Plain English
Glossary
200 terms explained the way you'd hear them at a barbecue. Use this when you bump into a term in our picks you don't know.
Fundamentals
Beta
Beta measures how much a stock's price swings compared to the overall market. A beta of 1 means the stock moves in line …
Book Value
Book value is what a company would theoretically be worth if it sold all its assets and paid off all its debts today. It…
Cash Flow
Cash flow is the actual money moving in and out of a company's bank account. It's different from profit—a company can lo…
Consensus Earnings (Analyst Estimates)
Consensus Earnings are the average profit predictions that professional analysts make for a company over a specific peri…
Debt-to-Equity Ratio
The Debt-to-Equity Ratio measures how much money a company owes compared to how much it's actually worth to shareholders…
Dilution
Dilution happens when a company issues new shares of stock, which spreads ownership across more shares and reduces what …
Dividend
A dividend is a payment that a company makes to its shareholders—basically, a slice of the company's profits shared with…
Dividend Yield
Dividend Yield is the annual dividend payment a company gives you as a percentage of the stock's current price. Think of…
Earnings Call
An earnings call is a live conference where a company's executives discuss their recent financial results with investors…
EBITDA
EBITDA is a company's earnings before interest, taxes, depreciation, and amortization—basically, the profit from its cor…
Enterprise Value (EV)
Enterprise Value is the total cost to buy an entire company, including its stock price plus its debt minus its cash. Thi…
EPS (Earnings Per Share)
EPS is a company's total profit divided by the number of shares outstanding (shares of stock that exist). It tells you h…
EV/EBITDA Ratio
The EV/EBITDA ratio compares a company's total value to its annual earnings before interest, taxes, depreciation, and am…
Follow-on Offering
A follow-on offering is when a company that's already publicly traded issues and sells new shares to raise more cash. Th…
Free Cash Flow (FCF)
Free Cash Flow is the actual cash a company generates after paying for operating expenses and capital investments—think …
Gross Margin
Gross Margin is the percentage of revenue a company keeps after paying for the direct costs of making its products. Thin…
Gross Profit
Gross Profit is the money a company keeps after paying for the direct costs of making or buying the products it sells. T…
Guidance (Management Outlook)
Guidance is a company's official forecast of its future financial performance, usually shared during earnings calls or p…
Income Statement
An Income Statement is a financial report showing how much money a company earned and spent over a specific period—usual…
Initial Public Offering (IPO)
An Initial Public Offering (IPO) is when a private company sells shares to the public for the first time, becoming a pub…
Market Capitalization (Market Cap)
Market capitalization (or market cap) is the total dollar value of a company's outstanding shares of stock. It's calcula…
Mega-cap
A mega-cap stock is a company with a market capitalization (total value of all its shares) of $200 billion or more. Thes…
Micro-cap
A micro-cap stock is a company with a market capitalization (total value of all its shares) between roughly $50 million …
Mid-cap
A mid-cap stock is a company with a market capitalization (total value of all its shares) between roughly $2 billion and…
Net Income
Net Income is the profit a company makes after paying all its bills. It's what's left over after subtracting expenses, t…
Net Margin
Net Margin is the percentage of revenue a company keeps as profit after paying all its expenses. It's calculated by divi…
Operating Profit
Operating Profit is the money a company makes from its core business operations, after paying for the costs directly tie…
Payout Ratio
The payout ratio is the percentage of a company's earnings that it returns to shareholders as dividends rather than rein…
Penny Stock
A penny stock is a company's share that trades for less than $5 per share, usually on smaller exchanges rather than majo…
Price-to-Book (P/B)
Price-to-Book (P/B) is a ratio that compares a company's stock price to its book value—basically what the company's asse…
Price-to-Earnings Ratio (P/E)
The Price-to-Earnings Ratio (P/E) is a company's stock price divided by its annual profit per share. It tells you how ma…
Price-to-Sales (P/S)
Price-to-Sales (P/S) is a ratio that compares a company's stock price to its annual revenue per share. It tells you how …
Revenue
Revenue is the total amount of money a company brings in from selling its products or services, before any expenses are …
