_{What Does Arbitrageur Mean?}

A type of investor who attempts to profit from price inefficiencies in the market by making simultaneous trades that offset each other and capturing risk-free profits. An arbitrageur would, for example, seek out price discrepancies between stocks listed on more than one exchange, and buy the undervalued shares on one exchange while short selling the same number of overvalued shares on another exchange, thus capturing risk-free profits as the prices on the two exchanges converge.

_{What Does Asset Stripper Mean?}

An individual or company, which purchases a corporation with the intention of dividing that corporation up into its parts and selling these parts for profit. An asset stripper will determine if the value of a company is worth more as a whole or as separate assets. Usually the asset stripper sells some assets off immediately then sells the functioning portion of the business later.

This is a corporate purchaser who discovers companies, which will create more profit by liquidating the parts rather than through business operations. For example an asset stripper could purchase a battery company for $100 million, strip and sell the R&D division for $30 million, then sell the remaining company for $85 million, for a profit of $15 million. The asset stripper could also just sell a portion of the business to fulfill debt obtained from acquiring the company.

_{What Does Ask Mean?}

The price a seller is willing to accept for a security, also known as the offer price. Along with the price, the ask quote will generally also stipulate the amount of the security willing to be sold at that price.

This is the opposite of bid, which is the price a buyer is willing to pay for a security, and the ask will always be higher than the bid. The terms "bid" and "ask" are used in nearly every financial market in the world covering stocks, bonds, currency and derivatives. An example of an ask in the stock market would be $5.24 x 1,000 which means that someone is offering to sell 1,000 shares for $5.24.

_{What Does Away From The Market Mean?}

When the bid on an order is lower (or the ask price is higher) than the current market price for the security.

In this case, the bid/ask spread is above or below the current price of the stock

_{What Does Barriers To Entry Mean?}

The existence of high start-up costs or other obstacles that prevent new competitors from easily entering an industry or area of business. Barriers to entry benefit existing companies already operating in an industry because they protect an established company's revenues and profits from being whittled away by new competitors.

Barriers to entry can exist as a result of government intervention (industry regulation, legislative limitations on new firms, special tax benefits to existing firms, etc.), or they can occur naturally within the business world. Some naturally occurring barriers to entry could be technological patents or patents on business processes, a strong brand identity, strong customer loyalty or high customer switching costs.

_{What Does Bear Market Mean?}

A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. As investors anticipate losses in a bear market and selling continues, pessimism only grows. Although figures can vary, for many, a downturn of 20% or more in multiple broad market indexes, such as the Dow Jones Industrial Average (DJIA) or Standard & Poor's 500 Index (S&P 500), over at least a two-month period, is considered an entry into a bear market.

A bear market should not be confused with a correction, which is a short-term trend that has a duration of less than two months. While corrections are often a great place for a value investor to find an entry point, bear markets rarely provide great entry points, as timing the bottom is very difficult to do. Fighting back can be extremely dangerous because it is quite difficult for an investor to make stellar gains during a bear market unless he or she is a short seller.

_{What Does Bid Mean?}

1. An offer made by an investor, a trader or a dealer to buy a security. The bid will stipulate both the price at which the buyer is willing to purchase the security and the quantity to be purchased.
2. The price at which a market maker is willing to buy a security. The market maker will also display an ask price, or the amount and price at which it is willing to sell.

This is the opposite of the ask, which stipulates the price a seller is willing to accept for a security and the quantity of the security to be sold at that price.

1. An example of a bid in the market would be $23.53 x 1,000, which means that an investor is willing to purchase 1,000 shares at the price of $23.53. If a seller in the market is willing to sell that amount for that price, then the transaction is completed.
2. Market makers are vital to the efficiency and liquidity of the marketplace. By quoting both bid and ask prices on the market, they always allow investors to buy or sell a security if they need to.

_{What Does Boom Mean?}

A period of time during which sales or business activity increases rapidly

_{What Does Bubble Mean?}

1. An economic cycle characterized by rapid expansion followed by a contraction.
2. A surge in equity prices, often more than warranted by the fundamentals and usually in a particular sector, followed by a drastic drop in prices as a massive selloff occurs.
3. A theory that security prices rise above their true value and will continue to do so until prices go into freefall and the bubble bursts.

