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This glossary is your go-to resource for understanding over 300 essential terms and acronyms used across our Saving, Investing, and Trading courses. Each definition is concise and easy to understand, designed to clarify key concepts and help you build a solid foundation in financial literacy.
The glossary is divided into six sections, corresponding to all the letters of the alphabet. Simply click on the first letter of the term or acronym you're looking for to jump directly to the corresponding section. Use the links throughout the courses to quickly access the definitions you need, when you need them.
glossary - "Q"
Q1/Q2/Q3/Q4
Quarters of the fiscal year.
QQQ
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.
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glossary - "R"
R/R - "Risk/Reward Ratio"
A measure used by traders to compare the potential profit of a trade to the potential loss, helping to assess whether the trade is worth taking based on their risk tolerance.
Rainy Day Fund
A savings reserve set aside to cover unexpected expenses or financial emergencies, providing a financial cushion in times of need.
Real Estate Investment
The purchase of property or real estate assets with the expectation of generating income or appreciation, which can include residential, commercial, or industrial properties.
REIT - "Real Estate Investment Trust"
A company that owns, operates, or finances income-producing real estate, allowing investors to buy shares and receive a portion of the income generated, typically in the form of dividends.
Resistance
A price level where an asset tends to stop rising and may reverse downward, as selling interest increases, creating a "ceiling" where supply is strong enough to halt an upward move.
RESP - "Registered Education Savings Plan"
A Canadian tax-advantaged savings plan designed to help families save for a child's post-secondary education, allowing contributions to grow tax-free until withdrawn for educational expenses.
Retail Trader
An individual who buys and sells financial securities, such as stocks, bonds, or derivatives, for their personal account rather than on behalf of an institution, typically using brokerage platforms and trading in smaller volumes compared to institutional investors.
Retirement Savings
Funds set aside during an individual's working life, typically in tax-advantaged accounts, to provide income and financial security in retirement.
Reversal Pattern
A chart formation that indicates a change in the direction of the price trend, suggesting that a security may reverse its current upward or downward trajectory.
Reverse Stock Split
A corporate action that reduces the number of a company’s outstanding shares by combining them, increasing the stock price proportionally, while maintaining the overall market capitalization. Companies typically execute a reverse stock split to meet stock exchange listing requirements, improve perceived value, or attract institutional investors by raising the stock price.
Risk Tolerance
The degree of variability in investment returns that an investor is willing to withstand in their investment portfolio, reflecting their ability and willingness to endure potential losses.
ROE - "Return on Equity"
A financial metric that measures a company's profitability by revealing how much profit is generated for each dollar of shareholders' equity, calculated by dividing net income by shareholder equity.
ROMO - "Regret Of Missing Out"
The feeling of regret or anxiety experienced by investors or traders who miss a profitable opportunity, often leading to impulsive decision-making in future trades.
Roth IRA
Individual Retirement Account - A type of individual retirement account that allows individuals to contribute after-tax income, enabling tax-free withdrawals in retirement, provided certain conditions are met.
Routing Number
A nine-digit code used in the United States to identify a specific financial institution for processing transactions such as checks and electronic transfers.
RRSP - "Registered Retirement Savings Plan"
A Canadian tax-advantaged savings plan that allows individuals to save for retirement while deferring taxes on contributions and investment income until withdrawal.
RSI - "Relative Strength Index"
A momentum oscillator that measures the speed and change of price movements, typically used to identify overbought or oversold conditions in a security on a scale of 0 to 100.
RTGS - "Real-Time Gross Settlement"
A system for transferring money from one bank to another on a real-time and gross basis, where transactions are settled individually and immediately, typically used for large-value transactions.
RTH - "Regular Trading Hours"
The standard hours during which the major stock exchanges are open for trading, typically from 9:30 AM to 4:00 PM Eastern Time in the U.S.
Rule of 72
A simple formula used to estimate the number of years required to double an investment at a fixed annual rate of return by dividing 72 by the expected annual rate of return.
RVOL - "Relative Volume"
A trading indicator that measures the current trading volume of a stock compared to its average volume over a specific period, highlighting unusual activity or investor interest.
