293 terms

Dictionary: C

Cable: Desk slang for GBP/USD, named after the transatlantic telegraph cable that carried the sterling-dollar rate between London and New York from the 1860s.
CAC payback period: How many months of gross profit from a new customer it takes to recover what was spent acquiring them; the cash-flow view of unit economics.
Calendar rebalancing: Returning to target weights on a fixed schedule, such as annually or quarterly, regardless of how far the portfolio has drifted.
Calendar spread: Selling a near-term option and buying a longer-dated one at the same strike, profiting from faster decay of the short leg.
Call option: A contract giving the buyer the right, but not the obligation, to buy 100 shares at a set strike price before expiration.
Callable bond: A bond the issuer may redeem early at set prices on set dates; the investor is effectively short a call option and is paid a wider spread for it.
Calmar ratio: Annualised return divided by maximum drawdown, usually over three years. A crude measure that corresponds closely to what actually makes people quit.
Canada Revenue Agency (CRA): Canada's tax authority, which decides whether trading profits are capital gains or business income and audits day trading inside registered accounts such as the TFSA.
Canadian capital gains inclusion rate: Canada: only a portion of a capital gain is included in taxable income, but frequent trading can be reassessed as business income and taxed in full.
Cancel-replace: Changing a live order's price or quantity by replacing it, which usually forfeits queue position and briefly leaves you exposed between cancel and confirmation.
Candle body: The thick part of a candle, spanning the open and close; its size shows how much ground price actually held.
Candlestick: A chart bar showing the open, high, low, and close for one period, with a body and wicks.
Candlestick confirmation: Requiring the bar after a pattern to close in the expected direction before acting, trading hit rate against entry price.
Capacity: How much money a strategy can run before its own trading destroys its edge. Small-account strategies routinely have capacities far below what people assume.
Capacity utilisation: The share of the industrial sector's productive capacity actually in use, published alongside industrial production; a gauge of slack in the goods-producing economy.
Capital allocation: How management deploys the cash the business generates: reinvestment, acquisitions, debt repayment, dividends and buybacks, ranked by expected return.
Capital and financial account: The side of the balance of payments recording cross-border investment flows: direct investment, portfolio flows, banking flows and changes in official reserves.
Capital asset pricing model: A model stating that an asset's expected return equals the risk-free rate plus its beta times the equity risk premium, so only non-diversifiable risk is rewarded.
Capital call: A demand from a private fund for part of an investor's committed capital, issued when the manager has an investment or expense to fund.
Capital controls: Official restrictions on moving money in or out of a country, ranging from taxes on inflows to outright limits on how much foreign currency residents may buy.
Capital efficiency: How much exposure a structure produces per dollar of capital tied up; the reason defined-risk spreads and long-dated calls exist alongside stock.
Capital expenditure: Cash spent on long-lived assets such as factories, machines, vehicles and capitalised software; an investing outflow, never an operating expense.
Capital loss carryover: Net capital losses above the annual deduction limit carry forward indefinitely in the United States, keeping their short or long-term character, to offset future gains.
Capital loss limitation: The US cap allowing only $3,000 of net capital losses per year to offset ordinary income, with the remainder carried forward; futures losses can be partially carried back instead.
Capital structure: The full stack of claims on a company, from secured debt at the top through unsecured and subordinated debt to preferred and common equity at the bottom.
Capital structure arbitrage: Taking offsetting positions in different securities of the same issuer, such as equity against debt or credit protection, when their relative prices imply inconsistent views.
Capitalised software: Development costs recorded as an asset and amortised over several years instead of being expensed immediately, which raises reported profit today.
Capitulation: The point in a decline where holders give up and sell all at once, producing a high-volume flush that often marks a low.
Capture ratio: The share of benchmark gains you capture in up periods and of losses you absorb in down periods, expressed as two separate percentages.
Carried interest: The share of a private fund's profits paid to the general partner, commonly 20%, after limited partners have received their capital back and any preferred return.
Carry (fixed income): The income a bond position earns over its funding cost while nothing else changes; positive when the bond yields more than the repo rate.
Carry trade: Borrowing in a low-interest-rate currency to buy a high-interest-rate one, earning the rate difference as long as the exchange rate cooperates.
Carry unwind: The rapid, self-reinforcing liquidation of carry trades, in which the funding currency surges as crowded positions are closed at once.
Carry-to-volatility ratio: The annual interest pickup on a carry position divided by the currency pair's annualised volatility, used to judge whether the yield is worth the risk of holding it.
Cash account: A brokerage account with no borrowing: every purchase must be paid for in full with settled funds, which removes leverage and introduces settlement timing rules.
