

“We’ll have to use a benchmark to evaluate the performance of that portfolio.”


In trading, the bid is the price of a stock for whoever is trying to purchase a stock.  This will be a term you will need to familiarize yourself with when you trade. If you are a seller, you will need to hit the BID – which is the highest price that someone else will be willing to purchase your stock/security from you.

“If I want to buy that stock I have to at least match the bid price.”

Big Uglies

Large, older companies that are typically in industrial sectors considered “dirty” by some investors. These may include coal mining, oil exploration, steel, and logging industries. These companies usually generate steady returns but investors may ignore them due to ethical concerns. 

“I don’t want to invest in that stock, it’s a big ugly. I’d rather invest in something from a cleaner industry.”

Binance Coin (BNB)

A utility cryptocurrency that operates as a payment method for the fees associated with trading on the Binance Exchange. Those who use the token as a means of payment for the exchange can trade at a discount. Binance Coin’s blockchain is also the platform that Binance’s decentralized exchange operates on. The Binance exchange was founded by Changpeng Zhao and the exchange is one of the most widely used exchanges in the world based on trading volumes.  It’s like having a passport from a country that allows for easy travel around the globe.

“I use Binance coin as a means of payment for the exchange so that I can trade at a discount.”

Binary Outcome

A binary outcome is a term used to describe a situation where there are only two possible outcomes. This concept can be applied to investing  situations where there are only two possible outcomes, usually one good and one bad (profit or loss).  Some sectors have a higher incidence of binary outcomes than others.  The biotech sector is a great example where binary outcomes are frequent.  The cure either works or it doesn’t.

Options trading is a great example of an investment with binary outcomes.


A type of cryptocurrency – the original trailblazer. A developer solved a big problem by providing transparency on the blockchain while simultaneously preventing bad actors from interfering with the transaction.  This cryptocurrency operates on a network supported by millions if not billions of computers around the world. It’s really an amazing community of nodes that are there for eachother in times of need.  It offers lower transaction costs than traditional online payment methods although the fluctuations of the currency itself are still volatile. It is the world’s largest cryptocurrency in terms of market cap.

“I’m so glad I bought some bitcoin before its value went through the roof back in 2017.”

Bitcoin Cash (BCH)

Bitcoin cash is a cryptocurrency created in August 2017, from a fork of Bitcoin. Bitcoin Cash increased the size of blocks, allowing more transactions to be processed and improving scalability.

“They created Bitcoin Cash to accommodate a larger block size compared to Bitcoin, allowing more transactions into a single block.”


The Black-Scholes model, also known as the Black-Scholes-Merton (BSM) model, is a mathematical model for pricing an options contract. In particular, the model estimates the variation over time of financial instruments.  It’s a legendary method used to quantify prices. 

I used the black-scholes model to analyze derivatives, but it was tough to figure out.


A public record-keeping technology that stores information in blocks. Once the block is full of data it is chained to the previous block which creates a chronological strand of data. 

Blockchain is the record keeping technology behind bitcoin. It is used in such a way that all users have control over the database collectively.”

Blue Chip

A high-quality, relatively low-risk investment; the term usually refers to stocks of large, well-established companies that have performed well over a long period. Many times, growth is fully realized and there is a dividend in the form of a cash payment from the proceeds of its revenues and sales that gets distributed to individual shareholders.

“I only like to invest in blue chip stocks.”


Bonds are fixed income instruments, meaning that that cash payments are distributed regularly, (usually every six months) to the lenders in the form of interest payments in return for them lending capital the company.  They represent a loan made by an investor to a borrower. They can be looked at as an ‘I owe you’ between the lender and the borrower.  The lending usually happens over a “term”, after which the original principal and the interest payments are returned to the lender.

“The company is issuing bonds to raise funds. I leant the company $10,000 in return for a 5% coupon over 5 years.”


The level of dollar investment in a mutual fund at which an investor becomes eligible for a discounted sales fee. This level may be achieved through a single purchase or a series of smaller purchases.

“I just need to invest a little more money in that mutual fund to reach the breakpoint.”


A helpful tool for estimating revenues or expenses over a period of time.  Monthly budgets are popular to coincide with the paycheck.  If you spend more money in a month than your monthly salary, it may be time to cut back on some of your expenses.

“I wanted to track my spending, so I made myself a budget.”


A bull is an investor who believes that a specific security or the market is poised to rise. They are optimistic investors who will likely attempt to profit from the upward movement in the market.

“They purchased securities under the assumption that they can sell them later at a higher price, they must be a bull.”

Fun fact: Bull markets got their term from the motion of a bull attacking their prey. The bull’s head moves upwards as they try to gore their victim on their horns.

Bull Market

Business Model

A design for the successful operation of a business, identifying revenue sources, customer base, products, and details of financing.  The business model demonstrates a clear path to revenue.

Finliti has a great business model, because we don’t make money unless you make money.


Call options are financial contracts that give the option buyer the right, but not the obligation, to buy a stock, bond, commodity or other asset or instrument at a specified price within a specific time period

“I’ll have to see what the price of the underlying security is when my call option expires to decide if I want to exercise it or not.”


A type of price chart used in technical analysis that displays the high, low, open, and closing prices of a security for a certain period. They originated from Japanese rice merchants and traders to track market prices and daily momentum for hundreds of years before becoming mainstream in the United States.

“Traders can use candlesticks to look for chart patterns.”


A broad term that refers to anything that provides value or benefits to its owner. While money itself may be considered capital, the term is more often used to describe money that has been put to work for production or investment purposes like a factory or machinery for example.

“If we are going to run the day-to-day operations of our business we need to have enough capital.”

Capital Asset Pricing Model (CAPM)

A model that describes the relationship between systematic risk and expected return for assets, and stocks in particular.

“I used CAPM to determine the expected return of a stock I’m interested in.”

Capital Expenditures (CapEx)

Funds used by companies to acquire, upgrade or maintain assets like buildings or technology, for example.

“The company had to make some capital expenditures this year to upgrade the production facilities.”

Capital Gain

The difference between a securitie’s purchase price and its selling price, when the difference is positive.

“I sold my stocks for a higher price than I bought them at, resulting in a capital gain.”

Capital Market

The places where savings and investments are moved between suppliers of capital and those who are in need of capital. The most common capital markets are the stock market and the bond market.

Capital markets improve transactional efficiency by bringing buyers and sellers of capital together.”

Capital loss

The amount by which the proceeds from a sale of a security are less than its purchase price.

“I sold my stocks for less than I bought them for, so I suffered a capital loss.


An economic system characterized by private ownership of the means of production, particularly in the industrial sector. The purest form of capitalism is the free market where private individuals are unrestrained as they may determine where to invest, what to produce or sell, and what prices to charge for goods and services.

“In capitalism, the market determines supply and demand.”


The market value of a company, calculated as the number of shares outstanding multiplied by the price per share.

“That company has a huge market capitalization.”


An “Ouroboros proof-of-stake” cryptocurrency that was created with a research-based approach by engineers, mathematicians, and cryptography experts. The project was co-founded by Charles Hoskinson, one of the five initial founding members of Ethereum. After having some disagreements with the direction Ethereum was taking, he left and later helped to create Cardano.

Cardano was constructed with a research-based approach by engineers and mathematicians.”

Cash Equivalent

A short-term money-market instrument, like a treasury bill or a repurchase agreement, of high enough liquidity that it can easily be converted to cash.

Cash equivalents are highly liquid assets.”

Cash Flows

Cash flow is a term typically used in corporate finance, but it can be used to describe a person’s income minus their expenses over a specified period of time. It is basically dollars in minus dollars out.

I increased my cash flow last month by reducing my expenses.

Central Counterparty Clearing (CCP)

Central counterparty clearing (CCP) is a system that helps make trades in financial markets safer and more reliable. It acts as a middleman between buyers and sellers, taking on the risk of one party not being able to fulfill their side of the trade. This reduces the chances of a trade falling through and protects the participants in the market.

When Sarah bought stocks through her brokerage firm, the CCP ensured that the trade was completed smoothly and securely, even if the seller couldn’t deliver the stocks.


Chainlink is a decentralized oracle network that bridges the gap between smart contracts, like the ones on Ethereum, and data outside of it. Blockchains themselves do not have the ability to connect to outside applications in a trusted manner. Chainlink’s decentralized oracles allow smart contracts to communicate with outside data so that the contracts can be executed based on data that Ethereum itself cannot connect to.

Chainlink will play an important role in the real world implementation of blockchain technologies.”


An asset that a lender accepts as security for a loan. The collateral may take different forms such as real estate or other assets depending on the purpose of the loan. It is a form of protection for the lender.

“My house serves as the collateral for my mortgage.”

Common Stock

Securities that represent ownership in a corporation. They must be issued by a corporation.

“I bought some common stock in a company, so now I am part owner of that company.”

Competitive Analysis

Competitive analysis in marketing, is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context to identify opportunities and threats.  It’s helpful to compare the same companies in a sector against each other to determine the strongest ones that would be good for potential investments. 

I conducted a competitive analysis of the companies I’m interested in investing in.

Compound Interest

Compound interest (or compounding interest) is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods. It can be thought of as “interest on interest”.

“The difficulty when calculating mortgage payments is because of compound interest.  They are always more than it seems!”


Conservatism is the commitment to traditional values and ideas with opposition to change or innovation.

I am a big believer in conservatism.


When investing, this is the prioritization of preserving capital over the potential for large gains.

I am very conservative when I invest because I’m afraid to lose money.

Conservative Strategies

Conservative strategies are investment approaches that prioritize the preservation of capital over growth or market returns.

I use conservative strategies when I invest.


Contango is a situation where the futures price of a commodity is higher than the spot price (the current price). Contango typically occurs when a commodity’s price is expected to rise in the future.

I’m seeing contango with some commodities and I’m feeling the figures so I think I’ll hold onto my long positions till the music stops.


