10Q: Quarterly report of corporate performance filed with the SEC by a public company for the first three quarters of its fiscal year. (This is required by law.)
ADX (Average Directional Index): An indicator used in technical analysis as an objective value for the strength of trend. ADX is non-directional so it will quantify a trend’s strength regardless of whether it is up or down. ADX is usually plotted in a chart window along with two lines known as the DMI (Directional Movement Indicators). ADX is derived from the relationship of the DMI lines.
AON (All or None): A condition used on a buy or sell order to instruct the broker to fill the order completely or not at all. If there is insufficient supply to meet the quantity requested by the order then it is canceled at the close of the market.
Ask/Offer Price: The price a seller is willing to accept for a security, also known as the offer price. Along with the price, the ask quote will generally also stipulate the amount of the security willing to be sold at that price.?.
ATR (Average True Range): A measure of volatility introduced by Welles Wilder in his book: New Concepts in Technical Trading Systems.
The true range indicator is the greatest of the following:
- current high less the current low.
- the absolute value of the current high less the previous close.
- the absolute value of the current low less the previous close.
Arbitrage: The simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time.
Bid Price: The price a buyer is willing to pay for a security. This is one part of the bid with the other being the bid size, which details the amount of shares the investor is willing to purchase at the bid price. The opposite of the bid is the ask price, which is the price a seller is looking to get for his or her share.
Bid-Ask Spread: The amount by which the ask price exceeds the bid. This is essentially the difference in price between the highest price that a buyer is willing to pay for an asset and the lowest price for which a seller is willing to sell it.
Bond: A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used by companies, municipalities, states and U.S. and foreign governments to finance a variety of projects and activities.
Breadth thrust indicator: A technical indicator used to ascertain market momentum. The breadth thrust indicator is computed by calculating the number of advancing issues on an exchange such as the NYSE divided by the total number of issues (advancing + declining) on it, and generating a 10-day moving average of this percentage. The indicator signals the start of a potential new bull market when it moves from a level of below 40% (indicating an oversold market) to above 61.5% within any 10-day period, a sentiment shift that occurs only rarely.
Bull market: A financial market of a group of securities in which prices are rising or are expected to rise. The term “bull market” is most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, currencies and commodities.
CAN SLIM: CAN SLIM is a system for selecting stocks that was created by Investor’s Business Daily founder, William J. O’Neil. Each letter in the acronym stands for a key factor to look for in a company. Also referred to as “C-A-N-S-L-I-M” or “CANSLIM”.
CCI: Commodity Channel Index. An oscillator used in technical analysis to help determine when an investment vehicle has been overbought and oversold. The Commodity Channel Index, first developed by Donald Lambert, quantifies the relationship between the asset’s price, a moving average (MA) of the asset’s price, and normal deviations (D) from that average.
CD: Certificate of Deposit is a savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years.
Channels: The technical range between support and resistance levels that a stock price has traded in for a specific period of time.
Chop: When there is no direction, just random pops and drops as the moving averages are tight.
Coefficient: A number or symbol multiplied with a variable or an unknown quantity in an algebraic term.
Coil: A V-shaped reversal bounce which may or may not have follow-through; often referred to the stochastic (i.e.: MSFT 20 band coil 1 minute stochastic, means MSFT is taking a V-shaped bounce through the 20 band). Trigger can be a coil that crosses the stochastic back up.
Coupon: The interest rate stated on a bond when it’s issued. The coupon is typically paid semiannually. This is also referred to as the “coupon rate” or “coupon percent rate”.
DIA: Shares in a trust representing all 30 stocks in the Dow Jones Industrial Average. Diamonds trade on the American Stock Exchange. ‘Diamonds trust’ Mirrors YM futures.
DAX: The most widely used German index.
Debt ratio: A ratio that indicates what proportion of debt a company has relative to its assets. It is calculated by dividing total debts by total assets.
Derivatives: Instruments, such as options and futures contracts, which derive their value from the value of an underlying security, group of securities, or an index.
Dividend: Payments made by a corporation to its shareholders (distribution of earnings). The amount you’ll receive is based on the number of shares you own.
Dividend yield: An indication of the income generated by a share of stock. Dividend yield is calculated as annual dividends per share divided by price per share.
Doji: A candle covering a large price range, but starting and ending at the same price. It comes after a series of uptrend or downtrend candles and reverses trend.