Cash account settlement: In a cash account every purchase must be paid for with settled funds and sale proceeds are only usable once settled, which limits how often the same capital can be recycled.
Cash and equivalents: Bank balances plus investments so short-dated and safe that they are treated as cash, normally anything maturing within three months.
Cash conversion: How much of reported profit turns into cash, usually operating cash flow divided by EBITDA or free cash flow divided by net income.
Cash conversion cycle: Days inventory outstanding plus days sales outstanding minus days payable outstanding: how long cash is tied up between paying suppliers and being paid.
Cash flow statement: The statement that reconciles net income to the actual change in cash, split into operating, investing and financing activities.
Cash market (physical market): The market where the actual commodity changes hands now, at negotiated prices, as opposed to the standardized futures market.
Cash ratio: Cash and liquid investments divided by current liabilities; the strictest liquidity test, assuming nothing is collected and nothing is sold.
Cash settlement: Expiry method where the contract is closed with a cash payment against a reference price instead of any goods changing hands.
Cash-and-carry arbitrage: Buying the physical commodity, storing and financing it, and selling a futures contract against it to lock in the spread when futures trade above full carry.
Cash-secured put: Selling a put while holding enough cash to buy the shares if assigned; you collect premium and may end up owning the stock at the strike.
Cash-settled option: A contract that pays the in-the-money amount in cash at expiration instead of delivering shares or a futures position.
Catastrophic stop: A far-away resting stop whose only job is to cap the worst case if a connection, a halt or your own judgement fails.
Cattle crush spread: Long feeder cattle and corn against short live cattle, replicating the margin a feedlot earns turning calves and grain into finished beef.
Cattle on Feed report: The USDA's monthly count of cattle in US feedlots plus placements and marketings, released on a Friday afternoon and the main scheduled event in cattle futures.
CBOT (Chicago Board of Trade): The oldest US futures exchange, founded in 1848 and now a CME Group division listing grains and Treasury futures.
CDX and iTraxx indices: Standardised baskets of credit default swaps that trade as a single instrument; CDX covers North America, iTraxx covers Europe and Asia, and both roll every six months.
Cede and Co: The nominee partnership in whose name the depository's shares are registered, making it the record holder of most publicly traded US stock.
Central bank intervention: Direct buying or selling of a currency by a central bank or finance ministry to influence its exchange rate, usually against a move officials describe as disorderly.
Central bank swap line: A standing agreement between central banks to exchange currencies at a set rate, used to supply foreign currency, usually dollars, to banks in another jurisdiction during a funding squeeze.
Central counterparty: An entity that interposes itself between the two sides of a trade, becoming buyer to every seller and seller to every buyer, and managing the resulting risk with margin and a default fund.
Central limit order book (CLOB): A single shared book where all orders for an instrument meet and are matched by transparent priority rules.
Central limit theorem: Averages of many independent observations tend toward a normal distribution even when the observations themselves are not normal. The reason standard errors work at all.
Central pivot range: A narrow band around the pivot point whose width is used as a rough gauge of whether the coming session is likely to trend or range.
Certificate of deposit (CD): A time deposit at a bank paying a fixed rate to a fixed date; large denominations are negotiable and trade in the money market.
CEX (centralized exchange): A company-run crypto exchange that holds customer funds and matches orders on a traditional order book.
CFD corporate action adjustment: The change a broker makes to an open share CFD position when the underlying company splits its stock, issues rights, consolidates or is taken over, to keep the economic exposure unchanged.
CFD margin tiering: The practice of raising the margin percentage as a position grows, so that larger exposures in one instrument require proportionally more collateral than small ones.
CFD vs spot FX: How a currency CFD differs from a retail spot forex position: in economics they are nearly identical, and the real differences are in contract wording, costs and regulatory treatment.
CFTC (Commodity Futures Trading Commission): The US federal regulator for futures, options on futures, swaps, and retail forex; also has fraud authority over crypto commodities.
Chaikin money flow: The accumulation/distribution calculation summed over a lookback window and divided by total volume, producing an oscillator around zero.
Chain split: When one blockchain becomes two permanently separate chains, each with its own coin, history and community.
Chandelier exit: A trailing stop placed a multiple of ATR below the highest high reached since entry, ratcheting up but never down.
Change in working capital: The cash effect of movements in receivables, inventory and payables; a use of cash when the business ties up more, a source when it releases some.
Change of character: The first break of a swing point against the prevailing trend, treated as early warning that control may be shifting.
Channel stuffing: Pushing more product to distributors than they can sell, to book revenue now at the cost of future quarters and of returns later.
Chapter 11: A court-supervised reorganization in which a company keeps operating while it restructures its debts; existing common stock is usually, but not always, wiped out.
