Glossary
Every term you meet on Finance Desk, explained plainly with a worked example.
10b5-1 plan
A pre-arranged trading plan that lets insiders sell shares on a fixed schedule, with a cooling-off period, to reduce insider trading risk.
24/7 price vs official price
Round-the-clock trading prices versus the closing or settlement price that markets officially record for the day.
2s10s spread
The difference between the 10-year and 2-year Treasury yields, the most watched slope measure of the yield curve.
ADR and ADR ratio
A US-listed certificate that represents shares of a foreign company; the ADR ratio sets how many ADRs equal one ordinary share.
AI capex
Capital spending on AI infrastructure, such as data-center buildings, servers, accelerators, networking and power equipment.
After-hours and pre-market trading
Trading outside the regular exchange session, with thinner liquidity and wider spreads than the main session.
At-the-market (ATM) offering
A program to sell new shares gradually into the existing market through a sales agent, rather than in one priced offering.
Balance sheet (Federal Reserve)
The total assets the Federal Reserve holds, mostly Treasury and mortgage-backed securities bought in its policy operations.
Basis
The gap between the spot price of an asset and the price of its futures contract; the sign convention varies by market.
Beat and miss
A beat means a reported result is above the consensus estimate; a miss means it is below.
Beta
A measure of how much an asset's returns move with the market, where 1.0 means it moves in line with the index.
Brent–WTI spread
The price difference between Brent and WTI crude, a gauge of US export economics and of the regional supply balance.
COMEX vs LME
COMEX, run by CME Group in New York, is the main US metals futures venue; the LME in London leads global base-metal trading.
Capital expenditure (capex)
Money a company spends on long-lived assets such as factories, equipment, data centers and capitalized software.
Circuit breaker
A trading halt triggered when prices fall past set thresholds, designed to pause panic selling.
Consensus estimate
The average of analysts' forecasts for a company's future results, used as the benchmark for beats and misses.
Consumer price index (CPI)
A monthly measure of the average change in prices paid by US urban consumers for a representative basket of goods and services.
Contango and backwardation
Contango: later-dated futures are priced above nearby ones. Backwardation: later-dated futures are priced below nearby ones.
Convertible notes
Debt that the holder can exchange for a set number of common shares, usually paying a lower coupon than straight debt.
Core CPI
CPI excluding food and energy prices, which are more volatile and less tied to underlying inflation.
Core PCE
The PCE price index excluding food and energy, the inflation measure the Federal Reserve watches most closely.
Crack spread
The margin between crude oil and refined products, a proxy for refinery profitability; the 3-2-1 spread is a common version.
Custom ASIC and XPU
An application-specific chip designed for one operator's workloads, such as an in-house AI accelerator; XPU is a generic term for such non-GPU accelerators.
DRAM vs NAND
DRAM is fast, volatile working memory; NAND is slower, non-volatile storage. The two have separate supply bases and price cycles.
Diluted EPS
Net income per share after counting the extra shares that options, convertibles and similar instruments could create.
Dividend
A cash or share payment a company makes to its shareholders out of profits or reserves, usually quarterly.
Dot plot
A chart of each Fed policymaker's anonymous projection for the policy rate, published in the Summary of Economic Projections.
Drawdown
The decline from a previous peak to a later low, expressed as a percentage of the peak.
EIA weekly inventory report
The US Energy Information Administration's weekly data on crude, gasoline and distillate stocks, normally released Wednesdays at 10:30 a.m. Eastern.
ETF flows
Net money moving into or out of an ETF, measured as new share creations minus redemptions.
EV/EBITDA
Enterprise value divided by earnings before interest, taxes, depreciation and amortization, a valuation multiple that includes debt.
Ex-dividend date
The first day a stock trades without the right to the upcoming dividend; buyers on or after that day do not receive it.
Exchange-traded fund (ETF)
A fund that holds a basket of assets and trades on an exchange like a stock, typically tracking an index, sector or commodity.
FOMC
The Federal Reserve's policy committee, which sets the target range for the federal funds rate at eight scheduled meetings a year.
Fair price (pooled across venues)
A single reference price computed by pooling quotes from several venues, so one venue's glitch does not set it.
Federal funds rate
The overnight interest rate at which banks lend reserves to each other, which the Fed steers through a target range.
Float
The number of a company's shares available to trade publicly, excluding restricted holdings such as insider stakes.