E-Minis: An electronically traded futures contract on the Chicago Mercantile Exchange that represents a portion of the normal futures contracts. E-mini contracts are available on a wide range of indexes such as the Nasdaq 100, S&P 500, S&P MidCap 400 and Russell 2000.
ECN: Electronic Communication Network. An electronic system that attempts to eliminate the role of a third party in the execution of orders entered by an exchange market maker or an over-the-counter market maker, and permits such orders to be entirely or partly executed.
EMA: Exponential Moving Average. A type of moving average that is similar to a simple moving average, except that more weight is given to the latest data. The exponential moving average is also known as “exponentially weighted moving average”.
EPS: Earnings per share. The portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability.
ETF: Exchange-Traded Fund is a security that tracks an index, a commodity, or a basket of assets like an index fund, but trades like a stock on an exchange. ETF?s experience price changes throughout the day as they are bought and sold.
FIBS: Fibonacci Numbers. Not used regularly in the PureTick trading methodology but you may hear references specifically related to the 50% fib.
Float: The total number of shares publicly owned and available for trading. The float is calculated by subtracting restricted shares from outstanding shares.
Foregone Earnings: Foregone earnings are the difference in earnings or performance between what is actually achieved and what could have been achieved with the absence of specific fees, expenses or lost time. Forgone earnings represent the investment capital that the investor spent on investment fees. The assumption is that if the investor had been exposed to lower fees, he or she would have generated a better return. This term is often used when referring to management fees or other expenses paid to mutual funds, exchange-traded funds, or other pooled investment vehicles.
Forex: The market in which currencies are traded. The forex market is the largest, most liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world.
Futures: A financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash. The futures markets are characterized by the ability to use very high leverage relative to stock markets.
Fundamental analysis: A method used to evaluate the worth of a security by studying the financial data of the issuer. It scrutinizes the issuer’s income and expenses, assets and liabilities, management, and position in its industry. In other words, it focuses on the “basics” of the business.
GAP: A gap is a break, space or ?gap? between prices on a chart that occurs when the price of a futures contract makes a sharp move up or down. This price movement must occur when the cash markets are closed between 4:00 PM EST and 9:30 AM EST. For example, the YM closes at 12,394 at 4:00 pm and then opens at 12,452 at 9:30 AM the next day. The difference between the closing price and the opening prices is 58 points (or ticks) and in this case is a ?gap UP?. Gap traders would be looking to short this gap up.
Goodwill: An account that can be found in the assets portion of a company’s balance sheet. Goodwill can often arise when one company is purchased by another company. In an acquisition, the amount paid for the company over book value usually accounts for the target firm’s intangible assets.
Guidance: In financial reporting, guidance is a publicly traded corporation’s official prediction of its own near-future profit or loss, stated as an amount of money per share. Guidance is usually given in a quarterly report to forecast the corporation’s performance in the next quarter. Guidance is an aid to financial analysts and the stock market in valuing the corporation, and helps prevent overvaluation.
GTC: Good ?Til Close (originally Good ?Til Cancelled). An order to buy or sell a security at a set price that is active until the investor decides to cancel it or the trade is executed. If an order does not have a good-’til-canceled instruction then the order will expire at the end of the trading day the order was placed.
Head-fake: When a market maker attempts to place bids and offers in such a way as to make other traders think a stock is moving in a direction that it really isn’t.
Hedge/Hedging: Hedge is an investment that is taken out specifically to reduce or cancel out the risk in another investment. The term is a shortened form of “hedging your bets”, a gambling term. A lot of EFT’s are used for hedging.
Hedge fund: A private investment fund or pool that trades and invests in various assets such as securities, commodities, currency, and derivatives on behalf of its clients, typically wealthy individuals. Some Commodity Pool Operators operate hedge funds.
Implied volatility: The volatility of a futures contract, security, or other instrument as implied by the prices of an option on that instrument, calculated using an options pricing model.
In options: A strategy involving the use of one open position to protect another.
Indemnify: Secure against hurt loss or damage as in an indemnification agreement in a corporation.
Intraday: Within the current day.
IBD: Investors Business Daily. Print and web publication for the research of stocks.
IOC: Immediate or Cancel. An order requiring that all or part of the order be executed immediately after it has been brought to the market. Any portions not executed immediately are automatically cancelled. IOC orders are available on the Order Entry Bar (Market Depth Window) under “TIF” at the very bottom. Route must be set to DART.
