Glossary

Section 212 allows taxpayers to deduct miscellaneous itemized deductions as long as they meet the “ordinary and necessary” standard. For example, investors are allowed to write off investment fees, including financial advisor fees, under this tax rule

A tax-advantaged savings plan designed to help families save money for future educational costs. There are two types of 529 plans: 529 prepaid tuition plans and 529 savings plans.

A type of 529 plan that allows families to pay tuition ahead of time for specific colleges or college systems at today’s tuition rates.

A type of 529 plan that allows you to invest your education savings in various types of investments, including mutual funds. Like a 401(k) or IRA retirement plan, your account could go up or down depending on market performance. This plan, also called an education savings plan, is typically sponsored by a state and may be available from a private investment firm. You also can use this plan to help pay tuition at public, private, or religious schools from kindergarten through 12th grade.

Stock alerts are a type of trading alert which you can set to notify you of price action, technical conditions or economic results which could affect the value of underlying stocks.

Stock analysis is the evaluation of a particular trading instrument, an investment sector, or the market as a whole. Stock analysts attempt to determine the future activity of an instrument, sector, or market.

The profit or loss on an investment over a one-year period.

Apple stock is traded on the NASDAQ Global Select Market under the ticker symbol AAPL.

The cost of borrowing money on a yearly basis, expressed as a percentage rate.

An item with economic value, such as stock or real estate.

Distribution of investment across various asset classes, such as stocks, bonds, and cash, to balance risk and return

Stands for "automated teller machine," a machine that lets bank customers perform basic transactions, such as deposits and withdrawals.

A fee you may be charged if you check your prepaid card balance at an ATM or if you call customer service to ask about your balance.

A bill-paying method you set up with the merchant or service provider. You provide the merchant or service provider (for example, your cell phone provider or utility company) with your checking account information and they take the funds from your account each time the bill is due (for example, every month).

A degree usually awarded for at least four years of full-time academic study beyond high school.

A financial institution and business that accepts deposits, makes loans, and handles other financial transactions.

A period in which stock prices fall and widespread pessimism leads to a prolonged decline.

Someone or something named to receive proceeds or benefits. In the insurance context, it’s the person, charity, trust, or estate designated by the policyholder to receive the policy's benefits or payments.

Something that an employer, the government, or an insurance company provides that’s often used only for a particular purpose, such as food or medical costs. Also: An advantage; something that is good.

A service you set up with a bank, credit union, prepaid card account, or a business you owe money to that lets you pay bills online or through a mobile app.

Twice a month.

Binary options, a financial derivative that allows people to make all-or-nothing wagers on events and asset price changes, have surged in popularity in recent years. But critics, including U.S. regulators who have long cautioned against them, warn that these trades are more akin to gambling than investing and carry a high risk of fraud and losses for unwary consumers.

Virtual Currency

Stocks of well-established companies with a history of reliable earnings and dividends.

A type of debt. When you buy a bond, you’re lending to the issuer, which may be a government, municipality, or corporation. The issuer promises to pay you a specified rate of interest during the life of the bond and to repay the principal — also known as the bond’s face value or par value — when the bond "matures," or comes due after a set period.

To receive something on loan with the understanding that you will return it.

A person or organization that borrows something, especially money from a bank or other financial institution.

A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange. Because securities exchanges only accept orders from individuals or firms who are members of that exchange, individual traders and investors need the services of exchange members. Brokers provide that service and are compensated in various ways, either through commissions, fees, or through being paid by the exchange itself.

A stockbroker is a financial professional who executes orders in the market on behalf of clients. A stockbroker may also be known as a registered representative (RR) or an investment advisor.

A plan that outlines what money you expect to earn or receive (your income) and how you will save it or spend it (your expenses) for a given period of time; also called a spending plan.

A period where stock prices are rising or expected to rise, often accompanied by investor optimism.

