The Book of Jargon

Finance has a vocabulary problem.

Not a shortage, that’s reserved for oil and silver, but quite the opposite.

Every mechanism gets an acronym. Every acronym gets a nickname. And after a while the whole thing reads like a language designed by a committee that was paid per syllable.

Which, in all fairness, I think it was.

Someone checked in with me and asked what every term I ever used in the “weekend thoughts” was.

So I went over everything, and stored - once and for all, in one place, alphabetically - their definitions in the plainest of plain words.

If you’ve been running around in the financial markets, you’ll probably know most of those already, or you heard them mutter by those guys at CNBC - which they probably use to sound all knowing and important but have no clue what they mean. And some of them exist to be uttered by the corner office in order to confuse the whole floor with their wisdom.

Bookmark it, ignore it, or read it top to bottom and see how much of modern finance just means “somebody owes somebody money”.

AAPL - Apple. The stock, not the fruit. Although both have been overvalued at various points.

ADP - Payroll processing company. Because it cuts a lot of paychecks, its monthly employment report arrives before the official one and is treated as an early read on the labour market. It is also frequently wrong, which nobody actually cares about as long as stocks go up.

ADX - Average Directional Index. Tells you how strongly a trend is trending. Not which direction. That part is still your problem.

AGG - iShares Core US Aggregate Bond ETF. The boring one. That was the selling point.

AI - Artificial Intelligence. Currently responsible for roughly all of the S&P 500’s gains and none of its profits.

ATH - All-Time High. The highest price ever paid, and therefore the moment at which everyone becomes certain it goes higher.

Backtest / BT - Price returning to a level it previously broke through, to check that the level still holds. Chart people call this “confirmation”. Everyone else calls it “going back down”.

Backwardation - Futures trading below spot. Translation: someone wants the thing now and is willing to pay a premium over the paper promise of it later. In a functioning market this basically doesn’t happen. Silver has been doing it for months.

Basis - The gap between spot and futures. When it goes strange, something is broken. Also, confusingly, a basis point (0.01%), and also, confusingly, your cost basis for tax.

BBB - The lowest rung of investment grade. One downgrade away from a forced-selling cascade, which is why an awful lot of corporate debt is rated exactly BBB and not a notch lower.

Bearish - Expecting prices to fall. Also: permanently early.

Bid - What a buyer will actually pay, as opposed to what a seller thinks it’s worth.

Bid-Ask Spread - The gap between those two numbers. Narrow in calm markets, and roughly the width of the Atlantic during a crisis, precisely when you need to sell.

BofA - Bank of America.

Bollinger Bands - Volatility bands drawn around a moving average. Price tends to stay inside them, until the day it very much doesn’t.

Bond - A promise to repay borrowed money with interest. The entire financial system rests on the idea that this promise is good.

Breakeven - Where you neither win nor lose. Also where most traders eventually beg to get back to.

Breakout / BO - Price punching up through resistance. Half of these are real.

Brent - The global oil benchmark, named after a North Sea field that barely produces anything anymore.

BRICS - Brazil, Russia, India, China, South Africa, plus whoever else has joined by the time you read this. A coalition whose main shared conviction is that they’d like to settle trade in something other than dollars.

BTC - Bitcoin. Digital, scarce, and marketed as a store of value by people who check the price nine times a day.

Bubble - Prices that make no sense, sustained by everyone agreeing they do.

Bullish - Expecting prices to rise. The default state of anyone whose salary depends on you buying something.

Call Option - The right, not the obligation, to buy at a set price. Cheap lottery tickets with Greek letters attached.

CAPE - Cyclically Adjusted Price-to-Earnings ratio, smoothed over ten years so you can’t hide behind one good quarter. It has been screaming “expensive” for so long that everyone has learned to ignore it.

CapEx - Capital Expenditure. Money spent on things that are supposed to still be useful in five years. See also: 19-year data centre leases for 1-year hardware.

CMBS - Commercial Mortgage-Backed Securities. Office buildings, sliced, pooled, and sold. Currently a topic people prefer to change.

Consolidation - Price going sideways. The market equivalent of “we need to talk”.