Revenue Growth
Revenue growth is how much a company's total sales increase from one period to the next, usually measured year-over-year…
ROA (Return on Assets)
ROA (Return on Assets) measures how efficiently a company uses its assets to generate profit. It's calculated by dividin…
ROE (Return on Equity)
ROE (Return on Equity) measures how efficiently a company turns shareholder money into profits. It's calculated by divid…
ROIC (Return on Invested Capital)
ROIC measures how efficiently a company turns the money invested in it into profits. Think of it as a report card for ma…
Secondary Offering
A secondary offering is when a company sells additional shares of stock to the public after its initial public offering …
Share Issuance (Dilution)
Share issuance (dilution) happens when a company creates and sells new shares of stock, spreading ownership across more …
Small-cap
A small-cap stock is a company with a market capitalization (total value of all its shares) between roughly $300 million…
Stock
A stock is a small piece of ownership in a company. When you buy stock, you're buying a share of that business—if it gro…
Stock Split
A stock split is when a company divides each existing share into multiple new shares, lowering the price per share while…
Tail Risk
Tail risk is the possibility of an extreme, unexpected market event that falls outside normal trading patterns—think a s…
Tangible Book Value
Tangible Book Value is what a company would theoretically be worth if you subtracted all its debts from its physical ass…
Working Capital
Working Capital is the money a company has available to run its day-to-day operations—basically, current assets (cash, i…
Technical analysis
52-week High
The 52-week High is the highest price a stock has traded at over the past year. You'll see this number quoted on most st…
52-week Low
The 52-week Low is the lowest price a stock has traded at over the past year. You'll see this number listed on most stoc…
Accumulation/Distribution
Accumulation/Distribution is a technical indicator that measures whether smart money is buying or selling a stock by com…
ADX (Average Directional Index)
ADX is a technical indicator that measures how strong a stock's price trend is, regardless of direction. You'll see it i…
ATR (Average True Range)
ATR (Average True Range) is a number that tells you how much a stock's price typically bounces around day-to-day. It mea…
Base (Consolidation)
A base, or consolidation, is when a stock's price moves sideways in a tight range for a period of time, rather than tren…
Bear Market
A bear market is when stock prices across the market fall 20% or more from recent highs and stay down for months or long…
Bear Trap
A bear trap is a false signal that makes a stock look like it's falling, tricking investors into selling—only to watch t…
Bollinger Bands
Bollinger Bands are three lines on a price chart that show where a stock's price typically trades. The middle line is a …
Breakout
A breakout happens when a stock's price moves decisively above or below a level it's been stuck near for a while. Think …
Bull Market
A bull market is when stock prices are rising over an extended period, and investors feel optimistic about the economy. …
Bull Trap
A bull trap is a false signal that makes a stock look like it's about to rise, but then it drops instead. You'll hear th…
Candlestick Pattern
A candlestick pattern is a visual formation created by a stock's price movement over a set time period—usually shown on …
Chandelier Stop
A Chandelier Stop is a dynamic stop-loss level that moves up as your stock gains value, protecting your profits while le…
Cup and Handle
A Cup and Handle is a chart pattern where a stock's price dips down and recovers (forming a U-shape like a cup), then pu…
Death Cross
A Death Cross happens when a stock's 50-day moving average (the average price over the last 50 days) drops below its 200…
Divergence (Technical)
A divergence occurs when a stock's price moves one direction while a technical indicator (a mathematical tool that measu…
Doji
A doji is a candlestick pattern where a stock's opening and closing prices are nearly identical, creating a cross or plu…
Drawdown
A drawdown is the peak-to-trough decline in a stock's price from its highest point to its lowest point before recovering…
EMA (Exponential Moving Average)
An EMA is a line on a price chart that shows a stock's average price over time, but gives extra weight to recent prices.…
Fibonacci Retracement
Fibonacci Retracement is a charting tool that predicts where a stock price might find support or resistance after it's m…
Gap (Price Gap)
