Glossary

Ask (offer)

The price a seller is willing to accept. The lowest ask is often shown as the market’s current offer.

Bid

The price a buyer is willing to pay. The highest bid is often shown as the market’s current bid.

Broker

A firm that routes or executes orders in securities markets for customers. Not the same as an exchange, and not the same as a crypto self-custody wallet.

Custody

Who holds the asset or the keys. Brokerage custody vs exchange custody vs self-custody change failure modes (hack, freeze, lost keys).

Diversification

Spreading exposure across multiple risks so one event hurts less. A concept, not a promise that losses disappear.

Equity (stock)

An ownership share in a company. Equity sits after creditors in a liquidation waterfall.

ETF (exchange-traded fund)

A fund whose shares trade on an exchange and that holds a basket of assets under stated rules (see prospectus).

Exchange

A marketplace that matches buy and sell interest under its rules. Stock exchanges and crypto venues differ in regulation, hours, and asset types.

Expense ratio

Annual fund fee expressed as a percentage of assets. One cost of holding many ETFs/mutual funds; trading costs are separate.

Index

A rules-based basket used to measure a market slice (example structure: large U.S. stocks). An index is a benchmark idea; products that track it are separate.

Liquidity

How easily you can enter or exit size near the quoted price. Thin liquidity often means wider spreads and worse fills.

Market order

An instruction to trade immediately at the best available prices. Speed over price certainty; slippage possible.

Limit order

An instruction to trade only at a specified price or better. Price control over guaranteed fill.

Prospectus

Formal disclosure document for a fund/offering describing objectives, fees, and risks. Prefer this over social summaries.

Risk

Chance of loss or of outcomes differing from what you expected. Includes market, credit, liquidity, operational, and behavioral risks.

Slippage

Difference between the price you expected and the price you got, often from moving markets or thin books.

Spread

Gap between bid and ask. A direct trading cost even when commission is zero.

Ticker

Short symbol identifying an instrument on a venue (e.g., a stock or ETF code). A label, not a quality rating.

Volatility

How much and how fast prices move. High volatility means larger swings in both directions; it is not automatically “opportunity.”

Wallet (crypto)

Software or hardware that manages cryptographic keys for on-chain assets. Self-custody means you are responsible for key safety.

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