Investopedia Staff

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  1. Term

    Long/Short Equity

    An investing strategy of taking long positions in stocks that are expected to appreciate and short positions in stocks that are expected to decline. A long/short equity strategy seeks to minimize market ...
  2. Term

    Weak Shorts

    Traders or investors who hold a short position in a stock or other financial asset who will close it out at the first indication of price strength. Weak shorts are typically investors with limited financial ...
  3. Term

    Multiple Tops

    A reversal chart pattern that shows the failure of a security to break through to new highs on a number of occasions, and is therefore a strong sell signal. Multiple tops can be double or triple tops.
  4. Term

    Quick Ratio

    An indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets. For this reason, the ratio excludes inventories ...
  5. Term

    Outstanding Shares

    A company's stock currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.
  6. Term

    Short Squeeze

    A situation in which a heavily shorted stock or commodity moves sharply higher, forcing more short sellers to close out their short positions and adding to the upward pressure on the stock. A short squeeze ...
  7. Term

    Net Investment

    The amount spent by a company or an economy on capital assets, or gross investment, less depreciation.
  8. Term

    Ostrich

    A colloquial term that refers to the tendency of certain investors to ignore bad news that can affect their investments. In the investment context, "ostrich" is based on the popular misconception that ...
  9. Forex Fundamentals

    The Future Of Cryptocurrency

    The emergence of Bitcoin has sparked a debate about its future and that of other cryptocurrencies. Despite Bitcoin’s recent issues, its success since its 2009 launch has inspired the creation of alternative ...
  10. Term

    Closing Cross

    A price discovery mechanism on the Nasdaq that crosses buy and sell orders at a single price at the end of the regular market session. The closing cross sets the Nasdaq Official Closing Price (NOCP) for ...
  11. Term

    Current Account

    The difference between a nation’s savings and its investment. The current account is defined as the sum of goods and services exports less imports, net income from abroad and net current transfers.
  12. Term

    Floor Broker (FB)

    An independent member of an exchange who is authorized to execute trades on the exchange floor on behalf of clients. Also known as a "pit broker."
  13. Term

    Indenture

    A legal and binding contract between a bond issuer and the bondholders.
  14. Term

    Voodoo Accounting

    Creative rather than conservative accounting practices. Voodoo accounting employs numerous accounting gimmicks to artificially boost the bottom line by inflating revenue or concealing expenses or both. ...
  15. Term

    Red Herring

    A preliminary prospectus filed by a company with the Securities and Exchange Commission (SEC), usually in connection with the company’s initial public offering.
  16. Active Trading

    Warren Buffett: How He Does It

    We look at the Sage of Omaha's methodology for evaluating value stocks.
  17. Term

    Customer To Customer (C2C)

    A business model that facilitates an environment where customers can trade with each other. Two implementations of customer-to-customer markets are auctions and classifieds.
  18. Term

    Indicative Match Price

    The price at which the maximum volume of orders can be executed at the time of an auction.
  19. Term

    Market-On-Open Order (MOO)

    An order to buy or sell shares that specifically requests execution at the opening price. Market-On-Open (MOO) orders can only be executed when the market opens, and at no other time during the trading ...
  20. Term

    Sticky-Down

    A figure that can move higher relatively easily, but only will go down with pronounced effort. The existence of sticky-down prices has been proved by numerous modern-day economic studies, and usually it ...
  21. Term

    Gearing

    The level of a company’s debt related to its equity capital, usually expressed in percentage form. Gearing is a measure of a company’s financial leverage and shows the extent to which its operations are ...
  22. Term

    Value-Added Network (VAN)

    A private network provider hired by a company to facilitate electronic data interchange (EDI) and/or provide other network services such as message encryption, secure email and management reporting.
  23. Options & Futures

    Shopping For A Financial Advisor

    Finding your perfect advisor is as simple as shopping for a car. Read on to learn more.
  24. Term

    Double-Spending

    The risk that a digital currency can be spent twice. Double-spending is a problem unique to digital currencies because digital information can be reproduced relatively easily.
  25. Term

    Cookie Jar Accounting

    A disingenuous accounting practice in which periods of good financial results are used to create reserves that shore up profits in lean years. “Cookie jar accounting” is used by a company to smooth out ...
  26. Term

    Paper Trade

    Using simulated trading to practice buying and selling securities without actual money being involved.
  27. Term

    Financial Shenanigans

    Acts or actions designed to mask or misrepresent the true financial performance or actual financial position of a company or entity. Financial shenanigans can range from relatively minor infractions involving ...
  28. Term

    Opening Imbalance Only Order (OIO)

    Limit orders that provide liquidity during the opening cross on the Nasdaq.
  29. Term

