Financial glossary

Plain-English definitions of the metrics and data types used across stocks-llm. Each links to where it is used live on the site. Educational content — informational only, not financial advice.

Valuation

Market capitalization — Market capitalization (market cap) is the total value of a company’s shares — its share price multiplied by the number of shares outstanding.
P/E ratio (price-to-earnings) — The P/E ratio divides a company’s share price by its earnings per share, showing how much investors pay for each dollar of profit.
PEG ratio — The PEG ratio divides a company’s P/E by its earnings-growth rate, so a fast grower and a slow grower can be compared on valuation more fairly than by P/E alone.
EV/EBITDA — EV/EBITDA compares a company’s enterprise value to its earnings before interest, taxes, depreciation, and amortization — a capital-structure-neutral valuation measure.
EBITDA — EBITDA is earnings before interest, taxes, depreciation, and amortization — a measure of operating profitability that ignores financing and non-cash charges.
Book value & price-to-book (P/B) — Book value is a company’s net assets on its balance sheet; the price-to-book (P/B) ratio compares the share price to that book value per share.

Profitability & quality

Earnings per share (EPS) — Earnings per share (EPS) is a company’s net profit divided by its shares outstanding — the profit attributable to each single share.
Earnings surprise and the reaction — An earnings surprise is how far a company’s reported profit landed from the analyst forecast; the reaction is what its share price actually did afterwards — and the two disagree far more often than people expect.
Net profit margin — Net profit margin is the share of every revenue dollar a company keeps as bottom-line profit, after all costs, interest, and taxes.
Gross margin — Gross margin is the share of revenue left after the direct cost of producing a company’s goods or services.
Operating margin — Operating margin is the share of revenue a company keeps as operating profit, after production costs and operating expenses but before interest and taxes.
Return on equity (ROE) — Return on equity (ROE) measures how much profit a company generates for each dollar of shareholders’ equity.
Return on investment (ROI) & ROIC — Return on investment (ROI) measures the profit generated relative to the capital put in; return on invested capital (ROIC) applies that idea to a whole company’s operating capital.
Revenue vs earnings — Revenue is the total money a company takes in from sales; earnings (net income) is what is left after all its costs — the two can move in very different directions.

Cash flow & balance sheet

Free cash flow (FCF) — Free cash flow is the cash a company has left after running and reinvesting in its business — real, spendable money available to pay down debt, dividends, and buybacks.
Free cash flow (FCF) margin — Free-cash-flow margin is the share of revenue a company converts into free cash flow — the cash left after operating costs and capital spending.
Debt-to-equity ratio — The debt-to-equity ratio compares how much of a company is financed with borrowed money versus shareholders’ equity — a core measure of financial leverage.
Current ratio — The current ratio compares a company’s short-term assets to its short-term liabilities — a quick check on whether it can cover its near-term bills.
Shares outstanding & float — Shares outstanding is the total number of a company’s shares in existence; the float is the portion actually available for the public to trade.
Share buyback (stock repurchase) — A share buyback is a company using its cash to repurchase its own shares, reducing the share count and returning capital to remaining shareholders.

Dividends

Dividend — A dividend is a cash payment a company makes to its shareholders out of its profits, usually on a regular quarterly schedule.
Dividend yield — Dividend yield is a company’s annual dividend per share divided by its share price, showing the income a shareholder earns relative to the price.
Dividend-growth streak — A dividend-growth streak is the number of consecutive years a company has kept its per-share dividend at least flat or rising.
Dividend payout ratio — The dividend payout ratio is the share of a company’s earnings (or free cash flow) it pays out as dividends — a gauge of how sustainable the dividend is.
Ex-dividend date — The ex-dividend date is the cutoff for a dividend: you must own the shares before it to receive the upcoming payment.

Risk & price

Beta — Beta measures how much a stock tends to move relative to the overall market — above 1.0 means more volatile than the market, below 1.0 means less.
Volatility — Volatility describes how sharply and quickly a stock’s price swings — high-volatility stocks move a lot, low-volatility ones move gently.
52-week high & low — The 52-week high and low are the highest and lowest prices a stock has traded at over the past year — a common frame for where the current price sits.
All-time high — An all-time high is the highest price a stock has ever traded at; stocks-llm tracks a 52-week window rather than an all-time price history.

Disclosure & ownership

Insider trading (SEC Form 4) — Corporate insiders — officers, directors, and large shareholders — must disclose their trades in the company’s own stock on SEC Form 4.
Short selling & short interest — Short selling is betting a stock will fall by borrowing and selling shares; short interest is the total number of shares currently sold short.
Days to cover (short ratio) — Days to cover estimates how many days of normal trading it would take short sellers to buy back all the shares they have sold short.
Short squeeze — A short squeeze is when a rising stock forces short sellers to buy shares back to limit their losses, and that buying pushes the price up further.
Institutional ownership (SEC 13F) — Large investment managers must disclose their US stock holdings each quarter on SEC Form 13F, revealing which companies big institutions own.
Congressional stock trading — The STOCK Act requires U.S. House members to publicly disclose their stock transactions in periodic reports; stocks-llm covers the U.S. House disclosures.