In finance, it is a statistic that measures the degree to which two securities move in relation to each other. They are computed as the correlation coefficient and always have a value between -1.0 and +1.0.  When it’s closer to +1, it’s highly correlated and vice versa.

“The correlation coefficient between those two securities is almost zero so there is not much correlation between the two.

Credit Ratings

A credit rating is an evaluation of the credit risk of a prospective debtor, predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting.

I really need to improve my credit rating.


A digital currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.

“I’m thinking about buying some cryptocurrency, but I’m not sure because of how volatile it can be.”

Day Trader

A type of trader who executes a relatively large volume of short and long trades to capitalize on price changes in the market during the day. The goal is to profit from very short-term price movements. Day traders sometimes also use leverage to amplify returns, which can also amplify losses.

“I can’t believe you’re a day trader, that must be really risky.”


Money that is owed or due.

My first step to financial freedom is paying off my debt.


Failure of a debtor to make timely payments of interest and principal as they come due or to meet some other provision of a bond indenture.

“They defaulted on their loan so they have a bad credit rating.”


In finance, a derivative is a contract that derives its value from the performance of an underlying entity. For example, an options contract is a derivative because its value is derived from the price of the underlying stock.

I’ve never invested in derivatives before, but I was thinking I might start by buying an oil futures contract.” (This is a dangerous first investment, financial friend!)

Derivatives Market

The derivatives market refers to the financial market for financial instruments such as futures contracts or options that are based on the values of their underlying assets.

I bought a futures contract on the derivatives market.

Diamond Hands (??)

An investor who holds on to a stock or cryptocurrency regardless of the risks, headwinds, or losses to get to an end goal. 

“My shares are up big since I bought them but I won’t sell, I’ve got diamond hands.”


The process of owning different investments that tend to perform well at different times in order to reduce the effects of volatility in a portfolio, and also increase the potential for increasing returns. 

“I want to make sure that I have enough diversification in my investment portfolio.”


A dividend is a portion of a company’s profit paid to common and preferred shareholders. Dividends provide an incentive to own stock in stable companies even if they are not experiencing much growth. Companies are not required to pay dividends.

“I like to invest in stocks that pay dividends.”

Dividend Investments

A dividend investment is any investment that pays income in the form of dividends. Dividend investments are known for being safe and reliable.

Coca-Cola turned out to be a great dividend investment for me.

Dividend Reinvestment Plan (DRIP)

A program that allows investors to reinvest their cash dividends into additional shares or fractional shares of the underlying stock on the dividend payment date.  Although a cool feature, this can mess up your gains and losses in a non-registered account when you are calculating taxes at the end of the year.

“You should set up a DRIP so you can reinvest your dividends.”

Dividend yield

Annual percentage of return earned by a mutual fund. The yield is determined by dividing the amount of the annual dividends per share by the current net asset value or public offering price.

“That mutual fund I invested in had a great dividend yield this year.”

Dollar cost averaging

Investing the same amount of money at regular intervals over an extended period of time, regardless of the share price. By investing a fixed amount, you purchase more shares when prices are low, and fewer shares when prices are high. This may reduce your overall average cost of investing.

“I use dollar cost averaging when I invest.”

Dow Jones Industrial Average (Dow)

The most commonly used indicator of stock market performance, based on prices of 30 actively traded blue chip stocks – primarily major industrial companies. The Average is the sum of the current market price of 30 major industrial companies’ stocks divided by a number that has been adjusted to take into account stock splits and changes in stock composition.

“The Dow was up huge today!”

Downside Protection

Downside protection is a strategy implemented in options to hedge the risk of volatility and lower or eliminate the losses of a portfolio in case the price of the underlying asset decreases.

I wish I had used downside protection when I was trading options.

Doubling Down

Doubling down is a risky tactic borrowed from the game of Blackjack.  This tactic is popular when trading or investing in risky, volatile securities.  When an investor believes in the position, they will “double down” and buy more of the same position at a lower price.  The idea is that the investor believes the security will rise in price and that they will reduce their average loss on the initial trade or investment.

I’m so confident in my investment that I doubled down.

Earnings Before Interest and Taxes (EBIT)

An indicator of a company’s profitability. EBIT can be calculated as revenue minus expenses excluding tax and interest. EBIT is used to analyze the performance of a company’s core operations without the costs of the capital structure and tax expenses impacting profit. 

“You should look at that company’s EBIT before you invest in it.”

Earnings Per Share (EPS)

EPS indicates how much money a company makes for each share of its stock, and is a widely used metric to estimate corporate value. A higher EPS indicates greater value because investors will pay more for a company’s shares if they think the company has higher profits relative to its share price. EPS is a company’s net profit divided by the number of common shares it has outstanding.

EPS can be a misleading metric for investors.”

Earnings Season

Earnings season is the stretch of time when a large number of publicly traded companies release their quarterly earning reports to the public. Typically, earnings season is at the end of each quarter.

I’m excited for earnings season! I hope that the companies I invested in exceed expectations.”

Earnings Surprise

An earnings surprise is when a company’s reported quarterly or annual profits are above or below analysts’ expectations.

“Some of the companies I’m invested in posted a positive earnings surprise this quarter and their share prices jumped.”


An entrepreneur is a person who organizes and operates a business, taking on greater than normal risks in order to do so.

A lot of entrepreneurs see potential in the fintech sector.


Typically referred to as shareholders’ equity (or owners’ equity for privately held companies) and represents the amount of money that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company’s debt was paid off in the case of liquidation.

“If the company wants to raise equity, it should issue shares.”

Equity fund

A mutual fund/collective fund in which the money is invested primarily in common and/or preferred stock. Stock funds may vary, depending on the fund’s investment objective.

“I just invested in an equity fund.”

Established Corporations

Established corporations are corporations that have been around for a long time and have consistently provided steady returns in the past.

Investing in established corporations gives me peace of mind.

Estate Planning

Estate planning is the process of anticipating and arranging, during a person’s life, for the management and disposal of that person’s estate during the person’s life, in the event the person becomes incapacitated and after death.  It’s usually used when people really care about where there money might go after they die.  Sometimes they’d like it to go to charity and other times they want to keep it away from sticky hands.

I really need to start estate planning.

Ethereum (ETH)

Ethereum, is a decentralized software platform that enables Smart Contracts and Decentralized Applications (DApps) to be built and run without any downtime, fraud, control, or interference from a third party. The goal behind Ethereum is to create a decentralized suite of financial products that anyone in the world can have free access to, regardless of nationality, ethnicity, or faith.

“The applications on Ethereum are run on its platform-specific cryptographic token, ether.”


The interval between the announcement and the payment of the next dividend for a stock.

“If you want to receive the upcoming dividend you need to purchase before the ex-dividend.”

Ex-Dividend date

The date on which a stock goes ex-dividend. Typically about three weeks before the dividend is paid to shareholders of record. 

“I purchased shares of the stock before the ex-dividend date so I should receive the upcoming dividend.”

Exchange rate

An exchange rate is the value of one nation’s currency versus the currency of another nation or economic zone. For example, as of March 25, 2021 it takes US$0.79 Dollars to buy CAD $1.00.

“Hey, do you know what the exchange rate is between the Canadian dollar and the euro?”

Exchange-Traded Fund (ETF)

An exchange-traded fund (ETF) is a type of security that tracks an index, sector, commodity, or another asset, but which can be purchased or sold on a stock exchange the same way as a regular stock. 

“You can buy an ETF that tracks the S&P 500.”

Exponential Growth

Exponential growth is growth whose rate becomes ever more rapid in proportion to the growing total number or size.

I’m hoping to see some exponential growth in my portfolio’s value

FAANG Stocks

An acronym that refers to the stocks of five well-known American technology companies: Facebook, Amazon, Apple, and Netflix, and Google.

“People like to invest in FAANG Stocks because they are well known.”

Fallen Angel

In the world of investing, a fallen angel refers to a bond that was initially given an investment-grade rating, but was later reduced to a junk bond rating. Investment-grade refers to a very high quality and stable bond, whereas a junk bond, as the name suggests, is of far worse quality. The reduced rating is usually a result of deterioration in the financial condition of the issuer.

Federal funds rate

The target interest rate set by the Federal Open Market Committee (FOMC) at which commercial banks borrow and lend their excess reserves to each other overnight.

The federal funds rate can influence short-term rates on consumer loans and credit cards as well as impact the stock market.”

Federal Reserve Board (The Fed)

The governing board of the Federal Reserve System. The board regulates the nation’s money supply by setting the discount rate, tightening or easing the availability of credit in the economy.

The Fed oversees activities of reserve banks.”


A fiduciary is a person or organization that acts on behalf of another person or persons, putting their clients’ interests ahead of their own, with a duty to preserve good faith and trust. Being a fiduciary thus requires being bound both legally and ethically to act in the other’s best interests.

“It’s my duty as a fiduciary to act on my client’s best interests.”


A term for matters regarding the management, creation, and study of money and investments. Finance can be broadly divided into three categories, public finance, corporate finance, and personal finance

“I want to learn about finance so I can start investing.”

Financial Advice

Financial advice is any recommendation or guidance that attempts to educate, inform, or guide an investor regarding a particular investment product or series of products.

“I get my financial advice from a qualified professional.”

Financial Advisors

A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation.

“I used to have a financial advisor manage my finances, but now I invest on my own with Finliti.”

Financial Concepts

Financial concepts are ideas and principles that help define the world of finance. They are based on microeconomic and macroeconomic theories.

“The time value of money is a key financial concept.”

Financial Foundation

This refers to a person’s base of wealth that they are able to build off of over time. A financial foundation can include savings, investments, an emergency fund and so on.

“I’m fortunate to have a strong financial foundation.”

Financial Institution

A company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange. Financial institutions encompass a broad range of business operations within the financial services sector including banks, trust companies, insurance companies, brokerage firms, and investment dealers.

