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.

The US Dollar Index — trade-weighted USD against EUR, JPY, GBP, CAD, SEK, CHF.

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.

Margin-based exposure multiplier in FX, ranging 30:1 (US retail) to 500:1+ (offshore brokers).

The bid-ask spread on an FX pair, expressed in pips — the broker's primary revenue and your primary friction cost.

The interest charged or paid on rolled FX positions overnight — the price of holding a pair past the broker's daily close.

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.

Price interest point — the smallest standard unit of price change in an FX pair.

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

The systematic method for determining trade size given leverage, account equity, stop distance and pair volatility.

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.