The Complete Fintech Glossary

A-D

Alligator Lines  A series of trend lines on a chart that indicates a strong or changing trend.

Arbitrage  The simultaneous purchase and sale of an asset to take advantage of the spread, or the difference between the buy and sell price, or the difference in price between brokers. This is illegal in many places.

Ask  Also known as offer rate.  The price at which you agree to buy the currency or asset.

Asset Allocation  The spread of your securities across different sectors or instruments to promote optimal growth within your risk profile.

AUM  Assets Under Management.  How much money traders have copying them or how much money a financial advisor is managing.

Base Currency  In a currency pair, the first currency is the base currency. This is the currency being bought or sold.

Bear Market  A downward trend in stock prices. It’s characterised by lower highs and lower lows.

Beta  The measurement of stock price volatility. A beta of 1 is average fluctuation. A beta lower than 1 indicates that a stock/security is less volatile than the market average, and a beta of greater than 1 is more volatile than the market average.

Bid  The price at which you sell a currency or an asset.

Bid/Ask Spread  The difference between the bid, or buy, price (what a buyer will pay) and ask, or sell, price (what a seller will accept for the security).

Bitcoin (BTC)  The original blockchain cryptocurrency, an alternative, decentralised currency.

Blockchain  The collection of blocks of transactions of cryptocurrencies into a ledger. This is a method of tracking transactions that is decentralised and private.

Blue Chip Stocks  These are established, dependable, high cap stocks that are considered low risk.

Bollinger Bands®  A chart that shows the asset trading within support and resistance bands.

Bond  A debt security or an IOU from a government, corporation, or municipality.

Breakout  When the price of a security rises or falls through a trending chart line.

Bull Market  A series of up-trends in stock prices. You see higher highs and higher lows.

Call Option  The right or opportunity to own a specific asset at a specific price within a certain time length. Buying a call gives you the opportunity (not the obligation) to buy at a specific price. Selling a call obligates you to sell at a specific price.

Candlestick Chart Pattern  A chart that displays the high, low, opening, and closing prices of a security for a specific time period. The pattern of the chart that looks like a candle with a fat middle and ‘wick’ lines extending from the top and bottom.

Carry Trading  Currency trading designed to take advantage of the difference in interest rates between the two countries.

Cash Commodity  The physical assets of gold, silver, oil, cattle, etc. as opposed to paper holdings.

CBOT  Chicago Board of Trade.  One of the world’s oldest futures and options exchanges.

CFD or Contract for Difference  A contract for difference is an agreement between a broker and a client to pay the difference between a security’s opening and closing price.

Channel  A chart pattern that shows trading occurring within a defined narrow area.

Chasing the Trade  Buying a rising asset at a higher price due to fear of missing out on possible profits. Often results in a loss as the asset price settles back down.

Clean Price  The value of a bond that considers only the current redemption value.

ColoredCoin  A cryptocurrency protocol that is standardised for the creation of other digital currencies.

Commodities  Natural resources from the ground, such as minerals and foods, that have a standardised measurement of quality so they can be interchanged.

Corporate Bonds  An IOU from corporations issued to the bondholder. Used for acquisitions, expansions, or to refinance debt.

Counter Currency  In a currency pair, the second currency is the counter currency. This is the currency being purchased. It is also known as the quote currency.

Coupon  The interest paid on bonds.

Covered Call  Selling a call option when you own the underlying asset.

Cryptocoin  A token or cryptocurrency designed to act like a share of a blockchain company and/or to be used as utility in an application.

Cryptocurrencies  A new form of digital money, outside government systems, based on the blockchain.

Crypto-tokens  These tradeable coins give holders part ownership in a company instead of, or as well, as being a source of currency.

DAO  Distributed Autonomous Organisation.  A blockchain based company.

Dash (DASH)  A cryptocurrency that specialises in privacy, anonymity, and speed of transactions.