“You can set up a trading account at a financial institution such as a brokerage firm.”

Financial Jargon

Financial Jargon refers to the technical terms used in the world of finance and investing.

Financial jargon can be tough to understand sometimes, almost like its a different language.

Financial Knowledge

Financial knowledge refers to knowledge of all things related to finance which includes investing, trading the capital markets etc.

I’m hoping to increase my financial knowledge with Finliti.

Financial Literacy

Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. If you want to become financially free, your first step should be to become financially literate.

Signing up for Finliti is the first step on my journey to financial literacy.

Financial Management

Financial management is the utilization of processes, services and products designed to grow, protect and utilize a person’s wealth.

I don’t need to work in financial management in order to grow my wealth.

Financial Objectives

A financial objective is a specific set of goals that a person has for their personal finances and investments.

I have lofty financial objectives.

Financial Plan

A financial plan is a document containing a person’s current money situation and long-term monetary goals, as well as strategies to achieve those goals. A financial plan may be created independently or with the help of a certified financial planner.

Financial plan is important if you want to become financially free.

Financial Statements

Written records that convey the business activities and the financial performance of a company. Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes.

“You should look at a company’s financial statements before you invest in them.”

Financial Technology (Fintech)

Financial technology (Fintech) is used to describe new tech that seeks to improve and automate the delivery and use of financial services. ​​​At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones. 

“Finliti is an exciting new Fintech company.”


Fiscal Policy

Refers to the use of government spending and tax policies to influence economic conditions, especially macroeconomic conditions, including aggregate demand for goods and services, employment, inflation, and economic growth.

“In a recession, the government may use fiscal policy to fuel economic growth.”

Fixed Income Security

An investment that provides a return in the form of fixed periodic interest payments and the eventual return of principal at maturity. Unlike variable-income securities, where payments change based on some underlying measure—such as short-term interest rates—the payments of a fixed-income security are known in advance.

“I’m thinking about investing in fixed income securities like bonds.”

FOTO (Fear of Taking Opportunities)

FOTO is when you are afraid to take an opportunity. In finance this would be the fear of taking advantage of or acting on an investment opportunity.

I have some serious FOTO when it comes to investing.

Free Market

An economic system based on supply and demand with little or no government control. 

“There are no forced transactions in a free market.”


A pool of money from a group of investors in order to buy securities. The two major ways funds may be offered are (1) by companies in the securities business (these funds are called mutual funds); and (2) by bank trust departments (these are called collective funds).

“There are so many different funds to invest in.”


Futures are derivative financial contracts that obligate the parties to transact an asset at a predetermined future date and price. The buyer must purchase or the seller must sell the underlying asset at the set price, regardless of the current market price at the expiration date.

“I bought a futures contract in natural gas.”


In finance, gains refer to profits from investing. In order to realize your gains you must sell your investments for a profit.

I sold my stocks for huge gains.


Gilt-edged securities are investment products issued by the government, which are considered to be very safe and low-risk. These securities are like bonds that investors can buy, in return for which they will receive regular interest payments and the original investment amount back after a certain period of time. The name “gilt-edged” came from the original Bank of England bonds issued on behalf of His Majesty’s Treasury which had a gold edge, or gilded edge, on the paper certificates. 

“Investing in gilt-edged securities provides individuals with a reliable way to save money while reducing the risk of losing their initial investment.”

Going Long

When you “go long” on a stock or other investment, it means that you believe that this investment will appreciate as time goes by and that you will achieve a positive outcome by putting money down on an investment or strategy.This is typically a stock market term and investors can use this jargon when they are referring to stocks or options strategies.

“I’m going long on my portfolio.” 

Government Bond

A debt security issued by a government to support government spending and obligations. Government bonds can pay periodic interest payments called coupon payments. Government bonds issued by national governments are often considered low-risk investments since the issuing government backs them.

“You should invest in government bonds because they’re not very risky.”

Green Bond

A type of fixed-income instrument that is specifically earmarked to raise money for climate and environmentally friendly projects.

“I invested in green bonds for ethical reasons.”


Greenwashing is the process of providing misleading information or converting a false image about how a company’s products are more environmentally sound. Greenwashing is often an unbacked claim to deceive consumers into believing that a company’s products are environmentally friendly.

Greenwashing is a huge problem in the world of ESG investing; they need some kind of regulation so that people know what is and isn’t environmentally friendly.”

Gross Domestic Product

The total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health.

“Canada’s GDP is lower this year than it was last year.”

Growth Investing

An investment strategy that focuses on stocks of companies and stock funds where the earnings and revenue are significant, and usually pays little or no dividend.

“She uses a growth investing strategy.”

Growth Rates

Growth rates refer to the percentage change of a specific variable within a specific time period.

The growth rate on my portfolio was low this year.

Growth Stock

Typically a well-known, successful company that is experiencing rapid growth in earnings and revenue, and usually pays little or no dividend. 

“I only invest in growth stocks.”

Growth-style funds

Growth funds focus on future gains. A growth fund manager will typically invest in stocks with earnings that outperform the current market. The manager attempts to achieve success by focusing on rapidly growing sectors of the economy and investing in leading companies with consistent earnings growth. The fund grows primarily as individual share prices climb.

“I’m focused on future gains so I invest in growth-style funds.”


A hedge is an investment that is made with the intention of reducing the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting or opposite position in a related security.

“I invested in stocks to hedge against inflation.”

Hedge Fund

Alternative investments using pooled funds that employ different strategies to earn active returns, or alpha, for their investors. Hedge funds may be aggressively managed or make use of derivatives and leverage in both domestic and international markets with the goal of generating high returns (either in an absolute sense or over a specified market benchmark).

“I was hoping the hedge fund I invested in would beat the market but that was not the case, unfortunately.”


A term that originated from a misspelling of hold, but now refers to buy-and-hold strategies in the context of bitcoin and other cryptocurrencies.

“Buy your bitcoins and HODL!”

Hold the Line

A battle cry for users during volatility in the markets. When favored stocks began to drop, appeals to “hold the line” became common. Often seen in conjunction with “diamond hands” and “to the moon.”

“I know things look bad right now but we gotta hold the line.”

Holding Company

A business entity—usually a corporation or limited liability company (LLC). Typically, a holding company doesn’t manufacture anything, sell any products or services, or conduct any other business operations. Rather, holding companies hold the controlling stock in other companies.

“Many large companies are just holding companies that own a number of subsidiaries.”


Income is money or the equivalent value that an individual or business receives, usually in exchange for providing a good or service or through investing capital. 

“My dividend payments provide me with a good source of income.”

Index Fund

A type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the Standard & Poor’s 500 Index (S&P 500). An index mutual fund is said to provide broad market exposure, low operating expenses, and low portfolio turnover. These funds follow their benchmark index regardless of the state of the markets. 

“If you want investments that track the market you could invest in index funds.”


The rate at which the value of a currency is falling and consequently the general level of prices for goods and services is rising.

Inflation was really high this year.”

Initial Public Offering (IPO)

An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. 

“This new company is doing an IPO, I think I might invest in them.”

Insider Trading

The buying or selling of a publicly traded company’s stock by someone who has non-public, material information about that stock.

“You can get into a lot of trouble for insider trading. You might even land in jail.”

Interest Rate

The amount charged on top of the principal by a lender to a borrower for the use of assets.

“I got a really low interest rate on my mortgage.”

Interest-Rate Risk

The possibility of a reduction in the value of a security, especially a bond, resulting from a rise in interest rates.

“You have to keep interest-rate risk in mind when you invest.”

Interest-Rate Swap

An interest rate swap is an interest rate derivative. It involves exchange of interest rates between two parties (investors). The two parties in an interest rate swap are trading a fixed-rate and variable-interest rate. For example, one company may have a bond that pays the SOFR (Secured Overnight Financing Rate) formerly the London Interbank Offered Rate (LIBOR), while the other party holds a bond that provides a fixed payment of 5%.

“I’m a property developer and to finance my high-rise, I’ve engaged in an interest rate swap to finance my “new build” with fixed payments, which will take over 5 years to develop.”




A financial intermediary is an entity that acts as the middleman between two parties in a financial transaction, such as a commercial bank, investment bank, mutual fund, or pension fund.

I wish financial intermediaries didn’t charge so much for their services.

Investment grade bonds

A bond generally considered suitable for purchase by prudent investors.

“I don’t invest in bonds unless they’re investment grade.”

Investment objective

The goal of a mutual fund and its shareholders, e.g. growth, growth and income, income, and tax-free income.

“I need to figure out what my investment objectives are.”

Investment Opportunity

Investment opportunities are opportunities to make financial investments.

“I see a property on a ravine lot for sale, nearby. That could be a great investment opportunity.

Investment Plan

An investing plan is the set of steps someone sets out to take in order to achieve their investing goals.

I’ve developed an investing plan, and I’m ready to start investing.

Investment Professionals

An investment professional is someone who gives financial advice, conducts securities analysis or makes trades in exchange for money.

Investment professionals can give great advice, but their fees can be expensive.

Investment Strategies

An investment strategy is the set of principles that a person lays out in order to achieve their financial and investing goals.

I need to figure out what my investment strategy will be before I start investing.


Investments are things that people buy with the hopes of being able to grow their wealth via those investments. For example, buying stocks as an investment with the hope of selling them at a profit down the road.

My stocks are my main form of investing.

Anatomy of an investor

Investing Methods

Investing methods refers to the many different ways that one can invest their money.

I like to stick to simple investing methods like buying stocks.

Investing Plan

An investing plan is the set of steps someone sets out to take in order to achieve their investing goals.

I’ve developed an investing plan, and I’m ready to start investing.

Investment Returns

Investment returns are the returns that someone gains on their investment, either through dividends or capital gains.

My investment returns last year were quite disappointing.


