Learn & glossary

Financial glossary

Basis point (bp)

One hundredth of a percentage point. A 25 bp rate hike lifts a rate by 0.25 percentage points.

Bear market

A fall of 20% or more from a recent high in a market or index.

Bull market

A sustained rise in prices, usually 20% or more from a recent low.

CAGR

Compound annual growth rate: the steady yearly rate that would turn a starting value into an ending value over a period.

CPI

Consumer price index: a measure of the change in prices of a basket of goods and services, used to track inflation. "Core" CPI leaves out food and energy.

Dividend yield

The yearly dividend per share divided by the share price, shown as a percentage.

EMI

Equated monthly instalment: the fixed monthly payment on a loan, covering interest and part of the principal.

EPS

Earnings per share: a company's net profit divided by the number of shares outstanding.

ETF

Exchange-traded fund: a fund that trades on an exchange like a share and usually tracks an index, sector or commodity.

Fed funds rate

The target interest rate the US Federal Reserve sets for overnight lending between banks. It influences borrowing costs across the economy.

Futures contract

An agreement to buy or sell an asset at a set price on a future date. Commodity prices on StockPil are front-month futures.

GDP

Gross domestic product: the total value of goods and services an economy produces over a period.

Halving

A scheduled cut in new Bitcoin issuance that happens roughly every four years.

Index

A basket of securities tracked as one number, such as the S&P 500 or Nifty 50, used to measure a market or sector.

IPO

Initial public offering: when a private company first sells shares to the public on a stock exchange.

Leverage

Using borrowed money to increase exposure. It magnifies both gains and losses.

Liquidity

How easily an asset can be bought or sold without moving its price much.

Market breadth

The number of stocks rising compared with those falling. Broad gains are usually seen as healthier than gains led by a few large names.

Market cap

Share price multiplied by total shares outstanding.

Moving average

The average closing price over a set number of periods, such as 20 or 200 days, used to smooth out short-term swings.

P/E ratio

Price-to-earnings ratio: share price divided by earnings per share. It shows how much investors pay for each unit of profit.

Pip

The smallest standard price move in a currency pair, usually 0.0001 (0.01 for yen pairs).

RSI

Relative strength index: a momentum gauge from 0 to 100. Readings above 70 are often called overbought, below 30 oversold.

Short selling

Selling borrowed shares in the hope of buying them back later at a lower price.

SIP

Systematic investment plan: investing a fixed amount at regular intervals, usually monthly, into a fund or stock.

Spread

The gap between the price buyers are willing to pay (bid) and the price sellers ask (ask).

Stablecoin

A cryptocurrency designed to hold a steady value, usually one US dollar, such as USDT or USDC.

Volatility

How widely an asset's price swings over a period of time.

Yield

The income an investment returns, shown as a percentage of its price. Bond yields rise when bond prices fall.