Buying a Stock Investment: Stock purchases are when investors buy ownership of the shares of a company. The investor's purchase price is called the cost basis. The goal is to sell the stock at a higher price and realize a profit. A buy order is an instruction to a stockbroker to buy a security.

A plan people use to identify and consider factors like cost, features, and choices as they prepare to make a purchase.

Also called purchasing power, it is the amount of goods and services that can be purchased by a given unit of currency, taking into account the effect of inflation.

The profit that comes from selling an investment for more than you paid for it.

The loss that comes from selling an investment for less than you paid for it.

Paper or coin money.

A savings tool from a bank or credit union that has a fixed maturity date and a fixed interest rate.

Stock chart patterns often signal transitions between rising and falling trends. A price pattern is a recognizable configuration of price movement identified using a series of trendlines and/or curves. When a price pattern signals a change in trend direction, it is known as a reversal pattern; a continuation pattern occurs when the trend continues in its existing direction following a brief pause.

An account at a bank (sometimes called a share draft account at a credit union) that allows you to make deposits, pay bills, and make withdrawals.

This type of card can only be used at certain locations. For example, a closed-loop card might be good only at a specific store or group of stores or on your public transportation system.

Coinsurance in insurance, is the splitting or spreading of risk among multiple parties. In the U.S. insurance market, coinsurance is the joint assumption of risk between the insurer and the insured. In health insurance, coinsurance is sometimes used synonymously with copayment, but copayment is really fixed while coinsurance is a percentage that the insurer pays after the insurance policy's deductible is exceeded up to the policy's stop loss.

An asset that secures a loan or other debt that a lender can take if you don't repay the money you borrow. For example, if you get a home loan, the bank's collateral is typically your house.

An amount of money someone earns for selling something.

When you earn interest on both the money you save and the interest you earn.

A measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Indexes are available for the U.S. and various geographic areas.

An individual who signs a loan, credit account, or promissory note of another person as support for the credit of the primary signer and who becomes responsible for the debt obligation.

The amount of money that is needed to pay for or buy something.

Borrowing money, or having the right to borrow money, to buy something. Usually it means you’re using a credit card, but it might also mean that you got a loan.

An open-ended loan that allows you to borrow money up to a certain limit and carry over an unpaid balance from month to month. There is no fixed time to repay the loan as long as you make the minimum payment due each month. You pay interest on any outstanding credit card loan balance.

A summary of how you've used your credit card for a billing period.

A limit set by the credit card company on how much you can charge on the card it issued to you. You can use your credit card to make purchases up to your credit limit.

A summary of your credit activity and current credit situation such as loan paying history and the status of your credit accounts. Lenders use these reports to help them decide if they will loan you money and what interest rates they will offer you. Other businesses might use your credit reports to determine whether to offer you insurance; rent a house or apartment to you; or provide you with cable TV, Internet, utility, or cell phone service. If you agree to let an employer look at your credit report, it may also be used to make employment decisions about you.

A number created from a scoring model that uses information from your credit history.

A cooperative financial institution that is chartered by the National Credit Union Administration (a federal independent agency) or a state government and is owned by its individual members.

The amount of credit a person has compared with the amount they've used.

Financially sound enough to justify the extension of credit.

A dark pool is a private financial forum or exchange for trading securities that operates outside of traditional public stock exchanges

The unauthorized movement or disclosure of sensitive information to a party, usually outside the organization, that is not authorized to have or see the information. Someone who gets the data might use it for identity theft.

FINRA rules define a “day trade” as the purchase and sale, or the sale and purchase, of the same security on the same day in a margin account. This definition encompasses any security, including options. Selling short and purchasing to cover a position in the same security on the same day is also considered a day trade. Exceptions to this definition include: a long security position held overnight and sold the next day prior to any new purchase of the same security; or a short security position held overnight and purchased the next day prior to any new sale of the same security.

A card used to make purchases at businesses (like grocery stores and gas stations) with money in your checking account.

Money you owe another person or a business.

