Glossary
Economics and finance in plain words
204 terms, each on its own page: what it means in simple words, an example with numbers, a picture, and a chart with today's numbers.
A
- Altcoin35%An altcoin is any cryptocurrency other than bitcoin, from ether and Solana to stablecoins and joke coins like Dogecoin.Crypto
- APR (annual percentage rate)21.19%APR is the yearly cost of a loan, interest plus most fees, shown as one percentage so that offers can be compared. US lenders must disclose it.Bonds and rates
- Asset allocation7.1%Asset allocation is how you split your money between kinds of investments, such as stocks, bonds and cash. It decides most of how a portfolio behaves.Investing and personal finance
B
- Bank runA bank run is when many depositors rush to take their money out of a bank at once, fearing it will fail, which can make it fail.Money and central banks
- Bear market0.0%A bear market is a fall in stock prices of 20% or more from a recent peak, usually with gloomy news and investors expecting worse.Stocks and markets
- Bitcoin$73,806Bitcoin is the first cryptocurrency: digital money with a supply capped at 21 million coins, run since 2009 by a network of computers instead of a bank.Crypto
- Bitcoin ETF+58%A bitcoin ETF is a fund that holds bitcoin and trades on a stock exchange, so people can own bitcoin’s price moves through an ordinary brokerage account.Crypto
- Bitcoin halvingApril 2028A bitcoin halving is when the reward for mining a block is cut in half, every 210,000 blocks (about four years), slowing the creation of new bitcoins.Crypto
- Bitcoin mining$36.1MBitcoin mining is the race in which computers compete to add the next block of payments to bitcoin’s blockchain, winning new bitcoins and fees as the prize.Crypto
- Black swan5A black swan is a rare, unexpected event with huge effects that people explain only afterwards, like a market crash or a pandemic.Economic ideas
- Blockchain975,498A blockchain is a shared record of transactions kept in blocks that are chained together, so that changing an old entry would break every block after it.Crypto
- Blue-chip stockA blue-chip stock is a share of a large, well-established company with a long record of steady profits, often paying dividends, and known to almost everyone.Stocks and markets
- Bond4.98%A bond is a loan you make to a government or a company: they pay you interest at a fixed rate and give the money back on a set date.Bonds and rates
- Bond yield4.98%A bond’s yield is the yearly return you get if you buy it at today’s price and hold it to the end: its interest plus any gain or loss on the price.Bonds and rates
- Bubble40.7A bubble is when the price of something soars far above what it is really worth, driven by excitement and the hope of selling higher, and then crashes.Economic ideas
- Budget deficit$1.99TA budget deficit is the amount by which a government’s spending exceeds its revenue in a year; the opposite is a surplus.Economy
- Bull market+107%A bull market is a long rise in stock prices, usually counted as a gain of 20% or more from a low, with investors growing more confident.Stocks and markets
- Business cycle6 yearsThe business cycle is the repeating rise and fall of economic activity: an expansion, a peak, a recession, a trough, and expansion again.Economy
- Buy and hold27%Buy and hold is investing for the long run: buy broad investments and keep them for many years, through ups and downs, instead of trading in and out.Investing and personal finance
C
- CAGR15.5%CAGR (compound annual growth rate) is the steady yearly rate that would take a starting value to an ending value over a period, as if growth had been smooth.Investing and personal finance
- Call option53%A call option is the right to buy a stock or other asset at a set price (the strike) until a set date. It gains value when the price rises.Funds and derivatives
- CAPE ratio (Shiller P/E)40.7The CAPE ratio (Shiller P/E) is a stock market’s price divided by its average inflation-adjusted earnings over the last 10 years.Stocks and markets
- Capital gains tax$976BCapital gains tax is a tax on the profit you make when you sell an asset, such as a stock, a fund or a house, for more than you paid for it.Investing and personal finance
- Central bank4.25%A central bank is a country’s official bank: it issues the money, sets the key interest rate and lends to banks when nobody else will.Money and central banks
- Central bank balance sheet$6.75TA central bank’s balance sheet lists what it owns, mostly bonds, and what it owes, mostly the cash and bank reserves it has created.Money and central banks
- Clearing houseA clearing house steps into the middle of every trade, becoming the buyer to each seller and the seller to each buyer, so a trade is completed even if one side fails.Funds and derivatives
- Commercial bank7.00%A commercial bank is an ordinary bank: it takes deposits from people and businesses and lends the money out, earning on the difference.Money and central banks
- Commodity$4,105A commodity is a raw material, such as oil, gold, copper, wheat or coffee, where one unit of a given grade is as good as any other, so it trades at one market price.Funds and derivatives
