Market microstructure and execution

Gross Domestic Product (GDP)

Total value of goods and services produced in a country.

Gross National Product (GNP)

Total value of goods and services produced by a country's residents.

Deflation

Decrease in the general price level of goods and services.

Stagflation

High inflation combined with high unemployment and stagnant demand.

Recession

Period of temporary economic decline.

Supply and Demand

The relationship between the quantity of a commodity and its price.

Elasticity

Measure of a variable's sensitivity to a change in another variable.

Monopoly

A market structure characterized by a single seller.

Oligopoly

A market structure in which a few firms dominate.

Fiscal Policy

Use of government spending and tax policies to influence economic conditions.

Monetary Policy

Central bank actions to manage money supply.

Purchasing Power Parity (PPP)

Theory comparing currencies through a "basket of goods".

Trade Deficit

When a country's imports exceed its exports.

Surplus

An amount of something left over when requirements have been met.

Subsidy

Government financial support to a business or sector.

Tariff

Tax imposed on imported goods and services.

Central Bank

Institution that manages a state's currency and monetary policy.

Asset

Resource with economic value that an individual or corporation owns.

Liability

Something a person or company owes, usually a sum of money.

Equity

The value of an owner's interest in an asset.

Balance Sheet

Financial statement showing assets, liabilities, and equity.

Cash Flow

The total amount of money being transferred into and out of a business.

Dividend

Distribution of profits by a corporation to its shareholders.

Portfolio

A collection of financial investments.

IPO

Initial Public Offering - first sale of stock to the public.

Bull Market

Market condition where prices are rising.

Bear Market

Market condition where prices are falling.

Short Selling

Selling borrowed securities hoping to buy them back lower.

Margin Call

Demand from a broker to deposit more money to cover losses.

Volatility

Degree of variation of a trading price series over time.

Liquidity

Ease with which an asset can be converted into cash.

Derivative

Contract deriving value from an underlying asset.

Futures Contract

Agreement to buy or sell an asset at a future date.

Option

Right, but not obligation, to buy or sell an asset.

Bond

Loan made by an investor to a borrower.

Mutual Fund

Pool of money from investors to buy securities.

Market Cap

Total value of a company's outstanding shares.

Debit

Entry recording an amount owed.

Credit

Entry recording a sum received.

General Ledger

Master record of all financial transactions.

Trial Balance

Report ensuring debits equal credits.

Amortization

Spreading cost of intangible assets over time.

Depreciation

Allocating cost of tangible assets over useful life.

Net Income

Revenue minus expenses, taxes, and costs.

Gross Margin

Revenue minus cost of goods sold (COGS).

Break-even Point

Point where revenue equals costs.

Revenue

Income generated from normal business operations.

Expense

Cost incurred to generate revenue.

Audit

Official examination of financial accounts.

Credit Risk

Risk of borrower defaulting on loan obligations.

Market Risk

Risk of losses due to market price movements.

Hedging

Strategy to offset potential losses in investments.

VaR

Value at Risk - maximum potential loss over a period.

Remittance

Transfer of money to a person in another location.

Underwriting

Process of evaluating risk for insurance or loans.

Actuary

Professional who analyzes financial risk using statistics.

Policy

Contract between insurer and policyholder.

Reinsurance

Insurance purchased by insurance companies to manage risk.

Liability Insurance

Insurance covering legal responsibility for harm to others.

Life Insurance

Insurance paying beneficiaries upon policyholder death.

Health Insurance

Insurance covering medical expenses.

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization.

ROI

Return on Investment - profit relative to cost.

ROE

Return on Equity - profit relative to shareholders equity.

CAGR

Compound Annual Growth Rate.

Accounts Receivable

Money owed to a company by its customers.

Accounts Payable

Money a company owes to its suppliers.

Accrual

Recording revenue/expenses when earned, not when cash is received.

Tax Deduction

Expense that reduces taxable income.

Limit Order

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

Market Order

Order to buy/sell immediately at current price.

Stop Loss

Order to sell when price falls to a certain level.

Take Profit

Order to sell when price rises to target level.

Candlestick

Chart showing price movement over time period.

Moving Average

Average price over a specific number of periods.