A gap is a jump in a stock's price between one trading day and the next, with no trades happening in between. You'll see…
Golden Cross
A Golden Cross happens when a stock's 50-day moving average (the average price over the last 50 days) crosses above its …
Head and Shoulders
A Head and Shoulders is a chart pattern that suggests a stock's price is about to drop. It looks like three peaks: a sma…
MACD
MACD stands for Moving Average Convergence Divergence—a tool that tracks whether a stock's momentum is building or fadin…
Momentum
Momentum is the speed and strength of a stock's price movement in a particular direction. Think of it like a rolling bal…
Moving Average
A moving average is the average price of a stock over a set number of recent days, recalculated daily as new prices come…
Oversold / Overbought
Oversold and overbought describe when a stock's price has moved to an extreme in one direction, suggesting it may be due…
Pocket Pivot
A Pocket Pivot is a technical chart pattern where a stock's price pulls back slightly within an uptrend, then resumes cl…
Pullback
A pullback is a temporary dip in a stock's price while it's in an overall uptrend. Think of it as a brief pause or step …
Relative Strength (RS Rating)
Relative Strength (RS Rating) measures how a stock's price performance compares to the overall market over a set period,…
Resistance
Resistance is a price level where a stock has repeatedly struggled to climb above, as if there's an invisible ceiling. Y…
RSI (Relative Strength Index)
RSI is a momentum indicator that measures how fast a stock's price is moving up or down on a scale of 0 to 100. You'll s…
SMA (Simple Moving Average)
A Simple Moving Average (SMA) is the average price of a stock over a set number of recent days. You calculate it by addi…
Stage 1 (Base)
Stage 1 (Base) is the early phase of a stock's price movement where it builds a foundation after a decline. You'll see t…
Stage 2 (Advancing)
Stage 2 (Advancing) is when a stock's price is rising steadily after breaking out from a period of consolidation (sidewa…
Stage 3 (Extended)
Stage 3 (Extended) is when a stock's price continues climbing well after an initial breakout, showing sustained upward m…
Stage 4 (Declining)
Stage 4 (Declining) is when a stock's price is falling and momentum—the speed and strength of that movement—is weakening…
Stop-loss
A stop-loss is an automatic instruction to sell a stock if its price drops to a specific level you set in advance. Think…
Support
Support is a price level where a stock has repeatedly stopped falling and bounced back up. Think of it as a floor—buyers…
Trailing Stop
A trailing stop is an automatic sell order that moves up whenever your stock price rises, but stays fixed if the price f…
Trend Line
A trend line is a straight line drawn on a price chart connecting two or more points where a stock's price has touched, …
Volume
Volume is the total number of shares traded in a stock during a specific time period, usually a single trading day. You'…
VWAP (Volume Weighted Average Price)
VWAP is the average price a stock traded at throughout the day, weighted by how many shares changed hands at each price …
Weinstein Stage Analysis
Weinstein Stage Analysis is a method for identifying where a stock is in its price cycle—whether it's building strength,…
SEC filings
10-K (Annual Report)
A 10-K is the official annual report that every public company must file with the SEC (Securities and Exchange Commissio…
10-Q (Quarterly Report)
A 10-Q is a quarterly financial report that public companies must file with the SEC (the government agency that oversees…
13D filing (>5% ownership)
A 13D filing is a public document that someone must submit to the SEC when they buy more than 5% of a company's stock. T…
13F filing
A 13F filing is a quarterly report that large investment managers must submit to the SEC (Securities and Exchange Commis…
13G filing (passive >5% ownership)
A 13G filing is a public notice that someone has bought more than 5% of a company's stock and plans to hold it passively…
8-K (Material Event)
An 8-K is a form that publicly traded companies must file with the SEC (the government agency that oversees stock market…
ATM offering (at-the-market)
An ATM offering is when a company sells new shares directly to the public at whatever the current market price is, rathe…
Beneficial ownership
Beneficial ownership means actually owning or controlling a stock, even if someone else's name is on the official paperw…
CIK number (Central Index Key)
A CIK number is a unique identification code assigned by the SEC (Securities and Exchange Commission) to every company t…
Cluster buying
Cluster buying is when a company's insiders—executives, board members, or major shareholders—all buy shares around the s…
