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Stock Market Glossary

Explore more than 400 curated terms for investors, traders and long-term savers. Detailed definitions, practical context and no marketing jargon — from your first ETF savings plan to option strategies.

Updated: August 4, 2026

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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Stock Market Glossary

A Terms beginning with A

Accrued interest

Interest accumulated since the last coupon date and included in a bond trade.

Accumulating

Fund/ETF variant that automatically reinvests distributions.

Accumulation

Phase in which large market participants build up positions inconspicuously.

Ad hoc announcement

Prompt publication of price-sensitive information by a listed issuer.

Additional-margin obligation

Obligation to provide extra capital or collateral for certain financial transactions.

ADR

Depositary receipt that can make foreign shares tradable on another market.

Advance flat rate

Tax mechanism for accumulating funds in Germany.

Advance-Decline line

Cumulative difference between rising and falling stocks in a market.

All-weather portfolio

Strategic portfolio that is intended to survive in any economic environment.

Allocation

Distribution of capital across individual positions or asset classes.

Alpha

Excess return of an investment compared to its benchmark index.

Anchor effect

Behavioral bias in which a reference value disproportionately influences decisions.

Show all terms beginning with A (6 more)

Stock Market Glossary

B Terms beginning with B

Backtest

Testing a trading strategy on historical price data.

Backwardation

Futures-market situation in which later contracts can trade below near-term contracts.

BaFin

Federal Financial Supervisory Authority.

Balance sheet

Statement of a company’s assets and capital at a reporting date.

Basis risk

Risk that a hedge and the position being hedged develop differently.

Bear market

Market phase with significantly falling prices, usually more than 20 percent from the high.

Beta

Measure of the sensitivity of a stock to fluctuations compared to the overall market.

Bid

Highest price at which a buyer is willing to purchase an asset.

Bid-ask spread

Bid-ask spread explained: what bid and ask quotes reveal about liquidity, trading costs and order types.

Blue Chip

Share of an established large company with high market capitalization and a stable business model.

Bollinger Bands

Volatility based indicator bands around a moving average.

Bond

Fixed-interest security that states or companies use to raise debt capital.

Show all terms beginning with B (8 more)

Stock Market Glossary

C Terms beginning with C

Call option

Option right that can benefit economically from a rising underlying price.

Calmar ratio

Ratio of annualized return to maximum drawdown.

Candlestick

Technical chart representation with opening, closing, high and low prices of a period.

Capex

Capital Expenditures – Investments in long-term assets.

Capital gains tax

Direct tax on capital gains, part of the withholding tax in Germany.

Capital increase

Issue of new shares through which a company raises additional equity.

Capital market

Market for medium and long-term financing, especially stocks and bonds.

Capital Markets Conference

Event at which companies present their strategy and figures to investors.

Capital-loss offsetting pot

Bank-maintained balance for offsetting certain investment losses against later gains.

Carry Trade

Strategy in which you sell a low-interest currency and invest in a higher-interest one.

Cash flow

Actual cash flow of a company, adjusted for accounting effects.

Cash ratio

Proportion of liquid assets in the portfolio.

Show all terms beginning with C (36 more)

Stock Market Glossary

D Terms beginning with D

DAX

DAX explained: composition, calculation and relevance as Germany’s leading stock index, with a practical investor example.

Day trader

Trader who holds positions exclusively within one trading day.

Day trading

Trading style with position opening and closing on the same day.

Deflation

Continuing falling price levels that can paralyze consumption and investments.

Delta

Option metric that approximates how an option reacts to a move in its underlying asset.

Deposit insurance

Protection for bank deposits within statutory or voluntary protection schemes.

Depot

Account for the safekeeping of securities.

derivative

Financial instrument whose value is derived from an underlying asset.

Designated Sponsor

Obligated liquidity provider for less liquid stocks on the Frankfurt Stock Exchange.

Dilution

Decreasing share per share due to the issuance of new shares.

Dirty price

Bond price including interest accrued since the last coupon payment.

Discount certificate

Certificate that represents the underlying asset with a discount but a limited maximum profit.

Show all terms beginning with D (9 more)

Stock Market Glossary

E Terms beginning with E

Earnings

A company's earnings report, often on a quarterly basis.

Earnings Surprise

Difference between reported earnings and analysts' consensus estimate.

EBITDA

Earnings before interest, taxes, depreciation and amortization.