Market concepts

Stock split — A stock split increases a company’s share count and lowers the price per share proportionally, without changing the total value of the company or your holding.
IPO (initial public offering) — An IPO is the first time a private company sells shares to the public and lists on a stock exchange, becoming a publicly traded company.
Blue-chip stock — A blue-chip stock is a large, established, financially sound company with a long track record — the household names of the market.
Penny stock — A penny stock is a very low-priced share (often under $5, sometimes a few cents) of a small company — typically thinly traded and higher-risk.
Market correction — A market correction is a drop of roughly 10% or more in a stock index or a stock from a recent peak — a normal, recurring feature of markets.

Market indexes

S&P 500 — The S&P 500 is a stock index tracking about 500 of the largest US public companies, widely used as the benchmark for the US stock market.
NASDAQ-100 — The NASDAQ-100 tracks about 100 of the largest non-financial companies listed on the Nasdaq exchange — heavily weighted toward technology.
Dow Jones Industrial Average (DJIA) — The Dow Jones Industrial Average is a 30-company index of large, established US "blue-chip" firms — one of the oldest and most-quoted market benchmarks.
Russell 1000 & Russell 2000 — The Russell 1000 tracks the largest ~1,000 US companies; the Russell 2000 tracks the next ~2,000 and is the most-followed small-cap benchmark.

Funds & vehicles

Index fund — An index fund is a pooled investment that mechanically holds every stock in a market index, aiming to match the index’s return at very low cost.
ETF (exchange-traded fund) — An ETF is a basket of assets — often stocks tracking an index — that trades on an exchange throughout the day like a single stock.
Mutual fund — A mutual fund pools money from many investors to buy a professionally managed portfolio of stocks, bonds, or other assets, priced once a day.
Hedge fund — A hedge fund is a private investment fund, open mainly to wealthy and institutional investors, that pursues higher returns using flexible and often riskier strategies.

Market dynamics

Bull market & bear market — A bull market is a sustained period of rising stock prices and optimism; a bear market is a sustained decline, conventionally a drop of 20% or more from a peak.
Diversification — Diversification is spreading investments across many companies, sectors, and asset types so that no single loss can sink the whole portfolio.
Dollar-cost averaging — Dollar-cost averaging is investing a fixed amount at regular intervals regardless of price, so you buy more shares when prices are low and fewer when high.
Compound interest (compounding) — Compounding is earning returns on your past returns, so an investment can grow at an accelerating pace the longer it is left to work.
Recessions & stocks — A recession is a broad, sustained decline in economic activity; stock prices often fall ahead of one and recover before it ends, because markets look forward.
Inflation & stocks — Inflation is a general rise in prices that erodes purchasing power; it affects companies unevenly and shapes the interest rates that drive stock valuations.
After-hours & pre-market trading — After-hours and pre-market trading are sessions outside the regular market day when stocks can still be traded, typically with thinner volume and wider swings.

Trading & derivatives

Options (calls & puts) — An option is a contract giving the right — but not the obligation — to buy or sell a stock at a set price by a set date; the two basic types are calls and puts.
Call option — A call option gives its holder the right to buy a stock at a set price by a set date — a bet, in essence, that the stock will rise.
Put option — A put option gives its holder the right to sell a stock at a set price by a set date — often used to bet on a decline or to protect against one.
Margin trading (buying on margin) — Margin trading is borrowing money from a broker to buy more stock than your cash alone allows — amplifying both gains and losses.
Day trading — Day trading is buying and selling securities within the same day to profit from short-term price moves — a demanding, high-risk activity, not long-term investing.

Style & size

Growth stock — A growth stock is a company expected to grow revenue and earnings faster than average, usually reinvesting profits rather than paying dividends.
Value stock — A value stock trades at a low price relative to fundamentals like earnings or book value — a bet that the market is under-appreciating a solid business.
Large cap, mid cap & small cap — Companies are grouped by market capitalization into tiers — mega, large, mid, small, and micro cap — that broadly signal size, stability, and risk.

