Each term below links to its full entry. The 60 terms are the ones that recur across the guides to Treasuries, savings, stocks, crypto and money transfers, grouped here by topic with a one-line definition each; the A-to-Z list follows at the end.
How are glossary terms chosen, defined and reviewed?
A term gets an entry when it recurs across several guides and needs more precision than a passing sentence allows, usually because it has a formula, a legal meaning or a common misreading. Topics with a guide of their own, such as FDIC insurance, stay with that guide.
Every entry follows one pattern: a plain definition in the first paragraph, then the formula or structure, at least one worked example with dated or clearly illustrative numbers, where the term turns up, how it differs from look-alikes and the usual mistakes. Strategy stays in the guides. The dividend yield entry gives the formula and its traps, for instance, while dividend investing basics covers building an income portfolio.
Definitions are checked against primary sources such as the SEC's Investor.gov glossary, the Bureau of Labor Statistics, the Federal Reserve, the IRS and FinCEN, and each entry lists its own. All 60 were first published and reviewed on November 2, 2026, and each is rechecked at least every 12 months, sooner when a rule or a reference figure changes. The editorial policy explains how pages are researched, updated and corrected.
How do links in other articles lead here?
The first time an article mentions a defined term, that mention links to its entry. Only the first mention counts, a page gets at most eight automatic glossary links, and headings, tables, code and existing links are skipped. Plurals and standard abbreviations also match, so bps leads to basis point and YTM to yield to maturity, but everyday words with several meanings, such as yield or spread on their own, never do. Acronym entries such as SOFR and CLABE match only in capitals, no entry links to itself, and a term linked by hand anywhere on a page gets no automatic link.
Bonds and interest rates
These 13 entries cover how bonds are priced and which benchmark rates loans follow; the Treasuries hub and why bond prices fall when rates rise put them to work.
Prices, coupons and yields
- Basis point: one hundredth of a percentage point, so 4.00% to 4.25% is a 25 basis point move.
- Par value: the face amount a bond repays at maturity and the base for its coupon.
- Coupon rate: a bond's fixed yearly interest as a percent of par, paid in two halves on Treasury notes.
- Current yield: a year of coupons divided by today's price, ignoring the pull back to par.
- Yield to maturity: the single rate that discounts every remaining payment back to today's price.
- Accrued interest: coupon interest earned since the last payment date, which a buyer pays the seller.
- Bond duration: price sensitivity to yields, roughly the percent price change for a 1-point yield move.
Credit and benchmark rates
- Credit rating: an agency's letter grade for default risk; BBB- (Baa3 at Moody's) is the lowest investment grade.
- Credit spread: the extra yield a bond pays over a Treasury of similar maturity.
- Municipal bond: state or local government debt whose interest is generally free of federal income tax.
- SOFR: the New York Fed's daily rate on overnight loans backed by Treasuries, and the successor to dollar LIBOR.
- Prime rate: banks' base loan rate, 3 points above the top of the fed funds range (7.00% on October 27, 2026).
- Term premium: the extra yield for holding a long bond instead of rolling short bills, estimated by models.
Worked example: Seven bond entries on one illustrative $10,000 note
A note with nine years left, a 4.25% coupon rate and a $10,000 par value is quoted at 97.00, or 97% of par.
- Coupons: $10,000 × 4.25% = $425 a year, in two $212.50 payments.
- Price: $9,700, plus accrued interest of $212.50 × 60 ÷ 182 = $70.05 if bought 60 days into a 182-day coupon period.
- Current yield: $425 ÷ $9,700 = 4.38%. Yield to maturity is higher, about 4.66%, because the $300 discount is also earned by maturity.
- Duration: with a modified duration of about 7.37, a 25 basis point rise in yields cuts the price by roughly 7.37 × 0.25% = 1.84%, or $179.
Inflation and the Federal Reserve
Four entries cover how inflation is measured and how Fed policy reaches market rates, a chain traced in how Fed rate decisions affect T-bill rates.
- Consumer price index: the BLS monthly price index for urban consumers; CPI-U was 336.940 in September 2026, up 3.7% in a year.
- PCE inflation: the change in the Commerce Department's price index for consumer spending, the gauge behind the Fed's 2% goal.
- Federal funds rate: the rate banks charge each other for overnight loans of reserves, with an FOMC target range of 3.75% to 4.00% (Federal Reserve Board, as of Oct 28, 2026).
- Quantitative easing: central bank bond buying with newly created reserves, meant to push long-term rates down.
Trading and fund costs
Seven entries measure what trading and fund ownership cost beyond commissions; the ETF guide and index funds explained apply them.
