Arbitrage involves buying and selling two related assets in two different markets in order to leverage the price or rate differential between the markets into risk-free profits.
A price target is an estimated value of a security based on an individual investor’s or professional analyst's assessment. It is a representation of what the investor or analyst believes the security to be worth.
A forward contract is an agreement between two parties to conduct a transaction at a specified rate and on a specified future date. Often, they are used in the commodity or foreign exchange market to let companies hedge against future price changes.
The CBOE Volatility Index (also called the VIX) is an index designed to track the volatility of the United States stock market. Specifically, it aims to track the expected volatility of the S&P 500 through call and put options.
Tracking error is the variation between the performance of a portfolio and the performance of the portfolio’s benchmark over time. It’s calculated as the standard deviation of the difference of a sequence of portfolio returns and index returns.
In financial markets, a tick measures the smallest possible price fluctuation for any particular asset. One tick is worth a specific amount of money, and this amount—the tick size or tick value—varies according to the asset being traded.
Adjusted Closing Price
Adjusted closing price is the closing price adjusted for corporate actions such as dividend payouts, stock splits, or the issuance of more shares. While the closing price of a stock tells you how much investors were paying for shares at the end of a trading day, the adjusted closing price gives you a more accurate representation of the stock’s value.
A pip, which stands for either "percentage in point" or "price interest point," represents the basic movement a currency pair can make in the market. For most currency pairs—including, for example, the British pound/U.S. dollar (GBP/USD)—a pip is equal to 1/100 of a percentage point, or one basis point, and pips are counted in the fourth place after the decimal in price quotes.
A penny stock, more formally known as a microcap stock, is a share of a company that typically has a market capitalization of less than $300 million. Nanocap stocks, also a type of penny stock, are issued by companies that typically have a market capitalization of less than $50 million. Penny stocks usually trade for less than $5 per share.
A short position is a trading strategy where an investor aims to earn a profit from a falling share price. Investors can borrow shares from a brokerage firm in a margin account and sell them. Then, when the share price drops, they can buy the shares back at the lower price and return them to the broker, earning the difference in share price as profit
Brokerage Trade Confirmation
A brokerage trade confirmation is a financial document that reports the details of a trade completed through your account. It is issued by your brokerage after each trade; it is separate from your account statements.
The trade date is the specific day on which buying or selling a security—e.g., a stock—occurs. However, the trade date is not necessarily the same day as the settlement date, which is when the trade finalizes.
The 52-week high/low is a stock’s highest price per share and lowest price per share within the past 52 weeks. The high and low numbers are based on the daily closing share price. They do not reflect intraday highs or lows that may be reached.