Debt Ratio  Total liabilities divided by total debt of a company.

Derivative  A contract that gets its value from an underlying asset such as an index, stock, commodity, currency, or interest rate. It does not own the asset.

Dirty Price  The value of a bond that considers interest and the current redemption value.

Dividend  Stock company profits paid out to investors. Dividends are usually paid quarterly, but can be paid monthly, annually, or in special payouts.

Dividend Ratio The percentage of earnings per share paid to stockholders.

Dogecoin (DOGE)   A cryptocurrency with a value of a fraction of a pence used by the Reddit community for fundraising and tipping.

Doji  A candlestick chart with a very short middle and long ends.

Drawdown  A loss in a security or in your account.

E-H

EBITDA  Earnings Before Interest, Taxes, Depreciation and Amortization.  This is used to help determine the value of a company.

Economic Calendar A schedule of government and economic reports that may influence market movement.

EPS or Earnings Per Share  EPS helps investors understand the health or strength of a company.

ETF or Exchange Traded Funds  Funds that invest in a basket of equities within a market sector.

Ethereum (ETH)  A cryptocurrency that is sometimes called ‘Bitcoin 2’ since it solves many Bitcoin problems and allows smart contracts to be written into the blockchain code.

Ethereum Classic (ETC)  This cryptocurrency split from Ethereum to maintain the inviolate nature of the blockchain.

EUR  Euro.  Official currency for parts of the European Union.

EV or Enterprise Value  The total assets of a company.

EV/EBITDA  the most accurate measure of a company value. It is the enterprise value divided by EBITDA. Low numbers means better value.

Exchange Rate  The price attached to a currency pair. Also called the FX rate or foreign exchange rate.

Fiat Currency  This money comes from a centralised location such as a country or government. It is backed by the government, not by gold or physical assets.

Fibonacci Lines  A mathematical pattern that suggests areas of resistance on a stock chart.

Foreign Currency Bonds  IOUs issued by a corporation in a currency different from the originating country.

Forex  Foreign Exchange Market.  The market in which government currencies are traded. Other common terms for forex are currency market, foreign exchange, and FX.

Forex Trading  Buying or selling CFDs or futures contracts in exchanges for currencies of governments and/or cryptocurrencies.

Fork or Hard Fork  A radical change in blockchain protocol that requires every node to update to the new protocol.

Forward Contracts  An agreement between two parties to purchase a commodity at a specific price, quantity, and quality for delivery on a specific date and location.

FTSE 100 Index  Financial Times Stock Exchange 100 Index. This is an index composed of the 100 largest companies listed on the London stock exchange.

Futures Contracts  Buying a commodity at a fixed price today, for a future delivery.

GBP  British pound.  Official currency of Great Britain.

Go Long  To buy.

Go Short  To sell.

Hash or Hashtag  The secure digital number that closes off a block in the blockchain.

Hedging  Buying insurance through options or futures to balance the chance of your assets falling in price.

HMO  Health Maintenance Organisation.  A health insurance organisation that uses a system of contracted providers to give care to its subscribers.

I-L

ICO  Initial Coin Offering.  A blockchain company that offers cryptocoins instead of stock in a public offering.

In the Money  When an option reaches the price point of the underlying asset.

Index Funds  Funds that follow a market index with a group of stocks in the same allocation as the market it follows.

Instrument  In financial terms, this is an asset that can be bought, sold, or traded. It usually refers to a stock, bond, security, or commodity, but can be anything of value that can be traded.

IPO  Initial Public Offering.  The first time a company offers stock for sale to the public.

JPY  Japanese yen.  Official currency of Japan.

Ladder  Buying bonds or equities so that they pay interest or mature in an orderly sequence.

Leverage  Using a small amount of money to control a large amount of securities.

Limit Order  The amount you are willing to pay to buy or sell an equity.

Liquidity  How easy it is to liquidate, or sell, a security.

