What on earth does that word mean?

Base rate

The interest rate the Bank of England sets. Savings and mortgage rates usually follow it up and down, though never exactly.

Bond

A loan you make to a company or a government. They pay you interest and give your money back on an agreed date.

Broker

The company that actually buys and sells investments for you and holds them on your behalf.

AJ Bell and Hargreaves Lansdown are two big UK ones.

Dividend

A slice of profit a company pays out to shareholders, usually a few times a year. Free money for holding.

A 20p dividend on 100 shares pays you £20.

Equity

Yet another word for shares — ownership in a company, as opposed to lending it money.

Financial advice

A regulated adviser looking at your own circumstances and telling you what to do with your money. It usually costs a fee. Penny does not do this — she explains things in plain English so the decisions stay yours.

Fund

A pot of money from lots of people, invested across many companies at once by one manager or one rule.

Gilt

A bond issued by the UK government. Considered one of the safest places to park money because the government would have to fail to not pay you back.

Index

A list that tracks a group of companies together, so you can see if 'the market' went up or down.

The FTSE 100 is a list of the 100 biggest UK-listed companies.

Index fund

A fund that simply buys everything in an index instead of trying to pick winners. Cheap and boring, which is usually good.

London Stock Exchange

The marketplace where UK shares are bought and sold. The FTSE 100, FTSE 250 and AIM are all lists of companies trading there.

Market cap

market capitalisation

What the whole company is worth right now: the share price multiplied by the number of shares.

£5 a share × 1 billion shares = a £5 billion company.

Portfolio

Everything you own, added together. Your collection.

Share

One small slice of ownership in a company. Own a share and you own a tiny piece of the business.

Buy 10 Tesco shares and you own ten slices out of roughly 7 billion.

Stock

Another word for shares. People say 'stocks' and 'shares' to mean the same thing.

Ticker

The short code a company trades under, like a nickname the stock market uses.

SHEL is Shell, TSCO is Tesco, BP. is BP.

Tracker

A fund that follows a list rather than trying to beat it. It buys everything in the index and charges very little for the privilege.

A FTSE 100 tracker holds all 100 companies in the same proportions as the index.

Upheld

When a complaint is decided in the customer's favour. Firms report this figure to the regulator, who publishes it twice a year.

Accumulating

The fund quietly reinvests your dividends back into itself instead of paying them out. Written as (Acc) on the end of a fund name.

AER

Annual Equivalent Rate

The yearly interest rate on savings, written in a standard way so you can compare accounts fairly.

AGM

Annual General Meeting

The once-a-year meeting where shareholders vote on things like pay and board members.

AIM

Alternative Investment Market

London's market for smaller, younger companies. Lighter rules, faster growth sometimes — and far more failures.

APR

Annual Percentage Rate

The yearly cost of borrowing, including fees. If yours is above about 8%, paying the debt off beats investing.

AUM

Assets Under Management

The total pile of money a fund or firm looks after.

CEO / CFO

Chief Executive Officer / Chief Financial Officer

The boss and the money boss. When either leaves suddenly, it's worth asking why.

CGT

Capital Gains Tax

Tax on profit when you sell an investment for more than you paid — but not inside an ISA or pension.

Distributing

The fund pays dividends out to you as cash, usually a few times a year. Written as (Dist) or (Inc) on the end of a fund name.

DRIP

Dividend Reinvestment Plan

An option to automatically use your dividends to buy more shares instead of taking the cash.

EBITDA

Earnings Before Interest, Tax, Depreciation and Amortisation

Profit before a lot of the awkward costs are taken off. Useful for comparing companies, but treat it with suspicion — it flatters the numbers.

EPS

Earnings Per Share

The company's profit divided by the number of shares — how much profit each share you own earned.

£100m profit and 500m shares = 20p of earnings per share.

ETF

Exchange-Traded Fund

A fund you can buy and sell like a single share. One purchase quietly gets you hundreds of companies.

FCA

Financial Conduct Authority

The UK regulator. Only use a broker that is FCA-regulated — check the register before sending anyone money.

