189 terms

Dictionary: R

R distribution: The full histogram of trade outcomes measured in R, which shows the shape of an edge that averages alone conceal.
R-multiple: A trade result expressed as a multiple of the amount initially risked; a +2R trade made twice what it risked.
R-squared: The share of a variable's variance explained by the model, from 0 to 1. High R-squared on financial return data usually means you have made a mistake.
Random forest: An ensemble of decision trees, each fitted on a resampled subset of rows and features, averaged together. A reasonable first non-linear model for market data.
Random search: Sampling parameter combinations at random rather than on a grid; usually finds good regions faster when most parameters barely matter.
Random walk: A series where the next change is unpredictable from the past. If prices are a random walk, no rule based on price history can have an edge.
Random walk hypothesis: The proposition that price changes are essentially unpredictable from past prices, which if true would make most chart-based forecasting worthless.
Range: A period where price moves sideways between a defined support and resistance without trending.
Range bars: Bars that close after price has travelled a fixed distance, so every bar has the same height and time varies.
Rate cut: A reduction in the central bank's policy rate, normally in 25 basis point steps, intended to loosen financial conditions when growth or inflation is undershooting.
Rate hike and rate cut: A central bank raising or lowering its policy interest rate, usually in 25-basis-point steps.
Rate of change: The percentage difference between the current price and the price a set number of bars ago, the simplest possible momentum measure.
Rating agency: A firm that publishes credit ratings, paid in most cases by the issuer whose debt it rates; the three largest are Moody's, S&P Global Ratings and Fitch.
Ratio spread: A spread with unequal leg counts — typically buy one, sell two further out — that collects extra premium at the cost of naked exposure beyond the short strikes.
Ratio write: Selling more calls than the shares you own — for example two calls against 100 shares — so part of the short position is naked.
Raw spread account: An account type showing the unmarked-up market spread and charging an explicit commission per lot instead of building the fee into the price.
RBOB gasoline futures: NYMEX contracts on 42,000 gallons of reformulated gasoline blendstock for oxygenate blending, delivered in New York Harbor and quoted in dollars per gallon.
Real effective exchange rate (REER): A currency's value against a trade-weighted basket of partner currencies, adjusted for relative inflation, published as an index and used to judge over or undervaluation.
Real estate investment trust: A company owning or financing income-producing property that avoids entity-level tax by distributing most of its taxable income, typically at least 90%, to shareholders.
Real exchange rate: The nominal exchange rate adjusted for the difference in price levels between two countries, showing how competitive one is against the other in actual purchasing terms.
Real interest rate: The nominal policy or market rate minus inflation, giving the return in actual purchasing power and a better guide to currency flows than the headline rate.
Real versus nominal GDP: Nominal GDP measures output at current prices; real GDP strips out price changes using chained weights so that growth reflects volume rather than inflation.
Real yield: The return on a bond after stripping out inflation, quoted directly by TIPS and calculated for nominal bonds as yield minus expected inflation.
Real yield: Return paid out of a protocol's actual revenue, such as trading fees or interest, rather than out of newly issued tokens.
Realised cap: The sum of every coin valued at the price when it last moved, rather than at today's price. An estimate of the capital actually invested in a network.
Realised profit and loss: The result locked in when a position closes, converted into the account currency and added to the balance, net of commission and any swap already charged.
Realised spread: The portion of the effective spread a liquidity provider actually keeps, measured by comparing the fill price to the midpoint a set interval later.
Realised volatility: How much the underlying actually moved over a past window, annualised; the backward-looking counterpart to implied volatility.
Realised volatility: Volatility measured from what prices actually did, as opposed to the implied volatility priced into options. Usually an annualised standard deviation of returns.
Reality check test: A statistical test that asks whether the best strategy out of many tested beats a benchmark by more than the search itself would produce by chance.
Rebalancing: Selling what has grown beyond its target weight and buying what has fallen below it, returning the portfolio to its intended allocation.
Rebalancing bands: Trigger levels around each target weight; you only trade when a holding drifts outside its band, which cuts turnover versus rebalancing on a fixed date.
Rebase token: A token whose supply automatically expands or contracts across all wallets, so your balance changes while your ownership share does not.
Rebate: A per-lot payment returned to a trader for volume traded, either by the broker for high activity or by an affiliate sharing its commission.
Rebate rate: The interest a short seller earns on the cash collateral backing a stock loan, net of the borrow fee; a negative rebate means the short is paying to hold the position.
Recency bias: Overweighting recent outcomes when judging a strategy or the market, so a short streak feels like a permanent change.