Congress trading (Pelosi tracker)
Congress trading refers to tracking stock trades made by members of Congress and their families. Since lawmakers have ac…
De-SPAC
De-SPAC is when a special purpose acquisition company (SPAC)—basically a blank-check shell company created to raise mone…
Form 4
Form 4 is a document that insiders at a company—like executives, board members, or major shareholders—must file with the…
Going concern warning
A going concern warning is a red flag from a company's auditors stating they have serious doubts about whether the busin…
Going private transaction
A going private transaction is when a company that trades publicly on a stock exchange is bought out and removed from pu…
Insider buying
Insider buying is when a company's executives, directors, or other high-level employees purchase shares of their own com…
Institutional investor
An institutional investor is a large organization—like a pension fund, mutual fund, insurance company, or university end…
Item 1.01 (entry into material agreement)
Item 1.01 is a section in SEC filings (official documents companies submit to regulators) where they announce major busi…
Item 2.02 (results of operations)
Item 2.02 is a section of a company's 8-K filing (an urgent disclosure form companies file with the SEC) where they anno…
Lock-up period
A lock-up period is a set timeframe after a company goes public (IPO) when company insiders—like founders, executives, a…
Material weakness
A material weakness is a serious flaw in a company's internal controls—the systems and processes that keep financial rec…
NT 10-K (Notification of Late Filing)
An NT 10-K is a form a company files with the SEC when it can't meet the deadline to submit its annual 10-K report (the …
Proxy statement (DEF 14A)
A proxy statement (officially called a DEF 14A) is a document a company sends to shareholders before their annual meetin…
Restated financials
Restated financials are corrected versions of a company's financial statements that were previously released with errors…
Reverse merger
A reverse merger is when a private company buys a public company (one whose shares trade on a stock exchange) and takes …
Rule 10b5-1 plan
A Rule 10b5-1 plan is a legal arrangement that lets company insiders (like executives or board members) sell their own s…
S-1 filing (IPO prospectus)
An S-1 filing is the official document a private company submits to the SEC (Securities and Exchange Commission) when it…
S-3 filing (shelf registration)
An S-3 filing is a streamlined way for established companies to register securities (stocks or bonds) with the SEC and s…
SEC EDGAR
SEC EDGAR is the free online database where publicly traded companies file their official financial documents with the U…
SEC investigation
An SEC investigation is when the Securities and Exchange Commission (the government agency that oversees stock markets) …
Shelf registration
A shelf registration is a document a company files with the SEC that allows it to sell new shares or bonds to the public…
SPAC (Special Purpose Acquisition Company)
A SPAC is a shell company—basically an empty corporate vehicle with no real business—created specifically to raise money…
Subsidiary spin-off
A subsidiary spin-off is when a parent company separates one of its business divisions into an independent, publicly tra…
Tender offer
A tender offer is a public invitation for shareholders to sell their stock at a specific price, usually higher than the …
Whale watching (13F tracking)
Whale watching is tracking what large institutional investors (called "whales") are buying and selling by reading their …
Macro
Commodity Cycle
A commodity cycle is the repeating pattern of price ups and downs for raw materials like oil, metals, or agricultural pr…
CPI (Consumer Price Index)
The Consumer Price Index (CPI) measures how much the average price of everyday goods and services—like groceries, gas, a…
Credit Spread
A credit spread is an options strategy where you sell an option (collecting money upfront) and buy a different option to…
Deglobalization
Deglobalization is the trend of countries and companies pulling back from international trade and supply chains, favorin…
Dot Plot (Fed Projections)
A Dot Plot is a chart where each Federal Reserve official places a dot showing their prediction for future interest rate…
DXY (Dollar Index)
The DXY (Dollar Index) measures the strength of the U.S. dollar compared to a basket of six major foreign currencies lik…
Fed Pivot
A Fed Pivot is when the Federal Reserve (the U.S. central bank) shifts its interest rate policy from raising rates to lo…
FOMC (Federal Open Market Committee)