FSCS

Financial Services Compensation Scheme

The UK safety net. If a regulated firm goes bust, savings are protected up to £120,000 per banking licence, and investments held with a failed firm up to £85,000. Neither covers your investments simply losing value.

FTSE 100

Financial Times Stock Exchange 100

Pronounced 'footsie'. The 100 largest companies on the London Stock Exchange, used as the headline scoreboard for UK shares.

FTSE 250

Financial Times Stock Exchange 250

The next 250 companies below the FTSE 100 — established but not giants, and mostly earning their money here in the UK.

If the FTSE 100 is the Premier League, this is the Championship.

IPO

Initial Public Offering

The first day a private company sells shares to the public. Often exciting, often overpriced.

ISA

Individual Savings Account

A wrapper around your investments that means the taxman takes nothing from your gains or income. You can put in up to £20,000 a year.

KYC

Know Your Customer

The identity checks a broker legally must do before letting you invest. That's why they ask for your passport.

LSE

London Stock Exchange

The marketplace where UK shares are actually bought and sold.

Nasdaq

An American stock exchange, and the scoreboard named after it. When the news says 'the Nasdaq', they usually mean its 100 largest, mostly technology, companies.

NAV

Net Asset Value

What one unit of a fund is actually worth, based on everything it owns.

OCF

Ongoing Charges Figure

The yearly cost of owning a fund, as a percentage. 0.10% is cheap, 1.5% is expensive and eats your returns.

P/E ratio

Price-to-Earnings ratio

How many years of current profit you're paying for. High means expectations are high; low can mean a bargain or a problem.

£10 share ÷ 50p earnings = a P/E of 20.

RNS

Regulatory News Service

The official channel companies must use to announce anything important. If it matters, it appears here first — not in the newspapers.

ROE

Return On Equity

How much profit the company squeezes out of the money invested in it. Higher is better.

S&P 500

A list of 500 large American companies — the US version of the FTSE 100, but bigger and far more technology-heavy.

SIPP

Self-Invested Personal Pension

A pension you run yourself. The government adds tax relief on top of what you put in, but you can't touch it until your late 50s.

TER

Total Expense Ratio

Same idea as the OCF — the annual cost of a fund. Lower is nearly always better.

UCITS

A European rulebook a fund follows, covering how spread out it must be and what it can hold. Almost every ETF sold in the UK says it.

YTD

Year To Date

How something has performed since 1 January of this year.

Compounding

Earning returns on your past returns. Slow at first, then surprisingly powerful.

£100 a month at 5% is about £15,500 after 10 years — £3,500 of it earned, not paid in.

Custody / platform fee

A small yearly percentage your broker charges just for holding your investments, usually taken monthly.

Dealing fee

The flat charge your broker takes each time you buy or sell, win or lose.

£5.95 a trade means buying and selling once costs you £11.90.

FX fee

Foreign exchange fee

A small percentage taken when your pounds are converted into another currency to buy a share, and again when you sell.

0.5% on a £1,000 US share is £5 each way.

Interest

What cash earns for sitting somewhere. If it's sitting uninvested in a trading account, the platform often earns it rather than you.

P&L

Profit and Loss

How much a holding has made or lost so far. Green up, red down.

Pound cost averaging

Investing the same amount every month instead of all at once, so you're not relying on picking the right day.

Return

What you got back, including both price change and any income.

Spread

The gap between the price to buy and the price to sell at the same moment. You lose it instantly, so it's a hidden cost.

Stamp duty

A 0.5% government tax when you buy most UK shares. Not charged on funds or ETFs.

Stock lending

Your platform lends the shares you own to a big institution, which pays a fee for borrowing them. You keep ownership; the platform usually keeps most of the fee.

Yield

The yearly income something pays, as a percentage of its price.

A 4% yield means £4 a year for every £100 invested.

Balance sheet

A snapshot of what a company owns versus what it owes. Healthy means plenty of cash and manageable debt.

