Glossary

Plain-English definitions of the market and trading terms used across this site.

MegaCapstockPicks Terms

Analyst Coverage

The number of financial analysts providing research and recommendations on a particular stock. Mega-cap stocks typically receive extensive analyst coverage, contributing to market insights and investor decisions.

Blue-Chip Stock

A stock from a well-established, financially stable, and reputable company with a history of stable earnings and reliable dividend payments. Many mega-cap stocks are considered blue-chip stocks.

Defensive Stock

A stock that is considered less sensitive to economic downturns and market fluctuations. While mega-cap stocks may exhibit defensive characteristics, their performance can still be influenced by broader market trends.

Dividend Yield

A financial ratio representing the annual dividend income as a percentage of the current market price per share. Some mega-cap stocks offer dividends, providing income to investors.

Earnings Per Share (EPS)

EPS

A financial metric representing a company's profit attributable to each outstanding share of common stock. Mega-cap stocks' EPS can be a key indicator of their financial performance.

Growth Stock

A stock from a company with the potential for above-average earnings growth. Mega-cap growth stocks are often sought after for their potential to deliver strong returns over time.

Index Inclusion

The incorporation of a stock into a stock market index, such as the S&P 500. Mega-cap stocks are often included in major market indices, influencing the performance of these benchmarks.

Institutional Ownership

The percentage of a company's outstanding shares held by institutional investors, such as mutual funds, pension funds, and hedge funds. Mega-cap stocks typically have high institutional ownership.

Large-Cap

A classification for stocks with a market capitalization typically between $10 billion and $200 billion. Mega-cap stocks are a subset of large-cap stocks, representing the largest companies in this category.

Liquidity

The ease with which an asset, such as a stock, can be bought or sold in the market without affecting its price. Mega-cap stocks often have high liquidity, allowing for efficient trading.

Market Capitalization

Market Cap

The total value of a company's outstanding shares, calculated by multiplying the current share price by the total number of shares. Market cap is a key indicator of a company's size in the stock market.

Market Diversification

The practice of spreading investments across different sectors and asset classes to reduce risk. Mega-cap stocks may contribute to market diversification strategies due to their broad representation across industries.

Market Dominance

The extent to which a company holds a significant share of its market or industry. Mega-cap stocks often exhibit market dominance due to their size and influence.

Market Leadership

The position of a company as a leader in its industry or market segment. Mega-cap stocks often demonstrate market leadership due to their size, resources, and competitive advantages.

Market Sentiment

The overall attitude and perception of investors toward the stock market or a specific stock. Mega-cap stocks can be influenced by market sentiment, impacting their stock prices.

Mega-Cap

A classification for stocks with a market capitalization generally exceeding $200 billion, indicating companies that are among the largest in the stock market. Mega-cap stocks are characterized by their significant size, stability, and broad market influence.

Price-to-Earnings Ratio (P/E Ratio)

P/E Ratio

A valuation ratio calculated by dividing the current market price per share by the earnings per share. Mega-cap stocks' P/E ratios are closely monitored by investors to assess their relative valuation.

Rotation Trade

A strategy where investors shift their investments among different sectors or styles based on prevailing market conditions. Mega-cap stocks may be subject to rotation trades as investors adjust their portfolios.

Share Buybacks

The repurchase of a company's own outstanding shares, often seen as a way to return value to shareholders. Mega-cap companies may engage in share buybacks to enhance shareholder value.

Technology Disruption

The impact of technological advancements and innovations on established industries. Mega-cap technology stocks are particularly influential in shaping and responding to technology disruption trends.

Value Stock

A stock that is considered undervalued based on fundamental analysis, often characterized by a lower price-to-earnings ratio or other valuation metrics. Mega-cap value stocks may be perceived as having favorable investment opportunities.

Volatility

The degree of variation in a stock's trading price over time. While mega-cap stocks are generally considered less volatile than smaller stocks, they can still experience price fluctuations.

General Trading Terms

ADA

Cardano (cryptocurrency)

A blockchain platform for the development of decentralized applications and smart contracts.