Someone who contributes capital with the expectation of receiving more than they contributed at a later date.

“I just bought my first stock, I’m an investor now!”

Investor Profile

Your investor profile is a comprehensive breakdown of what type of investor you are. It highlights your strengths and weaknesses.

I just received my investor profile after completing the Finliti discovery questionnaire.

January Effect

The January Effect is the perceived seasonal tendency for stocks to rise in that month.

“I sure hope the January effect helps my stocks rise in the new year.”

Joint Venture

A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. 

“I hope this joint venture I’ve entered into turns out to be a good investment.”

Junk bond

A lower-rated, usually higher-yielding bond, with a credit rating of BB or lower.

“I love the high yields that junk bonds offer, but they can be risky.”

Know Your Client (KYC)

A standard in the investment industry that ensures investment advisors know detailed information about their clients’ risk tolerance, investment knowledge, and financial position.

“As a financial advisor, it is important that you know your client.”

Kicking the tires

Kicking the tires is a colloquial expression that refers to performing minimal research into an investment, as opposed to conducting a thorough and rigorous analysis.

“I need to stop kicking the tires on investments and do some real research before I invest.”


The market capitalization of the stocks of companies with market values greater than $10 billion.

“I like to invest in large-cap stocks, they tend to be less volatile.”

Level 2

First introduced in 1983 as the Nasdaq Quotation Dissemination Service (NQDS), Level 2 is a subscription-based service that provides real-time access to the NASDAQ order book. It is intended to display market depth and momentum to traders and investors. Now, other stock exchanges use their own Level 2 that you need to purchase a license to use.

Level 2 provides users with in-depth price information, including all the available prices that market makers and electronic communication networks (ECN) post.”.


Leverage results from using borrowed capital as a funding source when investing to expand the firm’s asset base and generate returns on risk capital. Leverage is an investment strategy of using borrowed money—specifically, the use of various financial instruments or borrowed capital—to increase the potential return of an investment. 

“Using leverage can amplify my returns, but it could also amplify my losses.”


A liability is something a person or company owes, usually a sum of money. Liabilities are settled over time through the transfer of economic benefits including money, goods, or services.

“I have a lot of liabilities I need to pay off.”

Line of Credit

A preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit.

“I opened a line of credit to finance some of my expenses.”


The ability to have ready access to invested money. Mutual funds are liquid because their shares can be redeemed for current value (which may be more or less than the original cost) on any business day and the proceeds are usually available to be used within a few business days.

“The liquidity of my investment will determine how quickly I can convert them to cash.”

Litecoin (LTC)

Litecoin, launched in 2011, was among the first cryptocurrencies to follow in the footsteps of Bitcoin and has often been referred to as “silver to Bitcoin’s gold.” It was created by Charlie Lee, an MIT graduate and former Google engineer. Litecoin is based on an open-source global payment network that is not controlled by any central authority and uses “scrypt” as a proof of work, which can be decoded with the help of CPUs of consumer-grade.

Litecoin is an alternative to bitcoin if you want to invest in crypto.”

Loads (back-end, front-end, and no-load)

Sales charges on mutual funds. A back-end load is assessed at redemption, while a front-end load is paid at the time of purchase. No-load funds are free of sales charges.  These are also known as deferred sales charges and are gradually being phased out in many countries.

“Luckily there is no load for my mutual fund.”

Long Position

A long position refers to the purchase of an asset with the expectation it will increase in value.

“I’ve established long positions on my stocks and mutual funds.”


In finance, this refers to the loss of money or decrease in value.

I sold my stocks after they decreased in value. I suffered a loss as a result.

Lucrative Investing

Lucrative investing can be used to describe any investment that proved to be profitable for the person that made the investment.

Those stocks I bought turned out to be a very lucrative investment.


The money borrowed from a brokerage firm to purchase an investment. It is the difference between the total value of securities held in an investor’s account and the loan amount from the broker.

“I like to trade on margin to amplify my returns.”

Margin Call

A margin call occurs when the value of an investor’s margin account falls below the broker’s required amount. An investor’s margin account contains securities bought with borrowed money (typically a combination of the investor’s own money and money borrowed from the investor’s broker).

“At what price is the investor going to receive a margin call?”


Typically known as a recreational drug, Marijuana along with CBD, are a relatively new sector for investment.

I was thinking about investing in marijuana, but it’s been pretty volatile.


The market is where savings and investments are exchanged by the suppliers who have capital and those who are in need of capital. For example, retail investors are one of the groups who supply capital in the market in exchange for securities.

I can’t wait to start trading on the market.

Market Conditions

Market conditions are the characteristics of a particular market at a particular point in time. Market conditions are typically based on underlying economic conditions.

The market conditions were bleak during the pandemic.

Market Crash

A market crash is a sudden sharp decline of prices across a specific market, resulting in a significant loss of money. This could be in the stock or real estate markets for example. They are typically caused by panic selling and underlying economic conditions.

“I’m afraid to invest my money in stocks. What if the market crashes?

Market Price

This refers to the prices of assets or securities on a given market, like the stock market for example.

Market Prices were up for stocks today.

Market Risk

The possibility that an investment will not achieve its target.

“I can’t get rid of market risk in my portfolio, even if I diversify.”

Market Share

Market share represents the percentage of an industry, or a market’s total sales, that is earned by a particular company over a specified time period. This metric is used to give a general idea of the size of a company in relation to its market and its competitors.

“We can’t let our competition eat away at our market share.”

Market timing

A risky investment strategy that calls for buying and selling securities in anticipation of market conditions.

“I’m going to use market timing to try and make a quick return on my investments.”


The date specified in a note or bond on which the debt is due and payable.

“The maturity date on my bond is coming up soon.”


In trading, metrics are measures of quantitative assessment used for comparing and measuring the performance of stocks.

I have certain metrics I like to look at when I make trades.

Median Market Cap

The midpoint of market capitalization (market price multiplied by the number of shares outstanding) of the stocks in a portfolio, where half the stocks have higher market capitalization and half have lower.

“The median market cap of my portfolio is really low.”


The market capitalization of the stocks of companies with market values between $3 to $10 billion.

“I like to invest in mid-cap stocks because of the growth potential.”


Mining is an integral part of a cryptocurrency network that performs two important functions. First, it is used to generate and release new cryptocurrency tokens for circulation via the cryptocurrency network, and secondly, it is used to verify, authenticate and then add the ongoing network transactions to a public ledger.

“I need to buy specific hardware if I want to mine for crypto.”

Mining can also be a sector where natural resources are extracted from the earth to form commodities.

Momentum Trading

Momentum investing is a trading strategy in which investors buy securities that are rising and sell them when they look to have peaked. The goal is to work with volatility by finding buying opportunities in short-term uptrends and then sell when the securities start to lose momentum.

I tried to do some momentum trading, but my market timing was off.

Monero (XMR)

Monero is a secure, private, and untraceable currency. The development of this cryptocurrency is completely donation-based and community-driven. Monero has been launched with a strong focus on decentralization and scalability. It enables complete privacy by using a specialized technique called ring signatures.

Monero has exceptional security features.”

Monetary Policy

The demand side of economic policy refers to the actions undertaken by a nation’s central banks to control the money supply and achieve macroeconomic goals that promote sustainable economic growth.

“The nation’s central bank is implementing expansionary monetary policy to help with economic growth.”

Money Market

Refers to trading in very short-term debt instruments. At the wholesale level, it involves large-volume trades between institutions and traders. At the retail level, it includes money market mutual funds bought by individual investors and money market accounts opened by bank customers.

“I invested in the money market by purchasing a treasury bill.”

Money market mutual fund

A short-term investment that seeks to protect principal and generate income by investing in Treasury bills, CDs with maturities less than one year, and other conservative investments.

“My money market mutual fund won’t get me crazy returns but I feel it’s a safe investment.”

Morningstar ratings

System for rating open- and closed-end mutual funds and annuities by Morningstar Inc. of Chicago. The system rates funds from one to five stars, using a risk-adjusted performance rating in which performance equals the total return of the fund.

“I like to invest in mutual funds with a morningstar rating of at least 3 stars.”


This term refers to a stock or cryptocurrency that has reached its peak.

“You should sell that stock, it’s mooning.”

Mutual fund

A fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities, or money market securities.

“I like to invest in mutual funds because someone else can manage them for me.”


A global electronic marketplace for buying and selling securities. Nasdaq was created by the National Association of Securities Dealers (NASD) to enable investors to trade securities on a computerized, speedy and transparent system, and commenced operations on February 8, 1971.

“The Nasdaq has revolutionized the buying and selling of securities.”

Nasdaq Composite Index

The Nasdaq Composite Index is a large market-cap-weighted index of more than 2,500 stocks, American depositary receipts (ADRs), and real estate investment trusts (REITs), among others.

“The nasdaq composite index was down today.”

Natural Hedge

A management strategy that seeks to mitigate risk by investing in assets whose performances are inherently negatively correlated. For instance, a natural hedge against owning financial stocks is to hold bonds, since interest rate changes tend to influence each in an opposing fashion.

“I used a natural hedge against owning stocks by purchasing bonds.”

Net Asset Value per share (NAV)

The current dollar value of a single mutual fund share; also known as share price. The fund’s NAV is calculated daily by taking the fund’s total assets, subtracting the fund’s liabilities, and dividing by the number of shares outstanding. The NAV does not include the sales charge. The process of calculating the NAV is called pricing.

“I’m hoping the NAV per share of my mutual fund rises over time.”


A person who doesn’t own any cryptocurrency.

“She doesn’t own any crypto, she must be a noncoiner.”


Noise refers to information or activity that confuses or misrepresents genuine underlying trends. In the financial markets, noise can include small price corrections in the market as well as price fluctuations that distort the overall trend.

“The noise in the financial markets is making it hard to see the overall trends.”

Number of Holdings

The number of individual securities in a fund or portfolio.

