Trading Vocab and Abbreviations

Question 1

3p data

Answer 1

Third-party data; alternative data sources that track intra-quarterly data points from credit cards, emails, etc.

Question 2

AH

Answer 2

After Hours

Question 3

alpha

Answer 3

returns exceeding the benchmark

Question 4

ARG

Answer 4

Accelerating Revenue Growth

Question 5

Backwardation

Answer 5

commodities term:
When spot prices are sitting above forward pricing, indicating currently tight markets

Question 6

B/O or BO

Answer 6

Break-Out

Question 7

BTPS

Answer 7

Italian Treasury Bonds of any duration

Question 8

Cable

Answer 8

forex slang for the GBP/USD currency pair, originating from 19th century when exchange rate was transmitted across the Atlantic via underwater cable.

Question 9

CL or /CL

Answer 9

crude oil

Question 10

Contango

Answer 10

Opposite of backwardation (re: commodities):
When the futures prices of a commodity are higher than the spot price, typically due to expectations of rising prices in the future.

Question 11

Current Ratio

Answer 11

current assets / current liabilities

Benjamin Graham wanted the current ratio to e at least 2.0.

The higher the current ratio, the better able a company is to pay its short-term obligations.

Question 12

Distribution Day(s)

Answer 12

Happens when there’s a significant decline in the Nasdaq or S&P 500 on higher volume than was seen in the previous session.

IBD defines a “significant decline” as a drop of more than 0.2%, with no rounding up. Four or five distribution days over several weeks nearly always signal that stocks have topped and are heading for a downturn. IBD’s research has determined that investors shouldn’t count distribution days after 25 trading days have passed.At that point, those days of liquidation have become irrelevant.

A distribution day also falls out of an index’s count after the index climbs 5% above that distribution day’s close. IBD has developed this rule on the premise that when an index rallies and extends itself from a distribution day, it’s showing the strength to overcome high-volume selling. Some drops in higher volume don’t carry as much weight. Distribution days in this camp include those that come after a holiday, leading to an easy volume comparison.

Plus, watch for those sessions on Wall Street where turnover is boosted by heavy options-expiration trading.Options-expiration days fall on the third Friday of every month. If that Friday is a holiday, expirations move to Thursday.

Question 13

EOD

Answer 13

End of Day

Question 14

ER

Answer 14

Earnings Report

Question 15

GC or /GC

Answer 15

Gold

Question 16

HG or /HG

Answer 16

Copper / copper futures

Question 17

HOD or nHOD

Answer 17

High of Day or new High of Day

Question 18

Interest Coverage Ratio

Answer 18

EBIT/Total Interest Incurred

This is a financial metric used to determine how easily a company can pay interest on its outstanding debt. It’s calculated by dividing a company’s earnings before interest and taxes (EBIT) by its total interest incurred. A higher ratio means it should be easier for the company to pay its debt interest.