Italicised words in the definitions mean they are
also defined within the glossary.
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 uctuation. 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.
The Complete Fintech Glossary
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Blockchain The collection of blocks oftransactions
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.
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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.
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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.
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.
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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.
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.
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HMO Health Maintenance Organisation. A health
insurance organisation that uses a system of
contracted providers to give care to its
subscribers.
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.
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.
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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 shares 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.
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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 shares 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.
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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
eToro 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.
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.
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XRP by Ripple Labs 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 shares 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.
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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
exible 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.
Undervalued When the cash value of an asset is
worth more than the total shares outstanding.
USD United States dollar. Official currency of the
United States.
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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.
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