← All Glossary Large Cap Companies with a market capitalization typically above $10 billion, representing established, stable businesses often included in major indices like the S&P 500. Leverage The use of borrowed funds or financial instruments to amplify potential returns, increasing both upside potential and downside risk. LIBOR (London Interbank Offered Rate) A benchmark interest rate at which major global banks lend to each other, historically used as a reference for adjustable-rate loans and derivatives. Lien A legal claim or right against a property as collateral for a debt, giving the creditor the right to seize the property if the debt is not repaid. Limit Order An order to buy or sell a security at a specified price or better, ensuring price control but not guaranteeing execution if the market moves away. Liquidity The ease with which an asset can be converted to cash without significantly affecting its market price, a critical factor in portfolio risk management. Liquidity Pool A collection of funds locked in a smart contract used to facilitate decentralized trading, lending, and borrowing in DeFi protocols. LIT (London Interbank Offered Rate successor) The Secured Overnight Financing Rate (SOFR) and other risk-free rates replacing LIBOR as benchmark rates for financial contracts globally. Load (Mutual Fund Sales Charge) A sales fee charged to investors when buying (front-end load) or selling (back-end load) mutual fund shares, compensating brokers and typically reducing the amount actually invested. Long Position An investment position where the investor owns a security expecting its price to rise, profiting from price appreciation over time. Lot A standardized quantity of a financial instrument traded on an exchange, such as 100 shares for stocks or 100,000 units for forex standard lots. Lump Sum A single large payment or investment made at one time rather than in installments, often compared with dollar-cost averaging for market entry.
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