Contango - Futures above spot. The normal state of the world: paying a little extra for delivery later, because storage and time cost money.

Correlation - How reliably two assets move together. Traditionally goes to 1 at exactly the moment your diversification was supposed to save you.

COT - Commitment of Traders. The weekly CFTC report showing who is positioned where. Useful, delayed, and endlessly over-interpreted by people who have found the pattern that confirms what they already believed.

CPI - Consumer Price Index. The official inflation number, assembled from a basket of goods that is periodically adjusted so the number behaves.

Crack Spread - The refinery’s margin: crude in, products out, difference in the middle. Nothing to do with the other kind of crack, and refiners are tired of the joke.

CRE - Commercial Real Estate. Offices, malls, warehouses. Two of those three have a problem.

CRE - Capital Rotation Event: Northstar & Badcharts’ term for capital leaving equities for the metals, confirmed when the S&P rolls over priced in gold and the stock market turns bear.

Credit Spread - How much extra yield a corporate borrower has to pay over the government. When it’s tight, everything is fine. When it widens, everything was never fine.

Cup & Handle - A bullish chart pattern that looks like a cup with a handle. Chartists see crockery; the rest of us see a squiggle.

Death Cross - The 50-day moving average crossing below the 200-day. Dramatic name, mediocre track record.

Deflation - Prices falling. Sounds lovely for a shopper, catastrophic for anyone carrying debt, which is just about everyone.

Deleveraging - Paying down debt, usually not by choice.

Delinquency - Missing payments. The early tremor.

Divergence - When the indicator says one thing and the price says another. One of them is lying, and it’s usually the one you’re betting on.

Dividend - A slice of profit paid to shareholders. A quaint custom, still practiced in unfashionable sectors.

DJIA / Dow Jones - The Dow. Thirty big US companies, weighted by share price, which is a genuinely stupid way to build an index and it’s been that way since 1896.

DM - Developed Markets. The US, Europe, Japan and friends.

Dollar Index / DXY - The dollar’s strength measured against a basket of other currencies. Mostly the euro, and the euro is largely the dollar’s cousin.

Drawdown - Peak to trough. The number you quietly stop looking at.

Drawdown - What you do to a credit facility.

Drawdown - What the US did to the SPR, where it meant the opposite of a loss for whoever was buying.

Duration - How much a bond’s price moves when rates move. Long duration in a rising-rate world is how a bank with “safe” Treasuries goes bust. When a central banker says it, though, they usually just mean “how long”, as in higher for longer.

EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization. Otherwise known as earnings before all of the expensive bits.

EBITTDA - Earnings Before Interest, Taxes, and Trump’s Daily Announcements. The current version algos run with.

ECB - European Central Bank. Sets one rate for twenty countries with fourty economies between them. It’ll work out. Eventually.

Eligible - COMEX metal that meets the exchange’s specifications, sits in the same vault as the registered metal, counts in the same headline inventory total, and belongs to someone who has not offered it for sale. It is not available to you at any price they’ve agreed to. This distinction is the single most misread number in the PM market.

EMA - Exponential Moving Average. A moving average that cares more about recent prices, on the theory that last week matters more than last year.

Emerging Markets / EM - Countries whose crises are described as “emerging market turmoil” rather than “a banking crisis” in the DM.

Encumbered - Metal that exists, sits in a vault, and belongs to someone else. Turns up in inventory totals as though it’s available. It isn’t.

ESG - Environmental, Social, Governance. An investment screen that mysteriously permitted a great deal of what it was supposed to screen out, and is now being quietly retired.

ETF - Exchange-Traded Fund. A basket of things, traded like one thing. Wonderfully convenient right up until everyone tries to leave at once.

EU - European Union.

Eurodollar - Dollars held outside the United States. Nothing to do with the euro. Nothing to do with Europe either. Finance names things the way toddlers do. Traders also say “euro-dollar” out loud when they mean EURUSD, the actual currency pair, so listen for context and nod knowingly.

EV/Sales - Enterprise Value to Sales. The valuation metric you use when the company has no earnings, and therefore the metric currently in fashion.