ADR

Average Day Range (e.g., ADR(30) – average range over 30 days)

The average price range a stock experiences within a specific period, often used to gauge volatility.

AH

After Hours trades

Trades that occur after the regular market hours, typically between 4:00 PM and 8:00 PM Eastern Time.

AMM

Automatic Market Maker

A decentralized finance (DeFi) algorithmic trading protocol that provides liquidity to decentralized exchanges.

AON

All Or None

An order that must be executed in its entirety, or not at all.

ATH

All-Time High (price)

The highest historical price reached by a financial asset.

ATL

All-Time Low (price)

The lowest historical price reached by a financial asset.

ATM

At The Money

An option where the strike price is equal to the current market price of the underlying asset.

AUD

Australian Dollar

The official currency of Australia.

Aussie

AUD/USD currency pair

Refers to the currency pair involving the Australian Dollar and the U.S. Dollar.

BBL

Be back later

A quick way to inform others that you will be back later.

B/O

Breakout

A significant price movement above a certain level of resistance or below a level of support.

BPR

Buying Power Reduction

The amount of capital required to open and maintain a particular options position.

BRB

Be right back

A quick way to inform others that you will be right back.

BTC

Bitcoin (cryptocurrency)

The first and most well-known cryptocurrency, often referred to as digital gold.

BTD

Buy the dip

A strategy of purchasing an asset when its price experiences a temporary decline.

Cable

GBP/USD currency pair

Refers to the currency pair involving the British Pound and the U.S. Dollar.

CAD

Canadian Dollar

The official currency of Canada.

Carry

Carry Trade - strategy exploiting interest rate differentials

A trading strategy that involves borrowing in a currency with a low-interest rate and investing in a currency with a higher interest rate.

CBOE

Chicago Board Options Exchange

The largest options exchange in the U.S., facilitating the trading of options contracts.

CC

Covered Call

A strategy where an investor holds a long position in an asset and sells a call option on the same asset to generate income.

CHF

Swiss Franc

The official currency of Switzerland.

CP

Centerpoint Securities

A brokerage firm providing trading services for equities and options.

DAO

Decentralized autonomous organization

An organization represented by rules encoded as a computer program that is transparent, controlled by the organization members, and not influenced by a central government.

DAS

DAS Trading Software

A trading platform/software used for day trading.

DD

Due Diligence

Research and analysis conducted before making an investment decision.

DeFi

Decentralized Finance

A financial system built on blockchain technology that aims to recreate and improve upon traditional financial systems.

DEX

Decentralized Exchange

A cryptocurrency exchange that operates without a central authority or intermediary.

DITM

Deep In The Money

An option with a strike price significantly favorable compared to the current market price of the underlying asset.

D/R

DayRanger - stocks with the highest average day range

Stocks with the highest average daily price range, indicating higher volatility.

DYOR

Do Your Own Research

Encourages individuals to conduct their own thorough research before making investment decisions.

EOD

End of Day

The closing time of a trading session.

E/R

Earnings Report

The public release of a company's financial performance, including revenue and profit, usually on a quarterly or annual basis.

ETH

Ethereum (cryptocurrency)

A blockchain platform enabling the creation of decentralized applications and smart contracts.

EUR

Euro

The official currency of the Eurozone.

FA

Fundamental Analysis

Analyzing a security's intrinsic value by examining related economic, financial, and other qualitative and quantitative factors.

FOMO

Fear of missing out

The fear that others are making profitable investments and one might miss out on potential gains.

FTR

Fade the rip

A trading strategy that involves selling after a rapid price increase.

FUD

Fear, Uncertainty, Doubt

Negative information or rumors spread to create fear and uncertainty in the market.

FWIW

For what it’s worth

Used to qualify or emphasize a statement, often when providing information.

FX

Forex (foreign exchange)

The global marketplace for trading national currencies against one another.

FYI

For your information

Used to inform someone about a piece of information.

GBP

British Pound

The official currency of the United Kingdom.