“The number of holdings in your portfolio is quite low.”


An offset involves assuming an opposite position in relation to an original opening position in the securities markets. For example, if you are long 100 shares of a stock, selling 100 shares of said stock would be the offsetting position. An offsetting position can also be generated through hedging instruments, such as futures or options.

“I offset my initial stock purchase by selling the stocks.”

Open Position

In investing, an open position is any established or entered trade that has yet to close with an opposing trade. An open position can exist following a buy, a long position, a sell, or a short position. In any case, the position remains open until an opposing trade takes place.

“The stocks I bought represent an open position until I sell them.”

Operating Cash Flow (OCF)

A measure of the amount of cash generated by a company’s normal business operations. Operating cash flow indicates whether a company can generate sufficient positive cash flow to maintain and grow its operations, otherwise, it may require external financing for capital expansion.

“I wouldn’t invest in that company, their low OCF is a cause for concern.”

Opportunity Cost

Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. The idea of opportunity costs is a major concept in economics.

“I invested in Tesla instead of Apple. My opportunity cost are the returns I would have gained from investing in Apple.”


Options are financial derivatives that give buyers the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price and date.

“Investing in options can be extremely profitable, but can also be really risky.”

Options Market

The options market refers to securities exchanges that primarily or exclusively trade option contracts. Often, options are traded on an exchange along with futures and other derivatives. However, some exchanges specialize in option transactions.

I was thinking of dabbling in the options market, but I want to learn more about options contracts first.

Options Strategy

Option strategies are the simultaneous, and often mixed, buying or selling of one or more options that differ in one or more of the options’ variables.

I need to reevaluate my options strategy.

Ordinary Shares

Ordinary shares, also called common shares, are stocks sold on a public exchange. Each share of stock generally gives its owner the right to one vote at a company shareholders’ meeting. Unlike in the case of preferred shares, the owner of ordinary shares is not guaranteed a dividend.

“I bought some ordinary shares on the stock market, today.”


Ouroboros is the first provably secure proof-of-stake protocol, and the first blockchain protocol to be based on peer-reviewed research.

Ouroboros facilitates the creation of distributed, permissionless networks capable of sustainably supporting new markets.”

Out of the Money

An expression used to describe an option contract that only contains the extrinsic value. An OTM call option will have a strike price that is higher than the market price of the underlying asset.

“My option is out of the money so I won’t exercise it.”

Outside Day

In the stock market, an outside day refers to a day where a security’s prices are more volatile than its previous trading session. For it to be considered an outside day, a security’s price must reach both a higher high and a lower low than its previous day.

“The market was super choppy today and I didn’t know if I should sell or buy more – so a bunch of my stocks had outside days!

Over-the-Counter Bulletin Board

An electronic quotation service provided by the Financial Industry Regulatory Authority (FINRA) to its subscribing members that provide over-the-counter trade data for U.S. stocks. It is a quote-only service.

“The over-the-counter bulletin board provides me with useful information when trading.”

Over-the-Counter Market

A decentralized market in which market participants trade stocks, commodities, currencies, or other instruments directly between two parties and without a central exchange or broker.

“I bought bonds on the OTC market today.”

Overnight Rate

The interest rate at which depository institutions lend or borrow funds with another depository institution in the overnight market. In many countries, the overnight rate is the interest rate the central bank sets to target monetary policy. In most circumstances, the overnight rate is the lowest available interest rate, and as such, it is only available to the most creditworthy institutions.

“The overnight rate can help predict short-term interest rate movements.”


Refers to the excessive buying and selling of stocks by either a broker or an individual trader. Both are entirely different situations and have very different implications.

“I had to change brokers because my old one was overtrading to generate more commission fees.”

Painting the Tape

Painting the tape is a form of market manipulation in which traders attempt to influence the price of a security by buying and selling it among themselves to create the appearance of substantial trading activity. The goal is to trick others in the market to buy up the security and drive its price higher. Oh, and it’s also highly illegal.

“My buddy who works on Wall Street is in hot water with the SEC after he got caught painting the tape.”

Par value

Par value is the amount originally paid for a bond and the amount that will be repaid at maturity. Bonds are typically sold in multiples of $1,000.

“I’ll get the par value of my bond back when it matures.”

Passive Income

Passive income is earnings derived from a rental property, investments, or other means in which a person is not actively involved.

“My rental property provides me with a stream of passive income.”

Passive investing

An investing strategy to maximize returns by minimizing buying and selling. Index investing is one common passive investing strategy whereby investors purchase a representative benchmark, such as the S&P 500 index, and hold it over a long time horizon.

“I like to use a passive investing strategy.”

Paper Hands / ??

An investor who is seeking the same goal as someone with “diamond hands”, but instead is quick to sell a stock or cryptocurrency at the first sign of trouble.

“You’re going to have a hard time reaching your investing goals with those paper hands of yours!”

Penny Stock

A penny stock refers to a small company’s stock that typically trades for less than $5 per share. Although some penny stocks trade on large exchanges such as the NYSE, most penny stocks trade over the counter through the OTC Bulletin Board (OTCBB). In other countries, like Canada, penny stocks are securities that trade for less than $1.00.

“I like to invest in penny stocks because of the huge growth potential.”


In finance, this refers to a portfolio’s ability to provide you with profits relative to the amount of risk you are assuming.  It usually tracks a benchmark to show a comparisonPink sheets refer to listings for stocks that trade on the over-the-counter (OTC) market.

My portfolio’s performance was excellent this past year.

Pink Sheets

Pink sheet listings are not listed on major stock exchanges. Most pink sheet stocks trade for less than $5 per share and are considered risky due to a lack of regulatory oversight compared to stocks that trade on major exchanges because they have no obligation to report to the SEC. A lack of financial transparency or accountability makes these securities hard to analyze.

“I don’t invest in pink sheet stocks, they are usually too risky for me even though I see them promoted on my stock Discord channel.”

Polkadot (DOT)

Polkadot is a unique proof-of-stake cryptocurrency that is aimed at delivering interoperability between other blockchains. Its protocol is designed to connect permissioned and permissionless blockchains as well as oracles to allow systems to work together under one roof.

Polkadot’s core component is its relay chain that allows the interoperability of varying networks.”

Ponzi Scheme

A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from legitimate business activity, and they remain unaware that other investors are the source of funds

I’ve never been tricked into a Ponzi scheme; I’m too smart for that.


A collection of investments owned by one organization or individual, and managed as a collective whole with specific investment goals in mind.

“My portfolio must align with my investment objectives.”

Portfolio Allocation

Amount of assets in a portfolio specifically designated for a certain type of investment.

“I’m thinking about changing my portfolio allocation.”

Portfolio holdings

Refers to the investments included in a portfolio.

“My portfolio holdings are diversified to mitigate risk.”

Portfolio Manager

The person or entity that is responsible for making investment decisions of the portfolio to meet the specific investment objective or goal of the portfolio.

“I hired a portfolio manager to take care of my investments.’’

Portfolio Management

Portfolio management is the process of selecting and overseeing a group of investments that meet the long-term financial objectives and risk tolerance of a client, a company, or an institution.

My portfolio management skills could use some work.’’

Portfolio Management Techniques

Portfolio Management (PM) techniques are systematic ways of looking at a set of projects or activities or even business units, in order to reach an optimum balance between risks and returns, stability and growth, attractions and drawbacks in general, by making the best use of usually limited resources.

Whichever portfolio management techniques my advisor is using, they’re working great.’’

Preferred Stock

A class of stock with a fixed dividend that has preference over a company’s common stock in the payment of dividends and the liquidation of assets. There are several kinds of preferred stock, among them adjustable-rate and convertible.

“I bought preferred stock because of the fixed dividends.”


The amount by which a bond or stock sells above its par value.

“I prefer not to purchase bonds when they are at a premium.”

Price-to-book (P/B) ratio

The P/B ratio is the price per share of a stock divided by its book value (net worth) per share. The book value of equity can be found on a company’s balance sheet and is the difference between the value of assets minus the value of liabilities. For a stock portfolio, the ratio is the weighted average price-to-book ratio of the stocks it holds.

“I usually look at the price-to-book ratio of a company to help me decide if I think it will be a good investment.”

Price-to-earnings (P/E) Ratio

A stock’s price divided by its earnings per share, which indicates how much investors are paying for a company’s earning power.

“That company’s price-to-earnings ratio is pretty high, they might be overvalued.”

Price/earnings to growth (PEG) Ratio

A useful ratio when conducting fundamental analysis. Like the P/E ratio, it can help determine the value of a stock, but it goes further by taking earnings growth into consideration. The PEG ratio is calculated by dividing a stock’s P/E ratio by the stock’s earnings growth.

“I’m looking for stocks with a PEG ratio of less than one because this indicates they are undervalued.”


Profit describes the financial benefit realized when revenue generated from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity in question.

I sold my stocks for a profit.

Profit Margins

This refers to the amount by which revenues exceed expenses.

“That company has a very thin profit margins.”

Profit Taking

In finance, profit taking is the practice of selling an asset, mostly shares, when the asset has risen in price. This allows investors to convert the increase of an asset’s market value into cash

When I invest, I always make sure to make a habit of profit taking.


Formal written offer to sell securities that sets forth the plan for proposed business enterprise that an investor needs to make an informed decision. Prospectuses are also issued by mutual funds, containing the information required by the SEC, such as history, the background of managers, fund objectives and policies, financial statement, risks, services, and fees.

“If our company wants to offer stock for sale to the public we’ll have to file a prospectus with the SEC.”

Public Company

A corporation whose shareholders have a claim to part of the company’s assets and profits. Through the free trade of shares of stock on stock exchanges or over-the-counter (OTC) markets, ownership of a public company is distributed among general public shareholders.

“I wonder if they are a public company, I’d love to invest in them.”

Public offering price (POP)

A mutual fund share’s purchase price, including sales charges.