Consolidation means that your various debts, whether they are credit card bills or loan payments, are rolled into a new loan with one monthly payment. If you have multiple credit card accounts or loans, consolidation may be a way to simplify or lower payments. But a debt consolidation loan does not erase your debt. You might also end up paying more by consolidating debt into another type of loan.

A measure of how popular or necessary an item is and how many consumers want to buy it.

Demo Trading - Some online trading platforms offer potential investors a demo trading account funded with 'fake' money in which they can execute trades to practice trading before going ahead with actual market trades.

A financial institution like a bank or credit union that is authorized to accept checking and saving deposits.

Money electronically sent to your bank account, credit union account, or prepaid card.

Spreading investments across various financial instruments or sectors to reduce risk.

A dividend is the distribution of a company's earnings to its shareholders and is determined by the company's board of directors. Dividends are often distributed quarterly and may be paid out as cash or in the form of reinvestment in additional stock.

To receive money in exchange for goods or services.

Money made from working for someone who pays you or from running a business or farm. This includes all the income, wages, and tips you get from working.

Earnings releases are public disclosures that provide investors and analysts with important financial information about a company's performance

A cash reserve that's specifically set aside for unplanned expenses or financial emergencies. Some common examples include car repairs, home repairs, medical bills, or a loss of income.

Someone who organizes, manages, and assumes the risks of a business or enterprise.

Ownership interest in a corporation, typically represented by owning shares.

A tax on the value of property you own at your death. It considers everything you own or have certain interests in at the date of death. There is a federal estate tax, and some states have their own estate taxes.

ETFs or "exchange-traded funds" are exactly as the name implies: funds that trade on exchanges, generally tracking a specific index. When you invest in an ETF, you get a bundle of assets you can buy and sell during market hours—potentially lowering your risk and exposure, while helping to diversify your portfolio.

A number that is used to compare the value of money in two different countries. For example, you would use an exchange rate to figure out how many pesos or euros you could get for one U.S. dollar.

Exness is an authorized Forex trading platform

The index number schools use to determine your eligibility for federal financial aid. This number results from the financial information you provide in your Free Application for Federal Student Aid (FAFSA) form. Your EFC index number is reported to you on your Student Aid Report. It is not the amount of money your family will have to pay for college nor is it the amount of federal student aid you will receive. It is a number your school uses to calculate the amount of federal student aid you are eligible to receive.

The Free Application for Federal Student Aid form is used to determine how much a student and his or her family are eligible to receive in federal financial aid. The FAFSA may also be used to determine a student’s eligibility for state and school-based aid and also may influence how much private aid a student receives.

The federal government collects taxes based on the earnings of individuals and businesses, called an income tax. The federal income tax pays for national programs such as defense, foreign affairs, law enforcement, and interest on the national debt.

A law that requires taxes to be deducted from your pay to contribute to Social Security and Medicare; your employer contributes the same amount on your behalf.

The lowest national wage as established by law in the Fair Labor Standards Act (FLSA).

The ability to manage financial resources effectively, understand and apply financial knowledge, demonstrate healthy money habits, and successfully complete financial tasks as planned.

Expenses that come up unexpectedly, are very important, and need attention right away.

The ability to meet all financial needs, today and over time; feel secure in the financial future; absorb a financial shock; and have the financial freedom to make choices to enjoy life.

Expenses, like bills, that must be paid each month and generally cost the same amount. Some fixed expenses, like a utility bill, may also be variable because the amount changes each month depending on usage.

Investments that pay a fixed interest or dividend, such as bonds

A fee your card provider charges when you use your prepaid card in a foreign country or to pay in a foreign currency. This fee is usually a percentage of your purchase, withdrawal, or other transaction, rather than a flat fee. This fee is also called a currency conversion fee. Not all cards can be used outside the United States, so check your cardholder agreement before you travel.

Forex (FX) refers to the global electronic marketplace for trading international currencies and currency derivatives. It has no central physical location, yet the forex market is the largest, most liquid market in the world by trading volume, with trillions of dollars changing hands every day. Most of the trading is done through banks, brokers, and financial institutions.