RSI

Relative Strength Index - momentum indicator.

MACD

Moving Average Convergence Divergence indicator.

Volume

Number of shares or contracts traded.

Spread

Difference between bid and ask price.

Wire Transfer

Electronic transfer of funds between banks.

Market Maker

Firm providing liquidity by buying and selling.

Bid Price

Highest price a buyer will pay.

Ask Price

Lowest price a seller will accept.

Blue Chip

Stock of a large, reliable corporation.

Penny Stock

Low-priced, speculative stock.

Arbitrage

Profiting from price differences in markets.

Collateral

Asset pledged to secure a loan.

Insolvency

Inability to pay debts.

Liquidate

To convert assets into cash.

Fiat Currency

Government-issued currency not backed by gold.

Mergers and Acquisitions (M&A)

Consolidation of companies or assets.

LBO

Leveraged Buyout; buying with borrowed money.

Valuation

Process of determining asset value.

Synergy

Combined value greater than sum of parts.

Swap

Exchange of financial instruments.

Securitization

Pooling debt into investable securities.

SPV

Special Purpose Vehicle; subsidiary for specific risk.

Dark Pool

Private exchange for trading securities.

High-Frequency Trading (HFT)

Trading using powerful computers at high speed.

Quantitative Easing

Central bank buying securities to increase money supply.

Interest Rate

Cost of borrowing money.

Basis Point

One hundredth of one percent.

ROA

Return on Assets.

P/E Ratio

Price to Earnings ratio.

EPS

Earnings Per Share.

Diversification

Spreading investments to reduce risk.

Risk Management

Identifying and mitigating risks.

Credit Rating

Evaluation of creditworthiness.

Bankruptcy

Legal proceeding for insolvency.

Forex

Foreign Exchange market.

Exchange Rate

Value of one currency vs another.

Microfinance

Banking services for low-income individuals.

Gig Economy

Labor market of freelance jobs.

Outsourcing

Hiring outside party for services.

Offshoring

Relocating business process overseas.

Logistics

Management of flow of goods.

Inventory

Goods held for sale.

Wholesale

Selling goods in large quantities.

B2B

Business to Business.

B2C

Business to Consumer.

Startup

Young company founded to develop unique product.

Unicorn

Startup valued at over $1 billion.

Incubator

Org helping new startups develop.

Bootstrapping

Starting business with personal finances.

Exit Strategy

Plan to sell company ownership.

Patent

Legal right to make/sell an invention.

Copyright

Legal right to print/publish material.

Trademark

Symbol/word legally registered as representing a company.

Intellectual Property (IP)

Creations of the mind.

NDA

Non-Disclosure Agreement.

Stakeholder

Person with interest in a business.

Shareholder

Owner of shares in a company.

Board of Directors

Group elected to represent shareholders.

CEO

Chief Executive Officer.

CFO

Chief Financial Officer.

CTO

Chief Technology Officer.

COO

Chief Operating Officer.

HR

Human Resources department.

Payroll

List of employees and their wages.

Mortgage

Loan to buy real estate.

Foreclosure

Lender taking possession of mortgaged property.

REIT

Real Estate Investment Trust.

Lease

Contract renting property.

Tenant

Person renting a property.

Landlord

Owner of rented property.

Tax

Compulsory contribution to state revenue.

Income Tax

Tax on personal earnings.

Corporate Tax

Tax on company profits.

VAT

Value Added Tax.

Deduction

Amount subtracted from taxable income.

Tax Haven

Country with low taxes.

Budget

Estimate of income and expenditure.

Deficit

Spending exceeds revenue.

Fiscal Year

Year used for accounting purposes.

Quarter

Three-month period.

KPI

Key Performance Indicator.

Metric

Standard of measurement.

Variable Cost

Cost that changes with production volume.

Overhead

Ongoing business expenses.

Cash Cow

Business unit generating steady cash.

Loss Leader

Product sold at loss to attract customers.

Economies of Scale

Cost advantages due to scale.

Credit Score

Measure of an individual's creditworthiness.

Overdraft

Spending more money than is in the account.

ATM

Automated Teller Machine.

PIN

Personal Identification Number.

Cheque

Paper order to pay money.