Recession: A significant, broad and sustained decline in economic activity; in the United States the dating is a judgement call by the NBER, not the popular two-negative-quarters rule.
Record date: The date on which the company checks its shareholder register; whoever is on it receives the dividend or gets to vote.
Recovery days: Scheduled time fully away from markets, planned in advance rather than taken when you collapse.
Recovery factor: Net profit divided by maximum drawdown, showing how many times over the strategy earned back its worst decline.
Recovery rate: The share of face value creditors ultimately receive after a default, expressed as cents on the dollar; the counterpart to loss given default.
Rectangle pattern: A sideways range with roughly horizontal boundaries, traded either by fading the edges or by taking the eventual break.
Redemption: Exchanging a stablecoin with its issuer for the underlying currency at par. The mechanism that anchors a peg, and often unavailable to small holders.
Redemption gate: A provision capping total withdrawals in any single period, commonly at 10% to 25% of fund assets, so redemptions are spread over time instead of forcing rapid liquidation.
Reduce-only order: An order flagged so it can only shrink an existing position, never open or increase one; it is cancelled or trimmed if it would flip you.
Reduced-size restart: Returning to the market at a fraction of normal size after a limit breach, and earning the right to scale back up with results.
Reference point: The baseline your brain measures outcomes against - usually your entry price, yesterday's close, or your account high.
Refinancing risk: The danger that debt comes due when markets are closed or rates are far higher, forcing a company to pay much more or to raise equity on bad terms.
Reg-T options margin: The standard US retail margin framework for options: fixed formulas per strategy rather than a risk model of the whole portfolio.
Regime filter: A market-wide condition that switches a strategy on or off, such as trading trend rules only when volatility is below a threshold.
Registered and eligible stocks: Exchange vault categories: registered metal is backed by warrants and deliverable now; eligible metal meets the spec but is not currently offered for delivery.
Registered direct offering: A negotiated sale of already-registered shares to a small group of investors, combining a private placement's speed with a public deal's immediately tradeable stock.
Registered investment adviser (RIA): A firm registered with the SEC or a state to advise on securities for compensation; it owes clients a fiduciary duty and files Form ADV.
Registered representative: A licensed individual employed by a broker-dealer who may solicit and execute securities transactions for customers under firm supervision.
Regret aversion: Making choices to minimise future regret rather than to maximise expected outcome, which usually means avoiding decisions you would feel responsible for.
Regularisation: Penalising model complexity during fitting so coefficients stay small and the model cannot chase noise. The main defence against overfitting in a fitted model.
Regulation ATS: The US rule framework under which alternative trading systems operate as broker-dealers rather than exchanges, with disclosure, fair access and reporting obligations.
Regulation ATS: The US rules under which a venue may match orders without registering as an exchange, provided it registers as a broker-dealer, files Form ATS-N and meets volume-based obligations.
Regulation Best Interest: The SEC standard requiring a broker-dealer recommending a security or strategy to a retail customer to act in that customer's best interest, without placing its own interests ahead.
Regulation FD: The US rule barring a public company from selectively disclosing material non-public information to analysts or favoured investors without prompt broad public disclosure.
Regulation NMS: The US rule set that binds competing equity venues into one national market system, covering quote protection, market data, access fees and price increments.
Regulation NMS: The SEC framework linking US equity venues, best known for the order protection rule against trading through a better displayed price, plus access fee caps and market data rules.
Regulation SHO: The US rule set governing short sales: order marking, the locate requirement, mandatory close-out of fails, and a price test that restricts shorting after a sharp drop.
Regulation T: The Federal Reserve rule setting the initial margin for buying stock on credit at 50%, and governing cash-account settlement.
Regulatory fee: Small statutory charges levied on trades to fund market regulation, typically applied to sales rather than purchases and passed through to the customer.
Rehypothecation: A broker's reuse of client securities pledged as collateral — lending them out or pledging them onward — permitted within limits for margin accounts.
Reinforcement learning: Training an agent by rewarding sequences of actions rather than by labelling each observation. Attractive for execution problems, mostly disappointing for strategy discovery.
Reinvestment risk: The risk that coupons and maturing principal have to be reinvested at lower rates than the yield you originally locked in.
Rekt: Wrecked - suffering a severe loss, most often through leverage or liquidation.
Related party transaction: Business done with directors, large shareholders, executives or entities they control, disclosed separately because the terms may not be at arm's length.
Relative value volatility: Trading the difference between an option's implied volatility and the volatility the trader expects to be realised, with the price exposure hedged away.
Relative volume (RVOL): Current volume divided by the average volume for the same time of day, showing whether participation is unusual.