IRA: A type of Individual Retirement Annuity in which contributions are made with after-tax (non-deductible) dollars. If certain requirements are met, earnings accumulate tax-free, and no federal income tax is levied when qualifying distributions are taken from the plan.
ISM Services: Institute of Supply Management. There are two main indexes: manufacturing & services. They are monthly gauge of business activity based principally on the purchase of supplies for use in manufacturing and services as well as measuring various features such as prices, wages etc. They are typically a moderate impact report. The FED uses ISM as one of its inflation indexes.
jtHMA: Hull Moving Average. This is a smoothing moving average that displays the trend in blue for up and red for down. This indicator is used as further support in establishing a short term trend or momentum change.
January Effect: A general increase in stock prices during the month of January.
Keltner Channel: This is used to predict overbought/oversold conditions as well as the trend of the market. This oscillation indicator used in the 3 minute chart provides for a couple of different PureTick trade setups as well as exit strategies. A ?Keltner Day? is when the market moves up and down tagging each side of the Keltner bands with no real trend to direction. Oftentimes this occurs during narrow range trading days.
Price action: The movement of a security’s price. Price action is encompassed in technical and chart pattern analysis, which attempt to find order in the sometimes seemingly random movement of price. Swings (high and low), tests of resistance and consolidation are some examples of price action.
Limit order: An order to buy a stock at or below a specified price or to sell a stock at or above a specified price. For instance, you could tell a broker, “Buy me 100 shares of XYZ Corp at $8 or less” or “sell 100 shares of XYZ at $11 or better.” The customer specifies a price and the order can be executed only if the market reaches or betters that price. It is a conditional trading order designed to avoid the danger of adverse unexpected price changes.
Liquid Asset: An asset that can be converted into cash quickly and with minimal impact to the price received. Liquid assets are generally regarded in the same light as cash because their prices are relatively stable when they are sold on the open market.
MACD: A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the “signal line”, is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.
Market capitalization: The total market value of a company or stock. Market and capitalization is calculated by multiplying the number of shares by the current market price of the shares.
Market Order: Fills your order at the current market price on the tape. There can be slippage on your fill as with all market orders, sometimes favorable, sometimes unfavorable. This order type is used with a specific type of room trade call.
MIT: Market If Touched order. This executes a market order if the current price reaches the specified level. This order type behaves as if you yourself were watching the prints and instantaneously executed an order at the current market price when your price target was hit.
MOC: Market on close. A type of order which requires that an order be executed at or near the close of trading day on the day the order is entered. A MOC order, which can be considered a type of day order, cannot be used as part of a GTC order.
Momentum Indicator: Study that measures a security’s rate-of-change and displays it as a ratio. The ongoing plot line moves above and below 100. By looking for divergences, centerline crossovers and extreme readings, bullish and bearish interpretations are found. See rate of change for percentage of this study. See chart configuration under day trading notes.
Money Flow: Study indicator calculated by averaging the high, low, and closing prices, and multiplying by the daily volume. Comparing that result with the number for the previous day tells you whether money flow was positive or negative for the current day. Positive money flow indicates buying pressure. Negative money flow indicates selling pressure.
Money Flow Index: Study that compares “positive money flow” to “negative money flow.” Compare this indicator to price in order to identify the strength or weakness of a trend. The MFI is measured on a 0 – 100 scale and is usually calculated using a 14 day period. It is related to the Relative Strength Index, but where the RSI only incorporates prices, the Money Flow Index also accounts for volume.
Moving Average (MA/SMA): Moving average is a standard or exponential moving average line. This moving average is used for a number of different trade strategies, including retracement entries, support and resistance, etc.
NASDAQ: A computerized system that facilitates trading and provides price quotations on more than 5,000 of the more actively traded over the counter stocks. Created in 1971, the Nasdaq was the world’s first electronic stock market. Stocks on the Nasdaq are traditionally listed under four or five letter ticker symbols. If the company is a transfer from the New York Stock Exchange, the symbol may be comprised of three letters.
NAV: The value of a collective investment fund based on the market price of securities held in its portfolio. Units in open ended funds are valued using this measure. Closed ended investment trusts have a net asset value but a separate market value. NAV per share is calculated by dividing this figure by the number of ordinary shares. Investment trusts can trade at net asset value or their price can be at a premium or discount to NAV.
