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EBITDA
Earnings Before Interest, Taxes, Depreciation, and Amortization.
Read Full Definition & Formulas →Compound Interest
Interest calculated on initial principal plus accumulated interest.
Read Full Definition & Formulas →Price-to-Earnings (P/E)
Ratio for valuing a company measuring current share price relative to EPS.
Read Full Definition & Formulas →Discounted Cash Flow (DCF)
Valuation method estimating intrinsic value based on future cash flows.
Read Full Definition & Formulas →Yield Curve Inversion
Macro condition where short-term yields exceed long-term bond yields.
Read Full Definition & Formulas →Options Greeks
Mathematical sensitivities measuring option price sensitivity.
Read Full Definition & Formulas →Free Cash Flow (FCF)
Cash generated after subtracting expenditures for capital assets.
Read Full Definition & Formulas →Dividend Yield
Financial ratio measuring annual dividend payouts relative to stock price.
Read Full Definition & Formulas →Weighted Average Cost of Capital
Firm's blended cost of capital across equity and debt obligations.
Read Full Definition & Formulas →Enterprise Value (EV)
Comprehensive measure of a company's total economic valuation.
Read Full Definition & Formulas →Relative Strength Index (RSI)
Momentum oscillator measuring price velocity to evaluate overbought conditions.
Read Full Definition & Formulas →Quantitative Tightening (QT)
Central bank balance sheet runoff reducing liquidity in financial markets.
Read Full Definition & Formulas →All Financial Terms & Definitions
401(k) Contribution Limits
Statutory ceilings established annually by the IRS restricting total employee elective deferrals and employer contributions into defined-contribution plans.
Read Definition →Adjustable-Rate Mortgage
A home loan with an initial fixed interest rate period followed by periodic rate adjustments tied to a market benchmark index.
Read Definition →Annual Percentage Yield
The real rate of return earned on a deposit balance taking into account the effect of compounding interest over a year.
Read Definition →Beta Coefficient
A statistical measurement of the volatility or systematic risk of a security in comparison to the broader market portfolio.
Definition OverviewBitcoin
A decentralized peer-to-peer digital currency secured by cryptographic proof-of-work consensus without central authority control.
Read Definition →Bollinger Bands
A technical analysis tool defined by a set of trendlines plotted two standard deviations away from a simple moving average.
Definition OverviewCapital Gains Tax
A tax levied on the profit realized from the sale of non-inventory assets such as stocks, bonds, or real estate.
Read Definition →Certificate of Deposit
A savings product that earns a fixed interest rate on an initial lump-sum deposit for a predetermined time horizon.
Definition OverviewCertificate of Deposit Ladder
A fixed-income cash management strategy dividing capital across staggered CD maturity terms to maximize yield while preserving periodic liquidity.
Read Definition →Compound Interest
Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods.
Read Definition →Consumer Price Index
A monthly economic indicator published by the BLS measuring the average change over time in prices paid by consumers for a market basket of goods.
Read Definition →Debt Snowball Method
A debt-reduction strategy where a debtor pays off loans in order from the smallest balance to the largest.
Definition OverviewDebt-to-Income Ratio
The percentage of a borrower's gross monthly income that goes toward paying recurring debt obligations.
Definition OverviewDecentralized Finance
An umbrella term for financial applications and protocols built on blockchain networks without centralized intermediaries.
Read Definition →Discounted Cash Flow
A valuation method that estimates the intrinsic value of an investment based on its expected future cash flows discounted back to present value.
Read Definition →Dividend Yield
A financial ratio that shows how much a company pays out in dividends each year relative to its stock price.
Read Definition →Dollar-Cost Averaging
An investment strategy where an investor divides up the total amount to be invested across periodic purchases of a target asset.
Definition OverviewDonor-Advised Fund
A private fund administered by a 501(c)(3) public charity allowing donors to claim immediate tax deductions while advising grants over time.
Definition OverviewEBITDA
Earnings Before Interest, Taxes, Depreciation, and Amortization—a widely tracked metric of core operating profitability.
Read Definition →Emergency Fund
A cash reserve set aside specifically to cover unplanned financial emergencies such as medical bills or sudden job loss.
Read Definition →Enterprise Value
A comprehensive measure of a company's total market value, incorporating market cap, total debt, and subtracting cash reserves.
Read Definition →Federal Reserve Rate Path
The projected trajectory of benchmark federal funds interest rate adjustments set by the FOMC to balance inflation control and economic employment.
Read Definition →FICO Score
A proprietary credit score model created by the Fair Isaac Corporation to measure consumer creditworthiness.
Read Definition →Free Cash Flow
The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.
Read Definition →Free Cash Flow vs. EBITDA
A valuation comparison evaluating true discretionary cash generated after essential capital investments versus non-GAAP operating accounting earnings.
Read Definition →Gross Domestic Product
The total monetary value of all finished goods and services produced within a country's borders in a specific time period.
Definition OverviewHealth Savings Account
A triple tax-advantaged account designed for individuals enrolled in high-deductible health plans to save for medical expenses.
Definition OverviewHigh-Yield Savings Account
A deposit account paying significantly higher annual percentage yields than standard brick-and-mortar savings accounts.