Remaining performance obligations: The total contracted revenue not yet recognised, billed or unbilled; a required disclosure that gives a fuller view than deferred revenue alone.
Renko chart: A chart made of fixed-size bricks that print only when price moves a set amount, removing time from the horizontal axis.
Reopening auction: The single-price auction that restarts trading after a halt, matching accumulated buy and sell interest at whichever price clears the most shares.
Reorg (chain reorganisation): When a network discards recently accepted blocks in favour of a competing branch, un-confirming the transactions inside them.
Repainting: When an indicator changes the values or signals it displayed for past bars as new data arrives, making historical charts look better than live trading was.
Replace-by-fee (RBF): Resubmitting a pending transaction with the same nonce or inputs and a higher fee, so producers pick the new version instead.
Replay attack: Broadcasting a transaction valid on one chain onto another chain where it is also valid, usually after a fork produces two histories sharing the same balances.
Repo (repurchase agreement): A secured overnight loan structured as a sale of securities with an agreement to buy them back the next day at a slightly higher price.
Representativeness heuristic: Judging something by how much it resembles a mental stereotype rather than by the actual odds.
Repurchase agreement: A sale of securities with a simultaneous agreement to buy them back at a set price and date, economically a secured loan with the securities as collateral.
Request for quote (RFQ): A protocol where a trader asks selected dealers or market makers to quote a specific size, then trades on the best response.
Requote: A broker's response offering a new price instead of filling your order at the one you clicked, typically during fast markets.
Resampling (data): Converting data from one frequency to another, such as building hourly bars from minute bars. Simple in principle and full of edge cases in practice.
Research and development: Spending on designing new products and improving existing ones, expensed as incurred in most cases rather than capitalised as an asset.
Research log: A written record of every idea tested, with parameters, results and the decision taken. It is the only way to know how many tests your final result survived.
Reserve currency: A currency that central banks hold in quantity, that trade is invoiced in, and that borrowers outside its home country issue debt in; the dollar is the dominant one by a wide margin.
Reset: Paying a reduced fee to restart a failed prop-firm evaluation from the original balance without buying a new one.
Residuals: What the model failed to explain: actual minus predicted. In pairs trading the residual is the thing you actually trade.
Resistance: A price area where selling has previously stopped an advance and may do so again.
Restaking: Reusing already-staked capital to also secure additional services, earning extra rewards while accepting additional slashing conditions.
Restatement: A formal correction of previously issued financial statements, filed when earlier figures were materially wrong and can no longer be relied upon.
Restatement bias: Using the final, corrected value of a data series in a backtest when only the original, later-revised value was available at the time.
Resting order: A limit order sitting in the book waiting to be traded against, providing liquidity rather than consuming it.
Restricted stock: Shares issued with resale limits, usually from employee grants or private placements, that cannot be freely sold until conditions are met.
Restricted stock unit (RSU): A promise to deliver shares to an employee on a vesting date; on vesting, new shares are created and part is usually sold to cover tax.
Resulting: Poker slang for judging a decision purely by its result; borrowed by traders as shorthand for the same error.
Retail foreign exchange dealer (RFED): The US registration category for a firm that acts as counterparty to retail off-exchange forex trades, registered with the CFTC and required to be an NFA member.
Retail sales control group: Retail sales excluding autos, petrol, building materials and food services; the subset that feeds directly into the consumption component of GDP.
Retained earnings: The running total of every profit the company has ever made, less every dividend it has ever paid. Negative retained earnings are called an accumulated deficit.
Retender: Passing on a delivery notice you have been assigned by reselling the contract and issuing a fresh notice, rather than paying for and keeping the commodity.
Retest: A return to a level that was just broken, to check whether it now holds as support or resistance.
Return of capital: A distribution that is not paid out of earnings; it reduces your cost basis instead of being taxed as income when received.
Return on assets: Net income divided by total assets; how much profit the asset base produces regardless of how it was funded.
Return on capital (options): Premium collected or profit made divided by the capital the position actually ties up, which is the only way to compare structures fairly.
Return on capital employed: Operating profit divided by total assets less current liabilities; a pre-tax cousin of ROIC common in European and industrial reporting.
Return on equity: Net income divided by shareholders equity; the accounting return earned on the capital owners have left in the business.
Return on invested capital: After-tax operating profit divided by invested capital; the return the business earns on all the money employed in it, before financing choices.
Return on margin: Profit measured against the margin posted rather than against total account equity, which flatters leveraged results.
Return skew: The asymmetry of a return distribution, which determines whether a strategy makes many small gains and rare large losses, or the reverse.
