Growth Investing Stock Market Glossary
From A for ‘Asset’ to Z for the ‘Zero-Coupon Yield Curve’ — your comprehensive guide to everything that matters in the markets.
Backlog
Shows the open order backlog of a company and serves as an indicator for future revenues.
Backtesting
Testing an investment strategy on historical, time-corrected data to evaluate robustness and metrics.
Backwardation
A term structure where the futures price is below the spot price, usually due to limited availability.
BaFin (Federal Financial Supervisory Authority)
The German financial supervisory authority, which oversees institutions and markets and enforces central rules.
Balance of payments
Part of the balance of payments with flows of goods, services, income, and transfers.
Balance of Payments
Systematic recording of all economic transactions of a country with foreign countries.
Balance sheet total central bank
The sum of the assets of a central bank and reflects the scope of monetary policy operations.
Bank balance
Cash and cash equivalents in bank accounts, which are classified as current assets in the balance sheet.
Barrier option
An option whose validity or payout profile depends on reaching or not reaching a specified price barrier.
Basis (futures contract)
The difference between the futures price and the spot price of an underlying asset can be positive or negative.
Basis risk
Refers to the risk that hedging transactions do not perfectly replicate the underlying price.
BDC (Business Development Company)
A US corporate form that invests in medium-sized companies and acts as a publicly traded lender.
Bear market
A phase of sharp declining prices, often defined as a decrease of at least 20% from the peak.
Benchmark
Benchmark, against which the performance of a portfolio or product is measured.
Benchmark drift
Creeping deviation of an index replication from the target weighting due to market developments.
Benchmarking
Systematically compare key figures or strategies with a reference to assess performance and deviations.
Bermudan option
An option that can be exercised on specific predetermined dates before maturity.
Best Execution
Refers to the best possible order execution in the interest of the customer, taking into account price, costs, speed, and quality aspects.
Best Execution Policy
Defines the principles of an institute to ensure best execution of orders.
Best-Bid-Offer (BBO)
The best available bid and ask side in the order book of a market at a given time.
Bestand (Real estate)
Denotes the held real estate portfolio inventory as opposed to projects or sales.
Beta
Measures the market sensitivity of a security to the benchmark and is a core element of the CAPM.
Beta (unlevered/levered)
Unlevered Beta measures business risks without debt, while Levered Beta additionally takes into account the leverage effect.
Beta adjustment
Adjusting a measured beta for target leverage, industry effects, or regression properties.
Betriebsausgaben
Ongoing operating expenses such as sales, administration, and R&D.
Bid price
Highest purchase price that buyers are currently willing to pay.
Bill of exchange
Order paper debt with payment instruction from an issuer to a drawee.
Bill of exchange credit
Short-term financing through discounting or pledging of bills of exchange.
Bitcoin
Largest decentralized cryptocurrency, whose supply is algorithmically limited and transactions are secured on a blockchain.
BLA (Biologics License Application)
The US approval application for biological drugs at the FDA is an important milestone for biotech companies.
Black-Litterman
A portfolio model that combines market expectations with investors' subjective views to form consistent weights.
Block Trade
A large transaction conducted off-exchange or through special procedures to minimize market impact.
Blue Chips
Stocks of established, financially solid large companies with high liquidity.
Bollinger Bands
Volatility-dependent price bands around a moving average that display statistical extreme zones.
Bond
Debt security with fixed or variable coupon and repayment of the face value at the end of the term.
Bonus certificate
A structured product with a bonus payment if a barrier is not touched and limited profit/loss profiles.
Book-to-Bill ratio
Relates incoming orders to sales and shows the dynamics of future capacity utilization.
Bookbuilding
Determining the emission price in an initial public offering by collecting investor orders within the price range.
Bracket Order
Combined order consisting of an entry order with simultaneous stop-loss and take-profit orders to limit risk.
Break-even costs
Denote the costs at which, for example, raw material extraction or projects are economically viable.
Break-even point
Point at which revenues cover total costs.
Breakout
The dynamic crossing of a defined resistance or support zone with a subsequent trend.
Breakout Trading
A strategy that focuses on breakthroughs of key zones and usually works with consistent stops.
Bridge (Crypto)
Enables the transfer of tokens between blockchains through connecting protocols.
Bridge Finance
Short-term financing until the inflow of planned funds.
Bridge loan
Bridge loan to bridge until long-term financing.
Bucketed DV01
Disassemble the interest rate risk sensitivity by maturity buckets to refine control and hedging.
Bull market
A longer phase of rising prices, often driven by positive economic conditions and risk appetite.
Bull market
Sustained phase of rising stock prices in the stock market.
Bullet
Repayment of the entire face value of a bond at the end of its term.
Burn Rate
Specifies how quickly a company uses up its liquid assets, usually per month or quarter.
Business Cycle Indicator
Early, leading, or lagging indicator for assessing the economic situation.
Business Cycle Indicator
Key figure for classifying the current phase of the economic or market cycle.
Business cycle phase
Section of the business cycle from expansion to recession.
Business cycle risk
Risk of results and valuation due to cyclical fluctuations in demand.
Business cycle risk
Income and valuation risk due to cyclical fluctuations.
Business key performance indicator (KPI)
Measure for assessing yield, efficiency, liquidity, or growth.
Business model
Structure, how a company creates, delivers, and monetizes value.
Business or company value (Goodwill)
Difference between purchase price and fair value of net assets acquired in acquisitions.
Business segments
Reported areas of a company with their own revenues, expenses, and key figures.
Business valuation
Calculation of the company value using DCF, multiples, or residual income.
Business year
The reporting period of a company is not necessarily identical to the calendar year.
Buy order
Order to acquire a security with market, limit, or stop attributes.
Buy signal
Technical or fundamental indication of a potentially advantageous entry point.
Buyback program
Planned acquisition of own shares by the company for capital utilization.