- Comparative advantageComparative advantage means doing what you give up the least to do. When each side specializes that way and trades, both can end up with more.Economic ideas
- CompetitionCompetition is the rivalry between sellers for the same buyers. It pushes prices down toward cost and pushes firms to make things better.Economic ideas
- Compound interest$1.19MCompound interest is interest earned on interest: each year’s gain is added to your money, so next year you earn on a bigger sum.Investing and personal finance
- Consumer price index (CPI)3.7%The consumer price index (CPI) tracks the prices of a basket of goods and services that households buy; its change over a year is the inflation rate.Economy
- Contango and backwardationContango is when futures for later delivery cost more than for sooner delivery; backwardation is the opposite, with later delivery cheaper.Funds and derivatives
- Core inflation2.6%Core inflation is inflation without food and energy prices, which jump around; it shows the underlying trend of prices.Economy
- Corporate bond5.92%A corporate bond is a loan from investors to a company: it usually pays a fixed interest rate, higher than government bonds, and repays the money on a set date.Bonds and rates
- Cost of living$2.32The cost of living is how much money it takes to buy what a household needs: housing, food, transport, energy and the rest.Economy
- Coupon$498A bond’s coupon is the fixed interest it pays, usually twice a year, set as a percent of its face value when the bond is first sold.Bonds and rates
- Creative destruction109Creative destruction is how new products, firms and technologies replace old ones: the economy grows by tearing down what came before.Economic ideas
- Credit ratingA credit rating is a grade, like AAA or BB, that an agency gives a borrower or a bond to say how likely it is to pay its debts on time.Bonds and rates
- Credit score21.19%A credit score is a three-digit number, from 300 to 850 for the main US scores, that tells lenders how likely you are to repay a loan on time.Investing and personal finance
- Credit spread0.79A credit spread is the extra yield a riskier bond pays over a safe government bond of the same maturity: the market’s price for the risk of default.Bonds and rates
- Crypto exchange$73,806A crypto exchange is a marketplace where people buy and sell cryptocurrencies for dollars or for each other, run either by a company or by code on a blockchain.Crypto
- Crypto walletA crypto wallet is an app or device that keeps your private keys, the secrets that let you move your coins; the coins themselves stay on the blockchain.Crypto
- Cryptocurrency$2.27TA cryptocurrency is digital money recorded on a shared public ledger that thousands of computers keep, with no bank or government in charge of it.Crypto
- Currency devaluation97%Devaluation is when a currency is made, or allowed, to lose value against other currencies, so it buys less abroad.Money and central banks
D
- Debt-to-GDP ratio122%The debt-to-GDP ratio compares a government’s debt with a year of its economy’s output, to show how heavy the debt really is.Economy
- DefaultA default is when a borrower fails to pay interest or repay a loan on time as promised. For bondholders it usually means getting back only part of their money.Bonds and rates
- DeFi$247BDeFi (decentralized finance) means lending, borrowing and trading done by smart contracts on a blockchain instead of by banks and brokers.Crypto
- Deflation−2.0%Deflation is a general fall in prices, the opposite of inflation: the same money buys a bit more each year.Economy
- Deposit insuranceDeposit insurance is a government-backed guarantee that you get your bank deposits back, up to a limit, if the bank fails: $250,000 in the US as of 2026.Money and central banks
- Depression−33%A depression is an unusually deep or long recession: output falls far more than in a normal downturn, unemployment soars, and recovery takes years.Economy
- DerivativesA derivative is a contract whose value comes from the price of something else, such as a stock, oil, a currency or an interest rate.Funds and derivatives
- Diminishing returnsDiminishing returns means each extra unit of an input adds less output than the one before when other inputs stay fixed: more cooks in one kitchen help less and less.Economic ideas
- Diversification−19%Diversification means spreading money over many different investments, so that one bad one cannot sink the whole portfolio.Investing and personal finance
- Dividend1.10%A dividend is a share of a company’s profit paid out in cash to the people who own its stock, usually every quarter.Stocks and markets
- Dividend aristocrat46A dividend aristocrat is a company that has raised its dividend every year for at least 25 years in a row.Stocks and markets
- Dividend yield1.10%The dividend yield is a stock’s yearly dividends divided by its share price: the cash return you get from dividends, as a percent.Stocks and markets