Revaluation: A deliberate official increase in a pegged currency's fixed rate, making the currency stronger against its anchor, usually in response to trade surpluses or inflows.
Revenge size: Increasing position size specifically to recover a loss, which turns one bad trade into an account event.
Revenge trading: Taking new trades immediately after a loss to win the money back, typically larger and less selective than usual.
Revenue: The total value of goods and services a company sold in a period, before any costs are subtracted; the top line of the income statement.
Revenue recognition: The accounting rules that decide when a sale counts as revenue, based on transferring control to the customer rather than on receiving cash.
Reversal: Short stock, short put, long call at the same strike; the mirror of a conversion, used when the synthetic is rich relative to the stock.
Reversal pattern: A shape that forms at the end of a trend and, when confirmed, suggests direction is turning rather than resuming.
Reverse convertible: A short-dated note paying a high coupon, where the issuer may repay in shares rather than cash if the linked stock has fallen below a defined level.
Reverse DCF: Running a discounted cash flow backwards from the current share price to find what growth and margin the market is already assuming.
Reverse iron condor: A long strangle financed by a wider short strangle; a defined-risk debit trade that pays if the underlying moves far enough in either direction.
Reverse merger: A private company becomes publicly traded by merging into an existing listed shell, skipping the IPO process.
Reverse repo: The other side of a repo: lending cash and taking securities as collateral, with an agreement to sell them back the next day.
Reverse repurchase agreement: The other side of a repo: buying securities with an agreement to sell them back, which is lending cash against collateral.
Reverse split: A company combines several shares into one, multiplying the price and cutting the share count, often to keep an exchange listing.
Rho: The sensitivity of an option's price to interest rates; small for short-dated contracts and meaningful for LEAPS and deep in-the-money options.
Rights issue: An offering that gives every existing shareholder the right to buy new shares at a set discount in proportion to their holding, so they can avoid being diluted.
Rip: A sharp, fast move higher; to rip is to rally hard.
Ripping: Moving sharply higher with force and little hesitation.
Rising star: A bond upgraded from high yield to investment grade, which brings in a far larger pool of buyers and usually tightens its spread sharply.
Rising three methods: A bullish continuation pattern: a long green candle, a few small pullback candles held inside its range, then another long green candle.
Rising wedge: A pattern where both highs and lows rise but the highs rise more slowly, so the range narrows as price climbs, usually read as bearish.
Risk budget: A total quantity of risk allocated across strategies, sectors or time periods, spent deliberately rather than consumed by accident.
Risk contribution: How much of total portfolio volatility a single position is responsible for, accounting for its correlation with everything else.
Risk factors: The section of a filing listing what could go wrong, from generic boilerplate to specific, newly added disclosures that carry real information.
Risk graph: A payoff diagram with additional lines showing profit and loss today and at intermediate dates, not just at expiration.
Risk management: The set of rules that limit how much you can lose on one trade, one day, and in total, so that no single outcome ends your trading.
Risk normalisation: Expressing every trade in common risk units so results from different instruments and account sizes can be compared.
Risk of drawdown: The probability of reaching a specified decline at some point, which is much higher than beginners expect even for good strategies.
Risk of ruin: The probability that a series of losses reduces an account below the point where it can keep trading.
Risk parity: An allocation method that sizes assets so each contributes a similar amount of risk to the portfolio, rather than a similar amount of capital.
Risk per trade: The fixed fraction of your account you are willing to lose if a single trade hits its stop, commonly 0.5% to 2%.
Risk premium: The excess return an asset is expected to deliver above the risk-free rate, as compensation for bearing risk that cannot be diversified away.
Risk reversal: Selling a put to finance buying a call (or the reverse), producing a leveraged directional position with a synthetic stock payoff beyond the strikes.
Risk-adjusted return: Any measure of return per unit of risk taken, which is the only fair way to compare results produced with different amounts of leverage.
Risk-free position: A trade whose stop sits at or above the entry price, so the remaining outcome is a gain or roughly zero - subject to gaps.
Risk-free rate: The return available with no credit or market risk, usually short Treasury bills, which is the hurdle every strategy must clear before it has earned anything.
Risk-on / risk-off: A shorthand for market mood: risk-on means money flows into stocks, crypto, and high-yield currencies; risk-off means it flees to dollars, yen, Treasuries, and gold.
Risk-reward ratio: The planned reward of a trade divided by its planned risk, set by the distance to target versus the distance to stop.
Roadshow: The marketing tour, now largely virtual, in which management pitches the company to institutional investors during book building.
Robustness: The property of a strategy whose results survive small changes to parameters, data, start dates, instruments, and cost assumptions.
