Investing glossary
68 terms from investing, trading, taxes and crypto, explained simply and linked to our detailed guides.
A
B
Bear marketA period of long-term falling prices, usually 20% or more.Bitcoin (BTC)The first and largest cryptocurrency, with a fixed supply cap of 21 million.BlockchainA shared database of transactions arranged in a chain of blocks.BondA loan to an issuer (a government or a company) that pays interest.BrokerA company through which an investor buys and sells securities.Bull marketA period of long-term rising prices in a market.
C
CFDA derivative in which you bet on a price change without owning the asset.Compound interestReturns that are added to your capital and then earn returns themselves.CorrectionA short-term fall in prices within a rising trend, usually 10% or more.Crypto exchangeA platform for buying, selling and swapping cryptocurrencies.Currency riskThe risk that a change in a currency's exchange rate reduces the return on a foreign investment.
D
DCA (dollar-cost averaging)Buying the same amount at regular intervals regardless of the current price.DeFiFinancial services on a blockchain without a bank.DEXA decentralised exchange where you swap directly between wallets.Distributing ETFAn ETF that pays dividends out to investors.DiversificationSpreading money across several investments to reduce risk.DividendA part of the profit paid out to shareholders.Dividend yieldThe annual dividend divided by the share price, as a percentage.
E
F
H
I
K
L
LeverageTrading a larger amount than you have in your account.Limit orderAn order that executes only at the price you set or better.LiquidationThe forced closing of a leveraged position when the margin is no longer enough to cover its losses.LiquidityHow quickly an investment can be sold without a large drop in price.Long positionA bet that a price will rise.
M
Market capitalisationThe value of a company on the exchange: the share price times the number of shares.Market orderAn order executed immediately at the best available price.MemecoinA cryptocurrency based on an internet meme, usually with no real use.MSCI WorldAn index of large and mid-sized companies from developed countries.
N
O
P
P/E (price to earnings)The ratio of a stock's price to its annual earnings per share.Payout ratioThe share of profit that a company pays out as dividends.PipThe smallest common change in the rate of a currency pair.Proof of stakeA consensus method in which validators lock up coins as a guarantee.Proof of workA consensus method based on mining: computers compete in computational work.
R
RebalancingBringing a portfolio back to the chosen mix of assets.REITA company that owns or finances property and pays out most of its profit.RiskThe possibility that an investment does not deliver the expected return or causes a loss.Rug pullA scam in which the authors of a project sell their tokens and disappear.
S
S&P 500An index of the 500 largest US companies.Seed phrase12 or 24 words that can restore a crypto wallet.Short positionA bet that a price will fall.Smart contractA program on a blockchain that automatically carries out agreed rules.SpreadThe difference between the buy and the sell price.StablecoinA cryptocurrency tied to a stable value, most often the dollar.StakingLocking up a cryptocurrency to secure a network in return for a reward.Stock (share)A security that represents a share in the ownership of a company.Stop-lossAn order that automatically closes a position when the price falls to a set level.