GL

Good luck

Wishing someone success or good fortune.

G/R

Green to Red (Stock was above prior day’s close but dropped below it)

Indicates a stock that was initially above the prior day’s close but has dropped below it.

Green

Price or account has increased

Indicates an increase in price or account value.

GTFO

Get The Fuck Out / Got The Fuck Out

A slang expression urging someone to leave or expressing that someone has left.

HF

Have fun

Wishing someone an enjoyable experience.

HOD

High of Day (nHOD = new high of day)

The highest price reached by a security during a particular trading day.

HODL

Hold On for Dear Life

A term used in the cryptocurrency community to encourage holding onto assets despite market volatility.

IB

Interactive Brokers

A popular brokerage firm providing online trading services.

ICO

Initial Coin Offering

A fundraising method for new cryptocurrency projects, similar to an initial public offering (IPO) in the stock market.

ICYMI

IDK

I don’t know

Indicates uncertainty or lack of knowledge.

IIRC

If I remember correctly

Indicates that the following statement is based on the speaker's memory and may not be entirely accurate.

IMHO / IMO

In my (humble) opinion

Indicates a personal opinion on a matter.

IOW

In other words

Used to rephrase or clarify a statement.

ITM

In The Money

An option with intrinsic value, meaning the option's strike price is favorable compared to the current market price of the underlying asset.

IV

Implied Volatility

A measure of the market's expectations for the future volatility of an underlying asset, derived from option prices.

JPY

Japanese Yen

The official currency of Japan.

Kiwi

NZD/USD currency pair

Refers to the currency pair involving the New Zealand Dollar and the U.S. Dollar.

KYC

Know your customer

A process used by financial institutions to verify the identity of their customers.

L2

Level 2 stock quotes

Provides detailed market data, including the best bid and ask prices, for a particular security.

LBB

Lower Bollinger Band

The lower boundary in a Bollinger Bands chart, indicating potential oversold conditions.

L/F

Low Float

Refers to stocks issued with a low number of shares, leading to higher volatility.

LITM

Long In The Money

Holding a long position in an option that is in the money.

LOD

Low of Day

The lowest price reached by a security during a particular trading day.

LOL

Laughing out loud

An expression used to convey laughter or amusement.

Loonie

USD/CAD currency pair

Refers to the currency pair involving the U.S. Dollar and the Canadian Dollar.

LOTM

Long Out Of The Money

Holding a long position in an option that is out of the money.

Low Float

Usually small-cap companies with fewer shares issued, leading to higher volatility

Stocks with a limited number of shares available for trading, often resulting in price volatility.

MCP

Market Center Price

The midpoint between the national best bid and national best offer for an option.

MM

Market Maker

A financial institution or individual that facilitates the buying and selling of financial instruments.

MOC

Market on Close

An order to buy or sell a security at the closing price, typically entered near the close of the trading day.

NFT

Non-Fungible Token

A unique digital asset, often representing ownership of digital or physical items.

NZD

New Zealand Dollar

The official currency of New Zealand.

OEX

S&P 100 Index Options

Options based on the S&P 100 Index.

OI

Open Interest

The total number of outstanding options contracts for a particular security.

OMG

Oh my God

An expression of surprise or shock.

O/N

Over Night

Refers to positions or trades held overnight.

OTM

Out Of The Money

An option with no intrinsic value, meaning the option's strike price is not favorable compared to the current market price of the underlying asset.

P2P

Peer to peer

A decentralized network where participants interact directly with each other without intermediaries.

Perking Up

Stock is starting to move up off consolidation

Indicates a stock showing signs of upward movement after a period of consolidation.

PH

Power Hour (the last hour of trading)

The final hour of the trading day, often characterized by increased trading activity.

PIP

Percentage in Point (measure of price movement)

A standardized unit of movement in the foreign exchange market.

PM

Portfolio Margin

A margin system that bases margin requirements on the overall risk of a portfolio of positions.

POP

Probability of Profit

The likelihood that a trade will be profitable based on statistical analysis or option pricing models.