Litecoin (LTC)  A Cryptocurrency. It offers shorter block generation times than Bitcoin, increased transaction speed, and lower transaction costs.

Long  To own or buy a stock or currency.

M-P

MA or Moving Average  This is a statistic that averages a range of prices to give an indication of the trend of a security. This chart indicator smooths out the price fluctuation to show trends, support and resistance.

MACD  Moving Average/Convergence/Divergence.  Long and short exponential moving averages. They help traders see price changes and trends up or down.

MaidSafeCoin (MAID)  This cryptotoken keeps data safe by encrypting it and disbursing fractions of the data into different locations. It allows coin holders to ‘rent’ their computer space.

Margins  A certain level of funds needed in your account when you use leverage to make a commodity trade.

Margin Call  The requirement to deposit more funds into your account to cover a trade that has lost money.

Market Cap or Market Capitalization  The total value of all the outstanding stokes of a company.

Market Index  Financial experts use a cross section of industries within a market sector to assess the health of that section of the stock market.

Market Maker  A broker or security exchange that stands ready to buy or sell securities at any given time.

Market Order  An order to buy or sell at whatever rate the market will accept at that moment.

Margin Trading  Paying only a fraction of the cost of the underlying asset to control the asset. Typically using money borrowed against your account or your broker.

Metacoin (MET) A Cryptocurrency designed to add more features on top of the Bitcoin foundation.

Miner  A person or set of computer processors who create the ledger or blockchain to store cryptocurrencies.

Monero (XMR)  This cryptocurrency uses increased privacy tools. It conceals the sending address and creates stealth addresses for the receiving address.

Moving Average  A chart indicator that smooths out the price fluctuation to show trends, support, and resistance.

Municipal Bonds  Debt to cities, states, or other public entities.

Naked Call or Put  selling a call or put option without either owning the underlying security or having the funds to purchase the stocks.

Namecoin (NMC)  An early cryptocurrency designed as a decentralised name registry database.

Node  Any unique network address that holds the complete and updated copy of the cryptocurrency blockchain.

Nonce  A slight variation in the hash computation that lets Bitcoin miners adjust the calculations while seeking a hash that starts with enough zeros to qualify as a hash.

Options  The right or obligation to buy or sell an equity at a certain date and price. You may profit from asset movement without asset ownership.

OTC  Over The Counter trades. A method of buying stocks, person-to-person when they are not available on your country’s exchange.

Out of the Money  When an asset is not in range for the option to be executed.

Overvalued  When all of the stock stokes at the current price total more than the actual amount of money you’d get if you sold off all the parts of the company.

Paper Gain/Loss  The difference between the purchase price and the current price of a security before it is sold.

Passive Income  Money that comes to you from investments.  It is not money you actively worked for or earned in a job.

Peerplay  A gaming and wagering platform that uses blockchains.

PE Ratio  Price to Earnings Ratio.  It compares the current price of a share to the company’s earnings per share by dividing the price of an equity’s stock by its annual earnings. This provides a rough estimate of the asset value and how many years you would need to own the asset in order to earn back the cost of the stock.

Perpetual Bonds  These are bonds that make regular interest payments but have no redemption date.

Pip or Price Interest Point  A unit that measures the amount of change in the exchange rate for a currency pair. A pip is usually 1/10,000 or .0001% of the asset. In a mini-lot of 10k units of currency a pip is about one unit or roughly $1 or £1.

Portfolio  The total collection of assets owned or controlled by you.

Premium  When an asset’s price is higher than the actual value of the asset it is said to be selling at a premium.

Procharts®  Multiple chart selection offered by IMC-Capital to give users the ability to customise their charts section.

Proof of Stake  Where the cryptocurrency hash and income comes from owning a large amount of the coin.

Proof of Work  The difficult hashtag-producing system that verifies the blocks and pays the miners.

