165 terms

Dictionary: D

Daily drawdown (daily loss limit): The maximum a prop-firm account may lose in a single day before it is breached, measured from the day's starting balance or equity.
Daily loss limit: A fixed maximum loss for one session, after which you stop trading for the day regardless of what the market is doing.
Daily maintenance break: The short daily pause in electronic futures trading when the exchange rolls the trade date and runs settlement processing.
Daily settlement: The exchange's end-of-session process of marking every open futures position to an official price and moving cash between accounts.
DAO: A group coordinating through on-chain voting and shared treasury contracts, where token holders approve changes rather than a board or an owner.
Dark aggregator: A router that simultaneously works an order across many non-displayed venues, consolidating fragmented dark liquidity into one destination.
Dark cloud cover: A two-candle bearish pattern where a green candle is followed by one that opens higher and closes below the midpoint of the green body.
Dark pool: A private trading venue where orders are not displayed publicly before they execute.
Dark spread: The coal-fired equivalent of the spark spread: power price minus the cost of the coal burned to produce it.
Data availability: The guarantee that the data behind a batch of off-chain transactions was actually published, so anyone can verify or rebuild state.
Data leakage: Any path by which information about the test period reaches the model during training, from full-sample scaling to overlapping labels.
Data quality check: Automated assertions run over every dataset before it reaches a model: gaps, duplicates, impossible values, stale rows, and suspicious jumps.
Data revision: The routine restatement of economic data as more complete source information arrives; almost every major series is revised, sometimes enough to change the story entirely.
Data snooping: The bias that arises when you test many ideas on one dataset and report only the winner, whose performance is inflated by luck.
Data vendor: The source of your historical and live data. The choice determines what your backtest can and cannot honestly claim, and it is rarely examined closely enough.
Day count convention: The rule that decides how many days of interest have accrued between two dates, which differs by market and changes the cash amount.
Day order: An order that expires automatically at the end of the trading session if it has not filled.
Day trading: Opening and closing positions within the same session, holding nothing overnight.
Day-trade buying power: The intraday purchasing limit for a pattern day trader, typically four times the prior day's closing maintenance excess, available only for positions closed the same day.
Day-trading margin (intraday margin): A reduced margin brokers offer for futures positions that are closed before the session ends, sometimes as low as a few hundred dollars per contract.
Days inventory outstanding: Inventory divided by cost of goods sold times 365; how long stock sits before it is sold.
Days payable outstanding: Payables divided by cost of goods sold times 365; how long the company takes to pay its suppliers.
Days sales outstanding: Receivables divided by revenue times 365; the average number of days between making a sale and collecting the cash.
Days to cover: Shares sold short divided by average daily volume: a rough estimate of how many sessions of normal trading it would take for every short to buy back.
De-SPAC transaction: The merger that turns a SPAC into an operating public company, at which point the ticker, name, and share count all change.
Dead cat bounce: A brief rally in a falling asset that quickly fails and gives way to new lows.
Deal premium: The percentage an acquirer pays above the target's undisturbed pre-announcement price, typically 20% to 40% in agreed deals.
Deal spread: The gap between a takeover target's trading price and the value of the announced offer, which embeds the market's view of completion probability and timing.
Dealer gamma positioning: Whether options dealers are net long or short gamma, which determines if their hedging suppresses volatility or amplifies it.
Dealing desk: A broker model in which the firm itself is the counterparty to client trades, setting its own quotes and managing the resulting risk internally.
Death cross: When a shorter moving average, usually the 50 day, crosses below a longer one, usually the 200 day, treated in media coverage as a bearish milestone.
Debit spread: A vertical spread where you pay a net premium, profiting from a directional move up to the short strike.
Debt ceiling: A statutory cap on total US government borrowing; while it binds, the Treasury runs down its cash balance and stops issuing new net debt, which distorts bill yields and repo.
Debt to equity: Total debt divided by shareholders equity; how much of the capital structure is borrowed relative to what owners have committed.
