Glossary of Financial Terms

A loan specifically used to purchase real estate, where the property serves as collateral for the loan, typically requiring regular payments of principal and interest over a set period.

An investment vehicle that pools money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities, managed by professional portfolio managers.

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The National Association of Securities Dealers Automated Quotations, a global electronic marketplace for buying and selling securities, known for its high concentration of technology and growth-oriented companies.

Net Asset Value - The value of a fund's assets minus its liabilities, representing the per-share price at which investors can buy or sell fund shares.

Non-Farm Payrolls - A monthly U.S. economic indicator that measures the net change in employment excluding the farming sector, government employees, private households, and nonprofit organizations, often impacting market volatility, particularly in forex and U.S. dollar-related trades.

Non-Sufficient Funds - A term used when a bank account does not have enough money to cover a transaction, often resulting in a bounced check or declined payment.

New York Stock Exchange - The largest stock exchange in the world by market capitalization, located in New York City, where shares of publicly traded companies are bought and sold.

A stock market index that tracks the performance of 100 of the largest non-financial companies listed on the Nasdaq Stock Exchange, often representing sectors like technology, healthcare, and consumer services.

The total profit of a company after all expenses, taxes, and costs have been deducted from total revenue, often referred to as the "bottom line" or net profit.

The total value of an individual’s or entity's assets minus its liabilities, representing financial health. It is calculated using the formula: Net Worth=Total Assets−Total Liabilities; It indicates the owner's equity in assets after all debts are paid.

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Order Block – A price range where large institutions have placed significant orders, often leading to future reversals or strong reactions when revisited.

Once Cancels the Other - A type of order that allows a trader to place two orders simultaneously, where the execution of one order cancels the other, often used to set profit targets and stop-loss levels.

Opening Range Breakout - A trading strategy that identifies potential buy or sell opportunities based on price movement breaking above or below the high or low of the opening range, typically during the first minutes of the trading session.

Over-the-Counter (off-exchange trading) - A decentralized market where financial instruments, such as stocks, bonds, and derivatives, are traded directly between parties rather than through a formal exchange, often with less regulation and transparency.

Optimal Trade Entry – A Fibonacci-based entry concept, usually the 62–79% retracement zone of a price swing, considered a high-probability entry area.

The total number of outstanding derivative contracts, such as options or futures, that have not been settled or closed, indicating market activity and liquidity.

A listing of all available options contracts for a particular security, displaying various strike prices, expiration dates, and details such as bid and ask prices, volume, and open interest.

A real-time list of buy and sell orders for a specific security, organized by price level, showing the current demand and supply in the market. Often referred to as Level 2 (L2) data.

The real-time movement of buy and sell orders that reveals supply and demand and helps identify who is in control at a given price level, often observed through Time & Sales and other order-based tools on a trading platform.

An option that has no intrinsic value; for a call option, the current price of the underlying asset is below the strike price, and for a put option, it is above the strike price.

A candlestick pattern where the entire price range of a trading day (the high and low) is outside the range of the previous day, indicating potential reversal or continuation of the current trend.

A financial situation where a bank account balance goes below zero, allowing the account holder to withdraw more money than is available, often incurring fees or interest charges.

The ongoing business expenses that are not directly attributed to creating a product or service, such as rent, utilities, salaries of non-production staff, and other administrative costs, essential for the overall operation of a business.

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Price-to-Earnings Ratio - A valuation metric calculated by dividing the current share price of a company by its earnings per share (EPS), used to assess the relative value of a company's stock.

Price Action - The movement of a security's price over time, used in technical analysis to make trading decisions based on historical price patterns and trends rather than indicators.

Previous Day Close - The last trading price of a security at the end of the previous trading day, used as a reference point for current market analysis.

Previous Day High – The highest price reached during the prior trading session, often used as a liquidity or breakout reference.

Previous Day Low – The lowest price reached during the prior trading session, often used as a liquidity or breakout reference.

Pattern Day Trader Rule - A U.S. regulatory rule that requires traders who execute four or more day trades within five business days to maintain a minimum account balance of $25,000.

Purchasing Managers’ Index - An economic indicator that measures the health of the manufacturing and service sectors based on surveys of purchasing managers, indicating overall economic activity and business conditions.

Power of Three – ICT concept where markets accumulate, manipulate, then distribute, often within a daily or weekly price cycle.

Point of Control - The price level at which the highest volume of trading occurred during a specific time period, indicating a significant level of support or resistance in market analysis.

Point of Interest – A specific chart area identified as important for potential entries or reactions, often aligned with institutional concepts like OBs or FVGs.

Profit Target - A predetermined price level at which a trader plans to close a position to realize gains, often set based on technical analysis or percentage returns.

Earnings generated with minimal active involvement, often from investments like dividends, rental properties, or royalties, providing a steady cash flow over time.

The percentage of a company's earnings that is distributed to shareholders as dividends, calculated by dividing the total dividends paid by the net income.

A low-priced stock, typically trading for less than $5 per share, often characterized by high volatility and low market capitalization, making them riskier investments.

A candlestick pattern characterized by a long wick and a small body, indicating a potential reversal or rejection of a price level, with the wick representing a sharp rejection of higher or lower prices.

A collection of financial assets held by an individual or institution, such as stocks, bonds, cash, real estate, or other investments, aimed at achieving specific financial goals and managing risk through diversification.

The process of determining the amount of capital to allocate to a particular trade or investment, based on the trader's risk tolerance and the specifics of the trade, to manage overall portfolio risk effectively.

A type of stock that typically offers fixed dividends and has priority over common stock in terms of dividend payments and asset liquidation in the event of company bankruptcy. However, it usually does not provide voting rights to shareholders.

The financial market where new securities are issued and sold directly to investors by the issuer, such as during an Initial Public Offering (IPO).

A temporary reversal or pause in the direction of an asset's price trend, usually within an overall uptrend, offering potential entry opportunities before the trend resumes.

A financial contract that gives the holder the right, but not the obligation, to sell an underlying asset at a specified price within a designated time frame.

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Quarters of the fiscal year.

The Invesco QQQ Trust, an exchange-traded fund (ETF) that tracks the performance of the Nasdaq-100 Index, consisting of 100 of the largest non-financial companies listed on the Nasdaq Stock Market.