POS

Point of Sale.

Mobile Banking

Banking via mobile app.

Deposit

Money placed in a bank account.

Withdrawal

Taking money out of an account.

Balance

Amount of money in account.

Statement

Record of transactions.

Correction

Temporary price decline.

Support

Price level where buying is strong.

Resistance

Price level where selling is strong.

Trend

Direction of market movement.

Index

Measure of market section performance.

ETF

Exchange Traded Fund.

Yield

Income returned on an investment.

Principal

Original sum invested/lent.

Pip

Smallest unit of price change in Forex.

Lot

Standardized quantity of a financial instrument.

Asset Allocation

Strategy of dividing investment portfolio.

Rebalancing

Realiging weightings of a portfolio.

White Paper

Report giving info about a project.

Roadmap

Plan or strategy intended to achieve a goal.

OPEX

Operating Expenses.

Dividend Yield

Dividend per share divided by price.

Bear Trap

False signal causing sell-off before rise.

Bull Trap

False signal causing buying before drop.

Dead Cat Bounce

Temporary recovery in a bear market.

Black Swan

Unpredictable event with huge impact.

GDP

Gross Domestic Product.

Treasury Bill

Short-term government debt.

Junk Bond

High risk, high yield bond.

Liquidation

Selling off assets to pay creditors.

Solvency

Ability to meet long-term debts.

Income Statement

Report of financial performance.

Cash Flow Statement

Report of cash inflows/outflows.

Tax Avoidance

Legal usage of tax regime limits.

Offshore Account

Bank account in a foreign country.

Shell Company

Inactive company used for maneuvers.

Holding Company

Company owning other companies.

Subsidiary

Company controlled by a holding.

Merger

Combination of two companies.

Acquisition

One company buying another.

Joint Venture

Business arrangement by two parties.

Accrual Accounting

Recording revenues when earned.

Book Value

Value of asset on balance sheet.

Burn Rate

Rate at which cash is spent.

Operating Margin

Profit after operating costs.

Net Margin

Percentage of revenue as profit.

Write-off

Reduction of asset value to zero.

Demand

Desire to buy goods.

Equilibrium

Where supply meets demand.

Microeconomics

Study of individual decisions.

Macroeconomics

Study of economy as a whole.

Austerity

Cutting govt spending.

Stimulus

Govt spending to boost economy.

APR

Annual Percentage Rate.

APY

Annual Percentage Yield.

Compound Interest

Interest on interest.

S&P 500

Index of top 500 US companies.

NASDAQ

Tech-heavy US stock exchange.

Dow Jones

Index of 30 major US stocks.

Index Fund

Fund tracking market index.

Risk Tolerance

Ability to handle loss.

Liquidity Risk

Risk of not being able to sell.

Sales Tax

Tax on goods sold.

Excise Tax

Tax on specific goods.

Property Tax

Tax on real estate.

Pension

Fund for retirement income.

401(k)

US retirement savings plan.

IRA

Individual Retirement Account.

Estate Planning

Preparing for asset transfer after death.

Will

Legal doc for inheritance.

Trust

Fiduciary arrangement for assets.

Net Worth

Assets minus liabilities.

Loss

Financial deficit.

Commodity

Basic good like oil or gold.

Futures

Contract to buy/sell later.

Call Option

Right to buy.

Put Option

Right to sell.

Strike Price

Price option can be exercised.

Gearing

Debt to equity ratio.

Escrow

Third party holding funds.

Fiat Money

Govt issued currency not backed by gold.

Gold Standard

Currency backed by gold.

Barter

Trading goods for goods.

Currency

System of money.

Devaluation

Official lowering of currency value.

Revaluation

Increase in currency value.

Transaction

Exchange of value.

Ledger

Book of financial accounts.

Beta

Measure of volatility vs market.

Alpha

Excess return over benchmark.

DCF

Discounted Cash Flow.

Enterprise Value

Total value of a company.

FIFO

First In, First Out.

LIFO

Last In, First Out.

GAAP

Generally Accepted Accounting Principles.

IFRS

Intl Financial Reporting Standards.

Double Entry

Every entry has a debit and credit.

Marginal Utility

Benefit from one more unit.

