Stock Market Glossary - Letter T

Take profit

Pre-defined profit target at which a position is automatically closed.

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Takeover offer

Public offer to purchase a majority stake in a listed company.

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Tax-exemption order

Instruction to a German bank not to withhold tax on investment income up to the statutory allowance.

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Technical analysis

Evaluation of charts, patterns and indicators to predict price movements.

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TER

Total Expense Ratio – total expense ratio of a fund or ETF.

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Term deposit

Bank deposit with a fixed term and agreed interest rate.

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Theta

Option indicator for the loss in time value per day.

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Tick

Smallest possible price movement of an asset.

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Time in force

Period of validity of an order, for example valid for the day or until revoked.

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Total-return index

Index that combines price changes and reinvested distributions.

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Tracking difference

Actual return difference between a fund or ETF and its benchmark index.

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Tracking error

Standard deviation of the return difference between the fund and the benchmark index.

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Trade

Single trade: opening and later closing a position.

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Trading diary

Structured documentation of your own trades including justification and teaching.

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Trading plan

Written strategy with clear rules for entry, exit and risk management.

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Trading psychology

Behavioral economics aspects of trading.

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Trailing stop

Dynamic stop loss that moves with the price in the direction of profit.

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trend

Sustained directional price movement – upward, downward or sideways.

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Trend line

A line drawn on the chart that connects several lows (or highs).

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Treynor ratio

Risk-adjusted return measure that uses beta as a risk measure.

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TWAP

Time-weighted average price for consistent execution of larger orders.

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