Debt-to-GDP ratio: Government debt measured against annual output; its direction depends on the gap between the interest rate on the debt and the nominal growth rate, plus the primary balance.
Decision fatigue: The decline in decision quality across a long session, as the effort of choosing depletes and you drift toward defaults, impulses, or doing nothing.
Declaration date: The day the board formally approves a dividend and announces its amount, record date, and payment date.
DEF 14A: The annual proxy statement, which sets out matters for shareholder vote, executive pay in detail, board composition and related party dealings.
Default: An issuer's failure to meet its obligations, most commonly a missed interest or principal payment or a bankruptcy filing, which ends normal coupon payments and starts a recovery process.
Defensive stock: A stock whose demand holds up through recessions, such as utilities, staples, and healthcare; it usually falls less in downturns and lags in rallies.
Deferred month (back month): Any listed contract month beyond the front month, usually thinner, wider and less responsive to daily news.
Deferred revenue: Cash collected from customers before the product or service has been delivered; a liability to perform, not a debt to repay.
Deferred tax asset: A future tax saving already earned, typically from past losses or from expenses deducted for accounting sooner than for tax, carried as an asset.
Deferred tax liability: Tax that will be owed later because the company has deducted something for tax purposes sooner than it charged it in the accounts, most often accelerated depreciation.
DeFi (decentralized finance): Financial services such as lending, borrowing, and trading built as smart contracts on blockchains, without a central intermediary.
Deficiency notice: The exchange letter telling a company it has failed a listing standard and setting a deadline to regain compliance before delisting proceedings start.
Defined risk: A position whose worst case is a known, fixed number because a long option caps the exposure of a short one.
Deflated Sharpe ratio: A Sharpe ratio adjusted downward for the number of trials run, the sample length, and the non-normality of returns.
Deflation: A sustained fall in the general price level, which raises the real value of debt, encourages consumers to delay purchases, and is far harder for central banks to fight than inflation.
Degen: Short for degenerate gambler; a self-applied badge in speculative communities for someone who takes deliberately reckless positions.
Degrees of freedom: The number of independent choices you made while fitting a strategy; more choices mean less trustworthy results from the same data.
Deliberate practice: Structured, effortful repetition of a specific skill with immediate feedback - which is not the same as spending years trading.
Delisting: A venue removing a trading pair, forcing holders to withdraw or convert, usually on short notice and into falling liquidity.
Delisting: Removal of a stock from an exchange, whether forced for failing listing standards or voluntary as part of going private or a merger.
Deliverable: What one contract actually delivers on exercise; normally 100 shares, but corporate actions can change it to cash, mixed securities, or an odd share count.
Deliverable grade: The exact quality specification a commodity must meet to be delivered against a futures contract.
Delivery differential: The published price adjustment applied when a deliverable commodity is of a different grade or location than the contract's par standard.
Delivery notice: The document a short position files to start physical delivery, which the clearing house then assigns to a long.
Delivery period: The span from first notice day to last delivery day during which shorts may tender the physical commodity and longs may be assigned it.
Delta: How much an option's price changes for a $1 move in the underlying; also a rough estimate of the probability it expires in the money.
Delta as a probability proxy: The convention of reading an option's delta as roughly the chance it finishes in the money; useful, approximate, and not what delta actually measures.
Delta divergence: When cumulative delta and price disagree, such as price making a new high while net aggressive buying fails to confirm it.
Delta hedging: Trading the underlying to offset an option position's delta, so the book is insulated from direction and left with volatility exposure.
Delta neutral: A position whose net delta is around zero, so small moves in the underlying have no first-order effect on its value.
Demand zone: A price area from which a sharp advance previously began, watched for renewed buying when price returns to it.
Denial: Not looking - at the position, the account, or the journal - so the loss stays abstract and the decision keeps not being made.