- Dollar-cost averaging$245,631Dollar-cost averaging means investing a fixed amount at regular intervals, say $100 every month, whatever the price, instead of all at once.Investing and personal finance
- Dow Jones Industrial AverageThe Dow Jones Industrial Average is a stock index of 30 large US companies, weighted by share price. Started in 1896, it is one of the oldest indexes still in use.Stocks and markets
- Drawdown−82%A drawdown is how far an investment has fallen from its highest point. The maximum drawdown is the worst such fall over a period.Investing and personal finance
- Duration7.8Duration measures how much a bond’s price moves when interest rates change: a duration of 8 means about 8% for each 1-point move in rates.Bonds and rates
E
- Earnings per share (EPS)$295Earnings per share (EPS) is a company’s profit divided by its number of shares: how much profit each single share earned.Stocks and markets
- Earnings yield4.0%The earnings yield is a company’s yearly earnings per share divided by its share price: the P/E ratio turned upside down, as a percent.Stocks and markets
- Economies of scaleEconomies of scale are the savings that come with size: the more a business makes, the less each unit costs, because fixed costs are spread over more units.Economic ideas
- Elasticity+34%Elasticity measures how strongly one thing reacts to another, most often how much the amount people buy changes when the price changes.Economic ideas
- Emergency fund3.8%An emergency fund is cash set aside for unexpected costs or lost income, usually enough to cover three to six months of essential expenses.Investing and personal finance
- Enterprise valueEnterprise value (EV) is what it would cost to buy a whole company: the market value of its shares plus its debt, minus the cash it holds.Stocks and markets
- ETF$46,778An ETF (exchange-traded fund) is a basket of many investments, such as hundreds of stocks, that you can buy or sell as a single share on a stock exchange.Funds and derivatives
- Ethereum$2,050Ethereum is a blockchain that runs programs, called smart contracts, as well as payments; its own coin, ether (ETH), pays for using it.Crypto
- European Central Bank2.50%The European Central Bank (ECB) is the central bank of the euro: it sets one interest rate for every country that uses the currency.Money and central banks
- Exchange rate$1.1127An exchange rate is the price of one currency in another: how many dollars you pay for one euro, or how many yen one dollar buys.Money and central banks
- Ex-dividend dateThe ex-dividend date is the first day a stock trades without its next dividend: buy on or after it and that payment goes to the seller.Stocks and markets
- Expense ratio26%An expense ratio is a fund’s yearly fee, written as a percent of your money in it: 0.5% means $5 a year on every $1,000.Funds and derivatives
- ExternalityAn externality is a cost or benefit that lands on people outside a deal, like smoke from a factory or the bees of a beekeeper next to an orchard.Economic ideas
F
- Federal funds rate3.88%The federal funds rate is the interest rate US banks charge each other for overnight loans. The Fed steers it, and it sets the tone for all other rates.Money and central banks
- Federal Reserve3.88%The Federal Reserve, or the Fed, is the central bank of the United States: it sets the key interest rate and watches over the dollar and the banks.Money and central banks
- Fiat money$2.4TFiat money is money that has value because a government declares it legal tender and people trust it, not because it is made of or backed by gold.Money and central banks
- Fiscal policy$7.4TFiscal policy is how a government uses spending, taxes and borrowing to influence the economy.Economy
- Fixed vs variable rate$56,059A fixed rate stays the same for the whole loan; a variable (adjustable) rate moves with a market rate, so the payments can rise or fall.Bonds and rates
- Fractional-reserve banking10%Fractional-reserve banking means banks keep only a fraction of their deposits as cash and reserves and lend out the rest.Money and central banks
- Free float$4.0TThe free float is the part of a company’s shares that anyone can actually trade, leaving out shares held by founders, governments and other locked-in owners.Stocks and markets
- Futures$99.64A futures contract is a promise, traded on an exchange, to buy or sell a set amount of something on a set future date at a price agreed today.Funds and derivatives
G
- GDP$33TGDP (gross domestic product) is the value of everything a country produces in a year: all the goods and services sold to their final buyers, each counted once.Economy
- GDP growth+3.4%GDP growth is how fast an economy’s output is rising: usually real GDP compared with a quarter or a year earlier, in percent.Economy
- GDP per capita$90,252GDP per capita is a country’s GDP divided by its population: the average value of output per person in a year.Economy
- Gold standard$4,105Under a gold standard a currency can be swapped for a fixed amount of gold, so the amount of money is tied to the gold a country holds.Money and central banks
