Welcome to Fineco’s Glossary! It will help you better understand the financial terminology and master your financial skills.



Scalping is a very-short term trading strategy in which traders predict price movements using technical analysis rather than examining the underlying value of the stocks. The goal is to make small profits on a high number of quick trades using the underlying philosophy that short movements are easier to profit from than long-term ones.

Scalpers can make hundreds of trades a day and often work with timeframes measured in minutes. They frequently use leverage (borrowing money from broker to multiply gains), which makes scalping very risky because leverage also magnifies any losses that occur.


In finance, security is an instrument that can be traded and is fungible and characterised by a certain market value. It is, for example, a government bond, a share in a listed company or a property right through an options contract. Security is therefore a generic term by which one refers to financial instruments that can be sold or bought.

Securities are shares, bonds and derivative securities, i.e. financial instruments that are regulated by the authorities of each country. Securities are traded on the stock exchange, where they are listed on their respective markets.

Share Certificate

A share certificate is a physical, legal document issued by a company to a buyer of shares to prove their ownership of those shares. It often evidences other rights as well, such as entitlement to dividends and the ability to vote in corporate decisions.

Other names for this document are “stock certificate” or “certificate of stock”. Today’s electronic trading methods have made paper share certificates virtually obsolete.

Share trading

Share trading, which is referred to as stock trading in the US, is the activity of buying and selling units of ownership of a company with the aim of making a profit. The term also extends to trade in share-based derivatives, like options, forwards, and swaps.

Many draw a distinction between share investors, who aim to hold a share over time and see it appreciate in value, and share traders, who profit from shorter term price movements. Share trading can be carried out by individuals (retailers) or professionals on behalf of an institutions. Also, some share trading is done on margin, where the broker lends the trader money to amplify their gains.


A shareholder, or stockholder, is a person or entity that owns a portion (expressed as shares of stock) of a company. Shareholders benefit from strong company performance because it increases share prices or dividends, but they also suffer losses if the business performs poorly.

If a party owns more than 50% of a company’s shares, they are called a majority shareholder. Since shareholding is associated with voting rights within a company, a majority shareholder generally controls the company’s direction. Minority shareholders are those that own less than 50% of a company.

Sharpe ratio

Sharpe ratio is a performance indicator through which you can understand the relationship between an investment’s return and risk. The indicator measures the average return of an investment by measuring the return earned per unit of risk. This indicator was invented by American economist William F.

Sharpe, winner of the Nobel Memorial Prize in Economic Sciences in 1990, along with Harry Markowitz and Merton Miller.

Sharpe ratio is calculated by subtracting the rate of return of a low-risk activity, such as ETFs or UK bonds, from the expected rate of return and then dividing it by the total risk or standard deviation. The logic of Sharpe ratio is as follows: the higher the risk, the higher the return for the investor. Sharpe ratio can be used for historical performance analyses of an investment or to estimate future performances.

Short (oversold) position

An oversold condition occurs when there is a strong downward price movement. It means that traders are selling the asset, so the price tends to fall quickly due to high direct selling and short selling activity.
In such cases, it is possible to open a short position, i.e. to sell the security and then buy it back at a lower price if a further fall in price is expected.
However, when an asset is oversold, a trend reversal may also occur, rewarding long positions on security. In overbought and oversold conditions, the financial analysis should be used well by trying to identify possible future movements in the asset's price through technical indicators.

Short selling

Short selling is a complex financial operation used by traders and investors. This technique is used when you predict a drop in an asset’s price, for example, in a listed company’s shares. In this case, the investor can use short selling to speculate on the price decrease of a financial asset in order to try to profit from this decline in price. With short selling, the investor must firstly borrow financial instruments, for example from a bank or a financial intermediary.

Following this, the investor sells the financial instruments. When the price decreases, they repurchase them at a lower price and return them to the owner, thus making a profit. The broker or the banker that lends the financial instruments requires a maintenance margin from the investor in order to protect themselves should the prediction be incorrect, and the asset price not decrease.

Short squeeze

A short squeeze is a process that damages traders and investors with a short sell position. It is a condition that involves a rapid increase in the price of a financial instrument. Some investors are exposed to this due to short selling in that they have invested in the price collapse of the financial instrument.

In this case, the investors try to sell their positions quickly in order to try to limit their losses. Short squeezes occur when the price of an asset increases unexpectedly, against the expectations of investors and analysts.