Depeg: When an asset meant to track a reference price, usually $1, trades meaningfully away from it, signalling doubt about backing, redemption or liquidity.
Deposit-adjusted return: Performance measured after stripping out deposits and withdrawals, so account growth from funding is not mistaken for trading skill.
Depreciation: The spreading of the cost of a physical asset across the years it is used, charged to profit each period without any cash leaving the business.
Depreciation: A fall in a currency's market value against another, driven by supply and demand rather than by an official decision.
Depth of market (DOM): A vertical display of resting order quantities at each price level, plus the order-entry controls that let a trader click directly into the book.
Descending triangle: A flat support level with a falling series of highs above it, traditionally read as sellers becoming more aggressive.
Devaluation: A deliberate official reduction in a pegged currency's fixed rate, moving the defended level to a weaker one, typically after reserves or credibility run short.
DEX (decentralized exchange): An exchange that runs as smart contracts on a blockchain, matching trades from liquidity pools rather than an order book, with no custodian.
DEX aggregator: A router that splits an order across several pools and venues to find a better overall price than any single pool would give.
Diagonal spread: A spread with different strikes and different expirations; a calendar with a directional tilt, so it trades time decay and price at once.
Diamond hands: Holding a position through extreme volatility and losses without selling, celebrated in meme-stock and crypto communities.
Difficulty: A protocol setting that makes the proof-of-work puzzle harder or easier so blocks keep arriving at the target interval.
Diffusion index: An index built from the share of respondents reporting improvement rather than from the size of the change, so 50 means as many are better as worse.
Dilution: The drop in each existing share's ownership, earnings, and vote when a company creates new shares.
Direct feed: Market data taken straight from an individual exchange rather than through the consolidated processor, delivering more detail and lower latency at much higher cost.
Direct indexing: Holding an index's constituents directly in a separate account rather than through a fund, so individual lots can be traded for tax or customisation reasons.
Direct listing: A listing where existing shares simply begin trading on an exchange with no underwritten offering, no new shares in the classic form, and no lock-up.
Direct market access (DMA): Sending orders straight to a venue's book under a broker's membership, choosing the venue and order type yourself instead of handing the order to a desk.
Direct quote: A rate that prices one unit of foreign currency in units of the domestic currency, such as 1.36 Canadian dollars per US dollar to someone in Canada.
Direct registration: Holding shares registered in your own name on the company's books at the transfer agent, without a paper certificate and without a broker as intermediary.
Direct Registration System (DRS): A book-entry method of holding shares registered directly in the investor's own name on the issuer's transfer agent records, outside any broker's nominee account.
Directional Movement Index: A pair of lines measuring the share of recent range covered by upward versus downward movement, from which ADX is calculated.
Dirty price (invoice price): The total cash a bond buyer actually pays: the quoted clean price plus accrued interest since the last coupon.
Disaggregated COT: The more granular version of the Commitments of Traders report, which splits the old commercial and non-commercial buckets into four clearer categories.
Discontinued operations: A business being sold or shut down, reported on its own line so that continuing operations can be compared with prior periods on a like-for-like basis.
Discount (bond trading below par): A bond whose market price is below its face value, which happens when its coupon is lower than the yield the market now demands.
Discount rate: The annual rate used to convert future cash into present value, set to reflect the risk and the opportunity cost of the money.
Discount window: The Federal Reserve's standing facility for lending directly to banks against collateral, priced above market rates as a backstop.
Discounted cash flow: Valuing a business as the present value of the cash it will generate, discounted at a rate that reflects the risk of not receiving it.
Discretionary order: A displayed limit order carrying a hidden extra amount it is willing to pay, letting it reach across the spread without showing that price.
Discretionary trading: Trading where a human makes the final call on each trade, using judgement that is not fully reducible to rules.
Discretionary versus systematic: The distinction between trading on judgement applied to a framework and trading on rules executed without deviation.
Disinflation: A slowdown in the rate of inflation; prices are still rising, just less quickly, which is the normal objective of a tightening cycle.