Libor

London Interbank Offered Rate.

Yield Curve

Plot of interest rates.

Repo Market

Market for repurchase agreements.

Federal Funds Rate

Interest rate for banks lending to other banks.

Fractional Reserve

Banks keep only fraction of deposits.

Convertible Bond

Bond converting to stock.

Zero Coupon Bond

Bond paying no interest but sold at discount.

Sovereign Debt

Debt issued by a country.

CDO

Collateralized Debt Obligation.

Current Ratio

Current assets / Current liabilities.

Quick Ratio

Liquid assets / Current liabilities.

PEG Ratio

P/E ratio divided by growth rate.

Asset Turnover

Revenue / Total Assets.

Inventory Turnover

Sales / Average Inventory.

Receivables Turnover

Sales / Accounts Receivable.

DSO

Days Sales Outstanding.

Price to Book

Market price / Book value.

Price to Sales

Market cap / Revenue.

Yield to Maturity

Total return if bond held to maturity.

Duration

Sensitivity of bond price to interest rates.

Convexity

Measure of curvature of price-yield relationship.

Puttable Bond

Bond holder can sell back early.

Efficient Market

Hypothesis that prices reflect all info.

Random Walk

Stock prices move randomly.

Behavioral Finance

Psychology in financial decisions.

Black-Scholes

Model for pricing options.

Currency Swap

Exchange of principal/interest in currencies.

Quantitative Analysis

Using math for finance.

Technical Analysis

Evaluating price patterns.

Sentiment Analysis

Gauging market mood.

Blue Ocean

Uncontested market space.

Red Ocean

Competitive market space.

Value Trap

Stock looks cheap but isn't.

Short Squeeze

Short sellers forced to buy.

Pump and Dump

Manipulating price up then selling.

Insider Trading

Trading on non-public info.

Chinese Wall

Barrier to info flow in bank.

Fiduciary

Acting in best interest of client.

Escrow Account

Funds held by third party.

Restructuring

Reorganizing company operations.

Poison Pill

Tactic to prevent takeover.

Seed Round

First official funding round.

Series A

Funding after seed round.

Return on Equity

Net income / Shareholder equity.

Return on Assets

Net income / Total assets.

Gross Domestic Product

Total value of goods produced.

Mercantilism

Economic theory of accumulating wealth.

Laissez Faire

Free market with no intervention.

Invisible Hand

Self-regulating market force.

Bretton Woods

1944 monetary agreement.

Phillips Curve

Relation between inflation and unemployment.

Laffer Curve

Tax rate vs tax revenue.

Gini Coefficient

Measure of inequality.

Purchasing Power Parity

Comparing currency buying power.

Big Mac Index

Informal way to measure PPP.

Game Theory

Math of strategic decision making.

Nash Equilibrium

Optimal state in game theory.

Pareto Efficiency

Cannot help one without hurting another.

Tragedy of the Commons

Overuse of shared resources.

Moral Hazard

Taking risk because others pay.

Asymmetric Information

One party knows more.

Ponzi Scheme

Paying old investors with new money.

Pyramid Scheme

Recruiting members for money.

Embezzlement

Stealing funds you manage.

Offshore

Outside national boundaries.

Smurfing

Breaking large transactions to avoid checks.

Nostro Account

Our money in their bank.

Vostro Account

Their money in our bank.

Correspondent Bank

Bank providing services to another.

Bill of Lading

Receipt for cargo shipment.

Factoring

Selling invoices for cash.

Banker's Draft

Check guaranteed by bank.

Cashier's Check

Check drawn on bank's funds.

Clearing House

Intermediary settling trades.

Settlement

Finalizing a trade.

Reconciliation

Comparing records for accuracy.

BIC

Bank Identifier Code.

Line of Credit

Flexible loan amount.

Loan Shark

Illegal moneylender.

Ticker Symbol

Abbreviation for a stock.

VIX

Volatility Index.

Circuit Breaker

Halting trade to stop panic.

Margin Account

Account allowing borrowing.

Cash Account

Account without leverage.

Day Trading

Buying and selling same day.

Swing Trading

Holding for days or weeks.

Scalping

Making many small trades.

Dividend Aristocrat

Company increasing dividends 25y.