The FOMC is the group within the Federal Reserve (America's central bank) that decides interest rate policy. Think of th…
Hard Landing
A hard landing is when an economy slows down so sharply and suddenly that it tips into recession—a period of negative gr…
High-Yield Spread
High-Yield Spread is the difference in interest rates between high-yield bonds (riskier corporate debt) and safer govern…
Industrial Policy (CHIPS, IRA)
Industrial policy is when the government deliberately supports or steers specific industries through subsidies, tax brea…
Inflation
Inflation is when the prices of everyday things—groceries, gas, rent—go up over time, so your money buys less than it us…
Inverted Yield Curve
An inverted yield curve happens when short-term bonds pay higher interest rates than long-term bonds—the opposite of nor…
ISM Manufacturing PMI
The ISM Manufacturing PMI is a monthly survey that measures how U.S. factories are doing—whether business is expanding o…
Liquidity (Macro Sense)
Liquidity in the macro sense means how easily money and credit flow through the entire economy. Think of it as the amoun…
Market Breadth
Market breadth measures how many stocks are participating in a market move—whether most stocks are rising or falling alo…
Nonfarm Payrolls (NFP)
Nonfarm Payrolls (NFP) is a monthly report showing how many jobs the U.S. economy added or lost, excluding farm workers.…
PCE (Personal Consumption Expenditures)
PCE measures the total amount of money Americans spend on goods and services each month. It's one of the most important …
PPI (Producer Price Index)
The Producer Price Index (PPI) measures how much prices are rising or falling at the wholesale level—basically what manu…
Quantitative Easing (QE)
Quantitative Easing (QE) is when a central bank like the Federal Reserve buys large amounts of government bonds and othe…
Quantitative Tightening (QT)
Quantitative Tightening (QT) is when a central bank like the Federal Reserve shrinks its balance sheet by letting bonds …
Recession
A recession is when a country's economy shrinks for at least six months—meaning people and businesses are producing and …
Reshoring
Reshoring is when a company moves manufacturing or operations back to its home country after previously outsourcing them…
Risk-on / Risk-off
Risk-on and risk-off describe two opposite investor moods that swing based on economic confidence. When investors feel o…
Sector Rotation
Sector rotation is when investors shift their money from one industry group to another based on where they think returns…
Soft Landing
A soft landing is when a central bank (like the Federal Reserve) successfully slows down an overheating economy without …
Supercycle
A supercycle is an unusually long period—often 10+ years—when demand for a commodity or sector stays consistently high, …
Tariff
A tariff is a tax that a government places on goods imported from other countries. When you buy a foreign product, tarif…
VIX (Volatility Index)
The VIX is a number that measures how much investors expect the stock market to bounce around in the near future—basical…
Yield Curve
A yield curve is a graph showing the interest rates (or "yields") that the U.S. government pays on its bonds across diff…
Options & derivatives
At-the-Money (ATM)
At-the-Money (ATM) means an option's strike price—the price you'd pay to buy or sell the underlying stock—is essentially…
Call Option
A call option is a contract that gives you the right—but not the obligation—to buy a stock at a set price by a specific …
Cash-Secured Put
A cash-secured put is an options strategy where you agree to buy 100 shares of a stock at a set price (called the strike…
Covered Call
A covered call is a strategy where you own shares of a stock and simultaneously sell the right (called an option) for so…
Days to Cover
Days to Cover is how long it would take short sellers to buy back all the shares they've borrowed and sold, assuming nor…
Expiry Date
An expiry date is the last day you can exercise (use) an options contract—the deadline for buying or selling the underly…
Futures Contract
A futures contract is an agreement to buy or sell something at a set price on a specific future date. Unlike stocks, you…
Gamma Squeeze
A gamma squeeze happens when rapid stock price movements force options sellers to buy or sell shares in large quantities…
Implied Volatility (IV)
Implied Volatility (IV) is the market's forecast of how much a stock's price will swing up and down over the next few mo…
In-the-Money (ITM)
In-the-Money (ITM) means an option contract has intrinsic value—it would make money if you exercised it right now. For a…
Iron Condor
An Iron Condor is an options strategy where you simultaneously sell and buy call options (contracts giving the right to …
