Technical Analysis is the use of technical indicator to predict which direction the stock price will move in the future.  Technical indicators use past stock prices to calculate their value.

Charting Software is an analytical, computer-based tool used to help equity (stock) traders with trading analysis by charting the price stock price for various time periods along with various indicators. Equity charting software packages are used by many traders to determine the direction on any given stock price.

The Chicago Board of Trade (CBOT) is a publicly-traded exchange (NYSE: BOT) that specializes in futures and options trading. It is highly active in markets such as agriculture, energy, equities, and US Treasuries, providing an important risk-management function for thousands of its CBOT members.

The Chicago Mercantile Exchange (CME Group) is a publicly-traded derivatives-based exchange (NasdaqGS: CME), and is currently the largest futures exchange in the world in terms of number of contracts outstanding (or open interest).

Class A Shares are a form of common stock that may have more or less voting rights that Class B shares. Generally Class A shares have more voting rights, but companies sometimes trick investors by using the perception of “Class A” shares to attach fewer voting rights to them than Class B shares.

Class B Shares are a form of common stock that may have more or less voting rights that Class A shares. Generally Class B shares have lesser voting rights, but be vary of some companies that trick investors by using the perception of Class “B” (compared to “A”) shares to attach more voting rights to them than Class A shares.

A closed-end fund is a publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange.

A bullish collar is a protection strategy where you simultaneously buy a call at strike price 1 and sell a put at strike price 2. This strategy is for investors who has a bullish perception on the underlying asset. We can also create a “bearish” collar by simultaneously buying a put at strike price 1 and selling a call at strike price 2.

The fee charged by a broker or investment advisor in exchange for investment advice and/or handling the purchase or sale of a security. Commissions vary from brokerage to brokerage.

A basic material used in manufacturing or commerce that is interchangeable with other the same commodities coming from a different source. The quality of a specific commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade. Typical types of commodities are corn, gold, silver, steel, etc.

Common stock is a form of corporate equity ownership, a type of security. The terms “voting share” or “ordinary share” are also used in other parts of the world; common stock being primarily used in the United States. It is called “common” to distinguish it from preferred stock.

There are many different economic systems that try to result in more equality or faster growth. The structure of a country’s economy has a lot to do with the country’s politics and the values of its population. However, the economy of every country also changes over time, and how it falls between these broad categories will often change with it.

Compound Interest is an extremely important concept in any level of finance. Compound interest can make an enormous difference in the return you get from your investments. As we know, simple interest is the act of earning interest on an investment.

Comprehensive insurance to a form of insurance policy which includes a broad range of coverage or protection. This article discuss the types, features, and advantages of comprehensive insurance.

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Contract

A Contract is term that describes the unit of trading for a stock option, future option or future. It lists all the obligations and particulars related to the security.

A “Contract” is a legally binding agreement between two parties (people, companies, or both). Having a contract means that if one party does not keep their word, the other can sue them in court to either force them to fulfill their side of the agreement, or pay back compensation.

Convertible Bonds are bonds that can be converted into Common Stock usually at the maturity of the bond.

Convertible Preferred Stock are Preferred stock that can be converted into common stock at a particular time frame.

A corporation is an entity that abides by specific legal requirements that sets it apart as having a legal existence, as an entity separate and distinct from its stockholders (owners).

Correlation is a measure of the strength of linear association between two variables or more variables of interest. We can measure the degree and direction of their linear association using correlation analysis. Read this article to learn more!

Cottage Industry, or the “Putting Out System”, is a production system of producing goods that relies on producing goods, or parts of goods, by craftsmen at home, or small workshops, instead of large factories. Historically the cottage industry was the major production system for most of human history until the Industrial Revolution.

Coupon

A Coupon is the periodic interest payment made to a bondholder during the life of the bond. (Usually semi-annual)

Coupon Rate is the rate of interest paid on a bond, expressed as a percentage of the bond’s face value.

Covariance is a statistical measure of the extent that 2 variables move together relative to their respective mean (or average) values.

