Financial Markets Glossary

The simultaneous purchase and sale of the same asset in different markets to profit from price differences.

A grouping of financial instruments with similar characteristics, such as equities, fixed income, commodities, or real estate.

A market condition characterized by a sustained decline of 20% or more from recent highs.

The highest price a buyer is willing to pay for a security at a given time.

A fixed-income debt instrument representing a loan from an investor to a borrower, with specified interest payments and maturity date.

A market condition characterized by rising prices, typically 20% or more from recent lows.

A financial market where long-term debt and equity securities are bought and sold.

A basic good used in commerce (gold, oil, wheat) that is interchangeable with other goods of the same type.

A financial instrument whose value is derived from the performance of an underlying asset, index, or rate.

A distribution of a portion of a company's earnings to its shareholders, typically paid quarterly.

Ownership interest in a company, represented by shares of stock.

The price of one currency expressed in terms of another currency.

A standardized agreement to buy or sell an asset at a predetermined price at a specified future date.

An investment position taken to offset potential losses from another investment.

A mutual fund or ETF designed to track the performance of a specific market index.

A sustained increase in the general price level of goods and services, eroding purchasing power over time.

The cost of borrowing money or the return on lending it, expressed as a percentage of principal.

The degree to which an asset can be quickly bought or sold without affecting its price.

A firm or individual that provides liquidity by standing ready to buy and sell securities at quoted prices.

A contract giving the holder the right, but not the obligation, to buy (call) or sell (put) an asset at a specified price.

A collection of financial investments such as stocks, bonds, commodities, and cash equivalents.

Tradable financial instruments that hold monetary value, including stocks, bonds, and derivatives.

Selling a borrowed security with the expectation of buying it back later at a lower price to profit from a decline.

A statistical measure of the dispersion of returns for a given security or market index.

The income return on an investment, typically expressed as an annual percentage of the investment's cost or current market value.