Financial Dictionary

Browse our Gallery of Financial Terms

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Financial terms related to A
  • Asset class:An asset class is a categorization of the different types of investment or securities that bear the same result and have the same characteristics when released in the market with respect to the same laws and regulations. These are broadly classified into three types according to the risk factors they each possess i.e. Equities, Cash, and Bonds(fixed income).


  • Assets:An initial investment which guarantees to yield a certain profit or cash flow in the future is called an asset. An asset can be of any types whether in the form of a land, machine, building, cash invested in stocks or even gold. These can be classified according to the ease with which they give back the return.


  • Auction:The process in which the price of an object is neither set by the manufacturer nor by the dealer but rather is set by a competitive bidding where the item is sold to the person or the organization with the highest bidding price is called an auction.


  • Authorized Stocks:According to the article of incorporation, the maximum number of shares that a company can legally sell to its investors to raise its capital is called authorized stock or authorized capital. It can be changed when there is an expansion of the company or a merger with another company only when a vote is passed by the stockholders of the company.
Financial terms related to B
  • Bank:A financial organization that has been authorized by the government (generally central government) to deal with all the financial transactions of its customer such as accepting deposits( assets ), giving loans and credits on the assets is a 


  • Bank Run:A situation where a huge number of customers withdraw their deposits from a bank or financial institution due to the panic created by concerns regarding the solvency of that bank or financial institution is called bank run.As the bank only keeps a share of our deposits and use the others to lend loans to other people, thus when there is a huge withdrawal the institution may not be able to return the money thus leading to increase in defaults and finally bankruptcy and collapse.


  • Bear market: This is an absolute opposite of a bull market i.e. when a market starts to show a rapid decrease in the prices of the shares and stock ,or more precisely when the value of the stock falls by more than 20% of its peak value within a short time period of 2 months then the market is known as to bebear market. In this kind of market investors generally, sell off their shares rather holding them and waiting for the market to rise up again to avoid any further loss.


  • Bidding/BID: When a security or a commodity does not a have a fixed price, then the willingness and competition among the investors to offer a certain price to purchase that commodity are known as Bid, while the process that is used to determine the value of the commodity is known as 


  • Bond:The fixed-income securities which are traded in order to raise money to finance new projects or carry on on-going financial operation is called a  It is a debt investment used to lend money to an entity at a fixed or variable rate of interest for a fixed period of time after which the lender needs to repay it. These also are generally categorized into four major groups such as Corporate, Government (Treasury), Agency, Municipal.


  • Bull Market:Bull market is the term coined to a condition of the financial market where financial assets which are traded like bonds, equities or commodities experience a rise in trading price or expected to rise in a time period that may last for days/months or years. The assets collectively have the tendency to rise in price calling it as bullish nature of the market. At this stage, investors/traders feel optimistic and start feeling confidence as the value of security start rising and expect that results shall continue.


  • Buy limit order:when a security is bought at or below a specified price is called buy limit order. Here the price is guaranteed but the filling of the order is not. This allows traders and investors to fix a price they are willing to pay for a security. In a nutshell, it is the price that the investors would give to purchase a share.
Financial terms related to C
  • Capital: Any asset such as equity funds, machines, lands, a building that hold a certain value and can be used or is used for development to gain profit and is considered to be the strength of the individual or an organisation can be termed as a


  • Cash:Any physical form of money either a paper or a coin that can be used to exchange assets or purchase securities or commodities can be called as cash. Common types of cash are notes, printed bills, coins etcThe word has been derived from South Indian Dravidian language Kaasu meaning money.


  • Cash Discount: The reduction of the price below the actual price of any service or goods so as to make the offer look attractive and also get the money back in the right time period is called acash discount. Cash discount if wisely used can get the seller a big profit by increasing the sales.


  • Corporation:A symbiotic relationship between a group of companies or a group of individual (stockholders) is termed as a corporation. A corporation holds many rights that are separate from that of an individual or the owner himself. A corporation is generally considered to be a legal person who has the right to sell or buy a property, take loans or to enter into a contract and leases.
Financial terms related to D
  • Dealer: Aperson or firm who is in the business of buying and selling goods or services for their own account is termed as  A dealer has the authority to sell or purchase securities on his own, unlike the distributor who only has the right to distribute the securities rather than selling them on their own. Dealing can be done through brokers or otherwise


  • Debt:The money borrowed by one party from another is called debt. Debt is used for financial help by many corporations and individual in time of their economic crisis or for ambitious ventures such as expanding the business, purchasing machinery.


  • Demand:The willingness or the ability of an individual or an organization to purchase a good, security at a certain amount of price is known as the  It follows the law of demand i.e. keeping all the other factors constant if we increase only the price then the demand decreases and vice versa.