Foreign private issuer (FPI)
A non-US company that meets SEC tests for foreign status, which lets it use Forms 20-F and 6-K and skip some domestic reporting rules.
Form 10-K
The annual report US public companies file with the SEC, with audited financial statements, business description and risk factors.
Form 10-Q
The quarterly report US public companies file with the SEC, containing unaudited financial statements for the first three quarters of the year.
Form 13F
The quarterly SEC filing that discloses the US equity holdings of large institutional investment managers.
Form 20-F
The annual report that a foreign private issuer files with the SEC, in place of the Form 10-K used by US domestic companies.
Form 4
The SEC filing that discloses insiders' trades in their company's shares, due within two business days of the transaction.
Form 6-K
A report that a foreign private issuer files with the SEC to furnish information it makes public or distributes in its home market.
Form 8-K
The SEC filing a public company uses to disclose material events such as earnings, executive changes or deals, usually within four business days.
Form S-3
A short-form SEC registration statement that lets established public companies raise capital quickly, including through shelf offerings.
Forward P/E
The share price divided by expected earnings per share for the next twelve months, based on analyst estimates.
Foundry vs fabless
A foundry manufactures chips designed by other companies; a fabless firm designs chips and outsources all of its manufacturing.
Free cash flow
Cash a company generates from operations after capital spending, the money available to repay debt, pay dividends or buy back shares.
Funding rate
A periodic payment between long and short traders on a perpetual future that pushes its price toward the spot price.
GDP (advance, second and third estimates)
The total value of goods and services produced in a country, first estimated about a month after each quarter ends and revised twice.
Gross margin
The share of revenue left after the direct cost of producing what was sold, before operating expenses.
Guidance
A company's forecast for upcoming results, such as revenue or EPS for the next quarter or year, given in its earnings release or call.
Halving
A scheduled event that halves the block reward paid to bitcoin miners, roughly every four years.
Henry Hub
The US natural gas pipeline hub in Louisiana whose prices serve as the main benchmark for US natural gas futures and contracts.
High-bandwidth memory (HBM)
Stacked DRAM chips mounted beside an AI accelerator, giving it much higher memory bandwidth than standard memory modules.
Hyperscaler
A very large cloud or internet operator that builds data centers at scale, such as Amazon, Microsoft, Google and Meta.
IFRS vs US GAAP
Two accounting frameworks: IFRS, required in more than 140 jurisdictions, and US GAAP, used by US domestic companies; they differ in several rules.
ISM PMI
A monthly survey of purchasing managers; readings above 50 indicate expansion and below 50 indicate contraction.
Implied probability
The probability of an outcome implied by the market price of a contract that pays a fixed amount if it happens.
Index price
A weighted average or median of spot prices from several trading venues, used as the benchmark for derivatives.
Index rebalance
A scheduled change to an index's constituents or weights, which forces funds tracking the index to buy and sell.
Initial jobless claims
The weekly count of new applications for unemployment insurance, a timely indicator of layoffs.
LBMA gold price
The London benchmark price for gold, set twice a day and widely used as the reference for gold contracts.
LNG (liquefied natural gas)
Natural gas cooled to about minus 162 degrees Celsius so that it becomes a liquid and can be shipped by tanker.
Limit order
An order to buy or sell at a specified price or better, which may not fill if the market never reaches it.
Liquidation
A forced closing of a leveraged position by the exchange when its margin falls below the required minimum.
MMBtu
Million British thermal units, the standard energy unit for natural gas contracts; about the heat content of 1,000 cubic feet of gas.
Mark price
A smoothed reference price, built from the index price, used to value positions and trigger liquidations.
Market capitalization
The total market value of a company's shares: share price multiplied by shares outstanding.
Market structure bill
Proposed US legislation that would set which regulator oversees crypto assets and how their trading venues operate.
Monthly active users (MAU) and ARPU
MAU counts users active in a month; ARPU is revenue divided by average users over a period, a measure of revenue per user.
Monthly revenue report (TSMC style)
A monthly sales figure that Taiwan-listed companies publish early in the following month, giving an early read on quarterly results.
Nasdaq-100 and QQQ
The Nasdaq-100 tracks 100 of the largest non-financial companies listed on Nasdaq; QQQ is an ETF that holds and tracks that index.
Net interest revenue (brokers)
Interest a brokerage earns on customer margin loans and cash balances, minus the interest it pays customers on their cash.