A covered call is an options insurance strategy where you simultaneously own a stock and sell a call option for the same symbol (usually for a higher price than what you paid for it). This gives someone else the right (but not obligation) to buy your stock from you later at a specific price. If the underlying stock’s price goes up, the buyer will exercise the option and buy the shares. If the price goes down, the seller of the option keeps both the stocks and the price of the options.

Covered calls are options strategies by which investors retain a long position in an asset and write or sell a call options on an identical in an effort to produce an increased income from the asset.

A covered put is an options insurance strategy where you simultaneously have a short open position on a stock and sell a put option for the same underlying option. This means you’re shorting a stock, but give someone else the right to sell you that stock at certain price in the future. You would use this if you were certain a stock’s price wasn’t going to go up, but you weren’t sure if would go down either – so you make a bit more money if the price doesn’t change.

The U.S. Dollar has lost more than 30 percent of its value relative to other world currencies. Shorting the U.S. dollar and buying other world currency ETFs is one way to make money from this trend.

Currency Risk is the risk an investor is exposed to when investing in international markets. Currency risk is mainly associated with the fluctuations in exchange rates of the various world currencies.

Current Ratio is the ratio of current assets divided by current liabilities. It provides A liquidity ratio that measures a company’s ability to pay short-term obligations. Also known as “liquidity ratio”, “cash asset ratio” and “cash ratio”.

Day traders buy and sell the same stock (or other investment type) within a single trading day. Day trading has become a very popular way to make money, but it requires dedication and high volumes of cash.

If you perform four or more day trades in a 5 day period you may get flagged by the SEC as a “Pattern Day Trader.” This can cause you to lose your margin account status until you deposit enough cash to have $25,000 or more in your account. Many beginning traders have been bitten by this rule!

A trading term called a dead cat bounce is used to when a stock is in a severe decline and has a sharp bounce off the lows. It occurs due to the huge amount of short interest in the market. This bounce will be short lived and followed up by heavy selling which will break the prior price low.

A national government that owes money to international financial institutions such as the World Bank, foreign governments, or to foreign lenders.

Delta is also called the hedge ratio, which is the ratio of the change in price of an option to the change in price of the underlying stock.

In Economics, “Demand” is the relationship between prices and how much people want to buy a good or service.

Depreciation refers to the gradual and permanent decrease in value of the assets (referred to as a depreciatable asset) of a firm, nation or individual over its lifetime.

A depression is a recessionary decline in real GDP (taking inflation into account) greater than 10% lasting at least 3 years.

Derivative is a type of security whose value is “derived” from an underlying asset. (Eg; Futures and Options).

An investment service that allows individuals to purchase a stock directly from a company or through a transfer agent. Not all companies offer DSPPs and the plans often have restrictions on when an individual can purchase shares.

Discount refers to the price of a bond when it is below its par value.

Discounted Cash Flow (DCF) is a valuation technique or model that discounts the future cash flows of a business, entity, or asset for the purposes of determining its value.

Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be distributed to shareholders. There are two ways to distribute cash to shareholders: share repurchases or dividends. Many corporations retain a portion of their earnings and pay the remainder as a dividend.

A plan offered by a corporation that allows investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date.

A Dividend Yield is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. In the absence of any capital gains, the dividend yield is the return on investment for a stock. The formula is Annual Dividends Per Share divided by Price Per Share.

Dollar Cost Averaging is the method of purchasing a fixed dollar amount of one particular investment at regular period of times, regardless of the share price.

The Dow Jones Industrial Average, more frequently know simply as the Dow or the Dow Jones, is a stock market index made up of 30 of the largest publicly-owned companies based in the United States. It is a price weighted index meaning that the index’s price is an average of the price of the 30 stocks that make it up. Though it is price weighted, this does not mean that every time there is split the index is completely changed, as they have factors to keep the value of the index consistent.

Return on Equity (ROE) is one of the most important pieces of data that investors and creditors use to evaluate a company’s potential to grow and profitability. Dupont Analysis breaks the ROE into several different components in order to analyze where the returns are coming from.

Duration measures the percentage change in the price of a bond (or value of a bond portfolio) due to a change in market interest rates (also known as the yield).

Earning estimates are an estimate of forecasted earnings and they provide one strong measure of potential future performance and are a mainstay of stock investing research!