100 Must-Know Finance Terms

Fundamental lexicon explained,Glossary for finance beginners.

avatarTiger V
09-06

Understanding Non-Farm Payroll (NFP) and my Investment Philosophy

The Non-Farm Payroll (NFP) report is a key indicator of economic health, reflecting the number of jobs added or lost in the U.S. economy, excluding farming. Investors often closely monitor NFP data, as it provides insight into employment trends and can influence Federal Reserve monetary policy decisions. For instance, a rising unemployment rate might prompt the Federal Reserve to lower interest rates to stimulate economic growth, which could lead to higher bond prices and a weaker USD. Conversely, a strong NFP report may indicate a growing economy, but if inflation is also rising rapidly, the Fed might increase interest rates to cool down the economy. This could negatively impact the stock market. It's important to note, however, that NFP data is just one of many economic indicators. Inves
Understanding Non-Farm Payroll (NFP) and my Investment Philosophy

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avatarTiger_Academy
2023-12-27

Day67. Financial term | OTC

"OTC" stands for Over-the-Counter, which is a trading method conducted outside the formal securities exchange. In the OTC market, trading parties directly engage in transactions through phone calls, electronic trading platforms, or other means, rather than through a public exchange.This means that the OTC market is more decentralized compared to traditional securities exchanges.The OTC market is typically suitable for smaller or less liquid securities that do not qualify for listing on mainstream exchanges. It also includes companies that do not meet the listing requirements of exchanges or foreign companies trading in the United States.For example:Let's assume there is a startup company called X Tech, which, due to its unstable business, does not meet the conditions for listing on a mains
Day67. Financial term | OTC
avatarTiger_Academy
2023-12-26

Day66. Financial term | Delisting

Delisting refers to the formal removal of a company's stock from a securities exchange, ceasing its trading on the exchange. Delisting typically occurs due to a company facing financial difficulties, declining performance, violation of exchange regulations, or other serious issues.Delisting can happen on different securities exchanges, such as Nasdaq, New York Stock Exchange (NYSE), etc. The reasons for delisting are varied, but they are often related to the company's financial condition and business performance. When a company faces bankruptcy, reduced assets, excessive debts, or sustained losses, the exchange may decide to delist its stock.The delisting process usually follows regulations and procedures set by the exchange. The exchange may issue announcements informing investors about t
Day66. Financial term | Delisting

Day70. Financial term | Combination options

Combination options are an advanced option trading strategy that involves combining multiple option contracts to construct a portfolio with specific risk and return objectives. This strategy can be used for risk hedging, increasing returns, or seeking investment opportunities under specific market conditions.In simple terms, combination options involve strategically combining option contracts to achieve investment goals in various market scenarios.Common combination options strategies typically include:Protective Put: Investors simultaneously hold stocks and a corresponding quantity of put options to protect their stock investment from price declines.Covered Call: Investors hold stocks while selling call options, primarily to reduce the risk for stockholders and generate additional premium
Day70. Financial term | Combination options

Day68. Financial term | Brokerages

Brokerages play a crucial role in the financial markets, acting as intermediaries between buyers and sellers, facilitating trading and investments for investors. Brokerages can be individuals or companies that offer buying and selling of financial assets as a service to clients, earning commissions or transaction fees in return.Simply put, brokerages are intermediary institutions in the financial markets that provide buying and selling services for financial assets to investors and earn commissions from these transactions.The main responsibilities of brokerages include providing market information, executing trade orders, and offering investment advice to clients. They typically offer investors a trading platform, allowing them to trade on stock exchanges or other financial markets. These
Day68. Financial term | Brokerages

Day69. Financial term | ESG

ESG investment is an investment approach that incorporates Environmental, Social, and Governance factors into investment decisions. It emphasizes focusing on a company's social responsibility, environmental protection, and governance efficiency while seeking profitability, aiming to achieve sustainable long-term investment returns.The fundamental principle of ESG investment is the belief that excellent environmental and social practices, along with strong corporate governance, can enhance a company's value and performance, reduce risks, and promote sustainable economic growth.By investing in companies that perform well in ESG factors, investors can encourage these companies to improve their business practices while also generating more robust investment returns for themselves.For example:C
Day69. Financial term | ESG