  • Demonetisation: Thesituation where the current currency of a country is made invalid or ceased by the government so as to stop the illegal circulation of the money throughout the country is called 


  • Derivative:A security derived from one or more underlying assets are termed as  The fluctuations in the value of these assets affect the price of the derivative directly.
Financial terms related to E
  • Earning:Net income returned in returned to an individual or an organization in favour of  labour or service after removing the taxes and other deductions is called Earnings play the most important role as a factor of the share prices as the investors tries and invests in the shares of only those companies having a comparatively higher earnings.


  • EBITDA: EBITDAstands for earning before interest, taxes, a companies depreciation and amortization.It is company’s net income before interest taxes depreciations and amortizations are deducted. It is used as a measure as an in companies financial performances.


  • Economic Growth:The per capita increase in capitals, finance goods and services in a particular area for a given time is known as economic growth.


  • Economy:The status of a locality or a nation in terms of its production and consumption based on the income of the individual’s, culture, laws and many other factors is called the 


  • ESOP: ESOPstands for employee stock ownership plan in which the company makes attractive plans so as to encourage their own employees to purchase the stocks of their own company so as to raise the capital and to increase the corporate finance.
Financial terms related to F
  • Face value:The original and certified cost of stocks are termed as face value. It is the nominal value stated by the issuer.


  • Financial asset:The liquid or tangible assets that derive its value from a contractual claim is known as financial assets.Money Bonds etc are certain examples.


  • Financial Instrument:Assets that can be traded in exchange for money or services are called financial assets. These assets allow the free flow of money or capital throughout the economy.


  • Fiscal Year– Financial year in north America is called afiscal year. According to IRS a fiscal year is a continuous period of 12 months with the last month not being December.


  • Fixed Deposit:A form of investment where the investor receives a higher rate of interest from the bank or financial institution. The only trick is the investment cannot be liquidated before a certain time (maturity).


  • Float:Float refers to the total number of shares available for trading. It also means double counted money. Float happens when a customer’s account is credited as per the check deposited by him/her, even before the amount is received from the payer’s bank
Financial terms related to G
  • Gamble:An income generated by a game of probability or chance is termed as gambling. It is generally betting on something after analysing all the situations and factors affecting it which might lead to a great or profit.


  • Good credit:A score obtained on the basis of a credit history that gives the borrower a higher chance of getting loans. This score depends on a number of factors such as the amount the borrowed, the time of payment. This score can vary as these are defined from different methodologies.


  • Government Bond:It is a form of security issued by the government to help in its spending and financial ventures are termed as government bonds. These bonds are promised to be repaid at a particular interest in a given time.
Financial terms related to H
  • Hedge Fund:Pooled funds that use different economic strategies to generate a return for the investors are known as hedge funds.Hedge funds may be used as derivative or leverage in order to generate high returns.


  • Housing Bond:debt securities issued by a state or central government in return of housing developments are called housing bonds.


  • Hyperdeflation:An outrageous decrease in the price of goods and services in a particular given time is known as hyper deflation. A hyper defamatory environment results in lower wages and lower demand and increasing the value of the currency.


  • Hyperinflation:Inflation at a rapid rate is called hyperinflation. The price rise becomes so high that there is no numerical indicator of 


  • Hypermarket:Hypermarket is the collection of different supermarkets retail stores and department stores under the same roof. Hypermarkets generally provides with all goods required by a customer.
Financial terms related to I
  • Incentive:Incentive is a variable fee paid to the fund managers by the investors. It mainly depends on the performance of the fund manager and another element, in other words, the reward given to anyone for performing better than expected and required generally in monetary form is called an 


  • Indicator: Statistics used to analyze as well as forecast economic and financial trends are called indicators or economicindicators. It is these indicators that help the investors to choose where and how much to invest and expect a better return.


  • Inflation:Inflation is the general price rise for different products and downfall in the value of money,i.e. money could now help you buy fewer units of the same commodity as compared to the previous times. This is generally caused when there is a very large amount of money in circulation throughout a country which happens when there is excessive printing of money.  This inflation results in the reduction of the real value of the currency as the purchasing power per unit currency decreases.


  • Insider Trading:Insider trading is an illegal practice of trading of public stocks based on the nonpublic information about the security. It is unfair as it gives the ‘insider’ privilege over other investors.


  • Investment: An asset purchased for a better return or increased market value in future.


  • Investor:An investor is an individual who spends or commits financially in order to get a better and enhanced future return so as get a passive income after retirement. Investment can be done in many forms such as real estate, shares, annuity, equities, gold, silver.Real estate currency products are different forms of investment.
Financial terms related to J
  • Jackpot:In investing jargon jackpot occurs when an investor yields huge profit from his past investment.


