Investor Dictionary

A glossary of some of the most commonly used terms in the world of investing and the stock market. We strive to create easy to understand explanations and definitions. We are adding to this page on a daily basis, so make sure to check back often.

Form 8-K

What is a Form 8-K? Why would a company file a Form 8-K? What is the purpose of a Form 8-K?

Black Friday

What is Black Friday? What is the definition of Black Friday in the United States? What does Black Friday mean?

Zombie Bank

What is a zombie bank? What is the definition of a zombie bank? What is the meaning of the term zombie bank?

Consensus Estimate

What does consensus estimate mean? What is the definition of a consensus earnings estimate?

Chinese Wall

What is a chinese wall? What is the definition of a Chinese Wall as it applies to an investment firm?

Front Running

What is front running? What is the definition of front running? What are some examples of this practice?

T.2 Trading Halt Code

What is a t.2 trading halt code? What does it mean if a stock has been halted with the T.2 code?

Bank Run

What is a bank run? When do bank runs occur? What is the definition of a bank run?

Earnings Blowout

What is an earnings blowout? What is the definition of an earnings blowout?

Whisper Number

What is a whisper number? What is the definition of a whisper number?

Defensive Stock

What is a defensive stock? What is the definition of a defensive stock? What are some examples of defensive stocks?

Cyclical Stock

What is a cyclical stock? What is the definition of a cyclical stock? What is an example of a cyclical company?

Greater Fool Theory

What is the definition of the greater fool theory? What does greater fool theory mean?

Initial Jobless Claims

What are initial jobless claims? What is the definition of an initial jobless claim?

Black Swan Theory

What is the black swan theory? Who came up with the term black swan theory?

Derivatives

What are derivatives? How are derivatives best defined? What is the definition of derivatives?

Negative Amortization

What does negative amortization mean? What is the definition of negative amortization?

Option ARM

What is an option ARM? What are the characteristics of an option ARM mortgage?

Buy The Dip

What does it mean to buy the dip? What is the proper definition of buying the dip?

FDIC Troubled Bank List

What is the FDIC troubled bank list? Where can I find a list of the banks and thrifts that are currently on this list?

Labor Force Participation Rate

What is the definition of labor force participation rate? Why is the labor force participation rate important?

Double-Dip Recession

What is a double-dip recession? What is the definition of a double dip recession? Why are double-dip recessions so bad?

Pip

What is a pip? What is the definition of the term pip as it applies to forex trading? What is the meaning of pip?

Stagflation

What is stagflation? What is the definition of stagflation? When has stagflation taken place in the past?

Cramer Effect

What is the Cramer Effect? What is the definition of the Cramer effect?

HELOC

What is a HELOC? What is the definition of a HELOC? What is the meaning of the term HELOC?

Hedge Fund

What is a hedge fund? What is the definition of a hedge fund? What does hedge fund mean?

Options Strangle

What is an options strangle? When are strangles useful? What are the dangers in engaging in a strangle strategy?

Suckers Rally

What is a sucker's rally? What is the definition of a sucker's rally? What does sucker's rally mean?

Contrarian Investing

What is the definition of contrarian investing? What is a contrarian investor? What does contrarian investing mean?

Paper Millionaire

What is a paper millionaire? How does a person become a paper millionaire? What is the definition of a paper millionaire?

Capitulation

What is capitulation as it applies to the stock markets? What is capitulation selling? When does capitulation selling occur?

Stock Split

What is a stock split? What is the definition of a stock split? Why would a company want to split their shares?

Window Dressing

What is window dressing? What is the definition of the term window dressing? Why would mutual funds use window dressing?

Fallen Angel

What is a fallen angel? What is the definition of a fallen angel? What is the meaning of the term fallen angel?

Unfunded Federal Debt

What is the definition of unfunded federal debt? Exactly how much unfunded federal debt does the US government have?

Emerging Markets

What are emerging markets? What are emerging market economies? What is the definition of emerging markets?

Prop Trading

What is prop trading? What is the definition of a prop trading firm? Who would trade at a prop firm?

Panic Selling

What is panic selling? What is the definition of panic selling? What does the term panic selling mean?

Hyperinflation

What is hyperinflation? What is the definition of hyperinflation? Why might hyperinflation be coming to the United States?

Swing Trading

What is swing trading? What does it mean to swing trade? What is the definition of swing trading?

V-Shaped Recession

What is a V-shaped recession? What is the definition of a V-shaped recession? Is it good or bad for an economy?