Chapter 7: A bankruptcy in which the company stops operating and a trustee sells its assets to pay creditors in order of priority; common shareholders essentially never recover anything.
Charm: The rate at which delta changes as time passes, holding price constant; it pulls out-of-the-money deltas toward zero and in-the-money deltas toward one.
Chart clutter: Loading a chart with so many indicators and drawings that the price itself becomes hard to read and contradictory signals are always available.
Chart pattern: A recognisable shape formed by price over many bars, such as a triangle or a double top, used as a rough description of how a market is behaving.
Chart trading: Placing, moving and cancelling orders by dragging them directly on a price chart, so working orders and stops appear as lines at their trigger levels.
Chasing: Entering well beyond your trigger because the move is already running and you cannot bear to miss it.
Chasing losses: Continuing to trade specifically to recover money already lost - the behaviour with the closest relationship to gambling harm.
Cheapest to deliver (CTD): The bond in a Treasury futures deliverable basket that is least expensive for the short to deliver after adjusting for conversion factors — the bond the contract effectively tracks.
Checklist discipline: Running a short written list before entering, so routine conditions get verified rather than assumed.
Cherry picking: Allocating profitable trades to favoured accounts and losing trades to others after the outcome is known, typically by delaying allocation from an omnibus or block order.
Cherry-picking: Selecting the examples, dates, or trades that support a claim and quietly dropping the rest.
Chief compliance officer (CCO): The named individual responsible for a firm's compliance program, required at registered advisers and expected at broker-dealers, with personal liability risk.
Chikou span: The current closing price plotted twenty-six periods back, used to compare present price against the price action of that earlier period.
Child order: One of the many small orders an algorithm sends to venues to work a larger parent order.
Chop: Directionless, noisy price action that repeatedly reverses, stopping out both longs and shorts.
Choppiness index: A bounded measure of whether a market is trending or ranging, comparing the sum of recent true ranges to the total distance actually travelled.
Christmas tree spread: A butterfly variant using three strikes in a 1-3-2 pattern, which shifts the profit tent directionally while keeping the cost low.
Chunnel: Desk slang for EUR/GBP, named after the Channel Tunnel linking the two economies.
Churn rate: The share of customers or recurring revenue lost in a period, the single most important input to how long a subscription customer is worth anything.
Churning: Excessive trading in a customer account driven by the broker's compensation rather than the customer's objectives, measured by turnover rate and cost-to-equity ratio.
Circuit breaker: A market-wide trading pause triggered when a major index falls by a set percentage in a single day.
Circulating supply: The number of tokens currently available to trade, excluding locked, vesting, treasury and provably burned coins.
CIRO: Canada's national self-regulatory body for investment dealers and mutual fund dealers, formed by merging IIROC and the MFDA, overseen by provincial securities commissions.
CL (crude oil futures): The NYMEX WTI crude oil futures contract, covering 1,000 barrels and ticking in $0.01 ($10).
Class imbalance: When one label vastly outnumbers the other, so a model can score well by always predicting the majority. Common in event prediction and easy to misread.
Clean price: A bond's quoted price excluding accrued interest, used so the quote does not sawtooth upward between coupon dates.
Clearing broker: The firm that clears, settles and holds customer assets, often behind an introducing broker that handles the client relationship but touches no money.
Clearing house: The entity that stands between every futures buyer and seller, guaranteeing both sides and collecting margin.
Clearing member: A firm admitted to deal directly with the clearing house, posting its own capital behind the trades it clears.
Clearly erroneous trade: A trade so far from the prevailing market that the exchange can cancel or reprice it after the fact, under published numeric thresholds and a short filing window.
Client categorisation: The European classification of clients as retail, professional or eligible counterparty, which determines the protections, disclosures and leverage limits that apply.
Client money rules (CASS): UK rules requiring firms to hold client money in separately designated trust accounts at approved banks, reconciled daily, so it is ring-fenced if the firm fails.
Client order ID: The unique identifier your system assigns to an order, used to match acknowledgements, fills, cancels and rejects back to what you actually sent.
Close-to-close volatility: The simplest volatility estimator: the standard deviation of closing-price returns. Robust, widely understood, and wasteful of information.
Closed versus open equity: The difference between realised account value and the value including unrealised profit and loss, which is the base every sizing rule must pick.
Closed-end fund: A fund that raised a fixed pool of capital at launch and then trades on an exchange like a stock, so its price can sit well above or below net asset value.
Closed-end fund discount: The gap between a closed-end fund's market price and its net asset value per share, expressed as a percentage. Persistent discounts are the norm rather than an anomaly.
Closet indexing: Charging active management fees for a portfolio that largely replicates its benchmark, leaving too little deviation to cover the fee.