Nonfarm payrolls
The monthly count of jobs added or lost across most US employers, excluding farm workers, from the Labor Department's jobs report.
OPEC+
OPEC plus allied oil producers, including Russia, that coordinate production quotas to influence supply and prices.
Open interest
The total number of derivative contracts that are open and not yet closed or settled.
Operating margin
Operating income as a share of revenue, measuring profit from core operations after operating costs but before interest and tax.
Options expiration (opex)
The date listed options settle, usually the third Friday of the month, when open interest and hedging flows often increase.
P/E ratio
The share price divided by earnings per share, showing how many dollars investors pay for each dollar of trailing profit.
PCE price index
The Commerce Department's price index for consumer spending, which the Federal Reserve uses as its primary inflation gauge.
Payment for order flow (PFOF)
A practice in which a broker routes customer orders to a market maker that pays the broker for those orders.
Perpetual future (perp)
A futures contract with no expiry date, kept near the spot price by periodic payments between long and short holders.
Polymarket
An online prediction market where users trade shares on the outcomes of real-world events.
Preferred stock
A class of equity with priority over common stock for dividends and liquidation, usually with a fixed dividend and limited voting rights.
Process node (N3, N2, 18A)
A named manufacturing generation, such as TSMC's N3 or N2 or Intel's 18A; the label is a branding name, not a measured feature size.
Proxy statement (DEF 14A)
The definitive proxy filing sent to shareholders before the annual meeting, covering board elections, executive pay and shareholder votes.
Real yield
A bond yield adjusted for expected inflation, usually read from inflation-protected Treasury securities (TIPS).
Retail sales
Monthly total sales at US retail and food service businesses, a timely gauge of consumer spending.
Revenue
The total money a company earns from its main business before any costs are deducted, also called sales or the top line.
Rule of 40
A screening heuristic for software companies: revenue growth rate plus profit margin should total at least 40 percent.
S&P 500
A market-cap-weighted index of about 500 large US companies, maintained by S&P Dow Jones Indices and the standard benchmark for US stocks.
Schedule 13D and 13G
Filings required when an investor passes 5 percent ownership of a public company, with 13D for active intent and 13G for passive holders.
Share buyback
A company repurchasing its own shares, reducing the share count and often returning cash to shareholders.
Short interest
The number of shares sold short and not yet covered, reported by broker-dealers to FINRA twice a month, often shown as a share of float.
Slippage
The difference between the price you expected to trade at and the average price you actually received.
Spread (bid-ask)
The gap between the best bid to buy and the best ask to sell in a market.
Stablecoin
A crypto token designed to hold a steady value, usually pegged to the US dollar and backed by reserves.
Stablecoin reserve income
Interest earned by a stablecoin issuer on the cash and short-term securities held to back the coins it issues.
Stop-loss order
An order to sell, or buy to cover, once a price reaches a set level, to limit losses.
TPU (tensor processing unit)
Google's custom AI accelerator, designed for its own machine-learning workloads and offered to cloud customers through Google Cloud.
Target range
The band, usually 25 basis points wide, within which the Fed aims to keep the federal funds rate after each decision.
Tokenized gold (PAXG, XAUT)
Blockchain tokens designed to represent a set amount of physical gold held in custody, such as PAXG and XAUT.
Trailing twelve months (TTM)
The sum of the last four reported quarters, used to smooth seasonality and show a full year's figures.
Treasury yield
The annual return an investor earns by holding a US Treasury security to maturity, expressed as a percentage of its price.
Triple witching
Quarterly expiry of stock index futures, index options and single-stock options on the same day, the third Friday of March, June, September and December.
VWAP (volume-weighted average price)
The average price paid for an asset over a period, weighted by the size of each trade.
Venue
A specific exchange, platform or market where an asset is traded and its price is quoted.
Volatility
The size of an asset's price fluctuations, usually measured as the standard deviation of returns over a period.
Volume-weighted median
The price at which half the traded volume is above and half below, which is robust to outlier trades.
Year over year (YoY)
A comparison of a figure with the same period one year earlier, which removes seasonal effects.
Yield curve
A plot of interest rates on government bonds across maturities, showing how yield changes with time to maturity.
Yield curve inversion
A state in which shorter-maturity yields exceed longer-maturity yields, usually read as a sign the market expects weaker growth or lower rates ahead.