A form that the employee completes and the employer uses to determine the amount of income tax to withhold.

An illegal act that occurs when people try to trick you out of your personal information and your money.

Wealth that is transferred from parents or relatives to children or other members of their family. This may take the form of cash, property, or anything else that has financial value, as well as investments in children’s education, like paying for college or vocational training. Also referred to as intergenerational wealth.

A single project or task for which a worker is hired to work on demand. Some gigs are a type of short-term job, and some workers pursue gigs as a self-employment option.

Generally, an informal term for situations where people are hired for single projects or tasks or for short-term jobs, often through a digital marketplace.

Total pay before taxes and other deductions are taken out.

A hedge fund is a private investment fund that employs various strategies to earn active returns for its investors.

Trade ideas are sent to the client with a recommendation to buy or sell, an investment value (e.g. $2 million) and often a timeframe and an indication of level of conviction. The most active consumers of Trade Ideas are funds using quantitative or systematic strategies.

Using your personal information — such as your name, Social Security number, or credit card number — without your permission.

A fee charged if you don’t use your card for a certain period of time. The length of time that triggers an inactivity fee varies. Not all prepaid cards charge inactivity fees.

Money earned or received such as wages or salaries, tips, commissions, contracted pay, government transfer payments, dividends on investments, tax refunds, gifts, and inheritances.

Federal, state, and local taxes on income, both earned (salaries, wages, tips, commissions) and unearned (interest, dividends). Includes both personal and business or corporate income taxes. Not all states and localities have income taxes.

A mutual fund or ETF designed to track the performance of a specific market index

Inflation occurs when the prices of goods and services increase over time.

Insider trades involve transactions of securities by individuals who have access to non-public, material information about a company.

The practice or arrangement in which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.

A person or company offering insurance policies in return for premiums; person or organization that insures.

A fee charged by a lender, and paid by a borrower, for the use of money. A bank or credit union may also pay you interest if you deposit money in certain types of accounts.

Interest capitalization occurs when unpaid interest is added to the principal amount of your student loan. When the interest on your federal student loan is not paid as it accrues (during periods when you are responsible for paying the interest), your lender may capitalize the unpaid interest. This increases the outstanding principal amount due on the loan. Interest is then charged on that higher principal balance, increasing the amount of interest charged and the overall cost of the loan.

A percentage of a sum borrowed that is charged by a lender or merchant for letting you use its money. A bank or credit union may also pay you an interest rate if you deposit money in certain types of accounts.

Investing in stocks means buying shares of ownership in a public company. Those shares are called stock. If a stock you own becomes more valuable, you could earn a profit if you decide to sell it to another investor. Most people invest in stocks online, through a brokerage account.

Something you spend your money on that you expect will earn a financial return.

What you pay to use investment products and services.

Something that is a disadvantage, money owed, or a debt or obligation according to law.

A measure of the ability and ease with which you can access and use your money.

Money that needs to be repaid by the borrower, generally with interest.

Goals that can take more than five years to achieve.

The total value of a company’s outstanding shares, calculated by multiplying the share price by the number of shares

The date that an investor’s investment is to be paid back in full in accordance with its agreement. A certificate of deposit (CD) contains a maturity date provision obligating the financial institution to repay an investor sums invested plus interest on a specified date.

A federal law that provides special protections for active duty servicemembers, like capping interest rates on many loan products. MLA includes servicemembers on active Guard or active Reserve duty, as well as spouses and certain dependents.

The minimum dollar amount that must be paid each month on a loan, line of credit, or other debt.

You can use money to buy goods and services. Money looks different in different places around the world.

Federally insured account at a bank or credit union that offers a higher rate of interest than a savings account, allows for a limited number of transactions monthly, and may require a minimum deposit or minimum account balance.

A money order can be used instead of a check. You can buy a money order to pay a business or other party.

Mortgage loans are used to buy a home or to borrow money against the value of a home you already own.