NBBO: National Best Bid or Offer. NBBO is the bid and ask the average person will see. Day traders usually use Level 2 market maker screens to see ALL the bids and offers for a particular stock. The NBBO is updated throughout the day to show the highest and lowest offers for a security in all exchanges and market makers.
NQ’s: NASDAQ 100 E-minis Futures.
OBV: On Balance Volume study. A method used in technical analysis to detect momentum, the calculation of which relates volume to price change. OBV provides a running total of volume and shows whether this volume is flowing in or out of a given security. This indicator was developed by Joe Granville.
OCO: One cancels other order is an order stipulating that if one part of the order is executed, then the other part is automatically canceled.
Options: An option on a futures contract gives the holder the right to enter into a specified futures contract. If the option is exercised, the initial holder of the option would enter into the long side of the contract and would buy the underlying asset at the futures price. A short option on a futures contract lets an investor enter into a futures contract as the short who would be required to sell the underlying asset on the future date at the specified price.
Oscillator: A technical analysis tool that is banded between two extreme values and built with the results from a trend indicator for discovering short-term overbought or oversold conditions. As the value of the oscillator approaches the upper extreme value the asset is deemed to be overbought, and as it approaches the lower extreme it is deemed to be oversold.
Par value: The face value of a bond. What confuses many people is that the par value is not the price of the bond. A bond’s price fluctuates throughout its life in response to a number of variables (more on this later). When a bond trades at a price above the face value, it is said to be selling at a premium. When a bond sells below face value, it is said to be selling at a discount.
PARE: Means to scale out of a position, e.g.: if you have 10 cars, pare (out) would be to sell a partial amount at higher increments, such as 5 shares out of 12,400 and 5 shares out of 12,405.
Pivot: Specific area in the market where prices tend to pause and sometimes even reverse.
Point: One increment in price movement of the YM is 1 point. 1 point is equal to $5.00. Points are commonly referred to as ?ticks?, i.e., ?I hit my first target of 10 ticks on this trade.?
Program trading: Computerized stock trades involving the purchase or sale of a basket of 15 or more stocks generally with a total market value of USD 1 million or more, using metrics and algorithms based on market analysis and experience.
Pullback: A falling back of a price from its peak. This type of price movement might be seen as a brief reversal of the prevailing upward trend, signaling a slight pause in upward momentum.
PE: Price/Earnings Ratio. A valuation ratio of a company’s current share price compared to its per-share earnings
PEG Payback Period: A key ratio that is used to determine the time it would take for an investor to double their money in a stock investment. The price-to-earnings growth payback period is the time it would take for a company’s earnings to equal the stock price paid by the investor. A company’s PEG ratio is used rather than their price-to-earnings ratio because it is assumed that a company’s earnings will grow over time.
Premise: to set forth beforehand as an introduction or a postulate; to offer as a premise in an argument. In stocks: to research/discuss before making a trade.
Profit margin: A ratio of profitability calculated as gross earnings divided by revenues (or, said another way, gross profits divided by sales). It measures how much out of every dollar of sales a company actually keeps in earnings. Profit margin is very useful when comparing companies in similar industries. A higher profit margin indicates a more profitable company that has better control over its costs compared to the competitors in the industry. Profit margin is displayed as a percentage; a 20% profit margin, for example, which means that the company has a net income of $0.20 for each dollar of sales.
Rally: A sudden, significant rise in the price of an individual security or in the market as a whole.
Rate of change: Rate of Change is the speed at which a variable changes over a specific period of time. Rate of change is often used when speaking about momentum. It can generally be expressed as a ratio between a change in one variable relative to a corresponding change in another. Graphically, the rate of change is represented by the slope of a line
Reit Fund: Real Estate Investment Trust.
Relative Strength RSI: Study in direct pro. Related to the Money Flow Index, but incorporates only prices, not volume. RSI is plotted on a vertical scale from 0 to 100. Values above 70 are considered overbought and values below 30, oversold. When prices are over 70 or below 30 and diverge from price action, a warning is given of a possible trend reversal.
Relative Volatility Index: Study used to measure the direction of volatility. RVI is identical to the Relative Strength Index, except that it does not measure price as an indicator of market strength. RVI is plotted on a vertical scale from 0 to 100. Values above 50 indicate an increase in volatility (rapid changes in stock).