Excess Liquidity - Cash sitting around beyond what’s required. Nature abhors it, and so does a yield-hungry portfolio manager.

Falling Wedge - A bullish pattern in which the range contracts as price drifts lower. Or, alternatively, price drifting lower.

FCF / Free Cash Flow - Cash left after capital spending. The number that’s hardest to fake, which is why nobody leads with it.

Fed - The Federal Reserve. Ostensibly independent. Currently finding out how much of that was written down.

Federal Funds Rate - The overnight rate banks charge each other, and the lever the Fed pulls to move everything else.

Fibonacci Retracement - Levels at 38%, 50% and 62%, derived from a 13th-century Italian counting rabbits.

FOMC - Federal Open Market Committee. Twelve people, eight meetings, one global asset market held hostage.

Forward - A private contract to deliver an asset later at an agreed price. Like a future, but without the exchange watching.

Forward Guidance - A central bank telling you what it will do and reserving the right not to.

Free Float - Shares actually available to trade, excluding the ones locked up by insiders. Small floats move violently, which is either a risk or the entire strategy, depending on who’s talking.

Free Float - A currency can also free float, which means nobody is defending it, which is usually announced on a Sunday.

Futures - A standardised promise to deliver something later. In commodities, the interesting question is what happens when the promises exceed the something.

Gamma - How fast delta changes. When dealers are short gamma, they must chase price in whichever direction it’s already going, which is how a market falls over on a quiet Tuesday.

GDP - Gross Domestic Product. Total output, including the money spent cleaning up after disasters, which is why a good hurricane is technically stimulus.

GDX - VanEck Gold Miners ETF. The big miners.

GDXJ - VanEck Junior Gold Miners ETF. The smaller miners, some of which are “junior” the way a hole in the ground is a mine.

Gilt - A UK government bond. The name suggests gold. The 2022 experience suggested otherwise.

GLD - SPDR Gold ETF. Gold exposure, minus the gold.

Gold/Silver Ratio - See GSR.

Golden Cross - The 50-day moving average crossing above the 200-day. The optimistic twin of the death cross, and about as reliable.

Goldman Sachs - An investment bank. Recommends what it is selling.

Greeks - Delta, gamma, theta, vega. The risk measures that explain why your option lost money even though you were right about the direction. [indepth: The Ancient Greeks]

Gross Margin - What’s left of revenue after the cost of actually making the thing.

GSR - Gold/Silver Ratio. Gold price divided by silver price. Historically around 15:1, when both were money. Last year somewhere north of 100. Silver bugs have been pointing at that gap for forty years, and one day I’m going to be right, and I’ll be unbearable about it!

Head & Shoulders - A bearish reversal pattern. Also a shampoo. The chart version has a similar success rate against dandruff.

Hedge - A position taken to offset risk. In practice: a second way to lose money, purchased for peace of mind.

High Yield / HY - Bonds from borrowers who have to pay more because there’s a real chance they won’t pay at all. See also: junk.

Hindenburg Omen - A technical signal supposedly warning of a market top, named after a burning airship. It has predicted eleven of the last three crashes.

Hot Money - Capital with no loyalty and a very short memory. Arrives fast, leaves faster, blames you on the way out.

HUI - The NYSE Arca Gold Bugs Index. Unhedged gold miners, i.e. the ones that didn’t sell their production forward and therefore actually benefit when gold rises. Radical concept, apparently.

IBKR - Interactive Brokers. Where I do my damage.

IG - Investment Grade. BBB or better. A rating, not a guarantee, as several BBB-rated companies would like to remind you from beyond the grave.

IOR - Interest on Reserves. The Fed pays banks to leave money parked at the Fed. Yes, that’s what it sounds like.

ISM - Institute for Supply Management. Its surveys ask purchasing managers whether things feel better or worse than last month. This qualifies as hard economic data.

IV - Implied Volatility. How much movement the options market is pricing in. Reliably too low right before it matters. In any other document it means four.

Japan 10Y - The yield on 10-year Japanese government debt. For thirty years, this number did nothing at all. It is doing something now, and everyone who built a carry trade on the assumption it wouldn’t is paying attention.