    Ultra High Net Worth Individuals (UHNWI)

    Persons with investable assets of at least US$30 million, excluding personal assets and property such as one’s primary residence, collectibles and consumer durables. Ultra High Net Worth Individuals (UHNWI) ...
  30. Term

    Nominal Interest Rate

    The interest rate before taking inflation into account. The equation that links nominal and real interest rates is: (1 + nominal rate) = (1 + real interest rate) (1 + inflation rate). It can be approximated ...
  31. Term

    Net Order Imbalance Indicator (NOII)

    Order imbalance information about the opening and closing crosses on the Nasdaq disseminated to market participants prior to executing the crosses.
  32. Investing Basics

    A Look At Primary And Secondary Markets

    Knowing how the primary and secondary markets work is key to understanding how stocks trade.
  33. Term

    Tenbagger

    An investment that appreciates to 10 times its initial purchase price. The term “tenbagger” was coined by legendary fund manager Peter Lynch in his book “One Up On Wall Street".
  34. Forex Education

    How Leverage Is Used In Forex Trading

    Forex trading by retail investors has grown by leaps and bounds in recent years, thanks to the proliferation of online trading platforms and the availability of cheap credit. The use of leverage in trading ...
  35. Term

    Imbalance Only Orders (IO)

    Limit orders that provide liquidity during the opening cross and closing cross on the Nasdaq. Imbalance Only (IO) orders will execute only on the opening cross or closing cross.
  36. Investing Basics

    How To Calculate The Bid-Ask Spread

    It's very important for every investor to learn how to calculate the bid-ask spread and factor this figure when making investment decisions.
  37. Investing Basics

    Investing During Uncertainty

    The inability to forecast future events can turn the markets upside down. Find out how to stay right-side up.
  38. Bonds & Fixed Income

    The Wonders Of Convertible Bonds

    Ever wondered what exactly a convertible bond does? Read the features of a convertible bond and learn how important the conversion factor is to you as an investor.
  39. Investing Basics

    How And Why Do Companies Pay Dividends?

    If a company decides to pay dividends, it will choose one of three approaches: residual, stability or hybrid policies. Which a company chooses can determine how profitable its dividend payments will be ...
  40. Professionals

    The Claritas Investment Certificate: A New Foundation-Level ...

    The Claritas Investment Certificate is likely to find growing acceptance as the new foundation-level education and ethics standard for the financial service sector internationally.
  41. Forex Fundamentals

    The Effects Of Currency Fluctuations On The Economy

    Currency fluctuations are a natural outcome of the floating exchange rate system that is the norm for most major economies. The exchange rate of one currency versus the other is influenced by numerous ...
  42. Investing Basics

    Old Stock Certificates: Lost Treasure Or Wallpaper?

    What if you've discovered some old shares in bearer form? Follow our tips and find out what they're worth.
  43. Term

    NY Empire State Index

    A seasonally adjusted index that tracks the results of the Empire State Manufacturing Survey. The survey is distributed to roughly 175 manufacturing executives and asks questions intended to gauge both ...
  44. Term

    Collateralized Debt Obligation - CDO

    An investment-grade security backed by a pool of bonds, loans and other assets. CDOs do not specialize in one type of debt but are often non-mortgage loans or bonds.
  45. Term

    Federal Reserve Bank

    The central bank of the United States and the most powerful financial institution in the world. The Federal Reserve Bank was founded by the U.S. Congress in 1913 to provide the nation with a safe, flexible ...
  46. Economics

    How Bitcoin Works

    Bitcoin is a digital currency that exists almost wholly in the virtual realm, unlike physical currencies like dollars and euros. A growing number of proponents support its use as an alternative currency ...
  47. Term

    Obamanomics

    A buzzword used to describe the economic philosophies of United States President Barack Obama.
  48. Term

    NAHB/Wells Fargo Housing Market Index

    An index based on a monthly survey of members belonging to the National Association of Home Builders (NAHB) that is designed to measure sentiment for the U.S. single-family housing market.
  49. Term

    Circus Swap

    A combination of an interest rate swap and a currency swap in which a fixed-rate loan in one currency is swapped for a floating-rate loan in another currency. The term is derived from the acronym CIRCUS, ...
  50. Term

    Hawthorne Effect

    The inclination of people who are the subjects of an experimental study to change or improve the behavior being evaluated only because it is being studied, and not because of changes in the experiment ...
  51. Term

    Readvanceable Mortgage

    A mortgage feature that allows the borrower to re-borrow the principal amount of the original mortgage that has been paid down. A readvanceable mortgage consists of a mortgage and a Line of Credit (LoC) ...
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