LEAPS (Long-Dated Options)
LEAPS are options contracts (the right to buy or sell a stock at a set price) that expire much further in the future tha…
Leverage
Leverage means borrowing money to invest, so you can control a larger position than you could afford outright. You encou…
Margin (Broker)
Margin is borrowed money your broker lends you to buy stocks, letting you invest more than you have in cash. You'll enco…
Naked Options
A naked option is an options contract (a bet on future stock price movement) where the seller doesn't own the underlying…
Open Interest
Open Interest is the total number of active contracts (like options or futures) that haven't been closed or settled yet.…
Options Flow
Options flow is the real-time activity of options being bought and sold in the market—essentially tracking who's betting…
Out-of-the-Money (OTM)
Out-of-the-Money (OTM) means an option contract has no intrinsic value right now—it would be worthless if exercised toda…
PDT Rule (Pattern Day Trader)
The PDT Rule is a regulation that requires brokerage accounts with less than $25,000 to limit day trading—buying and sel…
Put Option
A put option is a contract that gives you the right to sell a stock at a set price by a certain date. Think of it as ins…
Short Interest
Short interest is the total number of shares that investors have borrowed and sold, betting the stock price will fall. Y…
Short Squeeze
A short squeeze happens when a stock price rises sharply, forcing investors who bet the price would fall (called "shorti…
Strike Price
The strike price is the fixed price at which you can buy or sell a stock through an options contract. Think of it as a l…
Theta Decay
Theta decay is the gradual loss of value in an options contract as time passes, even if the stock price stays exactly th…
Unusual Options Activity (UOA)
Unusual Options Activity (UOA) is when options—contracts that give you the right to buy or sell a stock at a set price—t…
Crypto
Bitcoin Halving
Bitcoin Halving is an automatic event that cuts the reward miners receive for validating transactions in half, roughly e…
Crypto Cycle (4-Year)
The Crypto Cycle (4-Year) is a recurring pattern in Bitcoin and cryptocurrency markets where prices tend to spike, crash…
Crypto Treasury Company
A Crypto Treasury Company is a traditional business that holds cryptocurrency (like Bitcoin or Ethereum) on its balance …
Custody (Crypto)
Custody in crypto means a third party safely holds and manages your digital assets (like Bitcoin or Ethereum) on your be…
DeFi (Decentralized Finance)
DeFi is a system of financial services—like lending, borrowing, and trading—built on blockchain networks (the technology…
Gas Fees
Gas fees are the costs you pay to process transactions on a blockchain—the digital ledger that records cryptocurrency tr…
Hash Rate
Hash rate measures how fast a computer can solve the complex math puzzles required to validate cryptocurrency transactio…
IPO Token / Fair Launch
An IPO Token or Fair Launch is a cryptocurrency project that releases its token to the public all at once, with no speci…
L2 Scaling
L2 Scaling is a technique that speeds up cryptocurrency transactions by processing them off the main blockchain (called …
Layer 2
Layer 2 is a separate blockchain system built on top of a main blockchain (like Bitcoin or Ethereum) to speed up transac…
Memecoin
A memecoin is a cryptocurrency created as a joke or meme, usually inspired by internet humor rather than serious technol…
Mining Difficulty
Mining Difficulty is a measure of how hard it is to solve the math puzzles that cryptocurrency miners compete to solve i…
Proof of Stake
Proof of Stake is a method that cryptocurrency networks use to verify transactions and create new coins, where validator…
Proof of Work
Proof of Work is a system that secures cryptocurrency networks by requiring computers to solve difficult math puzzles be…
Smart Contract
A smart contract is a self-executing agreement written in code that automatically carries out its terms when certain con…
Spot ETF
A Spot ETF is a fund that directly holds actual cryptocurrency (like Bitcoin or Ethereum) and trades on a stock exchange…
Stablecoin
A stablecoin is a cryptocurrency designed to maintain a steady price, usually by being backed by a real-world asset like…
Staking
Staking is when you lock up your cryptocurrency in a blockchain network to help validate transactions and earn rewards i…
Tokenomics
Tokenomics is the study of how a cryptocurrency is designed and distributed—basically the economic rules that govern a d…
Wallet & Cold Storage
A wallet is a digital tool that stores and manages your cryptocurrency (like Bitcoin or Ethereum), similar to how a phys…