“I wonder what the public offering price will be when that company goes public.”

Pump and Dump

When a group of investors collude and buy the same stock at the same time to drive up prices (the pump), to sell a short time later (ideally at the peak) to turn a profit. After the group has sold (the dump) the price will drop back to normal levels.

“Some are accusing the Reddit group of a pump and dump.”

Pure Play

A pure play is a company that focuses on just one type of product or service. Some investors prefer to invest in these types of companies because they are easier to analyze and give maximum exposure to a particular market segment.

I like to invest in Pure Plays, because then I know exactly what type of business model I’m investing in.”

Put Option

A put option is a contract that gives the owner the right but not the obligation to sell a specified amount of an underlying security at a predetermined price within a specific timeframe. The predetermined price is referred to as the strike price.

“I’m hoping the price of the underlying asset for my put option falls so that I can turn a profit.”

Quality distribution

The breakdown of a portfolio’s assets based on quality rating of the investments.

“The quality distribution on your portfolio is excellent.”


A quote is the last price at which an asset traded; it is the most recent price that a buyer and seller agreed upon and at which some amount of the asset was transacted.

“What is the quote on that security?”


The percentage of a fund’s movements that result from movements in the index ranging from 0 to 100. A fund with an R2 of 100 means that 100 percent of the fund’s movement can completely be explained by movements in the fund’s external index benchmark.

“The fund I invested in has an R2 of 100.”


Evaluations of the credit quality of bonds usually made by independent rating services. Ratings generally measure the probability of timely repayment of principal and interest on debt securities.

“Be cautious when investing in bonds with lower ratings.”


In investing, ratios are useful tools used for ratio analysis. They can be used to gain insight into whether or not a company might be a good investment.

I always look at a company’s financial ratios before I invest in them.


Rebalancing is the process of realigning the weightings of a portfolio of assets. Rebalancing involves periodically buying or selling assets in a portfolio to maintain an original or desired level of asset allocation or risk

I had to do a lot of rebalancing in my portfolio recently.


A downturn in economic activity, defined by many economists as at least two consecutive quarters of decline in a country’s gross domestic product.

“The economy is in a recession because of the pandemic.”


Sale of mutual fund shares by a shareholder.

“I requested a redemption for some of my mutual fund shares.”

Real Estate

Real estate is property that consists of land and/or buildings. It is a popular asset class to invest in.

“I want to start investing in real estate, but everything is so expensive.”

Real Estate Investment Trust (REIT)

A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. Modeled after mutual funds, REITs pool the capital of numerous investors. This makes it possible for individual investors to earn dividends from real estate investments—without having to buy, manage, or finance any properties themselves.

“A REIT is a great investment if you want to invest in real estate without actually buying any property.”

Real Interest Rate

A real interest rate is an interest rate that has been adjusted to remove the effects of inflation to reflect the real cost of funds to the borrower and the real yield to the lender or to an investor.

“You have to remove the effects of inflation to get the real interest rate.”

Registered Education Savings Plan (RESP)

A Registered Education Savings Plan (RESP), sponsored by the Canadian government, encourages investing in a child’s future post-secondary education. Subscribers to an RESP make contributions that build up tax-free earnings.  The government contributes a certain amount to these plans for children under age 18.

“If you want to save up for your child’s education you should open an RESP.”

Reinvestment option

Refers to an arrangement under which a mutual fund will apply dividends or capital gains distributions for its shareholders toward the purchase of additional shares.

“I set up a reinvestment option so that I can purchase more shares with my earnings from dividends and capital gains.”

Relative risk and potential return

The amount of potential return from an investment that is related to the amount of risk you are willing to accept.

“The relative risk and potential return must be attractive if i”m going to invest.”

Relative Strength Index (RSI)

A commonly used technical indicator that ranges between zero and 100. The RSI plots recent increases in price against recent decreases in price. Traders use this indicator to identify assets that are overbought or oversold. An asset is typically considered overbought when the RSI is above 70 and oversold when it is below 30.

“I was trying to figure out if an asset was overbought or oversold so I looked at its relative strength index.”

Renewable Energy Certificates (RECs)

A market-based instrument that is issued when one megawatt-hour of electricity is generated and delivered to the electricity grid from a renewable energy resource.

RECs can eventually be sold for profit to those looking to offset their carbon emissions or speculators betting on the value of energy credits.”


In finance, repackaging refers to when a private equity firm buys a struggling public company, takes them private, and then revamps its operations in effort to sell it at a profit. It’s like Holmes on Homes, but for big corporations.

“I can’t believe ABC investments bought that struggling company, they must be repackaging it.”


A commonly used concept in technical analysis. Resistance occurs when an upwards trend is expected to pause because of a concentration of supply.

“I’m try to identify resistance levels for a stock so I can figure when its price will top out.”

Return on Assets (ROA)

Return on assets (ROA) is a financial ratio that indicates how profitable a company is in relation to its total assets. Investors can use ROA to determine how efficiently a company uses its assets to generate profits. It is calculated by dividing a company’s net income by its total assets.

“Before I invest in a company,  I usually like to check out their ROA to make sure their generating profits efficiently.”

Return on Equity (ROE)

Return on equity (ROE) is a measure of financial performance. It is calculated by dividing a company’s net income by its shareholders’ equity. Because shareholders’ equity is equal to a company’s assets minus its debt, ROE is considered the return on net assets. ROE is used to evaluate a company’s profitability and how efficient it is at generating profits. The higher the ROE, the more efficient a company’s management is at generating income and growth from its equity.

“I like to calculate a company’s ROE before I invest in them. That way I know if they’re generating profits efficiently or not.”


Rights of accumulation

The right to buy over a period of time. For example, this might be done by an institutional investor to avoid making a single substantial purchase that might drive up the market price, or by a retail investor who wants to reduce risk by dollar-cost averaging.

“I used a right of accumulation to potentially reduce my commission costs.”


In finance, risk refers to the degree of uncertainty and/or potential financial loss inherent in an investment decision. In general, as investment risks rise, investors seek higher returns to compensate themselves for taking such risks.

I don’t like to take on too much risk when I invest.

Risk Averse

Refers to a company or an investor who chooses to preserve capital over the potential for a higher return.

“I’m risk averse so I don’t make any high-risk investments.”

Risk/Reward Ratio

This refers to the amount of risk you take on relative to the expected return on your investments. Ideally, you want a low amount of risk and high expected return but typically when one goes up, so does the other.

The risk/reward ratio on my investments is not ideal.

Risk Tolerance

The degree to which you can tolerate volatility in your investment values.

“I have a really high risk tolerance when it comes to investing.”


Digital platforms that provide automated, algorithm-driven financial planning services with little to no human supervision.

“I’d rather have a real person handle my investments than a robo-advisor.”

Rockets (?)

Refers to a stock that is set to see an increase in price. Another way of saying it’s going “to the moon.”

“That stock is a rocket. It’s going to the moon!”

Rogue Trader

A trader who acts recklessly and independent of others, usually at the expense of the institution that employs the trader and possibly their clients.”

“I hope there are no rogue traders at the bank where I invest my money.”

Roth 401(k)

A Roth 401(k) is an employer-sponsored investment savings account that is funded with after-tax dollars up to the plan’s contribution limit. This type of investment account is well-suited for people who think they will be in a higher tax bracket in retirement than they are now, as withdrawals are tax-free.

“You should contribute as much as you can to your 401(k).”

Roth IRA

A Roth IRA is an individual retirement account (IRA) that allows qualified withdrawals on a tax-free basis provided certain conditions are satisfied. Roth IRAs are funded with after-tax dollars; the contributions are not tax-deductible. But once you start withdrawing funds, the money is tax-free.

“If you want to start investing, opening a Roth IRA is a great start.”

Sales charge

An amount charged for the sale of some fund shares, usually those sold by brokers or other sales professionals. By regulation, a mutual fund sales charge may not exceed 8.5 percent of an investment purchase. The charge may vary depending on the amount invested and the fund chosen. A sales charge or load is reflected in the asked or offering price.

“I look to invest in funds with lower sales charges.”


A group of similar securities, such as equities in a specific industry.

“I like to invest in the energy sector.”

Sector breakdown

Breakdown of securities in a portfolio by industry categories.

“The sector breakdown in my portfolio aligns with my investing goals.”


Another name for investments such as stocks or bonds. The name ‘securities’ comes from the documents that certify an investor’s ownership of particular stocks or bonds.

“There are a number of different securities that you can invest in.”

Securities and Exchange Commission (SEC)

The federal agency created by the Securities and Exchange Act of 1934 that administers the laws governing the securities industry, including the registration and distribution of mutual fund shares.

“As an investor, the SEC protects me by maintaining fair and orderly function in the securities markets.”


A unit of ownership in an investment, such as a share of a stock or a mutual fund.

“I just bought some shares of Apple.”

Share classes

Classes represent ownership in the same fund but charge different fees. This can enable shareholders to choose the type of fee structure that best suits their particular needs.

“They offered different share classes for purchase. I bought class A shares.”

Sharpe Ratio

A risk-adjusted measure that measures reward per unit of risk. The higher the sharpe ratio, the better. The numerator is the difference between the Fund’s annualized return and the annualized return of the risk-free instrument (T-Bills).

“That company’s sharpe ratio is really high. That’s a good sign.”

Short/ Short Position

A short, or a short position, is created when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price. A trader may decide to short a security when she believes that the price of that security is likely to decrease in the near future.

“I think Gamestop is going to decline in price so I shorted the stock.”

Short-term investment

Asset purchased with an investment life of less than a year.

“I was looking for a short-term investment so I purchased 3-month T-Bills.”


Slippage refers to the difference between the expected price of a trade and the price at which the trade is executed. Slippage can occur at any time but is most prevalent during periods of higher volatility when market orders are used.

“There was some costly slippage in the trades I made today.”