Closing auction: The auction at 16:00 that sets the official closing price, and the single most liquid moment of the day because index funds and benchmarked traders execute there.
Closing price: The last traded price of a period; the single number most indicators and most traders treat as the period's verdict.
Closing range: The band of prices traded in the final seconds or minutes of a session, from which many products compute their official daily settlement.
Clustering illusion: Seeing structure in randomness, because genuinely random sequences contain more streaks and clumps than intuition expects.
CME CF Bitcoin Reference Rate (BRR): The once-daily benchmark price that CME bitcoin futures settle to, computed from trades on selected spot exchanges during a one-hour London window.
CME Group: The largest futures exchange operator, formed from the Chicago Mercantile Exchange, CBOT, NYMEX and COMEX.
Coach versus therapist: A coach works on performance within normal functioning; a licensed therapist treats mental health problems, and the difference matters when distress is real.
Cocoa futures (CC): ICE contracts on 10 metric tonnes of cocoa beans, quoted in US dollars per tonne, with a $1 tick worth $10.
Coffee futures (KC): ICE contracts on 37,500 pounds of washed arabica coffee, quoted in cents per pound, with a tick of 0.05 cents worth $18.75.
Cognitive load: The total mental work a setup demands; past a limit, extra screens, instruments, and indicators reduce performance rather than improving it.
Cognitive reappraisal: Changing how you interpret a situation so the emotion itself changes - reading a stop-out as the cost of information rather than a personal defeat.
Coin days destroyed: A volume measure weighted by how long coins sat still: moving one coin held five years counts far more than moving one held a day.
Cointegration: Two or more non-stationary series that move together so closely that some linear combination of them is stationary. The statistical basis of pairs trading.
Cold storage: Keeping private keys entirely offline so that remote attackers have no path to them.
Collar: Holding stock, buying a protective put, and selling a covered call, so the call premium pays for some or all of the put.
Collateral: Assets pledged to secure an exposure, so that if the pledging party defaults the other side can sell the assets to cover what it is owed.
Collateral factor: The fraction of a collateral asset's value you may borrow against. A factor of 0.75 means $10,000 of collateral supports $7,500 of debt.
Collateralised loan obligation (CLO): A securitisation of a diversified pool of leveraged loans, issuing tranches from AAA down to an unrated equity piece that absorbs first losses.
Colocation: Renting rack space in the same data centre as an exchange's matching engine, so your servers sit metres rather than miles from where orders are matched.
Colour: The rate at which gamma changes with the passage of time; it shows how a position's curvature builds or evaporates as expiration approaches.
Combinatorial purged cross-validation: A validation scheme that tests many different combinations of held-out blocks, producing a distribution of backtest results instead of a single path.
Combo order: A single order containing several option legs, or options plus stock, executed as one package at a net price.
COMEX: The CME Group division that lists gold, silver and copper futures and runs the approved vault system behind them.
Commercial paper (CP): Short-term unsecured corporate debt, usually issued at a discount with a maturity under 270 days, used to fund working capital.
Commercial trader: A COT category for firms that handle the physical commodity and use futures to hedge it — farmers, elevators, refiners, miners, processors and end users.
Commission: The broker's own charge for executing a trade, quoted per share, per contract, per trade or as a percentage, and separate from exchange and regulatory fees.
Commission model: The explicit fee schedule applied in the backtest: per share, per contract, percentage of notional, or tiered, plus exchange and regulatory fees.
Commission versus spread pricing: The two ways FX brokers charge: a wider quote with no visible fee, or a tight quote with a stated commission; only the combined figure matters.
Commitments of Traders report (COT): The CFTC's weekly breakdown of open interest by trader category, published Friday afternoon for positions held as of the previous Tuesday.
Commodity Channel Index: An unbounded oscillator measuring how far the typical price has deviated from its moving average, scaled by mean deviation.
Commodity currency: A currency whose economy depends heavily on raw material exports, so that it tends to strengthen when those commodity prices rise and weaken when they fall.
Commodity pool: A pooled vehicle that trades futures and other commodity interests, run by a registered commodity pool operator who is responsible for disclosure and reporting.
Commodity pool operator (CPO): An operator of a pooled vehicle that trades futures or swaps, registered with the CFTC and NFA, with its own disclosure, reporting and recordkeeping duties.
Commodity trading advisor: A regulated adviser that manages client money in futures, options on futures and certain forwards, registered with the CFTC and a member of the NFA in the United States.
Common gap: A small gap inside a trading range with no news behind it, carrying little information and usually filled quickly.
Common stock: The ordinary ownership share in a company: one claim on profits and assets, usually one vote, and last in line if the company fails.
Comparable company analysis: Valuing a company by the multiples at which similar listed companies trade, adjusted for differences in growth, margin and risk.
