
Terminology
Here’s an A–Z glossary of the most common terms used across equities, bonds, portfolios, and crypto.
A
Measure of excess return on an investment relative to a benchmark index. Indicates skill or market-beating performance.
B
Beta
C
Capitalization (Market Cap)
Total market value of a company’s shares or a crypto token’s supply.
D
Diversification
E
Equity
Ownership interest in a company, typically represented by shares of stock.
F
Fixed Income
Investments, like bonds, that pay regular interest and return principal at maturity.
G
Gross Domestic Product (GDP)
Total value of goods and services produced in a country; a key economic indicator affecting markets.
H
Hedge
Strategy or instrument used to reduce or offset potential losses from other investments.
I
Inflation
Rate at which general prices rise, eroding purchasing power and influencing interest rates.
J
Junk Bond
High-yield bond with lower credit ratings, offering higher returns for higher risk.
K
KYC (Know Your Customer)
Regulatory process where financial institutions verify client identity to prevent fraud and money laundering.
L
Liquidity
Ease of buying or selling an asset without causing a major price change.
M
Market Order
Instruction to buy or sell immediately at the best available price.
N
NAV (Net Asset Value)
Per-share value of a fund’s assets minus its liabilities; key for mutual funds and ETFs.
O
Options
Contracts granting the right, not the obligation, to buy or sell an asset at a set price by a given date.
P
Portfolio
Collection of financial assets like stocks, bonds, and crypto held by an investor.
Q
Quantitative Easing (QE)
Central bank policy of buying assets to inject liquidity into the economy and lower interest rates.
R
ROI (Return on Investment)
Measure of profitability; calculates gain or loss relative to the cost of the investment.
S
Smart Contract
Self-executing blockchain code that automatically enforces terms of an agreement.
T
Tokenization
Process of converting ownership rights of an asset into digital tokens on a blockchain.
U
Utility Token
Crypto token providing access to a product or service within a blockchain ecosystem.
V
Volatility
Degree of variation in asset prices; a measure of market uncertainty or risk.
W
Wallet (Crypto)
Digital tool for storing and managing cryptocurrencies and private keys.
X
XRP
Digital currency by Ripple Labs used for fast, low-cost international payments.
Y
Yield
Income return on an investment, usually expressed as a percentage of its cost or market value.
Z
Zero-Coupon Bond
Bond sold at a discount and redeemed at face value at maturity; pays no periodic interest.