Growth Stock

Stock expected to grow fast.

Value Stock

Undervalued stock.

Cyclical Stock

Stock following economy.

Defensive Stock

Stock stable in downturn.

Beta Slippage

Decay in leveraged ETFs.

Beneficiary

Person receiving payout.

Policyholder

Person owning insurance.

Grace Period

Time to pay without penalty.

Exclusion

What insurance won't cover.

Federal Reserve

Central bank of the US.

ECB

European Central Bank.

Quantitative Tightening

Central bank selling assets.

Order Book

List of buy and sell orders.

Stop Limit

Stop order becoming limit order.

Fill or Kill

Execute totally or cancel.

GTC

Good Till Cancelled.

Subprime

Risky borrower.

Quota

Limit on quantity.

Substitute Good

Good replacing another.

Complementary Good

Good used with another.

Normal Good

Demand rises with income.

Inferior Good

Demand falls with income.

Veblen Good

Demand rises with price (status).

Giffen Good

Demand rises with price (necessity).

Pension Fund

Fund for retirement.

Sovereign Wealth Fund

State-owned investment fund.

SPAC

Special Purpose Acquisition Company.

Direct Listing

Listing without IPO underwriters.

Carried Interest

Profit share for fund managers.

Lock-up Period

Period executing cannot sell.

Vesting

Earning asset over time.

Stock Option

Right to buy stock.

RSU

Restricted Stock Unit.

High Water Mark

Peak value of a fund.

Hurdle Rate

Min return needed for profit fee.

Family Office

Wealth management for rich family.

Accredited Investor

Investor allowed in risky deals.

High Net Worth

High Net Worth Individual.

Black Market

Illegal trade market.

Grey Market

Unofficial but not illegal trade.

Appreciation

Increase in currency value.

Ammortization

Paying off debt over time.

Interest

Cost of borrowing.

Emergency Fund

Money set aside for unexpected expenses.

FICO

Popular credit scoring model.

Budgeting

Creating a plan for spending money.

50/30/20 Rule

Budget rule: needs, wants, savings.

Lifestyle Inflation

Spending more as income increases.

Financial Independence

Having enough wealth to live without working.

FIRE

Financial Independence, Retire Early.

DCA

Dollar Cost Averaging.

Time Horizon

Length of time held investment.

Passive Income

Income requiring little effort.

Active Income

Income from working.

PPP

Purchasing Power Parity.

Trade Surplus

Exports exceed imports.

QE

Quantitative Easing; printing money.

Depression

Severe and prolonged recession.

Yield Farming

Earning rewards by providing liquidity to DeFi protocols.

Cross-border Payment

Payment sent from one country to another.

Liquidity Pool

Collection of funds locked in a smart contract.

AMM

Automated Market Maker.

Impermanent Loss

Loss sending when liquidity mining.

Flippening

Ethereum market cap surpassing Bitcoin.

Slippage

Difference between expected and executed price.

Algorithmic Trading

Trading using automated algorithms.

High Frequency Trading

Ultra-fast automated trading.

Front Running

Trading based on advance info.

Spoofing

Placing fake orders.

Wash Trading

Buying and selling to fake volume.

Latency

Time for data to travel.

Social Trading

Copying trades of others.

Copy Trading

Auto-executing copied trades.

HFT

High Frequency Trading.

OTC

Over The Counter trading.

Liquid Staking

Staking while keeping liquidity.

Fully Diluted Valuation

Market cap if all tokens flowed.

Sequencer

Node ordering rollup transactions.

Liquidity Mining

Earning tokens by providing liquidity.

Front-running

Trading based on advanced knowledge of pending transactions.

Prediction Market

Market betting on outcomes of future events.

Market Dominance

Percentage of total market cap held by one coin.

Quantitative Trading

Trading based on mathematical models.

Exchange

Platform for trading assets.

Order

Instruction to buy or sell.

Product Market Fit

Being in a good market with a product that can satisfy that market.

Disruption

Innovation creating a new market.

Sorting

Arranging items in order.

Algorithm Trading

Trading by algorithms.

Sorting Algorithm

Method to arrange data in order.

XLSX

Microsoft Excel spreadsheet.