Comparison trap: Measuring your results against a curated feed of other people's best days, which makes adequate performance feel like failure.
Complex order book: A separate exchange book where multi-leg option orders trade as one package against other packages, rather than leg by leg.
Composite operator: Wyckoff's thought experiment of treating all large, informed participants as a single actor whose intentions can be inferred from the chart.
Compound annual growth rate: The constant annual rate that would take a starting value to an ending value over a period; the standard way to express multi-year performance.
Compounding: Returns earned on returns. It makes the path of an equity curve, not just its endpoints, determine the final balance.
Compounding position size: Letting risk per trade grow with equity, which turns a linear edge into geometric growth and a linear edge into geometric decay.
Comprehensive income: Net income plus gains and losses that bypass the income statement, such as currency translation and certain pension and hedge marks.
Concentrated liquidity: Providing pool liquidity only within a chosen price band, earning far more fees per dollar while it trades inside that band and nothing outside it.
Concentration margin: An extra margin charge for a position large relative to the market's liquidity, reflecting the cost of unwinding it in a hurry.
Concentration risk: Exposure to loss from a single position, issuer, sector, country or factor being large enough that its failure meaningfully damages the whole portfolio.
Conditional order: An order held at the broker until a condition you define is met, such as a price in another symbol, a time, or an indicator value.
Conditional VaR: The average loss on the days when VaR is exceeded, answering the question VaR leaves open: how bad is bad?
Condor spread: Four strikes, all the same option type: long the outer two, short the inner two. A butterfly with a flat top instead of a peak.
Confidence calibration: Training your stated confidence to match reality, so that things you call 70 percent likely happen about 70 percent of the time.
Confidence interval: A range that would contain the true value in a stated share of repeated samples, usually 95%. It is the sane way to report any backtest statistic.
Confirmation: Requiring an additional piece of evidence before acting on a setup, which raises the proportion of winners but worsens entry price.
Confirmation: One block built on top of the block containing your transaction; more confirmations mean history is harder to reverse.
Confirmation bias: Seeking and weighting information that supports what you already believe while ignoring what contradicts it.
Confluence: Several independent reasons pointing to the same price level or direction at the same time.
Consecutive losses: The longest run of losing trades in a record, which is a near-certain event rather than a sign that something has broken.
Consensus estimate: The average of analyst forecasts for a company's revenue, earnings and other metrics; the benchmark a result is judged against.
Consensus mechanism: The rule set a decentralised network uses to agree on one shared history without a central authority.
Consistency rule: A prop-firm rule limiting how much of your total profit can come from a single day, typically 30% to 50%, to discourage one-shot gambling.
Consolidated audit trail (CAT): The US regulatory database capturing the full lifecycle of every equity and options order across all venues, linked to the identity behind each account.
Consolidated tape: The single public stream of last-sale prices and sizes for a security across every venue, which is what most people mean when they say a stock traded at a price.
Consolidation: A period where price moves sideways in a tight range, with supply and demand roughly balanced and volatility falling.
Constant currency: Growth recalculated using last year's exchange rates, so that currency moves do not distort the underlying performance of foreign operations.
Constant product formula: The classic AMM rule: the product of the two pool reserves stays constant through a trade, so price rises as you drain one side.
Constructive sale: A US rule treating an appreciated position as sold when you eliminate essentially all risk and reward, such as by shorting the same stock against the box or entering an offsetting contract.
Consumer confidence versus sentiment: Two rival surveys of household attitudes: the Conference Board's confidence index leans on labour market perceptions, while the University of Michigan's sentiment index leans on inflation and personal finances.
Contango: A futures curve where later contract months are priced higher than nearer ones.
Contingent convertible: A bank capital instrument that converts into equity or is written down when a capital ratio falls below a trigger, absorbing losses while the bank is still operating.
Contingent liability: A possible obligation that depends on a future event, such as a lawsuit or a guarantee; accrued only when it is probable and can be estimated.
Continuation pattern: A consolidation shape that forms inside a trend and, when it resolves, most often resolves in the direction the trend was already going.
Continuing claims: The number of people still receiving unemployment benefits, reported a week behind initial claims; it measures how hard it is to find a new job rather than how many are losing one.
Continuous contract: A synthetic price series that stitches successive futures months together so a chart can show years of history in one line.
Continuous net settlement: The process that nets each clearing member's buys and sells in a security to one delivery or receipt obligation, hugely reducing the movements required to settle.
Contract: The unit of trading for derivatives such as options and futures; one contract controls a fixed amount of the underlying.
Contract for difference: A leveraged bilateral contract paying the difference between an asset's opening and closing price, with no ownership of the underlying and no exchange involved.