ECB

European Central Bank – responsible for monetary policy in the euro area.

ECB key interest rate

Central control interest rate of the European Central Bank.

Economic calendar

Overview of upcoming economic indicators and central bank appointments.

Efficient market hypothesis

Theory that prices immediately price in all available information.

Emerging Markets

Emerging economies such as China, India, Brazil or South Africa.

Emission

Initial issue of securities on the market.

EPS

Earnings per share – earnings per share.

Equity fund

Investment fund that mainly holds shares and participates in their market performance.

Equity Premium

Long-term return advantage of stocks over risk-free investments.

Show all terms beginning with E (7 more)

Stock Market Glossary

F Terms beginning with F

Face value

Nominal amount shown on a security.

Factor investing

Investment style that specifically exploits academically proven return factors.

Fair Value Gap

Price area where a quick impulse has left little counter-trading.

Fibonacci retracement

Chart technical tool for determining possible supports and resistances.

FOMO

Fear Of Missing Out – Fear of missing out on a chance to win.

Foreign exchange

Claims on foreign currency in the form of non-cash means of payment.

Forex

Foreign Exchange – global foreign exchange market.

Forward Guidance

Forward-looking communication of monetary policy by central banks.

Free cash flow

Cash flow that is freely available to owners and creditors after investments.

Free float

Proportion of shares that can be traded freely on the market.

Free float factor

Proportion of freely tradable stocks used for index weighting.

Front running

Using knowledge of upcoming client orders for proprietary or earlier trades.

Show all terms beginning with F (8 more)

Stock Market Glossary

G Terms beginning with G

Gamma Squeeze

Price acceleration because options traders have to dynamically repurchase their protection.

Gap

Price gap in the chart between two consecutive periods.

GDR

Global Depositary Receipt – international counterpart to the ADR.

General meeting

Meeting of shareholders that votes on central corporate matters.

Going private

Withdrawal of a stock corporation from the stock exchange.

Gold standard

Historical monetary system in which currencies were backed by gold.

Goodwill

Balance sheet item that reflects the purchase price paid in excess of the net assets.

Government bond

Bond through which a state raises capital in the market.

Graham number

Benjamin Graham's rule of thumb for valuing asset values.

Greenwashing

Faking sustainability without any substance.

Growth

Investment style with a focus on high-growth companies.

Growth value

Share of a company with above-average sales or profit growth.

Show all terms beginning with G (1 more)

Stock Market Glossary

H Terms beginning with H

Haircut

Safety discount applied to the market value of collateral.

Hedging

Hedging a position against unwanted price movements.

Heikin Ashi

Smoothed candlestick variant that makes trends visually clearer.

High yield

Bonds with a low credit rating but a higher coupon.

High-water mark

Fee rule under which a performance fee should arise only above a previous peak.

Hit rate

Proportion of winning trades out of all completed trades.

Stock Market Glossary

I Terms beginning with I

Ichimoku

Complex Japanese trend indicator with cloud, baselines and lag line.

iNAV

Indicative net asset value of an ETF, estimated continuously during the trading day.

Index ETF

ETF that tracks an index as closely as possible.

Index funds

Fund that passively tracks an index.

Industry

Economic sector to which a company is assigned (e.g. tech, pharmaceuticals, finance).

Inflation

General increase in the price level, which reduces the purchasing power of money.

Inflation-linked bond

Bond whose payments or redemption amount can be linked to a price index.

information ratio

Key figure for the risk-adjusted excess return compared to a benchmark.

Inheritance tax

Tax on the free transfer of assets after death.

Insider purchases

Purchases of own shares by members of the board of directors or supervisory board.

Insider trading

Prohibited securities trading based on non-public information.

Interest-rate risk

Risk of price losses when market interest rates change.

Show all terms beginning with I (9 more)

Stock Market Glossary

J Terms beginning with J

Junk bond

Bond with a rating below investment grade.

Stock Market Glossary

K Terms beginning with K

KBV

Price-to-book value ratio – ratio of price to balance sheet equity per share.

Kelly criterion

Mathematical formula for optimal position sizing determination.

KIID

Key Investor Information Document – mandatory document for fund investors.

Knock out

Leverage product that becomes worthless as soon as a threshold is reached.

Stock Market Glossary

L Terms beginning with L

Lay

Time lag of an indicator compared to the price.

Letter course

Synonym for the ask price (Ask).

Lever

Multiplier with which invested capital controls a larger market position.

