The stock financial terms dictionary is a resource for every person involved in the market. Also, these terms conform to acronyms, phrases, and definitions, explaining the economic landscape. From EPS to equity, this dictionary helps you understand complex financial metrics.
It also includes terms related to trading, such as bearish, dividends, bullish, and amortization. Plus, this dictionary acts as a guide that helps with navigating jargon. Whether managing a portfolio or trading stocks, access to a financial terms dictionary supports market engagement and makes the learning process easy.
Equity
Equity refers to an asset’s residual value after the deductions of liabilities. Also, in trading, equity refers to the trader’s account value calculated by adding account balance to any unrealised losses and profits. It is crucial to monitor equity as it reflects and accounts for financial standing in real-time, the impact of marginal requirements, and the ability to open unique positions.
Exchange Rate
Typically, it represents the value of a currency expressed in terms of others. Generally, it is described as a currency pair of EUR/USD, indicating the USD required to purchase EUR. Fluctuations in exchange rates occur due to interest rates, Geopolitical events, economic indicators, investment decisions, and the impact of international trade.
Expert Advisor
It is a software program integrated into various trading platforms to automate trading strategies. Based on predefined criteria, it executes traits and efficiently enables traders to implement complex strategies without human intervention. Mainly, EA is useful for back-testing as it ensures that strategies are viable for trade execution with speed and precision.
Earnings Per Share
A financial metric that helps to indicate the company’s granted profit to each share in a common stock. EPS is the best tool for investors to assess a company’s financial health before investing. Also, it compares the performance of a company in the industry.
High earnings per share of a company suggest maximum profitability. It makes the stocks more stable and attractive to analysts and investors. Besides that, it is necessary to consider earnings per share and other financial metrics for a detailed evaluation.
EBITDA
EBITDA involves the company’s operational performance by focusing on its earnings generated from business activities, excluding accounting decisions and financial effects. Also, it provides a clear view of cash flow and operating profitability By omitting tax depreciation, amortisation, and interest.
Investors and analysts use this strategy while comparing companies in the same industry to neutralise the impact of tax environment and capital structures. However, solely relying on this strategy can be misleading.
Exchange-Traded Fund
ETF is a fund, investment or asset traded the whole day on the stock exchange in the form of bonds, commodities, and stocks. The exchange-traded fund enables investors to expand their portfolios without individually buying an asset. The combined variation benefits mutual funds through the liquidity of each stock.
Exchange-traded funds can track multiple sectors, commodities, and indices To provide exposure to the segments of specific markets. ETFs are appreciatable for their cost effectiveness, transparency, and flexibility. Despite that, they also have some errors, such as market volatility and management fees.