Contract for difference (CFD): A leveraged contract with a broker to exchange the difference in an instrument's price between opening and closing, with no ownership of the underlying at any point.
Contract month (expiry): The delivery or settlement month of a futures contract, identified by a letter code such as H, M, U, Z.
Contract month codes (F G H J K M N Q U V X Z): The single-letter codes exchanges use for each delivery month: F=Jan, G=Feb, H=Mar, J=Apr, K=May, M=Jun, N=Jul, Q=Aug, U=Sep, V=Oct, X=Nov, Z=Dec.
Contract multiplier: The number that converts one point of price movement into dollars for a futures contract.
Contract specifications (specs): The exchange rulebook page that fixes a futures product's size, tick, hours, months, limits and settlement method.
Contract stitching: A single long price history built by splicing together successive futures contract months, because no individual contract lives long enough to backtest.
Contribution margin: Revenue minus variable costs, expressed per unit or as a percentage; what each extra sale contributes toward fixed costs and profit.
Convenience yield: The intangible benefit of holding the physical commodity rather than a futures claim on it, which pushes curves into backwardation.
Convergence: The tendency of a futures price to meet the cash price of the underlying commodity as expiry approaches.
Conversion: Long stock, long put, short call at the same strike; a locked-in arbitrage package that earns interest rather than market direction.
Conversion factor: A published multiplier that puts each deliverable Treasury bond on a common footing with the notional 6% coupon bond the futures contract is written on.
Conversion fee: The markup a broker applies when converting a trade result, dividend or deposit from one currency into your account currency, usually a percentage of the amount.
Convertible arbitrage: Buying a convertible bond and shorting the issuer's stock to isolate the embedded option, which has often been issued cheaply relative to the volatility it provides.
Convertible bond: A bond that the holder can swap for a set number of shares, giving the issuer cheap debt and creating a future dilution overhang.
Convexity: The curvature of the price-yield relationship: the second-order correction showing that bond prices gain more on rallies than they lose on selloffs.
Conviction sizing: Varying position size by how strong the setup is, usually within a capped range like half to double a standard unit.
Conviction versus certainty: Conviction is a graded judgement you can size against; certainty is a feeling that removes your ability to manage the position.
Cool-down period: A required wait after a loss, a win, or a rule breach, before the next entry is allowed.
Cooling-off period: A mandatory pause after a loss, a streak or a limit breach, on the basis that the next decision is the worst one you will make.
Copium: Cope plus opium; the rationalisations traders inhale to avoid accepting a loss or a mistake.
Copper futures (HG): COMEX contracts on 25,000 pounds of grade 1 copper, quoted in cents per pound with a tick of 0.05 cents worth $12.50.
Copy trading psychology: Following someone else's trades removes the decision but not the emotion, and leaves you holding a position you cannot evaluate.
Core CPI: The consumer price index excluding food and energy, used because those two components are volatile and supply-driven, so the rest gives a cleaner read on underlying inflation.
Core PCE: The PCE price index excluding food and energy; the single inflation number the FOMC forecasts in its projections and the closest thing to an official target measure.
Core-satellite: A structure with a large, cheap, broadly diversified core plus small active or thematic satellites intended to add return without dominating the portfolio.
Corn futures (ZC): CBOT contracts on 5,000 bushels of number 2 yellow corn, the highest-volume agricultural futures market in the world.
Cornerstone investor: A large investor who commits publicly to buy a set amount of an IPO before the book opens, in exchange for a guaranteed allocation and usually a lock-up.
Corporate action: Any company-initiated event that changes the shares themselves: splits, dividends, mergers, spin-offs, rights issues, name and ticker changes.
Corporate action adjustment: Rewriting historical equity prices to account for splits, dividends and spin-offs, so returns computed across the event are correct.
Corporate bond: Debt issued by a company, paying a coupon above the government yield of the same maturity to compensate for default risk and worse liquidity.
Corrective wave: In Elliott Wave, a counter-trend move that usually unfolds in three legs labelled A, B and C, in forms such as zigzags, flats and triangles.
Correlation: A measure from -1 to +1 of how closely two assets move together; highly correlated positions are one bet, not several.
Correlation breakdown: The tendency for correlations across assets to rise toward 1 in a crisis, exactly when diversification is supposed to help.
Correlation matrix: A table of pairwise correlations between your holdings, which usually reveals that a diversified-looking book is two or three bets.
Cost basis: The amount invested in a position for tax purposes, used to compute gain or loss on sale; it is adjusted by commissions, reinvested dividends, and corporate actions.
Cost basis method: The rule determining which tax lots are treated as sold when part of a holding is disposed of, which changes the size and character of the realised gain.
Cost basis methods: The rules deciding which purchase lot a sale is matched against, which determines the gain or loss reported and whether it is short or long term. United States.