JOLTS - Job Openings and Labor Turnover Survey. Counts job postings, including the ones nobody intends to fill.

JPMorgan - An investment bank. Also, at various points, the largest holder of physical silver on the planet. No connection, obviously.

JPY - Japanese Yen. The funding currency for half the world’s leveraged bets, which makes it everyone’s problem when it moves.

Junk Bonds - Bonds rated below investment grade. Renamed “high yield” by marketing, because “junk” tested poorly with the target demographic.

Kelvin Lag - The delay between a change in air temperature and the moment a large body of water reflects it. Borrowed from a meteorologist.

Lease Rate - What it costs to borrow physical metal. Normally near zero, because who needs to borrow silver? When it spikes to double digits, somebody very much needs to borrow silver.

Leverage - Borrowed money used to amplify returns. Works beautifully in one direction.

LIBOR - London Interbank Offered Rate. The reference rate underpinning trillions in contracts, set for decades by a handful of traders submitting numbers they made up. Now retired, replaced by SOFR.

Liquidity - The ability to sell without moving the price. Abundant when you don’t need it.

Long - Owning the thing. Betting it goes up.

M2 - Money supply: cash, deposits, savings. Goes up, mostly.

M3 - A broader money supply measure. The US stopped publishing it in 2006, on the grounds that it wasn’t useful. Two years later, it might have been useful.

MACD - Moving Average Convergence Divergence. A momentum indicator built from two moving averages, with a third one drawn on top to tell you what the first two meant.

Mag 7 - Microsoft, Apple, Nvidia, Amazon, Tesla, Alphabet, Meta. Seven companies carrying an index of five hundred, which is fine and normal and definitely not a concentration risk.

Margin - Borrowed money used to buy securities. Or the profit left on a sale, as in gross margin. Opposite ends of the building, same word, and an earnings call will use both within a minute of each other.

Margin Call - The phone call in which your broker explains that the borrowed money would like to come home. You do not negotiate. You sell whatever is liquid, which is rarely the thing that’s actually falling.

Margin Debt - The total amount investors have borrowed to buy stocks. Peaks nicely at tops.

Mark-to-Market / MTM - Valuing an asset at what it would actually fetch today. Deeply unpopular in the financial world.

Market Cap - Share price times share count. The theoretical value of a company, computed by taking the price of the last hundred shares that changed hands and multiplying it by all of them. Nobody thinks about this too hard.

Meta - Facebook, after the rebrand it hoped you’d forget was a rebrand.

MOVE Index - The VIX of the bond market. When the bond market gets scared, everything downstream gets scared shortly afterwards.

Moving Average / MA - The average price over the last N periods. The 50-day and 200-day are watched because enough people watch them.

M&A - Mergers and Acquisitions. Two companies combine, the synergies are announced, and nobody ever checks those numbers again.

MSFT - Microsoft.

MSTR - MicroStrategy. Nominally an enterprise software company. In practice, a leveraged bitcoin holding vehicle with a software department attached, and increasingly not even that.

Naked Short - Selling shares you haven’t borrowed and don’t have. Illegal in most contexts, and yet the failures-to-deliver data keeps happening to somebody.

NDX - The Nasdaq-100. The tech index. See also: Mag 7, roughly half of it.

No1 - Me. Also nobody. The pun does a lot of work around here and I have no intention of stopping.

NVDA - Nvidia. Sells shovels. Currently priced as though the gold is guaranteed.

NYSE - New York Stock Exchange.

OI / Open Interest - The number of derivative contracts still open. In silver, this number is the interesting one: it tells you how many ounces have been promised versus how many exist.

OIS - Overnight Indexed Swap. A rates derivative, and a useful thermometer for what banks think the central bank will do.

P/B - Price-to-Book. What you’re paying relative to the accountants’ valuation of the assets. Assumes the accountants are right.

P/E - Price-to-Earnings. Share price divided by earnings per share. The oldest sanity check in the business, currently on sabbatical.

PE - Private Equity. Buys a company with the company’s own borrowing capacity, charges it a fee for the service, and sells it to the next fund along.

Palladium / Pd - Precious metal, mostly in catalytic converters. Mostly Russian. What could possibly go wrong?