Cash flow

Actual money moving in and out of the bank. A company can report profit and still run out of cash — cash is the one that kills you.

Director dealing

When bosses buy or sell their own company's shares. They must declare it publicly. Heavy selling is worth noticing.

Filing

An official document a company must publish by law — accounts, results, changes of director. Facts, not marketing.

Going concern

An accountant's note saying whether the company can survive the next 12 months. A warning here is one of the loudest red flags there is.

Profit

What's left after every cost is paid. Also called the 'bottom line'.

Profit warning

A company telling the market in advance that it will earn less than expected. The share price usually drops the same morning.

Receivables

Money customers owe but haven't paid yet. If this grows much faster than sales, people may not be paying.

Revenue

All the money coming in from sales, before any costs. Also called turnover or the 'top line'.

End-of-day price

The final price a share settled at when the market closed. One price a day — plenty for slow, considered decisions.

Limit order

Buy or sell only if the price reaches a number you set. Nothing happens unless it does.

Liquidity

How easily you can sell without moving the price. Big companies are easy; tiny ones can be hard to get out of.

Market order

Buy or sell right now at whatever the current price is.

Position

One holding you own. 'Opening a position' just means buying something.

Position size

How much of your pot goes into one idea.

2% of £1,000 is £20 — small enough that being wrong doesn't hurt.

Short selling

Betting a share will fall. Professionals do it; beginners shouldn't, because the losses have no ceiling.

Stop-loss

An automatic sell if the price falls to a level you chose, to cap how much you lose.

Buy at £10 with an 8% stop-loss and it sells automatically at £9.20.

Take-profit

The opposite of a stop-loss: sell automatically once you're up by a set amount, so you actually bank the gain.

Bear market

A fall of 20% or more. Uncomfortable, normal, and historically temporary.

Bull market

A stretch when prices are generally rising and everyone feels clever.

CFD

Contract for Difference

A bet on a price moving, using borrowed money, rather than owning anything. The firms' own disclosures say most retail accounts lose money.

Correction

A drop of around 10%. Happens most years.

Diversification

Spreading money across lots of different things so one disaster can't sink you.

Drawdown

The worst drop from a high point to a low point. It tells you how uncomfortable the journey was.

£1,000 falling to £700 before recovering is a 30% drawdown.

Emergency fund

Three to six months of spending kept in easy-access cash, so you never have to sell investments at the worst moment.

Inflation

Prices rising over time, so cash quietly buys less each year. It's the reason people invest at all.

Leverage

Trading with borrowed money so a small stake controls a big position. It multiplies losses exactly as much as gains.

10x leverage means a 10% fall wipes out your entire stake.

Offer period

The stretch of time after a possible takeover becomes public, when strict rules apply to what everyone involved can say and do. It ends when a firm offer is made, or the buyer walks away.

Risk

Not just 'losing money' — it's the chance the outcome isn't what you needed, when you needed it.

Short selling

Betting a price will fall, by selling something you don't own and hoping to buy it back cheaper. Losses have no ceiling, because a price can rise forever.

Spread betting

Another way of betting on a price move with borrowed money. Tax-free in the UK, and easy to lose more than you put in.

Volatility

How much the price jumps around. High volatility means a bumpy ride, not necessarily a bad one.

AI exposure

Our 1–5 guess at how much a company genuinely benefits from the AI boom, where 5 is heavily exposed.

Beginner Safe Mode

The guardrails this desk runs under: small positions, few trades, automatic stop-losses.

Early-warning rule

One of our ten automatic checks for signs of trouble in a company's paperwork.

Hallucination

When an AI states something confidently that isn't true. We check for it and log every case we catch.

Paper trading

Pretend trading with pretend money. Real prices, real fees, nothing ever actually bought or sold.

Reshuffle

The quarterly review where companies are promoted into the FTSE 100 or relegated to the FTSE 250, depending on their size.

March, June, September and December, just like promotion and relegation in football.

Verified

Every number in the note was checked back against the original public document. Unverified means treat it as a rumour.

Win rate

Out of all the closed practice trades, the share that made money.