Pump-and-Dump  Strategy used by unscrupulous groups that start a new cryptocurrency or fork. They hype up the cryptocurrency so the price increases, then dump or sell their coins and let the price fall.

Put  The right to sell, or the obligation to buy, an equity at a certain price within a certain time period. Buying a put give you the opportunity, but not the obligation to sell. Selling a put obligates you to buy if the asset reaches or passes the price.

Q-T

Quote Currency  In a currency pair, the second currency is the quote currency. This is the currency being purchased. It is also known as the counter currency.

Realised Gain/Loss  The difference between the purchase price and the sale price when a security is sold.

Revision to the Mean  The natural tendency of a security to come back to middle ground.

Ripple (XRP)  Cryptocurrency platform designed as an international payment system helping banks quickly move large amounts of money internationally.

Rollover  The money your trade gains or loses when kept overnight.

RSI or Relative Strength Index  The RSI is a momentum indicator that measures the speed and change of price movements and is shown using a number ranging from zero to 100. It shows oversold and overbought conditions indicating the likelihood of trends and trend changes.

Scaling  Adjusting position size to minimise risk. For example, as you reach your profit target, you sell part of your position and tighten your stop loss.

Scalping  A day trading method of many rapid trades that take advantage of very small price changes.

Share Lot  An amount of a security that is bundled into an option or currency offer. For options, a lot controls 100 stokes of equity. Currency lots are 100,000 or mini lots are 10,000. Lots are priced individually, but sold in blocks.

Short  To sell or to be obligated for a stock or currency.

Short Sale  Selling a security that is not owned by the seller, based on the expectation that it will decline and be bought back at a lower price for a profit.

Slippage  The difference between the expected trade price and the actual trade price. It is the amount the price changes from when you issue the order until it is executed.

Spot Contract  A contract where the commodity delivery takes place immediately or within a day or two of the contract start date.

Spot Price  The current price for a currency pair.

Spread  The difference between the ask/buy price and bid/sell price. It can vary from 1 to 20 cents or more.

Steem (STEEM)  A blockchain social media platform where users earn tokens for posts and can share in the profits of the company

Stop Loss Order  A predetermined point at which you instruct your broker to sell securities if the value drops. It can be a percentage of change or a specific price point.

Stratis (STRAT)  A cryptocurrency that also hosts a flexible blockchain development programme.

Strike Price  In options trading, this is the price at which you agree your option can be called or exercised.

Swaps  A commodity trade where the seller gets the commodity at a guaranteed price for a year or two, minus interest the sale money will earn, and the buyer pays in advance.

TaaS  Token as a Service.  A crypto-fund token from a closed end fund that invests in cryptocurrencies.

Tether  A cryptocurrency that keeps the consistent value of a fiat currency, such as USD, EUR, or JPY.

Trailing Stop  Also called a trailing loss. It is a standing order to sell your equity when it falls a certain percentage below the equity’s highest value while you own it.

Treasury Bond  A loan or IOU from a government or government body to the bondholder.

Trend Line  A line on a chart showing the direction the stock is moving. Formed by connecting three or more peaks or valleys.

TTM  Trailing Twelve Months. A report that incorporates the income statements of a company for the last twelve months. It is a measurement of a company’s financial health.

U-Z

Undervalued  When the cash value of an asset is worth more than the total stokes outstanding.

USD  United States dollar. Official currency of the United States.

Volume or Trading volume  The number of times an equity is bought or sold in a fixed period of time, usually a day.

Voxelus  A virtual reality (VR) content platform that uses cryptocurrencies and cryptocoins.

Wallet  A secure online place where your cryptocurrency is stored.

Zcash (ZEC)  A new cryptocurrency that is faster, more efficient, and more private than Bitcoin. It is built on a different blockchain protocol than Bitcoin.

Zero Coupon Bonds  Bonds that pay no regular interest. Instead, you pay a fraction of the face value, and at maturity you are paid the full face value.