Parabolic - Going up in a way that cannot continue and therefore will not.

PBOC - People’s Bank of China. Buys gold. Presumably.

PCE - Personal Consumption Expenditures. The Fed’s preferred inflation measure, chosen partly because it runs lower than CPI.

Physical - The actual metal. The bar, in your hand, with a serial number. Everything else in this list is a promise about it.

Pip - The smallest standard price move in forex. Fourth decimal place stuff, which tells you everything about how much leverage is involved.

Platinum / Pt - Rarer than gold, cheaper than gold. Markets are not always a weighing machine.

PM - Precious Metals. Gold, silver, platinum, palladium.

PM - the Portfolio Manager.

PM - the afternoon, so “ask the PM about PM this PM” is a sentence that parses and I refuse to apologise for it.

PMI - Purchasing Managers Index. Above 50, things are expanding. Below 50, they aren’t. Another survey elevated to the status of data.

PMI - Private Mortgage Insurance, which is what you pay when you couldn’t manage the deposit.

Put Option - The right to sell at a set price. Insurance, in other words, and priced accordingly: cheapest when nobody wants it.

QE - Quantitative Easing. The central bank creates money and buys assets with it. Emergency measure, 2008. Permanent feature, thereafter.

Quiescent Float - The interval a lure spends motionless on the water before the strike.

QQQ - The Nasdaq-100 ETF. If you own this, you own Nvidia. A LOT of Nvidia.

Ratio - One number divided by another number. I include this for completeness, because it was in my list, and I am not going to pretend I know what I was thinking.

Recession - Two consecutive quarters of contraction. Unless the people who declare recessions decide otherwise, which they can, and have.

Registered - COMEX metal actually available for delivery, with a warrant attached, offered for sale. The other category is eligible, and the difference between the two is the difference between a vault that is full and a vault that is useful.

Repo / Repurchase Agreement - Selling something with a promise to buy it back tomorrow at a slightly higher price. It’s a loan. Calling it a sale keeps it off certain balance sheets, which was rather the point.

Repo - The other repo, the one with the tow truck, is a repossession, and the two are closer in spirit than either industry would like.

Resistance - A price level where sellers have shown up before, and are presumed to be waiting again. Support, inverted.

Retail - You and me. The last to know, in the traditional telling.

Retail - Also an entire sector of the economy, so “retail was weak this quarter” could mean the shops or the shareholders, and occasionally both.

Reverse Repo / RRP - The Fed borrowing cash overnight from money market funds. When this facility balloons, the financial system has cash it cannot find a use for. When it empties out, it has found one. Note that a repo and a reverse repo are the same transaction viewed from opposite sides of the table, so which one you’re reading about depends entirely on whose desk the writer is standing at.

Rising Wedge - Bearish pattern. Price climbing, range narrowing, energy draining.

ROC / Rate of Change - Momentum, measured as the speed of the move rather than its direction.

ROC / Return on Capital - What a company earns on every dollar deployed. Whether the last decade was a business or a subsidy.

ROC / Republic of China - Meaning Taiwan - not to be confused with PRC which is actually China.

RSI / Relative Strength Index - A 0-100 momentum gauge. Above 70 is “overbought”, below 30 is “oversold”, and both readings can persist for months while you’re being stopped out.

Russell 2000 / RUT - The US small-cap index. The actual economy, as opposed to the seven companies.

Safe Haven - Where money runs during a crisis. Treasuries and gold, traditionally.

Sentiment - What everyone feels. Reliably most bullish at the top.

Settling Time - How long a suspension bridge takes to stop moving after the last truck leaves it. An engineer told me this one. Nobody has ever measured it for the markets.

SGE - Shanghai Gold Exchange. Where physical gold actually changes hands, rather than being promised.

SHFE - Shanghai Futures Exchange. China’s derivatives venue, and increasingly the one setting the price the West then discovers.

Shiller PE - See CAPE. Same thing, named after the man who kept pointing at it.

Short - Selling something you don’t own, hoping to buy it back cheaper. Unlimited downside, which sounds theoretical until it isn’t.