Technical analysis

Moving average (50-day & 200-day) — A moving average smooths a stock’s price by averaging its recent closing prices — the 50-day and 200-day are the most-watched trend lines.
Golden cross — A golden cross occurs when a stock’s 50-day moving average crosses above its 200-day moving average — a widely-watched long-term momentum shift.
Death cross — A death cross occurs when a stock’s 50-day moving average crosses below its 200-day moving average — the bearish counterpart of a golden cross.
RSI (Relative Strength Index) — The RSI is a 0–100 momentum oscillator that measures how fast a stock’s price has risen or fallen recently; readings below 30 are "oversold" and above 70 "overbought."
Overbought & oversold — "Overbought" and "oversold" describe a stock whose price has moved up or down unusually fast recently — most commonly measured with a 14-day RSI above 70 or below 30.
MACD (Moving Average Convergence Divergence) — MACD is a momentum indicator built from two moving averages; when its line crosses above its signal line it is read as bullish, and below as bearish.
Bollinger Bands & the squeeze — Bollinger Bands are volatility envelopes plotted two standard deviations around a 20-day average; when they narrow sharply — a "squeeze" — volatility is unusually low.
ADX (Average Directional Index) — ADX is a 0–100 gauge of how strong a trend is (regardless of direction); readings above 25 indicate a strong trend and below 20 a weak, choppy one.
Breakout (new N-day high or low) — A breakout is when a stock closes at a new high or low over a lookback window (e.g. 20 or 55 days), pushing beyond its recent trading range.
Support & resistance — Support is a price zone where a stock has tended to stop falling; resistance is a zone where it has tended to stop rising. Moving averages often act as both.
Volume & relative volume — Volume is the number of shares traded; relative volume compares today’s volume to a stock’s recent average to flag unusually heavy activity.
Relative strength (performance vs the market) — Relative strength measures a stock against the market rather than against zero — a 12% gain is a poor result in a market that rose 20%.
Candlestick patterns (doji, hammer, engulfing) — A candlestick draws one session as a body between the open and close with wicks to the high and low; named shapes like the doji, hammer and engulfing pair describe how that session went.
Winning and losing streaks (consecutive up or down days) — A run of consecutive trading sessions that each closed higher than the one before — or each lower — counted in sessions, not calendar days.
Price gaps (gap up, gap down, and filling a gap) — The part of a move that happens while the market is shut — the opening price measured against the previous session's close — and the level price has to trade back through to "fill" it.
Average true range (ATR) and being "stretched" — How far a stock travels in a normal session, counting overnight moves — and a way of measuring how far it has run from its own average in units of that normal travel.
The stochastic oscillator — Where the latest close sits inside the range a stock has actually traded in over the last 14 sessions — 0 at the bottom, 100 at the top.
Fibonacci retracement (the "golden pocket") — How much of a share’s move over the past year it has since given back — and the 61.8%-65% band that more chart-watchers draw than any other.
Anchored VWAP (volume-weighted average price) — What the average share bought since a chosen date actually cost — each day’s price weighted by how much stock changed hands that day.
The Ichimoku cloud (kumo) — A shaded band drawn from a stock’s own highs and lows and plotted five weeks ahead of them — above it is read as an uptrend, below it a downtrend, inside it unresolved.

Elliott wave

The Elliott wave principle — A way of describing a share’s path as a repeating sequence of five waves with the trend and three against it — and the most subjective thing in this glossary, which is why stocks-llm publishes a candidate labelling with the price that would kill it rather than "the" count.
Impulse wave (the five-wave move) — The five-wave leg that runs with the trend — and the only part of Elliott’s method with hard rules, three of them, which is what makes a candidate count checkable rather than a matter of opinion.
Corrective wave (the A-B-C) — The three-wave move that gives part of an advance back — labelled A, B and C, and the half of Elliott’s method with far softer rules than the five-wave leg it corrects.
Wave invalidation level — The price at which an Elliott labelling is simply wrong — not a stop-loss and not a target, but the level whose breach means the count has to be thrown away and started again.
ZigZag pivots (swing highs and lows) — The turning points a chart is reduced to before any wave can be counted — each one a high or low that stands out from the sessions either side of it, with the small wiggles filtered away.

The Top 10

The Long-term Score — A 0–100 number that is the weighted average of a company’s percentile ranks on six pillars — profitability 20%, growth 20%, financial health 15%, valuation 15%, capital return 10%, long-term trend 20% — and the thing the Long-term 10 is sorted by. It is a published formula and its output, not a recommendation.
The Short-term Score — A 0–100 weighted average of five technical pillars — trend 25%, momentum 20%, setup 20%, volume and participation 15%, catalysts 20% — describing where a share stands on the tape today. It describes past price behaviour; it does not forecast the next move.
Percentile rank — Where one company stands in a field, expressed from 0 to 100 rather than in the metric’s own units — the device that lets a margin, a growth rate and a valuation multiple be averaged into one score without any of them dominating.
Rebalance — The scheduled moment when a list’s membership is allowed to change — rebalanced on the first trading day of each month for the Long-term 10, rebalanced every Monday for the Short-term 10. Scores move every night; membership only moves on the calendar.
Hysteresis (why a list does not churn) — The rule that a current member keeps its place while its rank stays within 15 even though only 10 are published — a deliberate gap that stops the same two companies swapping places every period on differences too small to mean anything.
Equal weight — Treating every holding in a list as the same size, so a company’s influence on the result comes from its own move and not from how large the company is — the basis on which the Top-10 lists are tracked against the market.

Informational only — NOT financial advice. This is an educational definition, not a recommendation to buy or sell anything. Metrics on stocks-llm are delayed data and may be missing or stale. Always verify information independently and consult a qualified financial professional before making any investment decision.