- Gresham’s law$10.31Gresham’s law says “bad money drives out good”: when two kinds of money must be accepted at the same value, people spend the worse one and keep the better one.Economic ideas
- Growth stockA growth stock is a share of a company whose sales and profits are expected to grow much faster than average, usually priced high compared with today’s earnings.Stocks and markets
H
- Hash rate1,026 EH/sThe hash rate is how many guesses per second a proof-of-work network’s computers make at the puzzle that adds the next block; bitcoin’s runs into quintillions.Crypto
- Hedge fund$906BA hedge fund is a private investment fund for wealthy people and institutions that may bet on prices rising or falling, borrow, and use derivatives, for high fees.Funds and derivatives
- Herd behavior596Herd behavior is when people copy what the crowd is doing instead of deciding for themselves, which can push prices, fads and panics far beyond what the facts justify.Economic ideas
- Hyperinflation231 million percentHyperinflation is inflation out of control: prices rise by 50% or more a month, so money loses almost all its value within months.Economy
I
- IncentivesAn incentive is a reward or a penalty that makes people more or less likely to do something: a bonus, a price, a fine or a tax.Economic ideas
- Index fund$274,465An index fund is a fund that copies a stock market index, such as the S&P 500: it owns every company on the list, in the same proportions, for a small fee.Funds and derivatives
- Inflation3.7%Inflation is the rate at which prices rise on average, so the same money buys a little less each year.Economy
- Inflation hedge7.0%An inflation hedge is an investment expected to hold or grow its value when prices rise, so that inflation does not eat your savings.Investing and personal finance
- Inflation target3.6%An inflation target is the rate of price rises a central bank promises to aim for, most often 2% a year.Money and central banks
- Inflation-protected bonds (TIPS)2.78%Inflation-protected bonds raise their principal with consumer prices, so their interest and repayment keep their buying power. In the US they are called TIPS.Bonds and rates
- Interest rate3.88%An interest rate is the price of borrowing money, as a percent per year. A central bank’s key rate is the one that steers all the others.Money and central banks
- Inverted yield curve+0.68An inverted yield curve is when short-term interest rates are higher than long-term ones, an unusual state that has often come before US recessions.Bonds and rates
- Investment grade5.92%Investment grade means a bond has one of the four top credit ratings, BBB− or better (Baa3 at Moody’s), judged to have a low risk of default.Bonds and rates
- Invisible handThe invisible hand is Adam Smith’s image for how markets coordinate: people chasing their own gain, guided by prices, end up serving others without anyone planning it.Economic ideas
- IPO (initial public offering)141An IPO (initial public offering) is the first time a company sells its shares to the public, after which they trade on a stock exchange.Stocks and markets
J
- Jobless claims189,000Jobless claims are the number of people applying for unemployment benefits each week: the fastest official signal of layoffs in the US.Economy
- Junk bond (high yield)A junk bond is a bond from a borrower with a low credit rating (below BBB). It pays a higher interest rate because it is more likely to default.Bonds and rates
L
- Labor force participation61.9%The labor force participation rate is the share of adults who are either working or looking for work.Economy
- Leverage−85%Leverage means using borrowed money to make a bigger investment than your own money allows. It multiplies both gains and losses.Funds and derivatives
- Leveraged ETF−79%A leveraged ETF is a fund that aims to give two or three times an index’s move each day, up and down, using borrowed money and derivatives.Funds and derivatives
- Loss aversion35%Loss aversion is the tendency to feel a loss about twice as strongly as a gain of the same size, so people often avoid risks even when the odds favor them.Economic ideas
M
- Margin call4A margin call is a broker’s demand for more cash when an investment bought with borrowed money falls too far. If you cannot pay, the broker sells it.Funds and derivatives
- Marginal utilityMarginal utility is the extra satisfaction from one more unit of something. It usually shrinks: the first slice of pizza is great, the fifth much less so.Economic ideas
- Market capitalization$83.1TMarket capitalization is what the stock market says a whole company is worth: the share price times the number of shares.Stocks and markets
- Market correction14A market correction is a fall of 10% to 20% in stock prices from a recent peak: deeper than a dip, shallower than a bear market.Stocks and markets
- Market makerA market maker is a firm that is always ready to buy and to sell a stock or other security, quoting two prices, and earns the small gap between them.Funds and derivatives
- Market timing$186,117Market timing is moving money in and out of the market to dodge falls and catch rises, based on predictions of where prices will go next.Investing and personal finance