  • Joint Credit:Credit given to more than one individual on the basis of their joined income, joined assets and credit history is known as join credit. All the parties that are the participant of the joint credit share the same responsibility to pay the debt.
Financial terms related to K
  • KSOP:KSOP is a retirement plan combining ESOP with a 401(k). here the contribution of the employee is matched against stock and not cash.
Financial terms related to L
  • Lender:Any individual, group of individual, public or private financial institution who supplies funds to others with an expectation of a better return at a fixed rate of interest for a certain period of time is called 


  • Leverage:An initial financial asset used to control a much large potential return future is called leverage.


  • Liabilities:It is the future financial sacrifices committed by an individual or company as a result of past financial transaction. Liabilities can be paid by money stocks or other services.


  • Limit order:Limit order is the directive given to bank or broker to sell or buy a given amount of assets at a given price or better.


  • (Limited):Suffix used by the private institution. According to the definition, the shareholder’s liability is limited to the company itself.
Financial terms related to M
  • Mortgage: It is a debt instrument usually used to by real estate buyers where they confirm their property without giving the final sum of money rather providing mortgage in return would pay back the cost with some interest. Bank usually give loan on this basis and if loan is not paid the mortgage is kept by bank
  • Mobile wallet:Also well known as m-wallet is a service that is used for ease of transaction for the customers to buy products online through via mobile device.
Financial terms related to N
  • NASDAQ: NASDAQstands for National Associations of Securities Dealers Automated Quotation, As the name itself suggests this is an automated system where the securities are sold with the electronic media and the internet and allows brokers and investors make their trades online. This system was developed National associations of security dealers (NASD). This is system became operational on February 8, 1971.


  • Natural Capital: Natural capitalis the asset of any country which comprises of the different flora and fauna such as mountains, mines, fossils.


  • NSE:NSE stands for National Stock Exchange of India Ltd established in 1992 is now one of the world’s largest stock exchange markets which is completely automated. It is located in Mumbai. It is one of the leading stock exchanges in India. NSE has total listings of approximately 1600 and the market cap is around US $1.4 trillion important indices as NIFTY, CNX IT and many others.


  • Non-qualifying investment:These are such investments which are not liable for any sort of exemption of taxes.
Financial terms related to O
  • Odd lot: Anodd lot is the exact opposite of a round lot i.e., a round lot is an order that has an order quantity of anything(shares) in the multiples of 100, therefore any order quantity that is not a multiple of 100 is known as an odd lot.


  • Outstanding shares:The stocks of a company that is held with the shareholders of the company are called outstanding stocks.These stocks are used to evaluate the market capitalization.


  • Overbought:A situation where the shares experience a very sharp and peak rise in the price is called as overbought. After this situation is achieved there are very fair chances that the market and the price of that share will start falling.


  • Overvalued:Any security when sold at a price higher than the expected and deserved price level, then the security is referred to as  The value of a security is generally by the company’s profits earnings ratio (P/E ratio) and its growth potential.
Financial terms related to P
  • PAR:Suppose the values of two shares is same then that share would be called on  it is basically the equality between two bonds or shares.


  • Par value:PAR VALUE can be defined as the face value of bond or the stock value which is stated in the corporate charter.


  • Passive income: when a person gets money from a source in which it does not invest financially then that source of income is termed aspassive income. for ex. money from tenants.


  • Portfolio: portfoliois the total collection or one can say sum of all the bonds, shares of any individual or organization it includes mutual funds, closed funds etc.


  • Profit: it is the increase in price of the bond or share after a period of time.


  • Provident fund:It is a type of fund where employee as well as the company or organization shares some amount of their salary and when the employee gets retired this amount is paid to them.
Financial terms related to Q
  • Qualified Mortgage: A mortgage where the lender first checks whether the borrower is capable enough of paying back the loan by following the “Ability to Pay” rule is known as aqualified mortgage. Certain things that do not abide by the ability to pay rules are as follows: Loan terms cannot be more than 30 years, balloon payments, negative amortization.


  • Quote:From the financial point of view quote is kind of a bill that estimates the price of any commodity or the process of making it.
Financial terms related to R
  • Rate of change:Rate of change can be defined as the difference between the final value and the initial value of a quantity (like price, speed) within a specified period of time and is represented by a Greek symbol Delta.


  • Real estate:Real estate is a collective term used for a land or building anything on it that is immovable like walls, trees, fences etc. Real estate are broadly classified into three types (1) residential (2) commercial (3) industrials depending on the type of building and their usage.


  • Registered Bond:A bond that carries the name of the owner and the bond issuer. The person who is the owner and has his name on this bond has the right to rent the property or take its principal. It is only on his endorsement or authorization that the property can be transferred to some other person.