Cost of carry: The total cost of holding a commodity or asset until a future date: storage, insurance, financing, minus any yield it throws off.
Cost of debt: The interest rate a company pays on new borrowing, taken after tax because interest is deductible, not the average rate on legacy debt.
Cost of equity: The return shareholders require for holding the stock, most commonly estimated as the risk-free rate plus beta times the equity risk premium.
Cost of goods sold: The direct cost of producing what was sold in the period: materials, factory labour, and the manufacturing overhead tied to those units.
Cotton futures (CT): ICE contracts on 50,000 pounds of upland cotton, quoted in cents per pound with a 0.01-cent tick worth $5.
Counter currency: Another name for the second currency in a pair, the one the price is expressed in and the one your profit or loss is first denominated in.
Counterparty risk: The risk that the firm on the other side of your trade fails to pay, which in retail FX means the broker itself rather than a clearing house.
Coupon: The fixed annual interest a bond pays, expressed as a percentage of par value and usually paid in two instalments six months apart.
Covenant: A condition written into a loan agreement that the borrower must keep meeting, such as a maximum leverage ratio or a minimum interest coverage.
Covenant-lite: A loan or bond with few or no maintenance covenants, so lenders cannot force a renegotiation until the borrower actually misses a payment.
Covered call: Owning 100 shares and selling a call against them, collecting premium in exchange for capping the upside above the strike.
Covered call fund: A fund that systematically sells calls against a held portfolio, converting part of the equity's upside into distributions.
Covered interest arbitrage: Borrowing in one currency, lending in another, and locking the exchange rate back with a forward, so any deviation from interest rate parity becomes riskless profit.
Covered strangle: Long 100 shares, short an out-of-the-money call and short an out-of-the-money put; income from both sides with an obligation to buy more stock on a fall.
CPI (Consumer Price Index): The monthly US inflation report measuring the change in prices of a basket of consumer goods and services.
Crab market: A market moving sideways, going neither up nor down - crabs walk sideways.
Crack spread: The difference between crude oil futures and the refined products made from them, standing in for a refiner's gross margin.
Crawling peg: A peg that is adjusted in small, pre-announced or rule-based steps over time, usually to let a high-inflation currency depreciate gradually instead of in a single shock.
Creation and redemption: The mechanism that lets large institutions exchange baskets of securities for new ETF shares, or the reverse, keeping the ETF's price close to its net asset value.
Creation unit: The large block of ETF shares, often 10,000 to 50,000, that is the smallest quantity an authorised participant can create or redeem directly with the fund.
Credit curve: The term structure of an issuer's credit spreads across maturities; normally upward sloping, and its inversion is a warning that near-term default risk is rising.
Credit cycle: The recurring pattern of easy lending, rising leverage, tightening conditions and defaults, which drives credit spreads more reliably than the level of interest rates does.
Credit default swap: A contract where the buyer pays a periodic premium for protection against a credit event at a reference entity, and receives compensation if that event occurs.
Credit event: A defined trigger such as bankruptcy, failure to pay or restructuring that causes a credit default swap to settle.
Credit rating: An agency's opinion of an issuer's or bond's default risk, expressed on a letter scale from AAA down to D, with intermediate notches marked by plus and minus or 1, 2 and 3.
Credit spread: A vertical spread where the option sold is worth more than the option bought, so you collect premium and profit if the stock stays away from the short strike.
Credit spread (bond market): The extra yield a corporate or other risky bond pays over a government bond of the same maturity, quoted in basis points and compensating for default and liquidity risk.
Credit support annex: The collateral agreement attached to an ISDA master, specifying what collateral is posted against derivative exposure, how often, and in what form.
Crop year: The twelve-month accounting period for a commodity's supply and demand, running from one harvest to the next — 1 September to 31 August for US corn and soybeans.
Cross hedge: Hedging an exposure with a futures contract on a different but correlated asset, because no contract exists on the thing you actually own.
Cross margin: Margin mode where your whole account balance backs every position, so profits on one offset losses on another and liquidation is account-wide.
Cross rate: An exchange rate between two currencies that does not include the US dollar, usually derived from each one's dollar rate.
Cross-currency basis: The extra spread paid above or below theoretical parity to borrow one currency against another, a live measure of how scarce a funding currency is.
Cross-currency swap: A long-dated agreement to exchange principal and interest payments in two currencies, used by borrowers to raise money in one market and service it in another.
Cross-listing: Listing shares on an exchange outside the home market, usually to reach new investors, widen the shareholder base, and extend the hours the stock can trade.
Cross-validation: Splitting data into several folds and repeatedly training on some while testing on the rest, so every observation gets used for testing once.