- Maturity4.30%A bond’s maturity is the date the borrower pays back the face value and the bond ends; also, how long is left until then.Bonds and rates
- Median household income$87,460Median household income is the income of the household exactly in the middle: half of all households earn more, half earn less.Economy
- Minimum wage$7.25The minimum wage is the lowest hourly pay employers may legally pay most workers; in the US there is a federal floor and higher state ones.Economy
- Monetary policy3.88%Monetary policy is what a central bank does with interest rates and the supply of money to keep inflation low and the economy steady.Money and central banks
- Money printing+26.8%Money printing is the everyday name for a central bank creating lots of new money. Done too fast, it pushes prices up.Money and central banks
- Money supply$23.4TThe money supply is all the money people and businesses can spend: cash plus bank deposits. M2, the common US measure, adds small CDs and money market funds.Money and central banks
- MonopolyA monopoly is a market with a single seller. With no rivals to undercut it, it can charge more and sell less than a competitive market would.Economic ideas
- Moral hazardMoral hazard is the extra risk people take when someone else will bear the cost if things go wrong, as when insurance makes people a little less careful.Economic ideas
- Mortgage$2,102A mortgage is a loan to buy a home, repaid in monthly payments over many years, with the home as security: if the payments stop, the lender can take it.Investing and personal finance
- Mortgage rate6.2%A mortgage rate is the interest rate on a home loan. It sets the monthly payment, and over 30 years the interest can add up to more than the loan itself.Bonds and rates
- Municipal bondA municipal bond is a loan to a US state, city or other local government, usually to build things like schools or roads; its interest is often tax-free.Bonds and rates
- Mutual fund15.1%A mutual fund pools money from many people and invests it in stocks, bonds or both; each investor owns shares of the fund, priced once a day.Funds and derivatives
N
- Nasdaq CompositeThe Nasdaq Composite is a stock index of almost all the companies listed on the Nasdaq exchange, weighted by market value and dominated by technology firms.Stocks and markets
- National debt$40.6TThe national debt is the total a government owes: all its past budget deficits, minus surpluses, still to be repaid.Economy
- Negative interest rates8 yearsA negative interest rate means lenders pay to lend: a bank that parks money at the central bank gets back a little less than it put in.Money and central banks
- Net worth$241KNet worth is everything you own minus everything you owe: your assets (savings, investments, home) minus your debts (mortgage, loans, cards).Investing and personal finance
- Network effectsA network effect is when a product gets more valuable the more people use it, like a phone, a messaging app or an online marketplace.Economic ideas
- NFTAn NFT (non-fungible token) is a one-of-a-kind token on a blockchain that records who owns a specific item, such as a digital picture or a ticket.Crypto
- Nominal vs real$27.31Nominal values are in the money of the day; real values take inflation out, so you can compare what money buys across years.Economy
O
- Opportunity cost4.05%Opportunity cost is what you give up when you choose: the value of the best other thing you could have done with the same money or time.Economic ideas
- OptionsAn option is a contract that gives its buyer the right, but not the obligation, to buy or sell something at a set price before or on a set date.Funds and derivatives
P
- Paradox of thrift3.8%The paradox of thrift: if everyone tries to save more at the same time, spending falls, incomes fall, and the total amount saved may not rise at all.Economic ideas
- Passive investing10.3%Passive investing means buying a whole market through an index fund and holding it, instead of trying to pick the winners or time the market.Investing and personal finance
- Payout ratio28%The payout ratio is the share of a company’s profit that it pays out to its shareholders as dividends.Stocks and markets
- PCE inflation3.6%PCE inflation is the rise in the prices of everything US households consume, measured by the PCE price index; the Fed’s 2% target uses it.Economy
- P/E ratio25.2The P/E ratio is a stock’s price divided by its profit per share over a year: how many dollars you pay for each $1 the company earns.Stocks and markets
- Portfolio5.6%A portfolio is the whole collection of investments someone owns, such as stocks, bonds, funds and cash, looked at together rather than one by one.Investing and personal finance
- Price-to-book ratioThe price-to-book ratio (P/B) compares a company’s market value with its book value: what its assets minus its debts are worth in its accounts.Stocks and markets
- Prime rate7.00%The prime rate is the interest rate US banks charge their most creditworthy business customers; credit cards and many other loans are priced off it.Bonds and rates