Dispersion trade: Selling index volatility while buying volatility on the individual constituents, a position that profits when stocks move independently rather than together.
Displacement: A sharp, one-sided move that travels much further than recent bars, usually leaving imbalances behind and marking a change in participation.
Display size: The portion of a larger order that is shown publicly, with the rest held in reserve and refreshed as the visible slice trades.
Disposition effect: The documented tendency of investors to sell winners too early and hold losers too long.
Distressed debt: Buying the debt of companies in or near default, at prices reflecting expected recovery rather than face value, often with a view to influencing a restructuring.
Distributing share class: A fund class that pays income out as cash on a set schedule, leaving the investor to spend or reinvest it.
Distribution: A phase in which large holders sell into strength inside a range after an advance, keeping price stable while transferring inventory.
Distribution yield: Annualised distributions divided by current price. It measures cash paid out, which is not the same as income earned or return generated.
Distributions to paid-in: Private market multiples: DPI measures cash actually returned relative to capital drawn, while TVPI adds the appraised value of what is still held.
Divergence: When price makes a new high or low but an indicator such as RSI does not, hinting that momentum is weakening.
Diversification: Spreading exposure across assets that do not move together, so one bad outcome does not dominate results.
Dividend: A cash payment a company makes to shareholders, typically quarterly; you must own the stock before the ex-dividend date to receive it.
Dividend adjustment: A cash adjustment applied to share and index CFD positions on the ex-dividend date, credited to longs and debited from shorts, because the underlying price drops by the dividend.
Dividend arbitrage: Trades built around the treatment of dividends, including the early exercise decision on American calls before an ex-dividend date and cross-border tax differences.
Dividend aristocrat: A large company that has increased its dividend every year for at least 25 consecutive years.
Dividend capture: Buying just before the ex-dividend date and selling shortly after to collect the payment; the price drop usually cancels the gain.
Dividend cut: A reduction or suspension of the regular dividend, usually a signal of cash strain and often followed by forced selling from income funds.
Dividend discount model: Valuing a share as the present value of its future dividends, most simply as next year's dividend divided by the cost of equity less the growth rate.
Dividend payout ratio: The share of earnings paid out as dividends; above 100% the company is paying more than it earns.
Dividend risk: The risk that a short in-the-money call is exercised the day before an ex-dividend date, leaving the seller owing the dividend.
Dividend yield: Annual dividends per share divided by the share price, expressed as a percentage; it rises automatically when the price falls.
Diworsification: Adding holdings that do not improve the risk-return profile: overlapping funds, near-identical exposures, or positions too small to matter.
Dodd-Frank Act: The 2010 US law responding to the financial crisis: swaps pushed to clearing and reporting, the Volcker Rule, systemic risk oversight, whistleblower awards and the CFPB.
Doji: A candle whose open and close are nearly equal, showing indecision between buyers and sellers.
Doji star: A doji that gaps away from the previous candle's body, forming the middle element of star patterns such as the morning and evening star.
Dollar delta: A position's delta expressed in currency, telling you the profit or loss for a one-percent move in the underlying.
Dollar pair: Any pair with the US dollar on one side, as opposed to a cross; these carry the deepest liquidity and the tightest spreads.
Dollar risk: The actual currency amount you lose if a trade goes straight to your stop, before slippage.
Dollar smile: The observation that the dollar tends to rise both when the US economy strongly outperforms and when the world is in crisis, and to weaken in the middle when global growth is broad and calm.
Dollar-cost averaging: Investing a fixed amount at regular intervals regardless of price, which buys more units when prices are low and fewer when they are high.
Dollarization: Adopting a foreign currency, usually the US dollar, as the domestic means of payment, either officially by law or unofficially as citizens abandon a failing local unit.
Donchian channel: Bands marking the highest high and lowest low over a lookback period, the basis of classic breakout trend-following systems.