A company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund and the income it generates.

The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Small Cap Market that trades emerging growth companies.

Amount of money you receive in your paycheck after taxes and other deductions are taken out; also called take-home pay.

Material news is news that a company releases that might affect the value of its securities or influence investors' decisions. It is any type of news that directly relates to the company's business, and depending on the news, it will move the company's share price up or down.

A service that allows you to use a secure website to manage your bank or credit union account without the aid of a teller. While you can transfer money between accounts using this service, you generally cannot deposit checks or cash.

A bill-paying method you set up with your bank or credit union. You use online banking to give your bank the merchant or service provider’s information, and your bank makes the payment according to the amount and schedule you set up. Online bill paying may or may not also be offered on a bank’s or credit union’s mobile application.

This type of card has a network logo on it. Examples of networks are Visa, MasterCard, American Express, and Discover. These cards can be used at any location that accepts that card type. Most prepaid cards are open-loop cards.

Cost of the next best use of your money or time when you choose to buy or do one thing rather than another.

Options are contracts that offer investors the potential to make money on changes in the value of, say, a stock without actually owning the stock. Of course, one can also lose money trading options.

The term option refers to a financial instrument that is based on the value of underlying securities such as stocks, indexes, and exchange traded funds (ETFs). An options contract offers the buyer the opportunity to buy or sell—depending on the type of contract they hold—the underlying asset. Unlike futures, the holder is not required to buy or sell the asset if they decide against it.

The expenses and losses that are not reimbursed by insurance. This cost includes deductibles, copayments, and amounts paid for services or repairs that are excluded from coverage. It’s the amount paid before insurance coverage kicks in.

An overdraft occurs when you don’t have enough money in your account to cover a transaction, but the bank pays the transaction anyway.

A type of prepaid card you get from your employer that you receive your paycheck on.

Taxes taken from your paycheck, including Social Security and Medicare taxes.

A side pocket is a type of account utilized in hedge funds to segregate riskier or illiquid assets from more liquid investments. Usually, once a position enters a side pocket account, only the current participants in the hedge fund are entitled to a share of it. Future investors will not receive a share of the proceeds should the asset's returns become realized.

In the insurance context, it is a written contract between the insured and the insurer.

A collection of investments owned by an individual or institution

A fee lenders can charge borrowers if they pay off a loan early.

A valuation measure that compares the price of a stock to the company’s earnings per share

In the lending context, principal is the amount of money that you originally received from the lender and agreed to pay back on the loan with interest. In the investment context, it is the amount of money you contribute with the expectation of receiving income.

A professional investor is an individual or legal entity, that possesses the experience, knowledge and expertise to make its own investment decisions and properly assess the risks that it incurs

Money that is made in a business after all the costs and expenses are paid.

Taxes on property, especially real estate, but also can be on boats, automobiles (often paid along with license fees), recreational vehicles, and business inventories.

A stock quote is the price of a stock as quoted on an exchange. A basic quote for a specific stock provides information, such as its bid and ask price, last traded price, and volume traded.

The profit or loss on an investment expressed as a percentage.

A rebate reduces the price of consumer goods. Most rebates require consumers to pay the full cost of an item at the time of purchase, then to send documentation to the manufacturer or retailer to receive a rebate by mail.

A set amount of money you receive at the same time each week or month.

Paying back money you borrowed.

The profit or loss on an investment.

Exposure to danger, harm, or loss.

An investor's ability to endure losses in their investments

A tax on retail products based on a set percentage of the retail price.

Saving is putting aside money to reach your goals. Investing is putting your money into something specific with the expectation that its value will grow over time, providing you with the opportunity to create more wealth.

Money you have set aside in a secure place, such as in a bank account, that you can use for future emergencies or to make specific purchases.

The amount of money you plan to put aside for a specific purpose.

A stock screener is an instrument that traders and investors use for choosing stocks based on search criteria. Stock screeners can be used to separate stocks based on price, market capitalization, dividend ratio, P/E ratio, and debt-to-equity ratio, among others.

