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ABC Elliott wave terminology for a three-wave countertrend price movement. Wave A is the first price wave against the trend of the market while Wave B is a corrective wave to Wave A. Wave C is the final price move to complete the countertrend price move. Elliott wave followers study A and C waves for price ratios based on numbers from the Fibonacci series.
Abnormal Return Abnormal return is measured as the difference between actual return and expected return. Cumulative Abnormal Return or CAR is the sum of abnormal returns calculated over the period which includes the announcement and the publication of the information, as well as some time both before and after that event.
Account There are several types of accounts that most brokers offer: Cash Account, Margin Account, Option Account (for option trading), Custody Account (this account gives power of attorney), IRA Account, Joint Account, etc.
Account Statement Contains data on transactions and states the current condition of the client's account over a certain period of time.
Accumulation An addition to a trader's original market position.
Accumulation (2) The first of three distinct phases in a major trend in which investors are buying.
Accumulation/Distribution Line See Chaikin Oscillator
Active Management The main benefit of an active investment strategy is the potential for higher returns. An active manager can profit from market trends since he may choose amongst the most promising securities and sectors.
Active Portfolio In the context of the Treynor-Black model, this is a portfolio that contains analyzed stocks, non-zero alphas and passive portfolio of the market index.
Adaptive Filter Smoothing or forecasting prices with continuously updated weighting of past prices.
Adjusted Forecast A micro or macro forecast which is adjusted in order to minimize the inaccuracy of forecasting.
Adverse Excursion The loss attributable to price movement against the position in any one trade.
After Hour Trading The practice of buying and selling stocks or indexes after official trading hours.
All or None Used on a buy or sell order to instruct the broker to fill the order completely or not at all.
Alpha Premium that an investment portfolio earns above a given point of reference which exceeds the one that can be forecasted using the CAPM or APT model.
American Depository Receipts (ADR) Certificates that are issued by a bank of US origin and traded in the U.S. as domestic shares. The certificates represent the foreign securities that the bank holds in that security's country of origin.
American option, European option An American option can be exercised at any time up to the maturity date, unlike the European option, which can only be exercised at maturity.
Annual Earnings Change (%) The historical earnings change between the most recently reported fiscal year earnings and the preceding.
Annual Net Profit Margin (%) The percentage that the company earned from gross sales for the most recently reported fiscal year.
Appraisal Ratio A signal/noise ratio in the forecasts. A ratio between the Alpha and "Residual Standard Deviation".
Appreciation Increase in the value of a currency relative to another.
APR (Annual Percentage Rate) Annual percentage rate.
Arbitrage The simultaneous purchase and sale of two different, but closely related, securities to take advantage of a disparity in their prices.
Arbitrage Pricing Theory Arbitrage Pricing Theory is based on the Factor Model, emphasizing diversification and arbitrage arguments. The theory describes the dependency between the expected asset returns.
Artificial Intelligence The branch of computer science concerned with the development of programs that attempt to mimic the processes of the human brain.
Ask/Offer The price at which the market is prepared to sell a specific currency.
Asked Price The price at which the market maker is willing to sell a stock.
Asset Allocation Dividing instrument funds (stocks, bonds) among markets to achieve diversification or maximum return.
Asset Turnover (ATO) The ratio of net sales to total assets generated for every dollar's worth of assets.
Auction Market A market where buyers and sellers enter simultaneous bids and offers such as the New York Stock Exchange (NYSE).
Aussie A market term for the Australian Dollar.
Auto Regressive Integrated Moving Average (ARIMA) A linear stochastic model forecasting methodology described by Box and Jenkins in their book Time Series Analysis, Forecasting and Control.
Autocorrelation The correlation between the values of a time series and previous values of the same time series. The extent to which the trader's profit/loss ratio is dependent on his work over certain periods of time.
ATS - Alternative Trading Systems The most innovative segment of the stock market represented by electronic communication networks (ECNs) which provide investor with faster and cheaper access to markets. The most famous alternative trading systems are Instinet, SOES, Island, SelectNet, Terra Nova, etc.
Average collection period, or days' receivables The ratio of accounts receivables to daily sales, or the total amount of credit extended per dollar of daily sales.
Average Directional Movement Index (ADX) Indicator developed by J. Welles Wilder to measure market trend intensity.
Averaging A method used by stock market investors and speculators to optimize the average price of securities in the trader's portfolio. "Averaging down" means to buy more stock of a given issue at a price less than the last purchase successively as the price declines. "Averaging up" means to buy more of a given security at successively higher prices as prices advance.

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