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glossary - "S"
S&P - "Standard & Poor's"
A financial services company known for its stock market indices, most notably the S&P 500, which tracks the stock performance of 500 large publicly traded companies in the U.S.
S&P 500
A stock market index that tracks the performance of 500 large, publicly traded companies in the United States, often used as a benchmark for the overall U.S. stock market and a gauge of economic health.
Savings Account
A deposit account held at a financial institution that allows individuals to earn interest on their balance while providing easy access to funds for withdrawal or transfer.
Savings Rate
The percentage of disposable income that individuals save rather than spend, often used as an indicator of financial health and economic stability.
Scalping
A trading strategy that involves making numerous short-term trades to profit from small price changes, often executed within minutes or seconds.
SEC - "Securities and Exchange Commission"
A U.S. government agency responsible for regulating the securities industry, enforcing federal securities laws, and protecting investors by ensuring fair and efficient markets.
Secondary Market
The financial market where previously issued securities are traded among investors, such as on major stock exchanges like the NYSE (New York Stock Exchange) and Nasdaq, without direct involvement from the issuing company.
Sector Rotation
An investment strategy that involves moving investments among different sectors of the economy to capitalize on economic cycles and market trends, aiming to maximize returns and minimize risk.
Selling at the Ask
Placing a sell order at the current ask price, usually indicating a desire to exit a position quickly by matching the price that buyers are currently willing to pay. This can be a sign of urgency or liquidity in selling, but it’s less common than selling at the bid.
Selling at the Bid
Placing a sell order at the current bid price, which is the highest price a buyer is willing to pay. This approach is considered bearish, as it indicates urgency to sell and a willingness to accept a lower price to exit the position quickly, often contributing to downward pressure on the asset's price.
SEP IRA - "Simplified Employee Pension Individual Retirement Arrangement"
A type of retirement plan that allows employers to make tax-deductible contributions to their employees' retirement savings, providing a simple and cost-effective way to save for retirement.
Share Buyback
A company's repurchase of its own shares from the marketplace, often to reduce the number of outstanding shares, increase shareholder value, or improve financial ratios.
Short
A trading position where a trader sells an asset they do not own, borrowing it with the expectation that its price will decline, allowing them to buy it back at a lower price for a profit.
Short Interest
The total number of shares of a security that have been sold short but not yet covered or closed, indicating investor sentiment about future price movements.
Short Squeeze
A rapid increase in the price of a stock or asset caused by short sellers rushing to buy shares to cover their positions, often triggered when the price unexpectedly rises, leading to significant upward momentum.
Simple Interest
A method of calculating interest where the interest is earned only on the principal amount, without compounding, calculated using the formula: Interest = Principal × Rate × Time.
SL - "Stop Loss"
An order placed to sell (or cover) a security when it reaches a specific price, designed to limit an investor's loss on a position.
Slippage
The difference between the expected price of a trade and the actual price at which the trade is executed, often occurring in fast-moving or illiquid markets.
SMA - "Simple Moving Average"
A type of moving average that calculates the average price of a security over a specific number of periods, giving equal weight to each price in the calculation.
Small Cap
Refers to companies with a market capitalization typically under $2 billion, often characterized by higher growth potential but also higher risk and volatility compared to larger companies.
Spread Betting
A speculative trading strategy where traders bet on the price movement of an asset without actually owning it, profiting or losing based on the accuracy of their predictions relative to the spread set by the bookmaker.
Spread Trading
A trading strategy that involves simultaneously buying and selling related financial instruments, such as futures contracts or options, to profit from the price difference (spread) between them.
SPY
SPDR S&P 500 ETF Trust - An exchange-traded fund that aims to track the performance of the S&P 500 Index, allowing investors to gain exposure to a diversified portfolio of 500 of the largest publicly traded companies in the U.S.
ST - "Short Term"
A term used to describe investments or financial strategies that are intended to be held for a brief period, typically less than one year, often focusing on quick profits or liquidity.
