ALGORITHMIC TRADING
THEIR DEFINITION
"The use of computer algorithms to automate trading decisions, often executing orders at high speeds."
OUR DEFINITION
"Rich people paying nerds to outsmart other rich people. It's like bot warfare, and your retail orders are the collateral damage."
ALPHA
THEIR DEFINITION
"A measure of performance on a risk-adjusted basis. Alpha represents the excess return of an investment relative to the return of a benchmark index."
OUR DEFINITION
"The fancy word fund managers use to justify their fees when they accidentally beat the market. What they're really saying is: 'We got lucky this time, please don't fire us.'"
ARBITRAGE
THEIR DEFINITION
"The simultaneous purchase and sale of the same asset in different markets to profit from tiny differences in price."
OUR DEFINITION
"Finding a ten-rupee note on the floor that everyone else is too slow or too blind to see. The game is over in milliseconds."
ASSET ALLOCATION
THEIR DEFINITION
"The strategy of dividing investments among different asset categories to balance risk and reward."
OUR DEFINITION
"Not putting all your eggs in one basket. But when the market drops, all baskets tend to fall anyway."
BETA
THEIR DEFINITION
"A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole."
OUR DEFINITION
"How much a stock tends to throw a tantrum when the market has a bad day. High beta = dramatic teenager. Low beta = stoic grandparent."
BLACK SWAN EVENT
THEIR DEFINITION
"An unpredictable event that is beyond normal expectations and has severe consequences."
OUR DEFINITION
"The market's way of saying, 'You thought you knew? Think again.' See: 2008 crash, COVID-19, and whatever comes next."
BLOCKCHAIN
THEIR DEFINITION
"A decentralized digital ledger that records transactions across multiple computers."
OUR DEFINITION
"A technology that promises to change the world but is currently mostly used for buying JPEGs of monkeys."
BULL TRAP
THEIR DEFINITION
"A false signal indicating that a declining trend has reversed and is heading upwards when it is not."
OUR DEFINITION
"The market pretending to be your friend, luring you into buying before it slams the door shut and resumes its crash."
CIRCUIT BREAKER
THEIR DEFINITION
"A regulatory measure that temporarily halts trading on an exchange to curb panic-selling."
OUR DEFINITION
"The exchange hitting the pause button on a market meltdown so everyone can take a deep breath and panic more efficiently."
DARK POOL
THEIR DEFINITION
"A private exchange where large institutional trades are executed away from public markets."
OUR DEFINITION
"Where the big players trade in secret so you don't get to see their moves until it's too late for you to react."
DEAD CAT BOUNCE
THEIR DEFINITION
"A temporary, short-lived recovery in a declining stock trend."
OUR DEFINITION
"Even a dead cat will bounce if it falls from a great enough height. Doesn't mean it's alive again. Don't buy the bounce."
DERIVATIVES
THEIR DEFINITION
"Financial contracts whose value is derived from an underlying asset, such as stocks, commodities, or currencies."
OUR DEFINITION
"Financial Russian nesting dolls. You're betting on a bet about a bet, and nobody really knows what's inside until it's too late."
DIVIDEND
THEIR DEFINITION
"A portion of a company's profits paid out to shareholders."
OUR DEFINITION
"The company giving you a tiny cookie for holding their stock while they eat the entire cake."
DOLLAR-COST AVERAGING (DCA)
THEIR DEFINITION
"An investment strategy of investing a fixed amount at regular intervals, regardless of asset price."
OUR DEFINITION
"The 'set it and forget it' method of slowly feeding your money into the market so you don't panic-buy the top or panic-sell the bottom."
FOMO (FEAR OF MISSING OUT)
THEIR DEFINITION
"A pervasive apprehension that others might be having rewarding experiences from which one is absent."
OUR DEFINITION
"The emotional trigger that makes you buy at the very top of a pump, right before the dump. Your worst enemy."
FUNDAMENTAL ANALYSIS
THEIR DEFINITION
"The evaluation of a company's financial health, management, and competitive advantages to determine its intrinsic value."
OUR DEFINITION
"Actually reading the fine print instead of just looking at the pretty charts. Boring but occasionally useful."
GAMMA
THEIR DEFINITION
"The rate of change in an option's delta per 1-point move in the underlying asset's price. Gamma is an important measure of the convexity of a derivative's value."
OUR DEFINITION
"How fast your options position will make you either scream in terror or cry with joy when the underlying stock moves. Basically, the accelerator pedal of options trading."
GOLDEN PARACHUTE
THEIR DEFINITION
"A large payment or other financial compensation guaranteed to a company executive if they are dismissed."
OUR DEFINITION
"A CEO's 'get out of jail free' card. They can run the company into the ground and still get paid millions to leave."
HEDGE FUND
THEIR DEFINITION
"An investment partnership that uses pooled funds and employs complex strategies to generate high returns."
OUR DEFINITION
"A 'exclusive club' for the wealthy where they charge you 2% just to walk in and 20% of the profits, even if they lose your money."
HODL
THEIR DEFINITION
"A misspelling of 'hold,' originating from a crypto forum, meaning to hold onto investments despite market fluctuations."
OUR DEFINITION
"What you tell yourself when your portfolio is down 80% to avoid admitting you made a terrible mistake."