Trading Glossary Explained

Trading is a complex process, which includes many actions that a person unfamiliar with the financial world will find puzzling. Once you launch your trading career, you will be swamped with trading terms whose meaning you will not know. You will not immediately grasp how the market value of a business differs from its book value. Nor will you understand what CPI stands for and how it is different from IPO, unless we supply you with a glossary of all confusing terms that you meet in a trading business.

To help you avoid confusion, we have compiled a comprehensive glossary of financial terms used in the markets. All trading glossary is presented in our glossary in alphabetical order and is explained with linguistic precision. Any financial term that sounds baffling at you now will become crystal clear once you read its definition in our glossary below.

All | # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

There are currently 5 names in this directory beginning with the letter U.

Unborrowable Stocks

These are stocks that are not lendable to short sellers. When shares in a company become unborrowable, it is impossible to short sell them in a traditional way.

Underlying Asset

This term refers to the financial assets upon which a derivative’s price is based. A derivative is a financial instrument with a price based on a different asset.

Unemployment Rate

This term refers to the percent of the labor force that does not have a job. This indicator rises and falls in the wake of changing economic indicators but does not anticipate them.

Unlimited Liability

This term refers to the full legal responsibility that business owners and partners assume for all business debts. This liability is not capped. Business owners can pay their obligations through the seizure and sale of owners’ personal assets.

Upside

This term refers to the potential increase in value of an investment. It is measured in monetary or percentage terms. A higher upside means that the stock has more value than is currently reflected in the stock price.