_{What Does Buy The Dips Mean?}

A slang phrase regarding the practice of purchasing stocks following a decline in prices. After a significant dip in the price of a security or stock index, investors should increase positions or purchase different stocks to capitalize on what is seen as an eventual upswing.

The concept of buying dips is based on market fluctuation. Because the market is volatile, any given dip in prices should eventually rise back up. By purchasing stocks right after a dip, investors are essentially buying shares at a discounted sale price.

Like all trading strategies, buying the dips is not a sure thing, because some stock price drops are due to negative changes in the underlying company's fundamentals. For example, investors who followed this strategy around the bursting of the dotcom bubble may have lost a lot of money because many internet companies lacked a proper revenue-generating business model

_{What Does Base Currency Mean?}

The first currency quoted in a currency pair on forex. It is also typically considered the domestic currency or accounting currency. For accounting purposes, a firm may use the base currency to represent all profits and losses.

It is sometimes referred to as the "primary currency".

_{What Does Bear Market Rally Mean?}

A period in which prices of stocks increase during a bear market. A bear market rally is usually a short-lived market increase following a period of market decline and is followed by another period of market decline leading to a pronounced down trend.

Although there are no official guidelines for a bear market rally, it is sometimes defined as an overall market increase of 10-20% during an overall bear market. There are many examples of bear market rallies in modern stock market history, including the bear market rally of the Dow Jones following the stock market crash of 1929, which eventually saw a bottoming out in 1932

_{What Does Bid-Ask Spread Mean?}

The amount by which the ask price exceeds the bid. This is essentially the difference in price between the highest price that a buyer is willing to pay for an asset and the lowest price for which a seller is willing to sell it.

For example, if the bid price is $20 and the ask price is $21 then the "bid-ask spread" is $1.

The size of the spread from one asset to another will differ mainly because of the difference in liquidity of each asset. For example, currency is considered the most liquid asset in the world and the bid-ask spread in the currency market is one of the smallest (one-hundredth of a percent). On the other hand, less liquid assets such as a small-cap stock may have spreads that are equivalent to a percent or two of the asset's value.

_{What Does Broker Mean?}

1. An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.
2. The role of a firm when it acts as an agent for a customer and charges the customer a commission for its services.
3. A licensed real estate professional who typically represents the seller of a property. A broker's duties may include: determining market values, advertising properties for sale, showing properties to prospective buyers, and advising clients with regard to offers and related matters. Traditionally, only the wealthy could afford a broker and access the stock market. The internet triggered an explosion of discount brokers, which allow investors to trade at a lower cost, but don't provide personalized advice. Because of discount brokers, almost anybody can afford to invest in the market

What Does Bull Market Mean?

A financial market of a group of securities in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, currencies and commodities.

Bull markets are characterized by optimism, investor confidence and expectations that strong results will continue. It's difficult to predict consistently when the trends in the market will change. Part of the difficulty is that psychological effects and speculation may sometimes play a large role in the markets.

The use of "bull" and "bear" to describe markets comes from the way the animals attack their opponents. A bull thrusts its horns up into the air while a bear swipes its paws down. These actions are metaphors for the movement of a market. If the trend is up, it's a bull market. If the trend is down, it's a bear market.

_{What Does Cable Mean?}

Slang used among forex traders referring to the exchange rate between the U.S. dollar and the British pound sterling. Because it is the norm in forex for most major currencies to be quoted against the U.S. dollar on a regular basis, "cable" is a commonly used term.

"Cable" can also be used to refer simply to the British pound sterling.

_{What Does Commission Broker Mean?}

Someone who gets paid by the brokerage company for which he works for each order of securities he executes on a customer's behalf. The commission structure can encourage unethical behaviour by unscrupulous commission brokers. For example, a dishonest commission broker may engage in a practice called churning, which means executing multiple trades in a customer's account for the sole purpose of generating more commissions. The additional trades do not benefit the customer.

A broker who charges a flat fee for his or her services rather than earning a commission based on order size has more incentive to put the customer's best interest first. A flat-fee broker will not have an incentive to push a customer into certain securities because they are paying a high commission. Instead, he or she will have an incentive to get the customer into the best-performing investments so the customer will be loyal to that broker and be a steady source of business.

_{What Does Churning Mean?}

1. An unethical practice employed by some brokers to increase their commissions by excessively trading in a client's account. This practice violates the NASD Fair Practice Rules. It is also referred to as "churn and burn", "twisting" and "overtrading".
2. A period of heavy trading with few sustained price trends and little movement in stock market indexes.