SIL - Global X Silver Miners ETF. The larger silver producers.

SILJ - The junior silver miners ETF. Higher beta, in the sense that a firework has higher beta than a candle.

Silver / Ag - The metal. Half industrial, half monetary, entirely misunderstood by anyone who insists on it being only one of the two. In any other financial sentence, ag means agriculture, so a headline about ag prices is about wheat and I have been caught by this more than once.

SLV - iShares Silver Trust. The silver ETF, whose custodian is a bank, whose bars are audited on a schedule, and whose relationship to the metal you think you own is a subject I have written rather a lot about.

SMA / Simple Moving Average - The plain average price over N periods. Every period weighted equally, because sometimes simple is fine.

SOFR - Secured Overnight Financing Rate. LIBOR’s replacement, based on actual transactions rather than the honest recollections of traders.

Spot - The price for metal right now, in your hand, today. Increasingly a different number from the futures price, which is the whole story.

Spread - The difference between two prices or two yields. Widens when people get nervous. Which spread depends on the sentence: bid/ask, credit, option, crack. The word on its own carries no information at all, which has never stopped anyone using it.

SPR - Strategic Petroleum Reserve. The US emergency oil stockpile. Drawn down heavily to manage prices, and refilling has proven rather more expensive than emptying.

SPX / S&P 500 - The 500 largest US companies, weighted by market cap, which means it is now basically seven companies.

SPY - The S&P 500 ETF.

Stagflation - Stagnant growth plus rising inflation. The combination no central bank has a tool for, because every tool fixes one and worsens the other.

Standing Repo - A Fed facility banks can tap for emergency cash. Its use is supposed to be routine. Its use is watched like a hawk.

Support - A price level where buyers have turned up before. Holds, until it becomes resistance.

Swap / Swaps - Contracts exchanging one stream of cash flows for another. Trillions of notional value, mostly invisible, mostly fine. Interest rate, currency, credit default: all swaps, all wildly different animals. And a central bank swap line is a fourth thing entirely, which is the Fed quietly lending dollars to foreign central banks so their banks don’t fail.

SWIFT - The messaging network banks use to move money internationally. Not money itself, just the instructions. Which is why cutting a country off from it is an act of financial war, and why several countries are now building their own.

T-bill / Treasury Bill - Short-term US government debt, under a year. The closest thing to a risk-free asset, subject to the ongoing debate about that adjective.

TACO - Trump Always Chickens Out. Ordered “extra spicy”, arrives mild, and the kitchen swears that's what you asked for.

Tail Risk - The extreme event in the fat part of the distribution nobody modelled. Occurs roughly every four years.

Technical Analysis - Predicting prices from charts. Works, in the specific sense that enough people believe it to make it partly true.

Technicals - The indicators and patterns themselves.

Theta - Time decay. Your option is worth slightly less every morning, purely because it’s morning.

Tightness - Restrictive conditions. Money is expensive, credit is fussy, and marginal borrowers stop being borrowers. In a metals paragraph it means something else altogether: not enough physical to go around. Same word, and the two can happen at once, which is the interesting scenario.

TIPS - Treasury Inflation-Protected Securities. Bonds indexed to CPI, which protects you from inflation as measured by the people who measure inflation.

TLT - The iShares 20+ Year Treasury ETF. Long duration in ETF form. It has been an education.

Topix - The broad Japanese stock index. The one that took 34 years to get back to its 1989 high, which is a fact worth keeping in your pocket the next time someone explains that stocks always recover.

TP / Take Profit - The order that closes your position at a target. The most difficult decision of them all.

Transitory - Adjective. Economics. Temporary; short-lived; lasting no more than three or four years, possibly longer, definition subject to revision.

Triple Bottom - Three touches of support, then up. Bullish, allegedly.

Triple Top - Three touches of resistance, then down. Bearish, allegedly.

TSLA - Tesla. A car company, valued as a technology company, run by a man valued as a phenomenon.

TSX - Toronto Stock Exchange. Where the mining companies live.

TSXV - The TSX Venture Exchange. Where the mining companies that don’t have a mine yet live.