- Prisoner’s dilemmaThe prisoner’s dilemma is a game in which each player does best by betraying the other, yet if both betray, both end up worse off than if they had cooperated.Economic ideas
- Private equityPrivate equity firms buy whole companies with investors’ money and a lot of borrowed money, try to make them more profitable, and sell them a few years later.Funds and derivatives
- Private keyA private key is the secret number that lets you spend crypto coins: whoever knows it controls the coins, and if it is lost, nobody can recover them.Crypto
- Productivity+2.1%Productivity is how much is produced per hour of work; its growth is what lets wages and living standards rise over time.Economy
- Proof of stake−87%Proof of stake is a way for a blockchain to agree on new blocks in which validators lock up their own coins as a deposit, and lose part of it if they cheat.Crypto
- Proof of work1,026 EH/sProof of work is how some blockchains agree on new blocks: computers must spend real computing effort to add one, and anyone can check that effort instantly.Crypto
- Public goodsA public good is something everyone can use at once and no one can be kept from using, like a streetlight or a fireworks show, so markets tend to supply too little of it.Economic ideas
- Purchasing power$50.17Purchasing power is how much a sum of money can buy. When prices rise, each dollar’s purchasing power falls.Money and central banks
- Purchasing-power parity (PPP)$435Purchasing-power parity (PPP) is an exchange rate that equalizes what money buys in different countries, used to compare incomes and economies fairly.Economy
- Put option12%A put option is the right to sell a stock or other asset at a set price (the strike) until a set date. It gains value when the price falls.Funds and derivatives
Q
- Quantitative easing$6.75TQuantitative easing (QE) is when a central bank creates new money to buy large amounts of bonds, pushing down long-term interest rates.Money and central banks
- Quantitative tightening$2.43TQuantitative tightening (QT) is QE in reverse: a central bank shrinks the pile of bonds it bought, taking money out of the financial system.Money and central banks
R
- Real GDP$24.6TReal GDP is the value of everything an economy produces with price changes taken out, so it shows whether output really grew.Economy
- Real interest rate2.78%The real interest rate is the interest rate minus inflation: how much faster your money grows than prices. It can be negative.Bonds and rates
- Real return7.1%Real return is what an investment earned after inflation: how much more it can actually buy, not just how many more dollars it shows.Investing and personal finance
- Rebalancing99%Rebalancing is bringing a portfolio back to its target mix by selling some of what has grown and buying what has lagged behind.Investing and personal finance
- Recession+2.1%A recession is a broad fall in economic activity that lasts more than a few months: people spend less, companies produce less, and jobs are lost.Economy
- REITA REIT (real estate investment trust) is a company that owns property such as offices, warehouses or apartments and pays most of its income to shareholders as dividends.Funds and derivatives
- Reserve currencyA reserve currency is one that central banks around the world hold as savings and use for trade and loans. The US dollar is the main one.Money and central banks
- Retirement account55%A retirement account is a savings account with tax breaks, such as a 401(k) or an IRA in the US, meant for money you will use after you stop working.Investing and personal finance
- Risk and return11.3%Risk and return go together: investments that can pay more over time usually swing more and can lose more along the way.Investing and personal finance
- Rule of 727.7 yearsThe rule of 72 is a shortcut for compound growth: divide 72 by the yearly rate to find roughly how many years it takes money to double.Investing and personal finance
S
- Safe withdrawal rate3.7%A safe withdrawal rate is how much of your savings you can spend each year, raised with inflation, without running out. The best-known is the 4% rule.Investing and personal finance
- Satoshi1,355A satoshi (sat) is the smallest unit of bitcoin: one hundred-millionth of a coin, 0.00000001 BTC, named after bitcoin’s creator.Crypto
- Scarcity211,000Scarcity means there is not enough of something for everyone to have all they want, so people, firms and countries have to choose.Economic ideas
- Share buyback−$348BA share buyback is when a company buys its own shares back from investors, so each remaining share owns a bigger slice of the company.Stocks and markets
- Sharpe ratio0.62The Sharpe ratio measures return per unit of risk: the extra return over safe cash, divided by how much the investment swings.Investing and personal finance
- Short sellingShort selling is betting that a price will fall: you borrow shares, sell them now, and hope to buy them back cheaper later to return them.Stocks and markets
- Short squeezeA short squeeze is a sudden jump in a stock’s price that forces short sellers to buy it back, and their buying pushes the price even higher.Funds and derivatives