_{What Does Credit Crisis Mean?}

A crisis that occurs when several financial institutions issue or are sold high-risk loans that start to default. As borrowers default on their loans, the financial institutions that issued the loans stop receiving payments. This is followed by a period in which financial institutions redefine the riskiness of borrowers, making it difficult for debtors to find creditors.

_{What Does Cross Rate Mean?}

The currency exchange rate between two currencies, both of which are not the official currencies of the country in which the exchange rate quote is given in. This phrase is also sometimes used to refer to currency quotes which do not involve the U.S. dollar, regardless of which country the quote is provided in.

_{What Does Closing Price Mean?}

The final price at which a security is traded on a given trading day. The closing price represents the most up-to-date valuation of a security until trading commences again on the next trading day.

_{What Does Contagion Mean?}

The likelihood that significant economic changes in one country will spread to other countries. Contagion can refer to the spread of either economic booms or economic crises throughout a geographic region.

Contagion has become a more prominent phenomenon as the global economy has grown and economies within certain geographic regions have become more correlated with one another. An infamous example is the "Asian Contagion", which occurred in 1997 and started in Thailand. The economic crisis in Thailand spread to bordering Southeast Asian countries and then eventually spilled over to Latin America.

_{What Does Crash Mean?}

A major decline in a financial market.

_{What Does Cross Currency Mean?}

A pair of currencies traded in forex that does not include the U.S. dollar. One foreign currency is traded for another without having to first exchange the currencies into American dollars

_{What Does Currency Pair Mean?}

The quotation and pricing structure of the currencies traded in the forex market: the value of a currency is determined by its comparison to another currency. The first currency of a currency pair is called the "base currency", and the second currency is called the "quote currency". The currency pair shows how much of the quote currency is needed to purchase one unit of the base currency.

_{What Does Day Trader Mean?}

A stock trader who holds positions for a very short time (from minutes to hours) and makes numerous trades each day. Most trades are entered and closed out within the same day.

_{What Does Double-Dip Recession Mean?}

When gross domestic product (GDP) growth slides back to negative after a quarter or two of positive growth. A double-dip recession refers to a recession followed by a short-lived recovery, followed by another recession.

The causes for a double-dip recession vary but often include a slowdown in the demand for goods and services because of layoffs and spending cutbacks from the previous downturn.

A double-dip (or even triple-dip) is a worst-case scenario. Fear that the economy will move back into a deeper and longer recession makes recovery even more difficult.

_{What Does Downswing Mean?}

A reduction in the overall level of economic or business activity. Downswings may be caused by fluctuations in the business cycle or a variety of macroeconomic events. Downswing may also refer to the downward movement in the value of a security following a period of stable or rising prices

_{What Does Dead Cat Bounce Mean?}

A temporary recovery from a prolonged decline or bear market, after which the market continues to fall.

_{What Does Dove Mean?}

An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that inflation and its negative effects will have a minimal impact on society. This term is derived from the docile and placid nature of the bird of the same name, and is the opposite of the term "hawk".

Statements that suggest that inflation will have a minimal impact are called "dovish".

_{What Does Execution Mean?}

The completion of a buy or sell order for a security. The execution of an order happens when it is completely filled, not when it is placed by the investor. When the investor places the trade, it goes to a broker, who then determines the best way for it to be executed.

_{What Does Exit Strategy Mean?}

1. The method by which a venture capitalist or business owner intends to get out of an investment that he or she has made in the past. In other words, the exit strategy is a way of "cashing out" an investment. Examples include an initial public offering (IPO) or being bought out by a larger player in the industry. Also referred to as a "harvest strategy" or "liquidity event".
2. In the context of an active trader, a plan as to when a trade will be closed out.

_{What Does Fast Market Mean?}

A financial market that has a combination of high volatility and heavy trading.

_{What Does Financial Crisis Mean?}

A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated with a panic or a run on the banks, in which investors sell off assets or withdraw money from savings accounts with the expectation that the value of those assets will drop if they remain at a financial institution.

_{What Does Fundamental Analysis Mean?}

A method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors. Fundamental analysts attempt to study everything that can affect the security's value, including macroeconomic factors (like the overall economy and industry conditions) and company-specific factors (like financial condition and management).

The end goal of performing fundamental analysis is to produce a value that an investor can compare with the security's current price, with the aim of figuring out what sort of position to take with that security (underpriced = buy, overpriced = sell or short).

