Financial terms, explained from first principles.

Excess return over a benchmark, after adjusting for risk.

Sensitivity of a security's returns to overall market movement.

A company repurchasing its own shares from the open market.

A trading halt triggered by extreme price moves to allow markets to absorb information.

When new share issuance reduces existing shareholders' ownership percentage.

Annual dividend per share divided by current share price.

Difference between actual earnings and analyst consensus.

Earnings per share divided by price - the inverse of P/E.

The excess expected return of equities over the risk-free rate.

Exchange-Traded Fund - a basket of securities trading like a single stock.

Company-issued forecasts of future financial performance.

Initial Public Offering - a company's first public sale of stock.

An ETF that aims to deliver 2x or 3x daily returns of an underlying index.

A stock whose price is driven primarily by social media-fueled speculation.

A sustainable competitive advantage that protects long-term returns on capital.

Price divided by earnings per share. The most-quoted valuation metric.

Deciding how much capital to allocate to a given trade or position.

Cyclically Adjusted P/E - price divided by 10-year average earnings, inflation-adjusted.

Rapid price rise forcing short sellers to buy back, accelerating the move.

An automatic order to exit a position at a predefined adverse price.