  • Rent:A payment made to the owner for using his or her property for a certain period of time is termed as 


  • Rolling segment:Rolling segment (rolling settlement) means that all trades done on day T are settled on day T+X, where X depends on the type of settlement. Example: – suppose we have T+2 settlement that means trades done on day 1 are settled on day 3.Trades done on day 2 are settled on day 4,Trades are done on day 3 are settled on day 5.(Assuming 1,2,3,4,5 are all trading days).
Financial terms related to S
  • Saving:The part of income  that is left with an individual or an organisation after adopting several measures like keeping the money aside , reducing the expenditures is called assaving . while the other word that we do generally confuse with is Savings which in turn is an act of keeping money in the bank so as to continuous flow of cash after a certain interval of time.


  • Sell order:The order made to the seller to sell a certain number of securities. A sell order may take any of a number of forms. Depending on the nature of the order, the broker may execute it at the best available price when the order is made, at a set price designated by the client.


  • Shares:The capital of a company is divided into shares. of a company and is offered for sale so as to raise capital for the company.Shares are basically of two types – equity and preference shares. Equity shares give their holders the power to share the earnings/profits in    the company as well as a vote in the AGMs of the company, whereas as the individuals having, preference shares do not get any voting rights but are eligible to take the profit.


  • Stock broker: A person who buys and sells securities on a stock exchange on behalf of clients is known as a stockbroker.


  • Stock exchange: The financial market where trading of all types of securities is done is called astock exchange. If the company is able to trade in the exchange it is referred as listed while the companies which are not listed are sold Over the Counter (OTC).


  • Stock market:A place where trades are sold physically is known as stock market or stock exchange but when the trading emphasizes basically on the electronic media to be used for trading it is known as the stock market.
Financial terms related to T
  • TAX:A charge that is tagged along with a product or income by the government to help the government generate revenue for the betterment of the country or state is known as  The money that is paid by us as the TAX is generally used in improving the infrastructure of country such as street lighting, roads, education to the poor and sometimes also used in the emergency situations such as earthquake relief.


  • Tax exempt:Some commodities are not liable to taxation , such articles are known as tax exempted articles or goods.


  • Trader:Any individual who invests and keeps the stock with himself for a short period of time so as to gain some profit out of it without selling it to any other individual is known as a 


  • Transaction:Any kind of trade whether monetary, or asset when is done between two parties in agreement with each other is known as a 


  • Treasury bill:A short-term debt that is given to the government by the investor so that the government need of money is fulfilled and also the investor’s money is kept safe reducing his market risk. In India, these bills are issued by the central government.
Financial terms related to U
  • Undervalued:Any security when sold at a price below the expected and deserved price level, then the security is referred to as undervalued. The value of a security is generally by the company p’srofits-earnings ratio(P/E ratio) and its growth potential.


  • Universal Banking: If a bank has the permission and the ability to carry on with all types of banking such as the normal commercial banking(Ex: giving loans, opening savings accounts), investment banking( offering investment schemes), Development banking and  Insurance facilities then that bank is said to have a system ofuniversal banking.


  • Unsecured Debt:When the bank gives a loan to a person or individual based only on the basis of reputation and status without even considering the source of repayment then that kind of a debt is called an unsecured debt. The common examples of this kind of debts are credit card debts.
Financial terms related to V
  • Value:The worth of a good, asset, security or any other thing measured in monetary terms is to know as its 


  • Variable cost:These are the recurring costs that tend to change proportionally with the change in quantity of units produced because this includes factors like charge of the labour, running time, distribution cost, cost of raw materials and many others.


  • Voting shares:When an individual holds an equity share of a company then it gives that shareholder the right to vote against a certain decision in the annual general meet (AGM).This is known as the voting shares.
Financial terms related to W
  • Wage:A fixed reward that an individual gets for completing or doing any job is called a wage. Wage can depend on many different factors such as the types of work, time of work and also the effort applied to dot the job. A wage which is given after a regular interval of time whether months, weeks or days is called a salary.


  • Waiver:In our day to day life the word waiver means the cutting or reduction of something generally related to the powers, similarly in financial world waiver is the action due to which a party or individual loses its legal advantages, position and in many cases the right to vote for a decision.


  • Wall Street:The headquarters of the US brokerages, share market and investment bank which is an eight block long street in the lower Manhattan in New York is known as the Wall Street and as a reference to this any locality with investment banks, companies, and big business organizations is called a wall street.


  • World trade organisation:The global organisation which establishes the laws and regulation for any kind of trade between any two parties or any two member nations is called World Trade Organisation and can be abbreviated as the T.O. The W.T.O was established on January 1, 1995 and has its headquarters located in Geneva, Switzerland.
Financial terms related to X
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