This method of security analysis is considered to be the opposite of technical analysis.

_{What Does Fed Speak Mean?}

A phrase used to describe former Federal Reserve Board Chairman Alan Greenspan's tendency to make wordy statements with little substance. Many analysts felt that Greenspan's ambiguous "Fed speak" was an intentional strategy used to prevent the markets from overreacting to his remarks.

_{What Does Forex - FX Mean?}

The market in which currencies are traded. The forex market is the largest, most liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world.

_{What Does Gold Bull Mean?}

A slang term for a market or investor who is bullish on gold. A gold bull anticipates the price of gold increasing over the next period of time. A gold bull market is one where the value of gold has a rising trend.

_{What does Gold Trading mean?}

The buying/selling of the precious metal either by buying the underlying asset or by purchasing futures, options or ETF’s. Gold is seen as an investment which investors can use as a safe haven product when the global economy is in turmoil.

_{What Does Handle Mean?}

The whole dollar price, or stem, of a quote.

This term is usually used in the foreign currency and money markets.

For example, a foreign currency trading at 75.25 and a money market security trading at 75.75 both have handles of 75. Traders usually do not include the handles when quoting prices because it is assumed that involved traders already know them.

_{What Does Hit The Bid Mean?}

A buzzword used to describe an event where a broker agrees to sell at a bid price quoted by another broker. The broker is ultimately agreeing to sell a given stock at the highest price that another broker is willing to buy at.

For example, suppose a dealer is asking $20 for a particular security and another dealer's bid price for that same security is $19. If the dealer selling the security for $20 agrees to sell at the other dealer's bid price of $19, they are said to "hit the bid".

_{What Does Hawk Mean?}

An economic policy advisor who has a negative view toward inflation and its effects on society.

Also known as "inflation hawk".

_{What Does In and Out Mean?}

The purchase and sale of a security within a short period of time, usually on the same day.

Generally speaking, this is the strategy of day traders, where they attempt to profit by buying or short selling large quantities of stock to capitalize on small changes in price.

_{What Does Limit Order Mean?}

An order placed with a brokerage to buy or sell a set number of shares at a specified price or better. Limit orders also allow an investor to limit the length of time an order can be outstanding before being canceled.

Depending on the direction of the position, limit orders are sometimes referred to more specifically as a buy

_{What Does Major Pairs Mean?}

The four forex pairs which are considered to be the most heavily traded in the forex market. The four major pairs are: EUR/USD, USD/JPY, GBP/USD, USD/CHF.

_{What Does Market Order Mean?}

An order to buy or sell a stock immediately at the best available current price.

A market order is sometimes referred to as an "unrestricted order".

_{What Does Money Laundering Mean?}

The process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source.

Investopedia explains Money Laundering

Some estimate the size of the problem is over $500 billion annually. Often thought of as a victimless crime, money laundering is a very serious issue. Without it, international organized crime would not be able to function.

_{What Does Market Timing Mean?}

1. The act of attempting to predict the future direction of the market, typically through the use of technical indicators or economic data.
2. The practice of switching among mutual fund asset classes in an attempt to profit from the changes in their market outlook.

_{What Does Market Sentiment Mean?}

The feeling or tone of a market (i.e. crowd psychology). It is shown by the activity and price movement of securities.

_{What Does Oil Trading Mean?}

The buying/selling of oil either by buying the underlying asset or by purchasing futures, options or ETF’s. Oil is traded as an energy resource essential for the worlds day to day running , it is also traded by speculators who take advantage of the changes in the supply and demand chain to make profits.

_{What Does Opening Price Mean?}

The price at which a security first trades upon the opening of an exchange on a given trading day.

_{What Does Online Trading Mean?}

The act of placing buy/sell orders for financial securities and/or currencies with the use of a brokerage's internet-based proprietary trading platforms. The use of online trading increased dramatically in the mid- to late-'90s with the introduction of affordable high-speed computers and internet connections.

Stocks, bonds, options, futures and currencies can all be traded online.

_{What Does Order Mean?}

The instruction, by a customer to a brokerage, for the purchase or sale of a security with specific conditions.

_{What Does Panic Buying Mean?}

High volume buying brought about by sharp price increases.

_{What Does Pip Mean?}

The smallest price change that a given exchange rate can make. Since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point - for most pairs this is the equivalent of 1/100 of one percent, or one basis point.