- Liquidity: how quickly and cheaply an asset converts to cash near its fair value.
- Bid-ask spread: the gap between the best bid and the best ask, paid in full on a round trip.
- Slippage: the gap between an order's expected price and the average price it fills at.
- Expense ratio: a fund's yearly running costs as a share of assets; 0.03% is $3 a year per $10,000.
- Net asset value: a fund's assets minus liabilities, per share; mutual funds trade at it and ETFs near it.
- ETF creation and redemption: how authorized participants swap securities for ETF shares and back, keeping prices near NAV.
- Tracking error: how much a fund's return gaps against its index vary; their average is tracking difference.
Risk and return measures
These eight yardsticks run through performance tables and our research studies, such as Bitcoin vs the S&P 500.
- Total return: price change plus dividends or interest, usually with the income reinvested.
- Compound annual growth rate (CAGR): the steady yearly rate that turns a starting value into an ending value.
- Standard deviation: how widely returns scatter around their average; annualized, it is the volatility funds report.
- Drawdown: the percent fall from a peak to a later low; a 50% drop needs a 100% gain to recover.
- Beta: an investment's average move for each 1% move in a benchmark.
- Alpha: return beyond what market exposure explains, often measured as Jensen's alpha.
- Sharpe ratio: return above the Treasury bill rate divided by volatility.
- Benchmark index: the index a fund is judged against, a fair test only when it holds similar assets.
Stocks and company metrics
Seven entries cover the figures in an earnings release and a company profile; the stocks hub and how to read an earnings report show where each sits.
- Earnings per share: profit per common share; the diluted figure adds shares that options and convertibles could create.
- Free cash flow: operating cash flow minus spending on property and equipment.
- Price-to-book ratio: share price divided by book value per share, most telling for banks and insurers.
- Dividend yield: a year of dividends per share divided by the share price.
- Payout ratio: the share of earnings, or of free cash flow, paid out as dividends.
- IPO: a private company's first sale of shares to the public and its listing on an exchange.
- Blue-chip stocks: shares of large, established, financially strong companies, a label with no official definition.
Taxes on investment gains
Three entries decide how much of a gain is taxed and when. The capital gains tax guide covers US rates; rules change, so a tax professional can confirm how they apply to a specific situation.
- Cost basis: what an investment cost including fees, adjusted for splits, reinvested dividends and wash sales.
- Unrealized gain: a gain on something still owned, realized and usually taxed once it is sold or swapped.
- Capital gains distribution: a fund's payout of net gains from selling securities, taxable in a regular account even if reinvested.
Crypto and blockchain
Fifteen entries explain how blockchains secure coins and how tokens and DeFi are measured; the crypto hub and how to store crypto safely build on them.
Keys, addresses and consensus
- Private key: the secret number that signs transactions; whoever holds it controls the coins.
- Wallet address: the public string coins are sent to, in a format that depends on the network.
- Proof of work: Bitcoin's consensus method, in which miners spend computing power to find valid blocks.
- Proof of stake: consensus by validators who lock coins as collateral and can be slashed for cheating, as on Ethereum.
- Hash rate: the hash guesses per second a proof-of-work network makes, estimated from difficulty.
- Mempool: a node's queue of valid transactions waiting for a block, usually served highest fee first.
Tokens, DeFi and stablecoins
- Smart contract: a program at a blockchain address that holds and moves assets only as its code allows.
- Blockchain oracle: a service that brings outside data, mostly prices, onto a blockchain.
- Total value locked: the dollar value of tokens deposited in a DeFi protocol's contracts.
- Circulating supply: the coins in public hands and free to trade, the basis of market cap.
- Fully diluted valuation: a token's price times its maximum supply.
- Stablecoin depeg: when a coin meant to hold $1 trades meaningfully above or below it, as tracked on the top stablecoins page.
- Proof of reserves: an exchange's dated evidence that its holdings cover customer balances, which is not an audit.
- Real-world assets: traditional assets such as Treasury bills, loans or gold recorded as blockchain tokens.
- Impermanent loss: how far a liquidity pool position trails holding the tokens; one token doubling leaves a 50/50 pool about 5.7% behind.
Payments and money transfer
Three entries cover the checks and plumbing behind a cross-border payment, explained further in the money transfer hub and international wire transfer fees.
- Know your customer (KYC): the checks a financial firm runs to verify who a customer is, required in the US by the Bank Secrecy Act.
- Correspondent bank: a bank that holds accounts for foreign banks and moves their payments, often for a fee.
- CLABE: Mexico's 18-digit standardized bank account number, used for SPEI transfers.