Limit order

Order that is only executed at a specific price or better.

Liquidity

Measure of how quickly an asset can be traded without a significant price discount.

Liquidity sweep

Short price surge above highs or below lows to trigger liquidity there.

Liquidity trap

Liquidity trap explained: why very low interest rates may fail to stimulate demand and what that means for

Lock up

Ban on sales for existing shareholders after an IPO.

Long position

Position that relies on rising prices.

Long-term investor

Investors with an investment horizon of many years to decades.

Loss aversion

Behavioral economic phenomenon: Losses weigh more psychologically than equally large gains.

Lot

Standardized trade size in forex and futures trading.

Stock Market Glossary

M Terms beginning with M

MACD

Moving Average Convergence Divergence – Trend Following and Momentum Indicator.

Margin

Deposited security for leveraged positions.

Margin call

Request from the broker to provide additional collateral.

Market breadth

Market breadth explained: how many shares support a trend and why advance-decline data can matter to investors.

Market capitalization

Market value of a company: share price × number of shares outstanding.

Market depth

Distribution of available buy and sell orders across several price levels in an order book.

Market impact

Price move that an investor’s own large buy or sell order can cause.

Market makers

Trader who continuously provides buying and selling prices and thus provides liquidity.

Market order

Buy or sell order without a price limit that prioritises prompt execution.

Market phase

Economic and market cycle with its own characteristics.

Market Profiles

Auction-based market analysis across time, price and accepted trading ranges.

Maturity

Date on which a bond or derivative ends or is fulfilled under its terms.

Show all terms beginning with M (8 more)

Stock Market Glossary

N Terms beginning with N

NASDAQ

US technology exchange and namesake of well-known indices such as NASDAQ 100.

NAV discount

Discount at which closed funds or investment companies trade below their net asset value.

Net asset value

Net asset value of a fund per share.

Net asset value

Fund assets less liabilities, generally stated per fund unit.

Net return

Return after all costs and taxes.

Stock Market Glossary

O Terms beginning with O

OCO order

Order combination in which the execution of one order automatically deletes the other.

Open interest

Number of open options or futures contracts that have not yet been closed out.

Open-End Fund

Open-ended fund whose shares can be issued or redeemed at any time.

Opening Range

Price range of the first minutes of trading as a reference for intraday trades.

Opex

Operating Expenditures – ongoing operating costs of a company.

option

Right (not obligation) to buy or sell an underlying asset at a set price.

Option Greeks

Key figures that measure the sensitivity of an option to price, time and volatility.

Order

An order to the broker to buy or sell a security.

Order book

List of all open buy and sell orders for a security.

Order Flow

Real-time analysis of incoming buy and sell orders.

OTC trading

Over-the-counter trading directly between two parties.

Outperformance

Better performance than a benchmark.

Show all terms beginning with O (2 more)

Stock Market Glossary

P Terms beginning with P

P/E ratio

English synonym for P/E ratio.

P/E ratio

Price-to-earnings ratio – how many annual earnings the current share price costs.

P2P lending

Direct lending between private individuals via online platforms.

Partial exit

Closing part of the position while allowing the rest to continue.

Partial tax exemption

Partial tax relief for certain investment-fund income under German tax law.

Passbook

Classic German savings account with a low interest rate.

Payoff ratio

Ratio of average profit to average loss.

Payout ratio

Share of profit or cash flow that a company distributes as dividends.

PEG ratio

P/E ratio relative to expected earnings growth.

Performance

Performance of an investment over time.

Performance fee

Variable fund-manager fee linked to a defined investment performance.

Pip

Smallest usual price movement of a currency pair in Forex trading.

Show all terms beginning with P (15 more)

Stock Market Glossary

Q Terms beginning with Q

Quantitative easing

Monetary policy instrument in which central banks purchase bonds on a large scale.

Quantitative tightening

Reversal of QE: Central banks reduce their bond holdings.

Quarterly report

Quarterly annual report of listed companies.

Stock Market Glossary

R Terms beginning with R

R multiple

A measure that expresses the profit or loss of a trade in units of initial risk.

Rating

Credit rating of debtors by specialized agencies.

raw materials

Asset class made up of physical goods such as oil, gold, industrial metals or agricultural products.

Real economy

Sector of the economy in which real goods and services are produced.

Real interest rate

Nominal interest rate minus the inflation rate.