Read Definition →Iron Condor
An options trading strategy using two puts and two calls to profit from low volatility in the underlying asset.
Definition OverviewIrrevocable Life Insurance Trust
A specialized trust that holds life insurance policies outside the gross estate to avoid federal estate taxes.
Definition OverviewNo terms currently indexed under J. New definitions added daily.
No terms currently indexed under K. New definitions added daily.
Layer 2 Rollup
A secondary scaling framework that bundles hundreds of off-chain transactions into a single cryptographic proof verified on the base blockchain.
Definition OverviewModern Portfolio Theory
A practical framework for selecting investments to maximize their overall expected return for a given level of risk.
Definition OverviewMortgage Points
Upfront fees paid directly to a mortgage lender at closing to permanently lower the interest rate on a home loan.
Read Definition →Moving Average Convergence Divergence
A trend-following momentum indicator showing the relationship between two exponential moving averages of an asset's price.
Read Definition →Moving Average Crossover
A technical trading strategy where two moving average lines with differing lookback periods intersect to trigger automated trend reversal signals.
Read Definition →No terms currently indexed under N. New definitions added daily.
Online Broker
A digital financial intermediary providing retail and institutional investors with order routing, research analytics, and trading tools across global markets.
Read Definition →Options Greeks
Mathematical risk measures (Delta, Gamma, Theta, Vega, and Rho) that quantify the sensitivity of options prices to underlying market variables.
Read Definition →Pattern Day Trader Rule
A FINRA regulatory designation requiring margin traders executing four or more intraday day trades within five business days to maintain at least $25,000 equity.
Read Definition →Price-to-Earnings Ratio
A valuation metric comparing a company's current share price to its per-share earnings.
Read Definition →Private Mortgage Insurance
An insurance policy that protects the mortgage lender if the borrower defaults, usually required with less than 20% down.
Definition OverviewProof-of-Stake
A blockchain consensus mechanism where network validators pledge native cryptocurrency tokens to secure and validate transactions.
Definition OverviewQuantitative Easing
An unconventional monetary policy whereby a central bank purchases large-scale financial assets to inject liquidity and lower long-term yields.
Definition OverviewQuantitative Tightening Mechanics
The operational balance sheet runoff mechanisms central banks utilize to shrink bond holdings and absorb excess money supply from commercial reserves.
Read Definition →Relative Strength Index
A momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions.
Read Definition →Required Minimum Distribution
The minimum amount that retirement plan owners must withdraw annually starting at statutory ages determined by federal law.
Definition OverviewRevocable Living Trust
A legal entity created to hold ownership of an individual's assets during their lifetime and pass them seamlessly outside probate.
Read Definition →Roth IRA Contribution Limits
Annual statutory caps and income phaseouts established by the IRS governing direct contributions to tax-free individual retirement accounts.
Read Definition →Roth IRA Conversion Ladder
A systematic strategy of converting Traditional retirement funds into Roth IRA balances to access principal penalty-free prior to age 59½.
Read Definition →Section 1031 Exchange
A provision under IRS code allowing an investor to defer paying capital gains taxes on an investment property by swapping it for another like-kind property.
Definition OverviewSequence of Returns Risk
The risk that the timing of market declines in early retirement will permanently impair portfolio longevity.
Definition OverviewSharpe Ratio
A mathematical ratio calculating the excess return of an investment asset per unit of volatility or standard deviation.
Definition OverviewSmart Contract
A self-executing computer program directly written into code that automatically enforces agreement terms on a decentralized ledger.
Read Definition →Step-Up in Basis
The readjustment of the cost basis of an inherited capital asset to its fair market value on the date of the decedent's death.
Read Definition →Tax-Loss Harvesting
The practice of selling securities at a loss to offset capital gains tax liabilities incurred elsewhere in the portfolio.
Read Definition →Traditional 401(k)
An employer-sponsored, defined-contribution personal pension account funded with pre-tax payroll deductions.
Read Definition →Traditional IRA vs. Roth IRA
A comparative tax framework contrasting upfront pre-tax deduction benefits with back-end tax-free retirement withdrawal privileges.
Read Definition →No terms currently indexed under U. New definitions added daily.
Volume-Weighted Average Price
A trading benchmark that represents the average price a security has traded at throughout the day, based on both volume and price.
Definition OverviewWash-Sale Rule
An IRS rule prohibiting an investor from claiming a tax deduction for a loss on a security if they purchase a substantially identical security within 30 days.
Read Definition →Weighted Average Cost of Capital
The average after-tax cost of a company's various capital sources, including common equity, preferred stock, and debt.
Read Definition →No terms currently indexed under X. New definitions added daily.
Yield Curve Inversion
An abnormal macroeconomic condition where shorter-term government bond yields exceed longer-term bond yields, historically preceding recessions.
Read Definition →No terms currently indexed under Z. New definitions added daily.
Every Definition Verified by Certified Practitioners
Financial terminology is rife with nuances that make or break trading decisions and tax filings. Our review board of CFA charterholders, CFP practitioners, and CPA accountants continuously stress-tests our formulas and examples against changing IRS rules and market conventions.
Meet the Editorial Review Board →