L-Shaped Depression

What is an L-shaped depression? Why is the L-shaped depression so bad? Which countries have experienced an L-shaped depression?

Take a Bath

What does it mean to take a bath in the stock market? Is it good or bad to take a bath on an investment?

Buy and Hold Investing

What is buy and hold investing? What is the definition of buy and hold investing? Who should engage in such a strategy?

Short and Distort

What is a short and distort? What is the meaning of the term short and distort? What is the definition of short and distort?

Permabear

What is a permabear? Why would someone be called a permabear? What makes someone a permabear?

Soak the Rich

What does soak the rich mean? What is the definition of soak the rich? What is meant by soak the rich economics?

Green Shoots

What are green shoots? What is the definition of the term green shoots? Are we witnessing green shoots in our economy today?

Momentum Play / Momo Play

What is the definition of a momentum or momo play? Who would engage in these types of plays? Why might they be dangerous?

Debt vs Deficit

What is the difference between a debt and a deficit? Why do people often confuse the two?

The Great Recession

What is the Great Recession? When did the Great Recession start? When is it expected to end?

Bear Market Rally

What is a bear market rally? What are the defining characteristics of a bear market rally? What is the definition of a bear market rally?

Falling Knife

What is the definition of a falling knife? What does falling knife mean? Why is it bad if a stock is referred to as a falling knife?

Pump and Dump

What is a pump and dump? Why are pump and dumps frowned upon by the SEC? What is the definition of a pump and dump?

U-Shaped Recession

What is a U-shaped recession? What is the difference between a U-shaped recession and a V-shaped recession? What is the definition of a U-shaped recession?

U-6 Unemployment Rate

What is the U-6 unemployment rate? Why doesn't the government use this rate when quoting unemployment numbers to the media? What is the difference between the U-3 and U-6 unemployment rates?

Tier 1 Capital Ratio

What is Tier 1 Capital? What is the definition of Tier 1 Capital Ratio? Why is Tier 1 Capital important to a bank?

T.1 Trading Halt Code

What is a T-1 trading halt code? What does it mean if the Nasdaq has halted trading in a stock and affixed a halt code of T.1? Is this good or bad?

H11 Trading Halt Code

What does it mean if the Nasdaq assigns a trading halt code of H11 to a stock? What is the regulatory concern that the Nasdaq is alluding to with this code?

The Long Depression

What was the long depression? How long did the long depression last for? What were the causes of the long depression, and why was its name changed?

Tax Free Savings Account

What is a tax-free savings account? What are the benefits of a Tax Free Savings Account, and why should you consider getting one?

Bid Price

What is the bid price? How does it differ from the ask price? Why is the bid price always lower than the ask price?

Market on Close Order

What is a market on close order? When do market on close orders come in handy?

Dollar Cost Averaging

What is dollar cost averaging? What are the benefits associated with dollar cost averaging?

Ponzi Scheme

What is a Ponzi scheme? Who is the Ponzi scheme named after?

Irrational Exuberance

What does the term irrational exuberance mean? Who used the term, and why did it become so popular?

Market Cap

What is a market cap, or market capitalization as it is always known? Why is a company's market cap important to know?

Bear Market

What is a bear market? What are some past examples of bear markets? How long do bear markets generally last?

Back Up The Truck

What does backing up the truck mean? If a friend of mine tells me to back up the stock and buy shares in a company, what exactly is he talking about?

Reverse Stock Split

What is a reverse stock split? Why is it normally a very bad sign of things to come for the company that decides to partake in one?

Fade The Gap

What is fading the gap? What is meant by fade the gap? How would a person go about making money by fading the gap?

Gap and Trap

What is a gap and trap? Does it have anything to do with a gap-down or gap-up? Why is a gap and trap a bad thing?

Dead Cat Bounce

What is a dead cat bounce? How does the term applies to both an individual stock and the markets in general? When would I use the term, and what is its proper usage?

Short Squeeze

What is a short squeeze? How does short squeezes occur, and what are the optimal conditions for a short squeeze?

Bear Raid

A bear raid is when short-sellers conspire to lower the price of a stock through coordinated short sales or the spreading of false rumors.

Average Down

What is the definition of averaging down? Is averaging down a smart investment strategy, or should it be avoided?

Stock Float

What does the term stock float mean, and why it is important to know? The stock float can be important in trying to determine future volatility in a company, or the potential move after a company releases good or bad news.