Dormancy: Coin days destroyed divided by the volume that destroyed them: the average holding age of coins moved on a given day.
Dot plot: The chart in the FOMC's quarterly projections showing each participant's view of the appropriate policy rate at the end of each of the next few years and in the longer run.
Double bottom: Two troughs at roughly the same price separated by a peak, completed only when price closes above that peak.
Double calendar: Two calendar spreads at once, one above the market and one below, giving a wider profit tent than a single calendar at the money.
Double diagonal: A diagonal on each side of the market: short near-dated strangle, long further-dated strangle at wider strikes. An income structure with long vega.
Double spend: Spending the same coins twice by getting one transaction confirmed and then replacing it with a conflicting one.
Double top: Two peaks at roughly the same price separated by a trough, completed only when price closes below that trough.
Doubling down: Adding the same size again to a losing position, usually framed as conviction and usually driven by the loss.
Dow Theory: The oldest formal framework in technical analysis, built from Charles Dow's editorials on trends, confirmation between averages and the role of volume.
Downside deviation: The standard deviation of only the returns below a threshold, on the view that upside volatility is not a risk anyone wants removed.
Dragonfly doji: A doji with a long lower shadow and virtually no upper shadow, where price fell hard and returned to close at the open and the high.
Drawdown: The decline from an account's peak value to a subsequent low, usually expressed as a percentage.
Drawdown duration: How long an account stays below a prior equity peak, which usually matters more to a trader's survival than the depth of the decline.
Drawdown psychology: How behaviour changes during an extended losing stretch, and why the damage usually comes from the response rather than the losses themselves.
Drawdown recovery maths: The asymmetric arithmetic of getting back to even: the gain required grows faster than the loss that caused it.
Drawdown throttle: A rule that cuts position size as drawdown deepens and restores it as equity recovers, making losing runs mathematically survivable.
Drift: The gradual movement of actual portfolio weights away from their targets, caused purely by different assets producing different returns.
DRIP (dividend reinvestment plan): An arrangement that automatically uses dividend cash to buy more shares, often in fractional amounts and sometimes at a discount.
Dry powder: Committed capital that a private fund has not yet called or invested, available for future deals.
DTCC: The central US clearing house and securities depository, which nets trades between brokers and holds the immobilised shares that back nearly all street-name positions.
Dual listing: A company whose shares are listed on two exchanges, either as the same fungible security in two places or as two separate legal entities under one economic structure.
Dual mandate: The Federal Reserve's statutory objectives of maximum employment and stable prices, which together shape how it reacts to data.
Dual-class share structure: A structure where founders or insiders hold shares with extra votes, letting them control the company while owning a minority of the economics.
Dumb money: Retail participants as a group, assumed to be late and wrong - a label that is partly supported and heavily overused.
Dump: A sharp, fast move lower, or the act of selling a large position quickly.
Dunning-Kruger effect: Early competence produces the loudest confidence, because you need skill to see the size of what you do not yet know.
DuPont analysis: Breaking return on equity into margin, asset turnover and leverage, so you can see which of the three is driving the number.
Durable goods orders: Monthly new orders for goods expected to last three years or more; the headline is dominated by aircraft, so the core capital goods subset is what matters.
Duration: A measure of how much a bond's price moves when yields change, and of the average time you wait to receive its cash flows.
Dust attack: Sending tiny amounts of coin to many addresses in order to trace how they are later combined and spent.
Dutch auction tender: A buyback structured as an auction where holders name a price inside a stated range and the company pays a single clearing price to all accepted shares.
DV01 (dollar value of a basis point): The change in a bond or futures contract's price for a one-basis-point change in yield — the unit in which all interest rate hedges are sized.
DXY (US Dollar Index): An index of the dollar against six major currencies, weighted heavily toward the euro; the shorthand for dollar strength.
Dynamic asset allocation: Rule-based adjustment of portfolio weights in response to changing conditions such as realised volatility, drawdown or a trend signal.

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