The market capitalization of the stocks of companies with market values less than $3 billion.

“A lot of small-cap companies have great growth potential.”

Smart Money

Smart money is the capital that is being controlled by institutional investors, central banks, funds, and other financial professionals. Basically anyone who’s a big player in the market. Smart money also refers to forces that impact financial markets, often led by the actions of central banks. Smart money is invested on a much larger scale than retail investments.

“A friend told me to follow the smart money, so I try to keep an ear to the ground when it comes to where institutional investors are investing their money.”

Social bonds

A bond instrument where the proceeds will be exclusively applied to finance or refinance in part or in full new and/or existing eligible Social Projects.

Social bonds allow me to help raise funds for projects with positive social outcomes.”


A special purpose acquisition company, also known as a “blank check company,” is a shell corporation listed on a stock exchange with the purpose of acquiring a private company, thus making it public without going through the traditional initial public offering process.

SPACs can be risky investments.


In finance, speculation, or speculative trading, refers to the act of conducting a financial transaction that has a substantial risk of losing value but also holds the expectation of a significant gain or other major value.

I have a habit of speculative trading, but it has worked out well for me so far.


Stagflation refers to an economy that is experiencing an increase in inflation and halted economic output at the same time.

Because prices are rising, and the economic recovery from the pandemic is slowing, many are worried that the economy is heading for stagflation.”

Standard & Poor’s Index

Broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks commonly known as the Standard & Poor’s 500 or S&P 500.

“The S&P 500’s performance is a good indicator of the overall economic performance.”

Standard Deviation

A statistical measure of the degree to which an individual value in a probability distribution tends to vary from the mean of the distribution.

“Stocks with low a standard deviation are not very volatile.”


Refers to a company in the first stages of operations. Startups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand.

“Finliti is an exciting new startup!”

Stellar (XLM)

Stellar is an open blockchain network designed to provide enterprise solutions by connecting financial institutions for the purpose of large transactions. Huge transactions between banks and investment firms that typically would take several days, a number of intermediaries, and cost a good deal of money, can now be done nearly instantaneously with no intermediaries and cost little to nothing for those making the transaction. Stellar’s native currency is Lumens (XLM). The network requires users to hold Lumens to be able to transact on the network.

“I’m going to have to hold Lumens if I want to make transactions on the Stellar network.”


A long-term, growth-oriented investment representing ownership in a company; also known as ‘equity.’

“If you want to own a piece of a company  you can purchase their stock.”

Stock Price

Stock price is a term used to describe the price of a certain stock at a particular point in time on the stock market. This is because prices on the stock market are constantly fluctuating.

Microsoft’s stock price is down today, I might buy some more shares.


The owner of common or preferred stock of a corporation. Also called ‘shareholder.’

“Since I bought stocks, I am now a stockholder.”

Stock Split

A stock split is when a company divides the existing shares of its stock into multiple new shares to boost the stock’s liquidity. Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, because the split does not add any real value.

“It’s a great time to purchase Tesla stock because they just did a stock split.”


A deliberate misspelling of stocks. In some contexts, it’s used as a joke term if a loss is made. In other contexts, such as when paired with the side-eye emoji (stonks ?), it means a stock going up that’s worth watching.

Stock Market

The stock market refers to public markets that exist for issuing, buying, and selling stocks that trade on a stock exchange.

I want to start investing in the stock market.

Stop Loss

A stop loss is will automatically sell a position once it is below a certain price level or percentage in the red. It is designed to limit an investor’s loss (e.g. 25%) on a specific stock. 

“I set up a stop loss on some of my positions to limit potential losses.”


In finance, an investment strategy is a set of rules, behaviors or procedures, designed to guide an investor’s selection of an investment portfolio.

I like to use passive strategies when I invest.

Strike Price

A strike price is the set price at which a derivative contract can be bought or sold when it is exercised. For call options, the strike price is where the security can be bought by the option holder; for put options, the strike price is the price at which the security can be sold.

“The strike price is a huge determinant of the value of an option.”

Support Level

Support level, in finance, refers to a price point where a lot of people start buying a particular stock or investment. This buying activity prevents the price from falling any further. So, you could think of it as a safety net that the stock price bounces against if it starts to drop. It’s the price level where investors feel the investment is a “good deal”, so they start buying, which in turn helps the price to stabilize or even go up.

“John noticed that the stock price kept bouncing back anytime it fell to $20, thus identifying $20 to be its support level.”

Sustainability Accounting Standards Board (SASB)

A nonprofit organization with a mission to develop sustainability-related accounting standards.

SASB connects businesses and investors on the financial impacts of sustainability.”

Sustainability Bonds

Bond instrument where the proceeds will be exclusively applied to finance or re-finance a combination of both Green and Social Projects.

“Investing in sustainability bonds means I can help fund green and social projects.”

Sustainable Development Goals (SDGs)

A United Nations Initiative for all countries to adopt 17 goals that address global challenges including poverty, inequality, climate change, environmental degradation, and peace and justice.

“No poverty is the first of the 17 SDG’s.”

Sustainable investing

A forward-looking investment approach that aims to deliver a long-term sustainable financial return in a fast-changing world. It encompasses a wide range of approaches, the core of which starts with the incorporation of ESG information.

“I try to practice sustainable investing.”

Sustainability-Linked Bonds (SLB’s)

A Bond instrument for which the financial and/or structural characteristics can vary depending on whether the issuer achieves predefined Sustainability/ ESG objectives.

“The issuer of the sustainability-linked bonds that I purchased achieved their ESG goals.”

Systematic investment plan

A service option that allows investors to buy mutual fund shares on a regular schedule, usually through bank account deductions.

“I use a systematic investment plan to buy mutual fund shares consistently.”

Systemic Risk

Systemic risk is the possibility that an event at the company level could trigger severe instability or collapse an entire industry or economy. Systemic risk was a major contributor to the financial crisis of 2008.

To manage systemic risk, investors should diversify across multiple asset classes.


Taxes are mandatory contributions levied on individuals or corporations by a government entity. They can be local, regional or national.

I hate paying taxes but at least it pays for our healthcare.

Tax-exempt income

Tax-exempt income is income that is exempt from income taxes. A purchaser of state municipal bonds is exempt from federal taxation on the income earned from the bonds.

“State municipal bonds are a great source of tax-exempt income.”


Refers to financial gain in the stock market. It is often used by the traders of the wall street bets Reddit group.

“I got some serious tendies from my stocks this week.”

Terminal Rate

The terminal rate is the level at which a central bank is expected to stop raising interest rates. It’s the final stop on the rate hike schedule. 

It’s starting to look like the Bank of Canada’s terminal rate will be higher than expected. 

Tether (USDT)

Tether was one of the first and most popular of a group of so-called stablecoins, cryptocurrencies that aim to peg their market value to a currency or other external reference point in order to reduce volatility. Tether and other stablecoins attempt to smooth out price fluctuations in order to attract users who may otherwise be cautious. Tether’s price is tied directly to the price of the US dollar.

Tether’s system allows me to make transfers from other cryptocurrencies back to US dollars with ease.”

Time Value of Money (TVM)

This refers to the concept that money you have today is worth more than the identical sum in the future due to its potential earning capacity.

“You must consider the time value of money when investing.”

To the Moon

Refers to stock or cryptocurrency that will increase rapidly in price.”

“That stock is going to the moon!”

Too Big to Fail

Describes a business or business sector deemed to be so deeply ingrained in a financial system or economy that its failure would be disastrous to the economy. Therefore, the government will consider bailing out the business or even an entire sector—such as Wall Street banks or U.S. carmakers—to prevent economic disaster.

“The auto industry is just too big to fail.”

Toronto Stock Exchange (TSX)

The term Toronto Stock Exchange (TSX) refers to a Canadian stock exchange located in Toronto, Ontario. Founded in 1861, the TSX is Canada’s premier stock exchange with more than 1,500 listed companies, including those from the energy, mining, technology, and real estate sectors.

“I bought some Suncor stock on the TSX.”

Total return

Accounts for all of the dividends and interest earned before deductions for fees and expenses, in addition to any changes in the value of the principal, including share price, assuming the funds’ dividends and capital gains are reinvested.

“My total return this year was 10%.”

Tracking Error

The active risk of the portfolio. It determines the annualized standard deviation of the excess returns between the portfolio and the benchmark.

“The tracking error for my portfolio was larger this year than last.”


In business, traction refers to the progress of a start-up company and the momentum it gains as the business grows. When traction is lacking, sales dry up and the customer base dwindles, regardless of the effort put into the enterprise

Finliti is gaining a lot of traction.


Trade is a basic economic concept involving the buying and selling of goods and services, with compensation paid by a buyer to a seller, or the exchange of goods or services between parties.

“I just started trading securities with Finliti.” (Said a future investor!)

Traditional IRA

A traditional individual retirement account (IRA) allows individuals to direct pre-tax income toward investments that can grow tax-deferred. The IRS assesses no capital gains or dividend income taxes until the beneficiary makes a withdrawal. Individual taxpayers can contribute 100% of any earned compensation up to a specified maximum dollar amount.

“I opened a traditional IRA to start saving for retirement.”

Trailing Stop

A modification of a typical stop order that can be set at a defined percentage or dollar amount away from a security’s current market price. For a long position, an investor places a trailing stop loss below the current market price. For a short position, an investor places the trailing stop above the current market price.

“I set up a trailing stop on the stocks I just bought to limit potential losses.”

Transaction Fees

Transaction fees are expenses incurred when trading. This typically includes brokers’ commissions and spreads which are the difference between the price the dealer paid for a security and the price the buyer pays.

Minimizing transaction fees can save you a lot of money over time.

Treasury bill

Negotiable short-term (one year or less) debt obligations issued by the U.S. government and backed by its full faith and credit.

“I was looking for a short-term investment so I bought treasury bills.”