Rebalancing

Restoration of original portfolio weights.

Recency Bias

Tendency to give disproportionate weight to recent experiences.

Recession

Phase of declining economic performance, typically two consecutive quarters of GDP decline.

Redemption price

Price at which a fund company redeems units of an open-ended fund.

reference ratio

Number of subscription rights required to exercise subscriptions.

Reflation

Phase of rising inflation and growth expectations after a period of weakness.

Reinvestment

Reinvestment of distributions or interest.

Show all terms beginning with R (18 more)

Stock Market Glossary

S Terms beginning with S

S&P 500

Broad US equity index of 500 large publicly listed companies.

Saver’s flat rate

Tax allowance for capital gains.

Savings plan

Regular automated investment of fixed amounts.

Sector rotation

Shifting capital between industries depending on the phase of the economy.

Securities identification number (WKN)

Six-digit code for unique identification of a security in the DACH region.

Securities lending

Temporary lending of securities in return for a fee and collateral.

Securities prospectus

Legally required information document for certain security offers or admissions.

Settlement risk

Risk that a securities transaction is not completed as agreed.

SFDR

EU regulation on the disclosure of sustainability-related information in the financial services sector.

Share

Share certificate in a company that certifies ownership rights.

Share buyback

Purchase of own shares by the company with subsequent withdrawal or retention.

Sharpe ratio

Ratio of excess return to volatility.

Show all terms beginning with S (33 more)

Stock Market Glossary

T Terms beginning with T

Take profit

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

Takeover offer

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

Tax-exemption order

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

Technical analysis

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

TER

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

Term deposit

Bank deposit with a fixed term and agreed interest rate.

Theta

Option indicator for the loss in time value per day.

Tick

Smallest possible price movement of an asset.

Time in force

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

Total-return index

Index that combines price changes and reinvested distributions.

Tracking difference

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

Tracking error

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

Show all terms beginning with T (9 more)

Stock Market Glossary

U Terms beginning with U

UCITS

EU legal framework for regulated investment funds approved for private investors.

UCITS

EU-regulated undertaking for collective investment in transferable securities.

Underlying

English term for the underlying asset of a derivative.

Underlying value

Asset to which a derivative or certificate relates.

Stock Market Glossary

V Terms beginning with V

Value

Investment style with a focus on inexpensive value stocks.

Value date

Date from which a credit or debit is economically effective for interest or settlement.

VaR

Value at Risk – statistical maximum loss estimate with a given probability.

Vega

Option measure for sensitivity to implied volatility.

Volatility

Range of fluctuation in an asset, often measured as a standard deviation.

Volume

Number of shares of a security traded in a certain period of time.

Volume profiles

Frequency distribution of volume over price levels instead of over time.

Voting cap

Limitation of the maximum voting rights that can be exercised per shareholder.

Voting interest

Share of voting rights that an investor controls in a company.

VWAP

Volume weighted average price as an intraday benchmark for execution quality.

Stock Market Glossary

W Terms beginning with W

WACC

Weighted Average Cost of Capital – a company’s weighted cost of capital.

Warrant

Security issued by an institution whose value depends on an underlying asset.

Watchlist

List of observed securities without an investment decision.

Wealth building

Systematic buildup of fixed assets over years and decades.

Whipsaw

Quick trend change that repeatedly stops trend-following strategies.

Withdrawal plan

Regular withdrawal of money from a fund, ETF or portfolio under a defined rule.

withholding tax

Flat rate tax on capital gains in Germany of 25 percent.

Withholding tax

Tax withheld directly by a country when dividends or interest are paid.

Working capital

Difference between current assets and current liabilities.

World portfolio

Concept of a broadly diversified global investment portfolio.

Wyckoff method

Market analysis approach that models the accumulation and distribution of institutional players.

Stock Market Glossary

X Terms beginning with X

XETRA

Fully electronic trading system from Deutsche Börse.

Stock Market Glossary

Y Terms beginning with Y

Yield

The rate of return of a security, often expressed as a dividend or bond yield.

Yield curve

English name for the yield curve.

Yield curve

Graphical representation of the returns of bonds of different lengths.

Yield to maturity

Total return of a bond to redemption, including price, coupon and maturity.

Young shares

Shares from a current capital increase with possibly limited dividend entitlement.

Stock Market Glossary

Z Terms beginning with Z

Zero-coupon bond

Bond without regular coupon payments that repays its face value at maturity.