Trading Glossary

A measure showing how much excess return an investment earns for each unit of risk (volatility).

Buying back previously shorted shares to close a position.

When a trader borrows and sells an asset they don’t own, hoping to buy it back later at a lower price. The open trade created by this process is called a short position, which remains until the asset is repurchased (covered).

A sharp price rise that forces short sellers to buy back shares to cover their positions, pushing the price even higher.

The chance that a portfolio's return will fall below a predetermined minimum acceptable level over a specific period of time.

Interest calculated only on the original amount of money invested or borrowed, not on accumulated interest.

Measures how returns or data are tilted to one side of the average. Positive skew means more big gains than losses, while negative skew means more big losses than gains.

The difference between the expected price of a trade and the actual price it’s executed at, often due to market volatility or low liquidity.

A market with low trading activity where assets are hard to buy or sell without causing big price changes.

A technical indicator that shows the average price of an asset over a set period, helping traders smooth out short-term noise and spot trends.

Company stock with market capitalization between $300M and $2B.

An investment approach combining passive indexing with active factors like value, momentum, or volatility.

An automated trading system that analyzes multiple trading venues to execute an order at the best available price, liquidity, speed, and cost.

An investment strategy that seeks to generate both financial returns and positive social and environmental outcomes.

Debt security issued by a national government.