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Investing glossary
Plain-English definitions of the terms used across BeStock stock pages.
Terms27
- 52-week range
- The lowest and highest price the stock has traded at over the past year.
- Analyst consensus
- The average recommendation across Wall Street analysts covering a stock, typically buy / hold / sell.
- Bollinger bands
- Bands drawn two standard deviations above and below a 20-day average. Price outside them marks an unusually stretched move.
- Days to cover
- How many days of average trading volume it would take short-sellers to buy back all their borrowed shares.
- Dividend yield
- Annual dividend payments divided by the current share price, as a percentage.
- Drawdown
- The fall from a previous peak to a later low, as a percentage.
- EPS
- Earnings per share: net profit divided by shares outstanding.
- Economic moat
- A durable competitive advantage that protects a company's profits from competitors.
- Fair value estimate
- An independent research firm's estimate of what a stock is worth based on projected cash flows, to compare against the market price.
- Free cash flow
- Cash a business generates from operations after paying for the equipment and facilities it needs to keep running.
- Implied earnings move
- The size of move options are pricing for the day after an earnings report. Compare it with the stock's actual past reactions to judge whether options look cheap or expensive.
- Implied volatility
- How large a price swing the options market is pricing in for a stock, expressed as a percentage. It varies a lot stock-to-stock and isn't a prediction of direction, just of magnitude.
- Institutional ownership
- The share of a company owned by large investors such as funds and pension plans, rather than individuals.
- MACD
- Moving Average Convergence Divergence: the gap between a fast and a slow average, compared with its own smoothed signal line.
- Market cap
- Share price multiplied by shares outstanding: the total value the market places on the company.
- Moving average
- The average closing price over a set number of days (such as 50 or 200), which smooths daily noise and shows the trend.
- Open interest
- The number of options contracts at a given strike and expiry that are currently outstanding (bought but not yet closed out or exercised).
- Operating margin
- Operating profit as a percentage of revenue: how much of each sales dollar is left after the costs of running the business.
- P/B ratio
- Price divided by book value (assets minus liabilities) per share.
- P/E ratio
- Price divided by earnings per share. How many dollars investors pay for each dollar of annual profit; higher usually means the market expects more growth.
- P/S ratio
- Market value divided by annual revenue. Useful when profits are small or negative, but it ignores margins.
- Price target
- An analyst's estimate of where a stock's price will be, usually over the next 12 months.
- RSI
- Relative Strength Index: a 0-100 momentum gauge. Readings above 70 are conventionally called overbought and below 30 oversold.
- Return on equity
- Net profit divided by shareholders' equity. High readings can also come from heavy buybacks or debt shrinking the equity base.
- Short interest
- The percentage of a company's available shares that have been sold short (borrowed and sold, betting the price falls).
- Short-sale volume
- Shares sold short during a trading day as a share of that day's total volume. It includes market-maker activity, so it is noisier than short interest.
- Volatility
- How much a price moves around. We quote 30-day realized volatility, annualized, from daily returns.