Financial Terms Glossary

Use our investing glossary to find financial terms and THEIR meaning






A financial product that pays out a fixed stream of payments to an individual. These financial products are primarily used as an income stream for retirees. Annuities are created and sold by financial institutions, which accept and invest funds from individuals. Upon annuitization, the holding institution will issue a stream of payments at a later point in time.


Bar Chart

A chart drawn with a succession of vertical lines showing multiple price bars over time. Each bar shows how the price moved over a specified period of time and includes the open, high, low, and close (OHLC) prices for that period.

Bear Market

A market in which share prices are dropping, encouraging selling.


A loan made to a company, city, or the government, where you are acting as the bank, with the agreement that they pay back the loan in full, and with regular interest payments. Considered a more stable form of investment compared to other investments such as stocks and shares.

Bull Market

A market in which share prices are rising, encouraging buying.


Candlestick Chart

OHLC charts drawn with a succession of vertical lines (candles). Each candle shows the open, high, low, and close price of a trading period.


See Certificate of Deposit

Certificate of Deposit (CD)

A timed savings account that offers a set rate of interest for a specific period.



A contract between two or more parties whose value is based on an agreed-upon underlying financial asset (like a security) or set of assets (like an index). Common underlying instruments include bonds, commodities, currencies, interest rates, market indexes, and stocks.



Exchange-Traded Fund

Exchange-Traded Fund (ETF)

A basket of different types of investments pooled into a single entity, which are then offered as shares to investors. These are then traded on major stock exchanges through a brokerage firm, and each ETF share gives it’s owner a proportional stake in the total assets of the exchange-traded fund.


Foreign Exchange (Forex)

A decentralized global market where all the world’s currencies trade. The forex market is the largest, most liquid market in the world with an average daily trading volume exceeding $5 trillion.


See Foreign Exchange


See Foreign Exchange



See Gross Domestic Product

Gross Domestic Product (GDP)

A measure of the value of economic activity within a country. Strictly defined, GDP is the sum of the market values, or prices, of all final goods and services produced in an economy during a period of time, usually a year.


Hedge Fund

An investment designed to protect portfolios from market uncertainty, while generating positive returns in both up and down markets.



A method of increasing an amount of money by placing it in financial products. These include bank accounts, money market accounts, stocks, bonds, mutual funds, precious metals and property. Anything that potentially increases in value can be an investment.


See Investing

Individual Retirement Account (IRA)

A fund that hold different types of investments and assets.


Joint Venture (JV)

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task, such as a new project or any other business activity. Each of the participants is responsible for profits, losses, and costs associated with it. The venture is its own entity, separate from the participants’ other business interests.


See Joint Venture


Key Currency

A type of money that is stable, does not fluctuate, and provides the foundation for exchange rates and international transactions. Such currencies typically come from countries with strong and stable economies, and are involved in the global market. Because of their global use, key currencies often set the values of other currencies.


Line Chart

A chart showing a security’s closing prices over a period of time, such as day, month, or year. The chart is constructed by placing points representing the price at different points in time, and then connecting the points with straight lines.


Money, property or other material goods given to another party in exchange for future repayment of the loan value amount, along with interest or other finance charges. A loan may be for a specific, one-time amount or can be available as an open-ended line of credit up to a specified limit or ceiling amount.


Money Manager

A person or financial firm that manages the securities portfolio of an individual or institutional investor. Typically, a money manager employs people with various expertise ranging from research and selection of investment options to monitoring the assets and deciding when to sell them.


A legal agreement by which a finacial institution such as a bank or building society lends money at interest in exchange for taking title of the debtor’s property, with the condition that the conveyance of title becomes void upon the payment of the debt.

Mutual Fund

An investment made up of a pool of money collected from many members of the investing public to buy securities such as stocks, bonds, money market instruments, and other assets. Typically referred to as a portfolio, the average mutual fund holds hundreds of different securities, allowing investors to gain a wide diversification at a low price.



See Net Asset Value

Net Asset Value (NAV)

The price per share, the fund market value Calculated as the total value of the securities within the portfolio minus the liabilities, divided by the number of the fund’s outstanding shares.



A contract that gives the buyer (the owner or holder of the option) the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price prior to or on a specified date, depending on the form of the option.



A grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. Portfolios are held directly by investors and/or managed by financial professionals and money managers.



A three-month period on a company’s financial calendar that acts as a basis for periodic financial reports and the paying of dividends. A quarter refers to one-fourth of a year and is typically expressed as ‘Q1’ for the first quarter, ‘Q2’ for the second quarter, and so forth.



A business cycle contraction where there is a significant decline in general economic activity in a region, country, or the entire world that goes on for more than a few months. It normally is visible in GDP, industrial production, employment, real income, and wholesale-retail trade. In the UK, it is defined as a negative economic growth for two consecutive quarters.



A share is an indivisible unit of capital, expressing the ownership relationship between the company and the shareholder. A unit used as mutual funds, limited partnerships, and real estate investment trusts.

Self-Invested Personal Pension (SIPP)

A type of do-it-yourself pension plan that allows you to choose your own investments from a full range of investments approved by HM Revenue and Customs.  SIPPs are a low cost, affordable, flexible, and straightforward way to save.


See Self-Invested Personal Pension.


Also known as ‘shares’ or ‘equity’, is a type of security that signifies proportionate ownership in the issuing corporation. This entitles the stockholder to that proportion of the corporation’s assets and earnings. These investments can be purchased from most online stock brokers.



The buying and selling of financial instruments such as shares, forex and bonds, and derivatives such as CFDs, futures or options.


Unit Trust

An unincorporated mutual fund structure that allows funds to hold assets and provide profits that go straight to individual unit owners instead of reinvesting them back into the fund. 



The analytical process of establishing the current (or projected) worth of an asset or company. There are many ways of achieving this.


A statistical measure of the deviation of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security.


Wall Street

A street located in the lower Manhattan section of New York City and is the home of the New York Stock Exchange (NYSE). Wall Street has also been the historic headquarters of some of the largest U.S. brokerages and investment banks.



The horizontal line that runs sideways from zero, left to right, on a financial chart using cartisian coordinates.



The vertical line that runs upwards from zero, on a financial chart using cartisian coordinates.


The annual income from a security, expressed as a percentage of the current market price of the security.


Zero-Cost Strategy

A trading or business decision or strategy that does not entail any expense to execute.