Resistance: The price at which a stock or market can trade, but not exceed, for a certain period of time
ROE: Return on equity. The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested.
ROTH IRA: An individual retirement plan that bears many similarities to the traditional IRA, but contributions are not tax deductible and qualified distributions are tax free. Similar to other retirement plan accounts, non-qualified distributions from a Roth IRA may be subject to a penalty upon withdrawal.
RSI: Relative Strength Index. A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset.
Scalping: Trading strategy that attempts to make many profits on small price changes. Traders who implement this strategy will place anywhere from 10 to a couple hundred trades in a single day in the belief that small moves in stock price are easier to catch than large ones.
Secondary offering: The issuance of new stock for public sale from a company that has already made its initial public offering (IPO). This can also be defined as a sale of securities in which one or more major stockholders in a company sell all or a large portion of their holdings. The proceeds of this sale are paid to the stockholders that sell their shares. Often, the company that issued the shares holds a large percentage of the stocks it issues.
Short: The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value.
Short Interest: The total number of shares of a security that have been sold short by customers and securities firms.
Short Squeeze: A situation in which a lack of supply and an excess demand for a traded stock forces the price upward.
?Sleeping with?: When you are ?sleeping with? a stock, you are holding an open stock position overnight.
SMA: A simple moving average is formed by computing the average (mean) price of a security over a specified number of periods. While it is possible to create moving averages from the Open, the High, and the Low data points, most moving averages are created using the closing price. For example: a 5-day simple moving average is calculated by adding the closing for the last 5 days and dividing the total by 5.
Specialist: A member of an exchange who acts as the market maker to facilitate the trading of a given stock. The specialist holds an inventory of the stock, posts the bid, and asks prices, manages limit orders and executes trades.
Spread: The difference between the bid and the ask price of a security or asset.
Squawk box: An intercom speaker often used on brokers’ trading desks in investment banks and stock brokerages. A squawk box allows a firm’s analysts and traders to communicate with the firm’s brokers.
Support: The price level which, historically, a stock has had difficulty falling below. It is thought of as the level at which a lot of buyers tend to enter the stock.
-$SPX: S&P 500 Index.
Standard Deviation: A statistical study that provides a good indication of volatility. It measures how widely values (closing prices for instance) are dispersed from the average. The larger the difference between the closing prices and the average price, the higher the standard deviation will be and the higher the volatility. The closer the closing prices are to the average price, the lower the standard deviation, and the lower the volatility.
Stick: $1/share.
Sticks 5′S Levels: stock prices when they reach increments of 5, subtract .60 and add .60 to the level for the sticky 5′s range, e.g.: at $55.00 – 54.40 x 55.60 is the sticky 5′s range, 24.40 x 25.60 is the sticky 5′s range, 9.40 x 10.60 is the sticky 5′s range) these levels should be considered additional support and resistance levels especially when they test the first time on wider channel panics.
Stochastic (slow): The Stochastic Slow indicator calculates the location of a current price in relation to its range over a period of bars. Stochastics are used to help identify turning points. One of the PureTick trade entry methods is to use the 3 minute Stochastics as entry and exit signals when the indicator is oversold and overbought, respectively.
Stochastic Oscillator: A technical momentum indicator that compares a security’s closing price to its price range over a given time period. The oscillator’s sensitivity to market movements can be reduced by adjusting the time period or by taking a moving average of the result.
Syndicate pricing: It’s an IPO or Secondary pricing.
Synergy: The idea that the value and performance of two companies combined will be greater than the sum of the separate individual parts.
Tape: Time & Sales or Ticker. This lists trades that have actually occurred. Check with your platform provider to ascertain whether this is available as it is highly recommended for use with PureTick trading methodology.
Technical analysis: Study of charts, moving averages, volume.
TICK: Upward or downward price movements in a security or index. This is not to be confused with a TICK CHART or the TICK INDEX. In the case of the DOW (YM) futures market, a tick is equal to 1 point.
$TICK: Often referred to as ?ticks? in the room. This is a market internals indicator, like the advance declines. The ticks represent the number of stocks trading on an uptick minus the number of stocks trading on a downtick. High readings are bullish, negative reading are bearish.
TICK CHART: A ?trades transacted? based price chart; a new candle is created every time X number of trades is transacted. The 133 tick chart is a standard chart used with the PureTick methodology for concise trade entries and sometimes, exits.