Treasury bond

Negotiable long-term (10 years or longer) debt obligations issued by the U.S. government and backed by its full faith and credit.

Treasury bonds are a low-risk investment.”

Treasury note

Negotiable medium-term (one year to 10 years) debt obligations issued by the U.S. government and backed by its full faith and credit.

“I just invested in treasury notes.”

Treasury security

Securities issued by the U.S. Treasury Department and backed by the U.S. government.

Treasury securities are very low-risk investments.”


1. An organization or individual who has responsibility for one or more accounts. 2. An individual who, as part of a fund’s board of trustees, has ultimate responsibility for a fund’s activities.

“My trustee takes care of my accounts for me.”

Turnover Ratio

Percentage of holdings in a mutual fund that is sold in a specified period.

“That mutual fund had a huge turnover ratio this past year.”

Ultra ETF

An ultra ETF is a type of exchange-traded fund (ETF) that uses leverage in an attempt to amplify gains. While the name suggests that an ultra ETF is better than a normal ETF, this is not the case. The use of leverage simply increases the risk associated with an investment. With ultra ETFs, both gains and losses are amplified.

“I used to invest in Ultra ETFs, but I later realized they were a little too volatile for my risk appetite.”

Underlying Asset

Underlying assets are the financial assets upon which a derivative’s price is based. Options are an example of a derivative. A derivative is a financial instrument with a price that is based on a different asset.

“The price of the underlying asset at the expiration date of my call will determine if I exercise the option.”


In finance, Underwater is slang for an asset that is worth less than it was paid for. It commonly refers to having a loan on an asset that is larger than what the asset is worth. For example, a home is underwater if the mortgage is larger than what the home is worth. 

“I’m glad I didn’t buy real-estate when the market peaked a couple years ago, otherwise I’d probably be underwater right now.” 


Underwriting is the process through which an individual or institution takes on financial risk for a fee. This risk most typically involves loans, insurance, or investments.

“That financial institute does a ton of underwriting.”


A term used in the venture capital industry to describe a privately held startup company with a value of over $1 billion.

“Canva is a great example of a unicorn company.”

Unrealized Gain

An unrealized gain is a theoretical profit that exists on paper, resulting from an investment that has not yet been sold for cash.

“The increase in the price of my stocks represents an unrealized gain.”

Unrealized Loss

Unrealized losses are losses from holding onto an asset that has decreased in price but has not been sold.

“The decrease in the price of the stocks I own represents an unrealized loss.”

Unsolicited Financial Advice

Unsolicited financial advice is financial advice that was not asked for and possibly not wanted. People often give unsolicited financial advice.

I really wish my buddy would stop giving me unsolicited financial advice.

Unsystematic Risk

Unsystematic risk is the risk that is unique to a specific company or industry. It’s also known as specific risk, diversifiable risk, or residual risk.

In an investment portfolio, unsystematic risk can be reduced by diversifying.


An estimate of the value or worth of a company; the price investors assign to an individual stock.      

“We’re performing a valuation of the company.”

Valuation Metrics

Valuation metrics are ratios and models that can give investors an idea of what a company may be worth. Some are based solely on the company’s financial statements, while others compare the market price to per share statistics for the company.

I always look at valuation metrics before I invest in a company.

Value investing

A strategy whereby investors purchase equity securities that they believe are selling below estimated true value. The investor can profit by buying these securities then selling them once they appreciate up to their real value.

Value investing is a very difficult practice when operating in an efficient market.”

Value Stock

Typically an overlooked or underpriced company that is growing at slower rates.

“You should invest in that company, they’re a value stock.”

Value-style funds

Value-style funds typically hold company stocks that are undervalued in the market. Fundamentally strong companies whose stocks are inexpensive but trending upward may also be selected for value funds.

“I’m investing in a value-style fund.”

Value Traps

Value traps are investments that are trading at such low levels and present as buying opportunities for investors but are actually misleading.

The best way to avoid value traps is by doing your homework.

Vanilla Strategy

Refers to a very simple investing strategy. Usually involves passively investing in ETFs.

“I like to keep it simple when I invest, so I use a vanilla strategy.”


In finance, a venture is a risky undertaking or investment that someone takes with the hope of turning a large profit down the road.

I have an appetite for risky new ventures.

Venture capital (VC)

A form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

“We need some venture capital to fund our startup.”


The amount and frequency with which an investment fluctuates in value. The ups and downs and ziggly zaggles of the stock market that may cause extreme euphoria or panic.

“That stock is very volatile.”

Voting shares

A type of share that gives investors a say in how a company’s corporate policy is made, including the election of the board of directors.

“Some companies offer both voting shares and shares without voting rights.”


In the world of finance, a wallflower is a stock that gets little attention from investors. Wallflowers are often stocks in unpopular industries and typically have low trading volume. Because of this, Wallflowers are seen as high risk investments.

“I was super hyped about this new drywall stock that I bought last year, but it’s turned into a total Wallflower!”

Wall Street

A street located in the lower Manhattan section of New York City and is the home of the New York Stock Exchange or NYSE. Wall Street has also been the historic headquarters of some of the largest U.S. brokerages and investment banks.

“The biggest U.S. brokerages are on Wall Street.”

WallStreetBets (WSB)

A subreddit where participants discuss stock and options trading. They are known for their aggressive trading strategies and recently their role in the Gamestop short squeeze.

“I can’t believe wallstreetbets drove up the price of Gamestop that much.”


Wealth refers to an abundance of valuable possessions or money.

I’m really focused on building my wealth through investing.

Wealth Management

Wealth management is the utilization of processes, services and products designed to grow, protect and utilize a person’s wealth.

I prefer to use more active wealth management strategies.”

Wealth Warrior

Someone who is committed to becoming financially literate and financially free.

“Ever since I signed up for Finliti, I’ve become quite the wealth warrior.”

Weighted Average Market Cap

Most indexes are constructed by weighting the market capitalization of each stock on the index. In such an index, larger companies account for a greater portion of the index. An example is the S&P 500 Index.

“The weighted average market cap of that index is very high.”

Weighted average maturity

A Fund’s WAM calculates an average time to maturity of all the securities held in the portfolio, weighted by each security’s percentage of net assets. The calculation takes into account the final maturity for a fixed income security and the interest-rate reset date for floating rate securities held in the portfolio. This is a way to measure a fund’s sensitivity to potential interest rate changes.

“The weighted average maturity in my bond portfolio is quite short.”


Someone who owns a lot of a stock or cryptocurrency, enough that if they sell, it can cause the price of the asset to drop by flooding supply.

“That investor is a whale! They better not sell their shares.”


Wildcatting is a practice implemented by the US Securities and Exchange Commission (SEC) that requires the investigation or review of an entire sector when a significant issue is found at one or two companies in that sector.

The SEC is wildcatting the financial sector after they found a couple banks cooking their books.

Working Capital Ratio

This is a ratio that you can use to measure how capable a company is of meeting its current financial obligations. It is calculated by dividing a company’s current assets by their current liabilities.

“I try to avoid investing in companies with really low working capital ratios.

Yellow Knight

A Yellow Knight is a company that was working on a hostile takeover of another company, but then backs down, and settles for a merger with the target company instead. It’s sort of an “If you can’t beat em, join em” type of situation.

“It looks like that company is a Yellow Knight, they settled for a merger after coming in hot with that takeover attempt.”


Annual percentage rate of return on capital. The dividend or interest paid by a company expressed as a percentage of the current price.

“My yield from investments was not very good this year.”

Yield to maturity

The concept used to determine the rate of return an investor will receive if a long-term, interest-bearing investment, such as a bond, is held to its maturity date.

“What is the yield to maturity on the bond you purchased?”

YTD total return

Year-to-date return on investment including appreciation and dividends or interest.

“My YTD total return exceeded expectations.”

YTD Return (w load)

Year-to-date return on investment including appreciation and dividends or interest, minus any applicable expenses or charges.

“My YTD return with load is not very good compared to my YTD without load.”


A cryptocurrency with a decentralized blockchain that seeks to provide anonymity for its users and their transactions. As a digital currency, ZCash is similar to Bitcoin. Like Bitcoin, ZCash also has an including its open-source code, but its major differences lie in the level of privacy and fungibility that each provides.

ZCash is very similar to bitcoin in a number of ways.”

Zero-Coupon Bond

A zero-coupon bond is a debt security that does not pay interest but instead trades at a deep discount, rendering a profit at maturity, when the bond is redeemed for its full face value.

“I don’t need a steady stream of income so invested in a zero-coupon bond.”

Zero-Dividend Preferred Stock

A zero-dividend preferred stock is a preferred share issued by a company that is not required to pay a dividend to its holder. The owner of a zero-dividend preferred share will earn income from capital appreciation and may receive a one-time payment at the end of the investment term.

“I hope my zero-dividend preferred stock appreciates in value.”

Zombie ETF

A zombie exchange-traded fund (ETF) is generating little interest from new investors. It is described as a zombie because it isn’t growing and making money for the asset manager that issued it.

“I need to get out of this zombie ETF that I’m invested in.”

12b-1 fee

A mutual fund fee, named for the SEC rule that permits it, used to pay for broker-dealer compensation and other distribution costs. If a fund has a 12b-1 fee, it will be disclosed in the fee table of the fund’s prospectus.

“The mutual fund I invested in has a 12b-1 fee.”

30-day SEC yield (date)

Represents net investment income earned by a fund over a 30-day period, expressed as an annual percentage rate based on the fund’s share price at the end of the 30-day period. The 30-day yield should be regarded as an estimate of investment income and may not equal the fund’s actual income distribution rate.

“The 30-day SEC yield exceeded expectations this past period.”

52 Week High

A security’s trading high point over the last 52-week period.

“Microsoft’s 52-week high is $259.99.”

52 Week Low

A security’s trading low point over the last 52-week period.

“Starbucks 52-week low is $70.14.”

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