PoS

Proof of stake

A consensus algorithm used in blockchain networks, where validators are chosen to create new blocks based on the number of coins they hold and are willing to "stake."

PoW

Proof of work

A consensus algorithm used in blockchain networks, where validators (miners) solve complex mathematical problems to validate transactions and create new blocks.

Pre

Pre-market trades

Trades that occur before the regular market hours, typically between 4:00 AM and 9:30 AM Eastern Time.

PROPS

Proper respect / Proper recognition

An informal expression conveying proper acknowledgment or respect.

Red

Price is below the previous day’s close

Indicates that the current price is below the closing price of the previous trading day.

Res

Resistance

A price level at which a security often faces selling pressure, preventing it from moving higher.

R/G

Red to Green (Stock was below prior day’s close but rose above it)

Indicates a stock that was initially below the prior day’s close but has risen above it.

ROC

Return on Capital

A measure of the return generated on invested capital.

ROI

Return on Investment

A measure of the profitability of an investment, calculated as the gain or loss relative to the initial investment.

R/R

Risk/Reward

The ratio of potential profit to potential loss in a trade.

R/S

Reverse Split

A corporate action that reduces the number of a company's outstanding shares, increasing the share price proportionally.

SPX

S&P 500 Index Options

Options based on the S&P 500 Index

S/R

Support/Resistance

Levels on a chart where the price of an asset might experience a pause in its movement or change direction.

SS or S/S

Short Sell

The sale of a borrowed security with the expectation of buying it back later at a lower price.

SSR

Short Sell Restriction/Downtick Rule

A rule that prevents short selling on a downtick, designed to prevent excessive downward pressure on a stock's price.

STC

Sell To Close

Closing out an existing options position by selling the contract.

STD

Straddle

A strategy where an investor holds a position in both a call and a put option with the same strike price and expiration date.

STO

Sell To Open

Opening a position by selling an options contract.

STP

Stop

A conditional order to buy or sell an option at a specific price or better.

STT

Strangle

A strategy where an investor holds a position in both a call and a put option with different strike prices but the same expiration date.

Sup

Support

A price level at which a security often faces buying interest, preventing it from moving lower.

SV

Skewness Volatility

A measure of how the implied volatility of options varies with different strike prices.

T+1

Trade Date Plus One

The settlement date for securities transactions that occur on a trade date.

T+2

Trade Date Plus Two

The settlement date for most securities transactions, occurring two business days after the trade date.

T+3

Trade Date Plus Three

The settlement date for certain securities transactions, occurring three business days after the trade date.

TA

Technical Analysis

The analysis of historical price and volume data to forecast future price movements.

TIA

Thanks in advance

Expressing gratitude for anticipated assistance or information.

TOS

Thinkorswim

A trading platform owned by TD Ameritrade.

TTM

Time To Maturity

The remaining time until an options contract expires.

TTYL

Talk to you later

A casual way of saying goodbye with the intention of talking again in the future.

TY

Thank you

Expressing gratitude or appreciation.

UBB

Upper Bollinger Band

The upper boundary in a Bollinger Bands chart, indicating potential overbought conditions.

USD

United States Dollar

The official currency of the United States.

VIX

Volatility Index

The CBOE Volatility Index, which measures market expectations for future volatility.

WITM

Warrant In The Money

A warrant where the current market price is higher than the exercise (strike) price.

WOTM

Warrant Out Of The Money

A warrant where the current market price is lower than the exercise (strike) price.

WTB

Write To Buy

A trading strategy involving writing options and using the premium received to buy other options.

XSP

Mini S&P 500 Index Options

Options based on the Mini S&P 500 Index.

XYZ

Generic Stock Symbol

Used to represent an unknown or generic stock in examples or discussions.

Yen

USD/JPY currency pair

Refers to the currency pair involving the U.S. Dollar and the Japanese Yen.

Yen

USD/JPY currency pair

Refers to the currency pair involving the U.S. Dollar and the Japanese Yen.

YW

You’re welcome

A polite response to someone expressing gratitude.