- Small capA small-cap stock is a share of a smaller listed company, by a common rule of thumb one worth roughly $300 million to $2 billion on the stock market.Stocks and markets
- Smart contract4.65M ETHA smart contract is a program stored on a blockchain that runs automatically when its conditions are met, moving coins or data exactly as its code says.Crypto
- Soft landing5.33%A soft landing is when a central bank slows an overheating economy enough to bring inflation down without causing a recession.Economy
- S&P 5007,723The S&P 500 is an index of about 500 of the largest US companies, weighted by market value. It is the most watched gauge of the US stock market.Stocks and markets
- Stablecoin$247BA stablecoin is a cryptocurrency built to keep a steady price, usually $1, often by holding dollars or Treasury bills for every coin issued.Crypto
- Stagflation7.9%Stagflation is the bad mix of high inflation with a stagnant economy and rising unemployment, like the US in the 1970s.Economy
- Stock exchange$68.9TA stock exchange is a marketplace with strict rules where shares of listed companies are bought and sold, such as the New York Stock Exchange or Nasdaq.Stocks and markets
- Stock index7,723A stock index is one number that tracks the prices of a group of stocks, so you can see at a glance whether that part of the market went up or down.Stocks and markets
- Stock market$68.9TThe stock market is where shares of companies are bought and sold: all the exchanges and trading systems where investors trade with each other.Stocks and markets
- Stock market crash−85%A stock market crash is a sudden, steep fall in share prices across the market, often 10% or more in a day or a few days, driven by panic selling.Stocks and markets
- Stock (share)56%A stock (or share) is a small piece of ownership in a company: it gives you a slice of the company’s profits and, usually, a vote.Stocks and markets
- Stock split142A stock split cuts each existing share into several new ones: the price per share falls in proportion, and the company’s total value does not change.Stocks and markets
- Supply and demand$5.75Supply and demand explains prices: when buyers want more of something than sellers offer, the price rises; when there is more than buyers want, it falls.Economic ideas
- Survivorship biasSurvivorship bias is the mistake of judging by the winners you can see while forgetting the losers that dropped out of sight.Economic ideas
T
- Tariff6.8%A tariff is a tax on goods brought in from another country, paid to the government by the importer when the goods cross the border.Economy
- Time value of money$615The time value of money is the idea that a dollar today is worth more than a dollar later, because today’s dollar can be invested and earn interest.Investing and personal finance
- Total return$42,295Total return is everything an investment earned over a period: the change in its price plus the dividends or interest it paid, as a percent.Stocks and markets
- Trade balance$1.22TThe trade balance is a country’s exports minus its imports; when it buys more from abroad than it sells, it runs a trade deficit.Economy
- Tragedy of the commonsThe tragedy of the commons is what happens when a shared resource is open to all: each user takes a little more, and together they use it up.Economic ideas
- Transaction fee$209KA transaction fee is what you pay a blockchain’s miners or validators to include your payment in a block; on Ethereum it is called gas.Crypto
- Treasury bills4.30%Treasury bills are short loans to the US government, from 4 weeks to a year. You buy them below face value and get the full amount at the end.Bonds and rates
- Treasury bonds (Treasuries)4.98%Treasuries are the bonds, notes and bills the US government sells to borrow money. They are seen as the safest investment in dollars.Bonds and rates
U
V
- Value stockA value stock is a share that trades at a low price compared with the company’s profits, assets or dividends, often because investors expect little from it.Stocks and markets
- Velocity of money1.42The velocity of money is how many times a dollar is spent in a year: a year’s GDP divided by the money supply.Money and central banks
- Venture capitalVenture capital is money invested in young startups in exchange for a share of the company, in the hope that a few of them grow into giants.Funds and derivatives
- VIX (volatility index)The VIX is an index of how much the stock market expects the S&P 500 to swing over the next 30 days, calculated from options prices. High means fear.Funds and derivatives
- Volatility9.0%Volatility measures how much and how fast a price swings up and down. The bigger the swings, the higher the volatility and, usually, the risk.Stocks and markets
Y
Z
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How this glossary works
- Plain words first, then one level deeper, then an example with real numbers.
- The numbers on the term pages (inflation, rates, GDP, stock prices) are recalculated from long data series every night.
- It explains; it does not advise. Nothing here is investment advice.