Turnover - How much trading volume there is relative to what’s outstanding. In Europe it means revenue, and in HR it means the people leaving. A British CFO and an American trader can hold an entire conversation about turnover and agree on nothing.

UBS - Formerly Union Bank of Switzerland, now just the letters. Swallowed Credit Suisse in a weekend, which is what “systemically important” looks like from the inside.

UE / Unemployment - The share of the labour force without a job and looking for one. The definition of “looking” is doing quite a lot of work in that sentence.

Unregistered - Not actually a COMEX category, though half the internet says it and I have said it myself. The word you want is eligible.

Unrealized Loss - A loss you haven’t sold into yet, and therefore, in the language of bank accounting, not really a loss at all. Several banks held that view right up to the end.

Uranium / U - Nuclear fuel. Politically toxic for thirty years, suddenly essential now that everyone has noticed data centres need electricity.

USD / US Dollar - The world’s reserve currency. The arrangement everyone complains about and nobody has yet replaced.

UST / US Treasury - US government debt. The bedrock asset of the global system, issued by a borrower whose debt is growing faster than its economy.

VAR / Value at Risk - The maximum you expect to lose, at a given confidence level, on a normal day. Says nothing whatsoever about abnormal days, which are the only ones that end careers. Econometricians read the same three letters as Vector Autoregression and will look at you strangely.

Vega - Option sensitivity to changes in volatility.

VIX - The volatility index. Known as the fear gauge, though a low VIX has never once meant there was nothing to fear.

Volatility - How violently prices move. Not the same thing as risk, though the industry has spent decades pretending it is.

Volume - How much actually traded. A move on no volume is a rumour; a move on heavy volume is a decision.

WACC - Weighted Average Cost of Capital. The blended cost of a company’s debt and equity, and therefore the hurdle every project has to clear. When rates rise, this rises, and a great many projects that made sense in 2021 quietly stop making sense.

WAL - Weighted Average Life. The expected life of a mortgage-backed security, given that borrowers prepay and default at rates the model assumed they wouldn’t. It also means Write-Ahead Logging, a database technique, which is what I originally wrote down here, because I spend my days in both worlds and they occasionally leak into each other. Both definitions are about a promise being durably recorded before anyone acts on it. Make of that what you will.

Warrant - A long-dated option, usually issued by the company itself. Popular in mining financings, where the company would like you to take the risk and is prepared to sweeten the deal. Confusingly, a COMEX warrant is a completely different object: the document proving title to a specific bar in a specific vault. That’s the one that turns eligible metal into registered metal, so when I use the word in a silver piece, that’s usually the one I mean.

WTI - West Texas Intermediate. The US oil benchmark. Famously went negative in April 2020, briefly making crude oil a liability, which is the sort of thing you’d like to see happen only once.

XAU - The Philadelphia Gold and Silver Index. Precious metals miners, hedged and unhedged. Not to be confused with the HUI, which is the unhedged one, or with XAU as the currency code for an ounce of gold, because of course the same three letters mean two different things.

Y2K - The bug that was going to end civilisation at midnight on 1 January 2000, and then didn’t, because thousands of engineers spent two years quietly fixing it. The prevailing lesson people drew was that the warnings had been overblown.

Yield - What an asset pays you for holding it. Bonds pay it in coupons, stocks in dividends, gold in nothing at all, which is either its greatest flaw or the entire point depending on which decade you ask.

Yield Curve - Bond yields plotted across maturities. Normally upward-sloping, because lending for longer should pay more.

Yield Curve Inversion - When it doesn’t. Short rates above long rates: the bond market telling you it expects the economy to break. It has preceded every US recession in living memory, and has been dismissed every single time by someone explaining that this time is different.

YoY - Year-over-Year. Comparing to the same period last year, which is how you smuggle a terrible quarter past a reader if last year’s was worse.

YTD - Year-to-Date. Performance since 1 January, a start date chosen by the Romans, and therefore of no analytical significance whatsoever.

Yttrium - A rare earth element, atomic number 39, essential in electronics and magnets, and controlled almost entirely by China. It is here because it starts with a Y and because there are seventeen of these and China has export controls on the ones that matter.

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