Risk Statistics
This is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole (usually the S&P 500).
What is Beta?
This is a retirement savings plan offered by many American employers that has tax advantages for the saver. It is named after a section of the U.S. Internal Revenue Code (IRC).
What is 401(k)?
This term means that an investor, a professional money manager, or a team of professionals is tracking the performance of an investment portfolio and making buy, hold, and sell decisions about the assets in it.
What is Active Management?
This is an order to buy or sell a stock at the best available price. Generally, this type of order will be executed immediately.
What is a Market Order?
This option is a derivatives contract giving the owner the right, but not the obligation, to buy a specified amount of an underlying security at a specified price within a specified time.
What is a Call?
This is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market return over some period.
What is Alpha?
In a retirement plan this term means ownership. This means that each employee will own a certain percentage of their account in the plan each year.
What is "Vesting"?
This is a style of management associated with mutual and exchange-traded funds (ETF) where a fund's portfolio mirrors a market index.
What is Passive Management?
This is a type of order to purchase or sell a security at a specified price or better.
What is a Limit Order?
This is the number of shares that one Option Contract typically represents.
What is 100 shares?
This measurement in finance is often used as a measure of a relative riskiness of an asset.
What is Standard Deviation in finance?
This is a federal law that protects the retirement assets of American workers.
What is ERISA?
This is a stock-buying strategy that looks for companies that are expected to grow at an above-average rate compared to their industry or the broader market.
What is Growth Style investing?
This is an order to buy or sell a stock once the price of the stock reaches a specified price, known as the stop price.
What is a Stop Order? (Stop Loss Order)
This is a risk-management strategy using options contracts that investors employ to guard against a loss in a stock or other asset.
What is a Protective Put?
For the cost of the premium, protective puts act as an insurance policy by providing downside protection from an asset's price declines.
In investing, this is generally interpreted as the percentage of a fund or security's movements that can be explained by movements in a benchmark index.
What is R-Squared?
This number is the maximum amount that a person can contribute to a ROTH IRA in a year.
What is $6,000?
This is an investment strategy that involves picking stocks that appear to be trading for less than their intrinsic or book value.
What is Value Style investing?
This is an order to buy or sell a stock that combines the features of a stop order and a limit order.
What is a Stop Limit Order?
Once the stop price is reached, a stop-limit order becomes a limit order that will be executed at a specified price (or better)
These options are different from American options in that they can only be exercised at the end of their lives on their expiration date.
What are European Options?
This ratio compares the return of an investment with its risk. It's a mathematical expression of the insight that excess returns over a period of time may signify more volatility and risk, rather than investing skill.
What is Sharpe Ratio?
This is the age a person must start taking Required Minimum Distributions from their Traditional IRA.
What is 72?
These terms represent the 3 main company sizes.
What is Small Cap, Mid-Cap, and Large Cap?
This is a stop or stop limit order in which the stop price is not a specific price. Instead, the stop price is either a defined percentage or dollar amount, above or below the current market price of the security.
What is a Trailing Stop Order?
These strategies use various combinations of buying and selling different options for the desired risk-return profile.
What are Options Spreads?
Spreads are constructed using vanilla options, and can take advantage of various scenarios such as high- or low-volatility environments, up- or down-moves, or anything in-between.