Crossed market: An abnormal condition where the best bid exceeds the best offer across venues, producing a negative spread that signals stale data or a venue problem.
Crossing network: A venue that matches buy and sell interest at a price taken from another market, usually the midpoint, without its own price discovery.
Crush spread (soybean crush): Long soybeans against short soybean meal and oil, or the reverse, replicating the processing margin of a soybean crushing plant.
Crypto-collateralised stablecoin: A token minted against crypto collateral locked in a smart contract, kept solvent by requiring more collateral value than tokens issued.
Cumulative delta: A running total of volume traded at the ask minus volume traded at the bid, approximating net aggressive buying versus selling.
Cumulative return: The total percentage change over the whole period, which flatters long records and hides everything about how the money was made.
Cup and handle: A rounded base followed by a shallow pullback near the highs, with the breakout taken above the pullback rather than the whole base.
Currency board: A rigid peg written into law, under which every unit of domestic currency issued is backed by foreign reserves and the issuer gives up discretionary monetary policy entirely.
Currency correlation: The tendency of pairs to move together or in opposition because they share a currency leg or a common driver, which quietly multiplies risk across what look like separate trades.
Currency futures: Exchange-traded, centrally cleared contracts on exchange rates, quoted as dollars per unit of the foreign currency rather than in spot FX convention.
Currency hedging: Removing or reducing exchange rate exposure on a foreign asset, liability or cash flow, usually with a forward, a swap or an offsetting spot position.
Currency nicknames: Trading-floor names for currencies and pairs, such as cable for GBP/USD or loonie for the Canadian dollar, still used in commentary and chat.
Currency option: A contract giving the right, not the obligation, to exchange one currency for another at a set rate on or before a set date.
Currency pair notation: The convention of writing a rate as BASE/QUOTE, where the number tells you how many units of the second currency one unit of the first is worth.
Currency peg: An official commitment to hold a currency at or near a fixed rate against another currency or basket, maintained by buying and selling reserves at the chosen level.
Currency transaction report (CTR): A US report filed for cash transactions above $10,000 in a single business day by one customer, aggregated across the institution; routine, automatic and not an allegation.
Currency war: A period in which several countries try to weaken their currencies at once to gain export advantage, a policy that cannot work for everyone because exchange rates are relative.
Current account: The part of the balance of payments covering trade in goods and services plus income and transfers, and the headline measure of whether a country earns more from the world than it spends.
Current assets: Assets expected to be converted to cash, sold or consumed within twelve months: cash, short-term investments, receivables, inventory and prepayments.
Current liabilities: Obligations due within twelve months: trade payables, accrued expenses, short-term borrowings, the current portion of long-term debt and near-term deferred revenue.
Current ratio: Current assets divided by current liabilities; a rough test of whether a company can meet the next year of obligations from the next year of assets.
Current yield: Annual coupon divided by current market price; a quick income measure that ignores any gain or loss from holding to maturity.
Curve fitting: Shaping a strategy's rules around the particular history you tested on, so it describes the past precisely and predicts the future not at all.
Cushing, Oklahoma: The inland tank farm and pipeline hub that is the delivery point for NYMEX WTI crude futures, and whose storage level is the single most watched US oil statistic.
CUSIP: A nine-character identifier assigned to securities issued in the United States and Canada, used for clearing, settlement, and record keeping rather than display.
Custodial wallet: A wallet where a company holds the private keys on your behalf, so your balance is a claim on that company.
Customer acquisition cost: Total sales and marketing spending in a period divided by the number of new customers won, a measure of what growth actually costs.
Customer due diligence (CDD): The ongoing obligation to understand the nature and purpose of a customer relationship, build a risk profile, and monitor activity for transactions inconsistent with that profile.
Customer identification program (CIP): The required procedure for verifying the identity of each new customer at account opening, collecting name, date of birth, address and an identification number before or shortly after access.
Customer lifetime value: The total gross profit a customer is expected to generate over the whole relationship, usually annual revenue times gross margin divided by the churn rate.
Customer protection rule: The US rule requiring broker-dealers to segregate fully paid customer securities and to hold a cash reserve for net customer credit balances.
Customer protection rule (Rule 15c3-3): The SEC rule requiring brokers to keep fully paid customer securities in good control locations and to hold a cash reserve so customer money is not funding the firm.
Customer segregated funds: Futures customer money that a US FCM must hold apart from its own, in accounts titled for customers, never used to fund the firm or cover another customer's deficit.
Cyclical stock: A stock whose earnings rise and fall with the economic cycle, such as autos, homebuilders, airlines, and industrial metals.
CySEC: The Cyprus regulator that licenses a large share of EU retail forex and CFD brokers, which then passport across the European Economic Area.

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