_{What Does Panic Selling Mean?}

Wide-scale selling of an investment, causing a sharp decline in price. In most instances of panic selling, investors just want to get out of the investment, with little regard for the price at which they sell.

_{What Does Position Trader Mean?}

A type of stock trader who holds a position for the long term (from months to years). Long-term traders are not concerned with short-term fluctuations because they believe that their long-term investment horizons will smooth these out.

_{What Does Rollover Mean?}

A rollover is when you do the following:

1. Reinvesting funds from a mature security into a new issue of the same or a similar security.
2. Transferring the holdings of one retirement plan to another without suffering tax consequences.
3. A charge that is incurred by Forex investors who move their positions to the following delivery date.

_{What Does Risk Averse Mean?}

A description of an investor who, when faced with two investments with a similar expected return (but different risks), will prefer the one with the lower risk.

_{What Does Scalpers Mean?}

A person trading in the equities or options and futures market who holds a position for a very short period of time, attempting to make money

_{What Does Slippage Mean?}

The difference between the expected price of a trade, and the price the trade actually executes at. Slippage often occurs during periods of higher volatility, when market orders are used, and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of trade.

Slippage is a term often used in both forex and stock trading, and although the definition is the same for both, slippage occurs in different situations for each of these types of trading.

_{What Does Spread Mean?}

1. The difference between the bid and the ask price of a security or asset.
2. An options position established by purchasing one option and selling another option of the same class but of a different series.

_{What Does Stop-Loss Order Mean?}

An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit an investor's loss on a security position.

Also known as a "stop order" or "stop-market order".

_{What Does Stopped Out Mean?}

A situation where a stock price decreases and, consequently, an investor's stop order is executed.

_{What Does Scalping Mean?}

A trading strategy that attempts to make many profits on small price changes. Traders who implement this strategy will place anywhere from 10 to a couple hundred trades in a single day in the belief that small moves in stock price are easier to catch than large ones.

_{What Does Spike Mean?}

1. The comparatively large upward or downward movement of a price or value level in a short period.
2. The trade order execution confirmation slip which shows all the pertinent data, such as the stock symbol, price, type and trading account information

_{What Does Stop-Limit Order Mean?}

An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better.

_{What Does Stop Order Mean?}

An order to buy or sell a security when its price surpasses a particular point, thus ensuring a greater probability of achieving a predetermined entry or exit price, limiting the investor's loss or locking in his or her profit. Once the price surpasses the predefined entry/exit point, the stop order becomes a market order.

Also referred to as a "stop" and/or "stop-loss order".

_{What Does Technical Analysis Mean?}

A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.

_{What Does Trading Desk Mean?}

A desk where transactions for buying and selling securities occur. Trading desks can be found in most organizations (banks, finance companies, etc.) involved in trading investment instruments such as equities, fixed-income securities, futures, commodities and foreign exchange. A trading desk provides traders with access to instantaneous trade executions. Also known as "dealing desk".

_{What Does Trendline Mean?}

A line that is drawn over pivot highs or under pivot lows to show the prevailing direction of price. Trendlines are a visual representation of support and resistance in any time frame.

_{What Does Tick Size Mean?}

The minimum price movement of a trading instrument. The price movements of different trading instruments varies. For example, if the minimum price movement of a stock is 0.01; the stock has a tick value of one cent (each tick is worth one cent for one stock). Futures markets typically have a tick size that is specific to the instrument. For example, the Russell 2000 e-mini futures contract (TF) has a tick size of .10; the value of each tick is $10.00 (each contract is worth $100 multiplied by the index).

_{What Does Trend Mean?}

The general direction of a market or of the price of an asset. Trends can vary in length from short, to intermediate, to long term. If you can identify a trend, it can be highly profitable, because you will be able to trade with the trend.

_{What Does Wall Street Mean?}

1. A street in lower Manhattan that is the original home of the New York Stock Exchange. The street is the historic headquarters of the largest U.S. brokerages and investment banks. Many have since relocated to other areas of Manhattan and the United States. Wall Street was named after the wooden wall Dutch colonists built in this area in 1653 to defend themselves from the British and Native Americans.
2. The collective name for the financial and investment community, which includes stock exchanges and large banks, brokerages, securities and underwriting firms and big businesses. Some people believe that the interests of these big firms contrasts those of smaller businesses, or "Main Street".