Ask
The lowest price currently offered by a seller.
Stock market glossary
The fastest way to understand a term you see in a stock-market guide, company report or trading screen.
Bid
The highest price currently offered by a buyer.
Bid-ask spread
The difference between the best available bid and ask.
Beta
A measure commonly used to describe a stock's sensitivity to market movements.
Book value
A company's accounting equity attributable to shareholders.
Book value per share
Book value divided by relevant shares outstanding.
CAGR
Compound annual growth rate over a specified period.
Capex
Capital expenditure on long-lived assets or investments.
Circuit
A trading price band or limit applied under exchange rules.
Current ratio
Current assets divided by current liabilities.
DCF
Discounted cash flow valuation based on expected future cash flows.
Debt-to-equity
Debt relative to shareholders' equity.
Dilution
Reduction in an existing shareholder's ownership or earnings per share caused by additional shares.
Dividend yield
Dividend per share relative to share price.
EBIT
Earnings before interest and tax.
EBITDA
Earnings before interest, tax, depreciation and amortisation.
EPS
Earnings per share.
Enterprise value
A valuation measure commonly combining equity value with debt and other adjustments, less cash.
EV/EBITDA
Enterprise value divided by EBITDA.
FCF
Free cash flow; commonly operating cash flow less capital expenditure, depending on definition.
Free float
Shares available for public trading under the relevant market definition.
Gross margin
Gross profit divided by revenue.
Intrinsic value
An estimate of value based on a valuation framework and assumptions.
IPO
Initial public offering of securities to public investors.
i-NAV
Indicative intraday net asset value for certain exchange-traded products.
Leverage
Use of debt or other financing to increase exposure to an investment or business.
Limit order
An order with a specified maximum purchase price or minimum sale price.
Liquidity
How easily an asset can be bought or sold without a large price impact.
Market capitalisation
Share price multiplied by the relevant shares outstanding.
Market order
An order intended to execute at available market prices.
NAV
Net asset value of a fund or similar pooled vehicle.
Net debt
Debt less cash and cash equivalents, subject to definition.
Operating margin
Operating profit divided by revenue.
P/B
Price-to-book ratio.
P/E
Price-to-earnings ratio.
PEG
A valuation heuristic relating P/E to an earnings-growth rate.
Promoter
A controlling or founding shareholder classification used in markets such as India.
ROCE
Return on capital employed; a return-on-capital measure with definitions varying by methodology.
ROE
Return on equity.
Settlement
The process by which securities and cash are exchanged after a trade.
Short selling
Selling a borrowed or otherwise permitted security with the aim of buying it back later, subject to market rules.
Stop-loss
An instruction or risk-management level intended to limit loss; mechanics depend on order type and market.
Tracking error
The difference between a fund's performance and its benchmark, often measured statistically.
TTM
Trailing twelve months.
Volatility
A measure of the magnitude or variability of price movements.
Yield
Income or return expressed relative to an amount invested, with definitions depending on the instrument.
52-week high
Highest traded price over a defined trailing 52-week period.
Working capital
Current operating assets minus current operating liabilities, depending on definition.