These are assets against which many investors have placed bets through short selling, in an attempt to make a profit from the decrease in price of the financial instrument. When a short squeeze occurs, the asset suddenly increases in value, causing problems for the short sell investors.


Size refers to the size of a financial product, e.g., a contract or a metric such as the demand for consumer goods. When the term “size” refers to a contract, it indicates the quantity of the asset that can be delivered, i.e., a standard amount that defines the quantities of the security that are traded in the market.

A contract that is standardised in size cannot be altered; however, it ensures smoother and clearer trading between market participants.

S&P 500 Index (Standard & Poor's 500 Index)

The S&P 500 Index (Standard & Poor's 500 Index) is a weighted index of the 500 listed companies on United States stock exchanges by capitalisation. There are numerous criteria that companies must meet to be included in the index. In addition to capitalisation, companies must have a free float of at least 50%, an average share value of more than $1 and a monthly trading volume over the past 6 months of at least 250,000 shares.

The S&P 500 Index contains securities of companies listed on the NYSE (New York Stock Exchange) and NASDAQ (National Association of Securities Dealers Automated Quotation). This index was created by the American rating agency Standard & Poor's in 1957. The stocks with the highest weighting in the S&P 500 Index include Apple, Microsoft, Amazon, Tesla, Alphabet Class A, Alphabet Class C, Berkshire Hathaway Class B, UnitedHealth Group Incorporated, Johnson & Johnson and Exxon Mobil.

Spread trading

Spread trading is profiting from divergences in the price of two related securities, called legs, by simultaneously buying one and selling the other. Since the prices of related securities tend to move in the same direction, spread trading is less volatile than trading just one of the individual legs, where the trader is exposed to the full volatility of the underlying asset or the security itself. This type of trading is usually done using derivatives, like options or futures.

Types of spread trading include intra-commodity (where the two legs are contracts for the same commodity but on different dates), inter-commodity (where the legs are two related commodities, like oil and gasoline, or soybeans and soy oil), or inter-exchange (the same asset traded on two different exchanges).


In finance, the term 'spring' is used in various contexts. The coiled spring or coiled market refers to a market condition in which, after a strong movement in one direction or a stationary period, the market has a high potential in the opposite direction. This happens when a market should follow a certain direction, e.g. upwards, but certain factors push it in the opposite direction, e.g. downwards. This correction eventually causes an intense movement in the natural direction.

Spring loading, on the other hand, refers to the granting of stock options to the employees of a company before a positive event for the company, e.g. before the launch of a new product on the market or the publication of quarterly results. This is a controversial practice as it allows employees to make profits quickly.


A spike is a rapid and intense asset price movement. This condition occurs when the price of a financial instrument rises or falls rapidly, spiking upwards or downwards. An example is the collapse of a stock on the stock exchange, or a financial crisis that leads to the collapse of the entire stock market.

Typically, spikes are related to news and information, such as the publication of a quarterly report that prompts investors to buy the stock en masse or sell it, causing a spike. It can also occur as a response to an unexpected event, such as a sudden rise in central bank rates that leads investors to close risk positions and invest in bonds. Spikes are studied through technical and fundamental analysis, but are sometimes completely unpredictable.

Standard Deviation

A standard deviation is a tool that helps to calculate an investment’s risk level. In finance, it is used to quantify the riskiness of a transaction and to work out what minimum return the investment must offer to cover that risk. It is a statistical formula with which the deviation of a data set from its mean can be measured.
Standard deviation helps to calculate the volatility of the market or specific security, providing useful hints for traders to understand possible price trends. For example, an asset with strong price growth will have a high standard deviation, while a low-risk investment that replicates an index, such as ETFs, will have a low standard deviation.


A stakeholder is a party who has an interest in the outcome of a decision or in the success of an endeavour. In a corporate context, stakeholders are a broad category of individuals and entities including shareholders, employees, members of the business’ supply chain, customers, bondholders, and even the general public (in the case of environmental impacts, for example). They can be classified as primary stakeholders, which engage in economic transactions with the business, or secondary stakeholders, which may affect or be affected by a business but are not directly exchanging value with it.


Statistics is the study and practice of gathering and analysing data to extract conclusions and present them in mathematical form. The discipline can be applied to wide variety of fields, including social sciences, physical sciences, business, and finance. Key statistical concepts in the world of investing and finance are mean, median, and mode; standard deviation and variance; and skew and kurtosis. Many of these key concepts were pioneered by Carl Friedrich Gauss, a German mathematician who lived in the 1800s.


