← All Glossary Dark Pool A private financial exchange or forum for trading securities that does not publicly display order information, allowing large institutional trades without market impact. Day Trading The practice of buying and selling securities within the same trading day, often using leverage and short holding periods to profit from small price movements. DCF (Discounted Cash Flow) A valuation method estimating the value of an investment based on its expected future cash flows, discounted to present value using an appropriate discount rate. Default A failure by a borrower or bond issuer to make required interest or principal payments when due, triggering potential legal action and credit rating downgrades. Default Risk The possibility that a bond issuer or borrower will fail to make required interest payments or repay principal, also known as credit risk. Deferred Annuity An annuity contract where payments to the investor begin at a future date, allowing the invested funds to grow tax-deferred during the accumulation phase. DeFi (Decentralized Finance) A blockchain-based financial ecosystem that enables lending, borrowing, trading, and earning interest without traditional intermediaries like banks or brokers. Delta An options Greek measuring the sensitivity of an option's price to a $1 change in the underlying asset's price, ranging from 0 to 1 for calls and -1 to 0 for puts. Derivative A financial contract whose value derives from an underlying asset, index, or benchmark, including options, futures, swaps, and forwards. Diversification The practice of spreading investments across different assets, sectors, or geographies to reduce overall portfolio risk without necessarily sacrificing expected returns. Dividend A distribution of a company's earnings to its shareholders, typically paid quarterly in cash or additional shares, representing a return on investment. Dividend Yield A financial ratio showing how much a company pays out in dividends annually relative to its stock price, expressed as a percentage. Dollar-Cost Averaging (DCA) An investment strategy of regularly investing a fixed dollar amount into an asset regardless of price, reducing the impact of volatility and removing timing risk. Dow Jones Industrial Average A price-weighted index tracking 30 large publicly-owned US companies, one of the oldest and most widely followed stock market indices globally. Drawdown The peak-to-trough decline in an investment's value during a specific period, typically expressed as a percentage, measuring downside risk. Duration A measure of a bond's sensitivity to interest rate changes, expressed in years, indicating how much a bond's price is expected to change per 1% change in yield.
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