Roll (rollover): Closing a position in an expiring futures contract and opening the same position in a later month.
Roll adjustment: Shifting historical futures prices at each roll so the stitched series has no artificial jumps. It removes the seam but distorts the levels.
Roll date: The day traders and data vendors move from the expiring contract to the next one, usually when volume tips over.
Roll out: Moving a position to a later expiration at the same strike, buying time for the thesis to work and collecting the difference in time value.
Roll up: Moving an option position to a higher strike in the same expiration, usually to lock gains on a long call or raise a short call's cap.
Roll yield: The gain or loss a futures holder earns purely from rolling into a differently priced contract month, separate from any move in spot price.
Roll-down: The price gain a bond earns simply by ageing into a lower point on an upward-sloping yield curve, with no change in the curve itself.
Rolling an option: Closing an existing option and opening another with a different strike, expiration or both, usually as a single order for a net price.
Rolling performance window: Recomputing a statistic over a moving window to see how it evolved, rather than collapsing the whole history into one number.
Rolling regression: Re-fitting a regression over a moving window so coefficients can change over time, at the cost of noisier estimates.
Rolling Sharpe ratio: The Sharpe ratio computed over a moving window, so you can see whether performance was consistent or came from one lucky stretch.
Rolling window: A fixed-length span of recent data that slides forward one step at a time, used for fitting parameters or computing statistics.
Rollover: The daily moment, usually 5pm New York, when open FX positions are rolled to the next value date and swap interest is applied.
Rollup: A layer 2 that executes transactions off-chain and publishes compressed data back to the base chain so anyone can verify or reconstruct state.
Round lot: The standard trading unit in a stock, 100 shares in US equities, which is the size quotes are displayed in and the unit many exchange rules are written around.
Round number bias: Over-weighting prices that end in zeros, both in your own decisions and in how you expect a market to behave.
Round number level: A price ending in round figures that attracts orders simply because humans think in round numbers.
Round turn: One complete futures trade — entry and exit — and the standard unit for quoting futures costs.
Rounding bottom: A slow, curved base where selling pressure fades gradually and buying builds, forming a bowl shape over weeks or months.
RRSP: Canada: a retirement plan giving a deduction for contributions and tax-deferred growth, with withdrawals taxed as income; a notable treaty benefit applies to US dividends.
RSI (Relative Strength Index): A momentum oscillator from 0 to 100 that compares recent gains to recent losses, usually over 14 periods.
RSI range shift: The observation that RSI tends to oscillate between 40 and 80 in uptrends and between 20 and 60 in downtrends, rather than around 50.
RTH (regular trading hours): The core daytime session for a futures product, when volume, participation and the levels traders watch are concentrated.
RTY (E-mini Russell 2000 futures): The CME E-mini future on the Russell 2000 small-cap index, $50 per index point with a 0.10 tick worth $5.
Rug pull: A scam where a token's creators drain the liquidity or dump their holdings after attracting buyers, leaving the token worthless.
Rugged: Having been on the receiving end of a rug pull - the project's insiders sold or withdrew liquidity, collapsing the price.
Rule 10b-5: The catch-all US antifraud rule prohibiting material misstatements, omissions and deceptive schemes in connection with the purchase or sale of any security.
Rule 10b5-1 plan: A written pre-arranged plan that gives an insider an affirmative defence to insider trading, provided it was adopted in good faith while not aware of material non-public information.
Rule 144: The US safe harbour allowing resale of restricted or control securities if holding period, current information, volume limit and manner-of-sale conditions are met.
Rule 605 report: A standardised monthly disclosure in which US market centres publish execution quality statistics by security and order size — spreads, speed, fill rates and improvement.
Rule 606 report: A quarterly broker disclosure of where customer orders were routed, the venues used, and the payments received or paid for that order flow.
Rule drift: Rules loosening gradually through small exceptions, until the plan being followed is no longer the plan that was tested.
Rule of 40: A software heuristic that revenue growth rate plus profit margin should exceed 40, treating growth and profitability as interchangeable.
Rule set: The explicit, unambiguous list of conditions a trading system evaluates, written so that no interpretation is left to the reader.
Run rate: The most recent period scaled up to a full year, as if that pace continued unchanged; useful shorthand and an easy way to mislead.
Runaway gap: A gap that occurs partway through an established trend, traditionally read as a sign of strength rather than exhaustion.
Runner: The portion of a position left open after partial profits are taken, held for a larger move with the rest already banked.
Running yield: Another name for current yield, used mainly in UK and European bond markets: annual income divided by the price you paid.

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