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MARKET DOG
Economic Research & Planning
Bollinger Bands
Two lines that are above and below a simple moving average each usually representing two standard deviations
Discounted Cashflow (DCF)
Multiplying a discounting factor by the future cashflows to obtain present values.
Head and shoulders
A bearish technical trend illustrated in a stock chart that is represented by 3 periods of rising price levels separated by two descending periods whereby the second ascending price is higher than the first, but the third ascending price level does not rise above the second.
Hedge
A position held that lowers the risk of an investment.
Implied Volatility
The expected volatility in a stock based off of options pricing.
Margin
In securities, this refers to the difference between the market value of a security and the amount borrowed. Margin is refering to the amount borrowed from a broker to exercise leverage.
Moving Average Convergence/Divergence
A technical indicator to illustrate momentum in price movements and trends. This indicator compares the relationship of two exponential moving averages (EMA) to a signal line. The standard form of this is to subtract a 26 period EMA from a 12 period EMA to compare it to a signal line which is a 9 period EMA of the MACD line. Traders use this indicator to illustrate bullish or bearish trends when the MACD line crosses the signal line or to illustrate reversals of trends.
Price to Book Ratio
A valuation method to compare the market cap of a company to its book value. This ratio is found by taking the current market price per share and dividing it by the book value per share. Book value per share = (total assets-intangible assets-total liabilities) divided by number of outstanding shares).
Price/Earnings to Growth (PEG) Ratio
A calculation used to value a company by taking the firms price to earnings ratio (P/E) and dividing it by the expected earnings growth rate for a given time period. This calculation is viewed as a more comprehensive valuation method than simply looking at the P/E, but expected and actual growth rates can vary greatly.
Relative Strength Index (RSI)
A technical analysis measurement of the number of days of increasing prices relative to the number of days of decreasing prices.
Return on Assets (ROA)
A profitability indicator that takes net income for the trailing twelve months and divides it by the total average value of assets. ROA includes a company's debt in contrast to return on equity (ROE) which does not include debt.
Return on Equity (ROE)
A profitability indicator that takes thenet income for the past twelve months and divides it by common stockholder equity.
Standard Deviation
A measurement used in statistics to quantify the amount of variation in a set of data values.
Vertical Line Charting
technical charting method that illustrates each day's trading range with a vertical line expanding from its high and low for each day with the closing price indicated by a short horizontal line.