Credit card that typically requires a cash security deposit. The larger the security deposit, the higher the credit limit. Secured cards are often used to build credit history.

Loans in which your property (a thing you own) is used as collateral; if you cannot pay back the loan, the lender takes your collateral to get their money back. The lender can also engage in debt collection, can file negative information on your credit report, and might sue you.

Financial instruments that hold value and can be traded, like stocks, bonds, and options.

An investment product such as a stock or bond.

A unit of ownership, often in a company’s stock or in a mutual fund.

Goals that can take a short time, or up to five years, to reach.

Goals that are specific, measurable, attainable, relevant, and timebound.

Provides benefits for retired workers and people with disabilities, as well as the unmarried children, surviving spouses, or former spouses (in certain cases) of both.

The nine-digit number on a Social Security card, an important piece of identification issued by the federal government that you'll need to get a job and collect government benefits.

The Standard and Poor's 500, or simply the S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States.

Most states and some local municipalities require their residents to pay a personal income tax. Generally, states use one of two methods to determine income tax: the graduated income tax or the flat rate income tax. Both methods first require you to figure your taxable income.

A type of investment that gives people a share of ownership in a company.

Stock Event means a stock split, stock combination, reclassification, payment of stock dividend, recapitalization or other similar transaction of such character that the shares of Common Stock shall be changed into or become exchangeable for a larger or small number of shares.

How much of a product is available to buy at any given time.

A tax on products imported from foreign countries. This tax can increase the costs of those products, which ultimately can be passed on to consumers as higher prices.

A dollar-for-dollar reduction in a tax. It can be deducted directly from taxes owed. Tax credits can reduce the amount of tax you owe or increase your tax refund, and some credits may result in a refund even if you don't owe any tax.

An amount (often a personal or business expense) that reduces income subject to tax.

Required payments of money to governments, which use the funds to provide public goods and services for the benefit of the community as a whole.

Money owed to taxpayers when their total tax payments are greater than the total tax. Refunds are received from the government.

When someone steals your Social Security number to file a tax return claiming a fraudulent refund; may also be called tax-filing-related identity theft.

A fixed or limited period of time for which something lasts or is intended to last (for example, a five-year loan, a three-year certificate of deposit, a one-year insurance policy, a 30-year mortgage).

Trade in stocks broadly refers to any buying and selling of stock, but is colloquially used to refer to more shorter-term investments made by very active investors. Stock trading is a difficult and risky enterprise, but with education, you can work to lower risks and increase your likelihood of success.

A fee charged every time you use the card for a certain type of transaction. Be sure to ask about fees or read the cardholder agreement associated with your card.

Income people receive even if they don’t work for pay. Can include things like children’s allowances, stock dividends paid by corporations, and financial gifts.

A loan (such as most types of credit cards) that does not use property as collateral. Lenders consider these loans to be more risky than secured loans, so they may charge a higher rate of interest for them. If the loan is not paid back as agreed, the lender can also start debt collection, file negative information on your credit report, and might sue you.

An interest-bearing savings security issued by the U.S. government for a set amount of money.

Stock valuation is the process of determining the intrinsic value of a company's shares

The amount of money that something is worth.

Expenses that change in amount from month to month.

A kind of electronic money. It’s a digital representation of value that is not issued by a government, such as a central bank or a public authority, but is accepted as a means of payment and can be transferred, stored, or traded electronically.

Tricking someone into wiring or transferring money to steal from them. One common example of a wire transfer fraud is the “grandparent scam.” This is when a scammer posing as a grandchild or a friend of a grandchild calls to say they are in a foreign country, or in some kind of trouble, and need money wired or sent right away.

Money that employers withhold from employees’ paychecks. This money is deposited for the government and is credited against the employees' tax liability when they file their returns. Employers withhold money for federal income taxes, Social Security and Medicare taxes, and state and local income taxes in some states and localities.

The income return on an investment, usually expressed as an annual percentage