Reference
Glossary
The language of markets, defined plainly — the terms our coverage uses and what they actually mean.
A
B
- Bear Market
- A prolonged period of falling prices, conventionally a decline of 20% or more from a recent high. Like a bull market, it is a descriptive label rather than a precise measurement.
- Bitcoin
- The first cryptocurrency, launched in 2009, running on a proof-of-work blockchain with a supply capped at 21 million coins and issuance that halves roughly every four years.
- Blockchain
- A shared record of transactions maintained by many independent computers, where each block of entries is cryptographically linked to the one before it. Rewriting history therefore requires redoing everything after the change.
- Bond
- A loan to a government or company that pays interest and returns the principal at maturity. Bondholders rank ahead of shareholders if the issuer fails.
- Bridge
- A system for moving value between blockchains, typically locking an asset on one chain and issuing a representation on another.
C
- Capitulation
- A phase of heavy, indiscriminate selling in which holders give up regardless of price, often on unusually high volume.
- Carry Trade
- Borrowing in a low-interest currency to hold a higher-yielding one, aiming to earn the difference in rates.
- Circulating Supply
- The number of tokens currently available to trade, excluding those locked, reserved or not yet issued.
- Custody
- The safekeeping of assets on a client's behalf. Regulated custodians must segregate client assets from their own.
D
- DeFi
- Financial services — lending, trading, derivatives — built from smart contracts rather than intermediaries, with users retaining custody of their assets.
- Dividend
- A share of profits paid out to shareholders, usually in cash and often quarterly. Dividend yield expresses the annual payment as a percentage of the share price.
E
- Equity
- An ownership stake in a company. Shareholders have a claim on profits and assets after every creditor has been paid, which is why equity is riskier than the same company's debt.
- ETF
- A fund holding a basket of assets whose shares trade on an exchange like a single stock. Most track an index, though actively managed ETFs exist.
- Ethereum
- A blockchain designed to run programs — smart contracts — as well as move value. It moved from proof of work to proof of stake in 2022, and most DeFi and token activity has…
- Exchange
- A venue for trading assets. A centralised exchange holds customer funds and matches orders on its own systems; a decentralised exchange settles trades through smart contracts with users keeping custody.
F
- Forex
- The market for exchanging one currency for another. It trades over the counter between banks and brokers rather than on a central exchange, around the clock on weekdays.
- Futures
- A standardised contract to trade an asset at a set price on a future date. Crypto venues also offer perpetual futures, which never expire and use a funding rate to stay near the spot…
G
- Gas Fee
- The payment for the computation a blockchain transaction consumes, paid in the network's own currency and set by demand for limited block space.
- Guidance
- A company's own forecast of its coming results. In a central-bank context, forward guidance instead means signalling the likely path of interest rates.
I
- Index
- A rules-based measure of a group of assets, such as the S&P 500 or FTSE 100. Most are weighted by market capitalisation, so the largest constituents dominate the reading.
- Interest Rate
- The cost of borrowing money. The policy rate set by a central bank anchors the rates throughout an economy, from bond yields to mortgages.
- IPO
- The first sale of a company's shares to the public, after which they trade on an exchange.
L
- Layer 2
- A network built on top of a base blockchain that processes transactions separately and posts results back, reducing cost and congestion on the main chain.
- Leverage
- Using borrowed money to increase the size of a position relative to the capital committed. Ten-times leverage turns a 1% move in the asset into roughly a 10% move in the account.
- Liquidation
- The forced closing of a leveraged position when its collateral no longer covers losses. On crypto derivatives venues this is automatic and can happen within seconds.
- Liquidity
- How easily an asset can be bought or sold without moving its price much. Liquid assets have many willing buyers and sellers and tight spreads; illiquid ones can only be sold quickly at a…
- Liquidity Pool
- A pot of two or more tokens locked in a contract that traders swap against, with prices set by a formula rather than an order book. Depositors earn a share of the trading fees.
M
- Market Capitalisation
- Share price multiplied by the number of shares outstanding — or, for a cryptocurrency, price multiplied by circulating supply. It measures the total market value of what exists.
- Momentum
- The tendency of an asset's recent direction to persist, and the family of strategies built on that observation.
N
O
- On-Chain Analysis
- Studying public blockchain records — balances, transfers, active addresses, exchange flows — to describe how a network is being used.
- Order Book
- The live list of outstanding buy and sell orders at each price, showing how much would have to be bought or sold to move the price.
P
- Private Key
- The secret number that authorises transactions from an address. Possession of the key is possession of the assets.
- Proof of Work
- A consensus method in which participants compete to solve a computational puzzle to add the next block, making rewriting history expensive. Bitcoin uses it.
R
- Regulation
- The rules governing financial markets and the bodies that enforce them, such as the SEC in the United States, the FCA in the United Kingdom and SEBI in India.
S
- Self-Custody
- Holding your own keys rather than leaving assets with an exchange or custodian.
- Slippage
- The difference between the price expected when an order is placed and the price at which it actually fills. It grows with order size, thin liquidity and fast-moving markets.
- Smart Contract
- A program stored on a blockchain that runs automatically when its conditions are met, without an intermediary holding the assets.
- Stablecoin
- A token designed to hold a steady value against a reference, usually the US dollar. Most are backed by reserves of cash and short-term government debt; some instead rely on algorithms or crypto collateral.
- Staking
- Committing tokens to help secure a proof-of-stake network, earning newly issued tokens and fees in return. Misbehaving validators can have part of their stake destroyed.
T
- Token
- A digital asset issued on an existing blockchain rather than having its own. Tokens can represent governance rights, access to a service, a claim on something, or nothing in particular.
V
- Valuation
- An estimate of what an asset is worth, whether from multiples such as P/E, from discounted future cash flows, or from comparison with similar assets.
- Volatility
- How much a price moves around over time, usually measured as the standard deviation of returns. High volatility means larger swings in both directions, not a direction of travel.
- Volume
- The quantity of an asset traded over a period, usually a day. It measures participation, not direction: a large move on thin volume reflects fewer participants than the same move on heavy volume.
W
Y
- Yield
- The income an asset produces as a percentage of its price. For a bond held to maturity, yield to maturity also accounts for any gain or loss against the price paid.