TIGHTING/TIGHT CHANNELS: this refers to the moving averages charts, as the 5 and 15-period simple moving averages indicated the trend channel.
Time Sales: Research public trades executed that day (or up to five trading days prior). Uptick transactions are in green, red are downtick. Prints are updated at the bottom.
Total/market capitalization: A measure of a public company’s size. Market capitalization is the total dollar value of all outstanding shares. It’s calculated by multiplying the number of shares times the current market price. This term is often referred to as “market cap”.
Trade deficit: a negative balance of trade in which a country imports more than it exports.
Trade lingo: BTO = Buy to open, BTC = Buy to close, STO = Sell to open, STC = Sell to close, SSHORT=Sell Short.
Trailing Stop: A stop-loss order set at a percentage level below the market price – for a long position. The trailing stop price is adjusted as the price fluctuates. The trailing stop order can be placed as a trailing stop limit order, or a trailing stop market order.
Trend: The general direction of a market or of the price of an asset. Trends can vary in length from short, to intermediate, to long term. If you can identify a trend, it can be highly profitable, because you will be able to trade with the trend.
TRIN: Short for TRaders INdex. A technical analysis indicator calculated by taking the advances-to-declines spread and dividing that by the volume of advances to declines.
Triple Witching: An event that occurs when the contracts for stock index futures, stock index options and stock options all expire on the same day. Triple witching days happen four times a year on the third Friday of March, June, September and December.
TTW: PureTick.com abbreviation for: Trades That Work!!
TTW ADEAutoPivots: Plots intraday resistance (R1-3) and support (S1-3) levels, the daily pivot and the high, low, and close of the previous day.
TTW ADESaveSettle: Trade station indicator used in conjunction with the TTW ADEAutoPivots to plot the intraday S/R, etc. levels. This indicator is used daily.
Upgrades/Downgrades: Updated every 20 minutes in direct web platform.
Uptick: A transaction occurring at a price above the previous transaction. In order for an uptick to occur, a transaction price must be followed by an increased transaction price. This term is commonly used in reference to stocks, but it can also be extended to commodities and other securities.
VIX: The ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIX is a widely used measure of market risk and is often referred to as the “investor fear gauge”.
Volatile: characterized by or subject to rapid or unexpected change.
Volatility: A statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly: the higher the volatility, the riskier the security.
Volume Avg: The volume average indicator plots a N-bar average of the volume overlaid on the current volume. Used in the 3 minute chart.
Volume Plus: Study shows the number of shares traded in a stock during a given period. Red Candlestick – Indicates a negative change in volume for the unit of time selected. Green Candlestick – Indicates a positive change in volume for the unit of time selected. Blue Candlestick – Indicates no change in volume for the unit of time selected.
VWAP: Volume Weighted Average Price, which is calculated by dividing the value of trades by the volume over a given period. A closing 10 minute VWAP is used to set closing prices on the order book.
Weekdays: Most stocks seem to gap down Friday evening.
Weekend Effect: A common occurrence in which stock prices tend to be negative Friday through Monday. 69% True verified with charts.
Wiggle: Tick against your position (when all the other charts are still going with your trend entry).
Williams %R: Much like Stochastics, Williams’s %R is useful for measuring overbought and oversold stock levels. The scale ranges from 0 to -100 with readings from 0 to -20 considered overbought, and readings from -80 to -100 considered oversold. Typically, Williams’s %R is calculated using 14 periods and can be used on intraday, daily, weekly, or monthly data.
Window dressing: A strategy used by mutual fund and portfolio managers near the year or quarter end to improve the appearance of the portfolio/fund performance before presenting it to clients or shareholders. To window dress, the fund manager will sell stocks with large losses and purchase high flying stocks near the end of the quarter. These securities are then reported as part of the fund’s holdings.
YM: The DOW mini-contract symbol (TradeStation). The symbol is notated as: YM(month)(year), e,g,, YMU11; U=the expiration month of the contract and the 11=the last 2 digits of the year.
YTM: Yield to Maturity. The rate of return anticipated on a bond if it is held until the maturity date. YTM is considered a long-term bond yield expressed as an annual rate. The calculation of YTM takes into account the current market price, par value, coupon interest rate and time to maturity. It is also assumed that all coupons are reinvested at the same rate. Sometimes this is simply referred to as “yield” for short.