A stock, also known as a share, is a unit of ownership of a company. It is a security that can be bought and sold, often on an exchange. Companies issue stock as a way of financing their activities.

Stocks can be categorised as either common or preferred. Common stocks are the most ubiquitous variety, and carry voting rights, while preferred stocks are rarer and do not generally grant voting rights to the holder. Owners of preferred stocks get paid dividends first and have a priority claim to company assets in bankruptcy proceedings.

Stock analysis

Stock analysis means analysing data related to equities in order to predict the future movements of a market, market sector, or specific stock and make the appropriate trading decisions.

Stock analysis can be fundamental or technical. Fundamental stock analysis focuses on the health and profitability of the company based on in-depth information like the company’s financial statements. Technical stock analysis looks at the history of a stock’s performance on the market to predict future behaviour, focusing on price movements and volume rather than the soundness of the company itself.

Stock broker

A stock broker is an intermediary who buys or sells stocks for another person or entity. They usually charge a fee or commission for each transaction. They provide an important service by matching buyers to sellers, and they can find clients low prices and advise them on the timing or order of trades. Stockbrokers now play a smaller role in the market than they historically had due to the rise of automated online brokers that provide a wide range of institutions and individuals easy access to stock exchanges.

Stock market

The stock market is the collection of buyers and seller of stocks, also known as shares, which are units of ownership in a company. This activity can take place through a formal exchange, in which case the stocks are listed, or through private, over-the-counter transactions. Stock market transactions are often facilitated by brokers, though electronic platforms that bypass human brokers are increasingly common.


In the financial sphere, stops are automatic orders that can be applied to trading positions. These are types of orders that help manage risk in investments, to close positions when the price of the asset reaches a certain threshold. For example, if the price of an asset is £100 and you set a stop order at £90, the broker will try to sell the security if the price reaches £90.
There are various types of stop orders in trading. Ordinary ones allow you to stop losses by liquidating the position if the asset price falls below a certain level.
A stop-entry order, on the other hand, allows you to open the position when the price crosses a certain threshold (e.g. if the price moves in a range between £20 and £30 you could place a stop-entry order at £31).

Support (Support Level)

Support, also known as support level, is a minimum price level below which a security will not fall for a certain period of time. It is an important indicator for technical analysis, the study of the historical price trend of an asset through charts and indicators.

Support is formed when the price of an asset goes down to a certain value and stops, coming back up and trying to go down but failing to cross the support level. When this happens, a new support level is set. In trading, support is useful for traders to know when to enter a long position if they think the price of the asset might go up. The support is also used to set up the stop loss in order to protect short positions on the asset.


Sustainability is the ability to continuously maintain a process over time, so that physical or natural resources remain available at all times. This concept has three dimensions: economic, environmental and social sustainability, i.e. the search for sustainable models with a positive impact on society, the environment and economic development.

Sustainable finance represents a new approach to investing that takes environmental, social and governance (ESG) factors into account when choosing projects and economic activities in which to invest one's capital.

Environmental sustainability refers to activities that reduce the climate crisis and environmental impact; social sustainability includes projects that respect human rights and workers’ rights. Governance factors in terms of sustainability, on the other hand, relate to the choice of companies that are managed in a sustainable, ethical and responsible manner.

Swing trading

Swing trading involves profiting from price fluctuations by buying and selling securities within a time period that is generally longer than a day but less than a couple of months. This timeframe makes it different from scalping or day trading, which are shorter strategies, or from buy-and-hold investing, which has a much longer time window. Most swing traders make their decisions based on technical analysis, which means they analyse past price behaviour to predict future movements, but they may also draw on fundamental analysis.


A symbol is a set of letters, often abbreviated or combined into an acronym, representing a financial instrument, e.g. a share, mutual fund or option. For example, the stock Amazon is indicated on the market by the abbreviation AMZN, and Astrazeneca by the abbreviation AZN. These symbols are also called tickers, i.e. stock symbols.

Share symbols have rules for their composition. For example, shares listed on the New York Stock Exchange (NYSE) can be abbreviated to a maximum of four letters while NASDAQ stocks can have a ticker symbol of up to five characters.

The use of ticker symbols for stock trading speeds up transactions and reduces the risk of errors when trading stocks with a similar name.