STO - "Stochastic Oscillator"
A momentum indicator used in technical analysis to compare a security's closing price to its price range over a specific period, helping traders identify overbought or oversold conditions.
Stock
A type of security that represents ownership in a corporation, giving shareholders a claim on part of the company’s assets and earnings. Stocks are also known as shares or equity and can provide returns through dividends and capital appreciation.
Stock Split
A corporate action that increases the number of a company’s outstanding shares by dividing each share, reducing its price proportionally while maintaining the overall market capitalization. Companies often split their stock to make shares more affordable for investors, increase liquidity, and broaden their shareholder base.
Stop Hunt
A deliberate market move designed to trigger stop-loss orders placed by traders at predictable levels, often resulting in increased volatility and a temporary price reversal.
Stop Order
An order to buy or sell a security once it reaches a specified price, known as the stop price, which triggers the order to become a market order.
Stop-Limit Order
A combination of a stop order and a limit order, where a specified stop price triggers a limit order to buy or sell a security at a designated limit price or better.
Straddle
An options trading strategy that involves buying both a call option and a put option with the same strike price and expiration date, allowing the trader to profit from significant price movement in either direction.
Strangle
An options trading strategy that involves buying a call option and a put option with different strike prices but the same expiration date, allowing the trader to profit from significant price movements in either direction while potentially lowering the cost compared to a straddle.
Supply
The total quantity of a financial asset available for sale at a given price, representing the level at which sellers are willing to sell, often influencing price movements when matched with demand.
Support
A price level at which an asset tends to stop falling and may reverse direction, as buying interest increases, creating a "floor" where demand is strong enough to halt a decline.
SWIFT Code
A standardized international bank code used to identify specific banks and financial institutions worldwide, facilitating secure and efficient cross-border transactions.
Swing High
A peak point on a price chart where the price reaches a high before reversing direction, indicating potential resistance in an upward trend.
Swing Trading
A trading strategy that aims to capture short- to medium-term price movements by holding positions for several days to weeks, typically based on technical analysis of price trends and patterns.
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glossary - "T"
TA - "Technical Analysis"
A method of evaluating securities by analyzing statistical trends from trading activity, such as price movements and volume, to predict future price behavior and identify trading opportunities.
Tax-Deferred Savings
A type of savings or investment account where taxes on earnings, such as interest, dividends, and capital gains, are postponed until withdrawals are made, typically found in retirement accounts like IRAs or 401(k)s.
Technical Analysis
A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume, to forecast future price movements and identify trading opportunities.
TFSA - "Tax Free Savings Account"
A Canadian savings account that allows individuals to earn investment income tax-free, with contributions not being tax-deductible, but withdrawals, including gains, are also tax-free.
Ticker Symbol
A unique series of letters assigned to a security or stock for trading purposes, used to identify and represent the company on stock exchanges.
Tradebook
A record-keeping tool or journal used by traders to document their trades, including details such as entry and exit points, position size, strategies used, and outcomes, helping to analyze performance and improve future trading decisions.
Trading Platform
A software application or online interface provided by brokers that allows traders and investors to buy, sell, and manage financial instruments, such as stocks, options, and currencies, often featuring tools for analysis, charting, and risk management.
Trading Range
The area between a defined support level and a resistance level where an asset’s price tends to move back and forth, indicating consolidation and a lack of clear direction in the market.
Trading View
A popular web-based charting and social trading platform that provides real-time market data, technical analysis tools, and charting capabilities for stocks, forex, cryptocurrencies, and other financial instruments, allowing users to share ideas and strategies within a trading community.
Trailing Stop
A type of stop order that adjusts automatically as the market price of a security moves in a favorable direction, allowing for profit protection while still enabling gains as long as the price continues to rise (for long positions) or fall (for short positions).
Trending Market
A market environment where prices consistently move in one direction (either upward or downward) over a sustained period, characterized by a series of higher highs and lows (uptrend) or lower highs and lows (downtrend).
Trendline
A straight line drawn on a price chart that connects two or more significant price points, used in technical analysis to represent the direction of an asset's trend, whether upward, downward, or sideways.