Financial Terms Dictionary - Letter T

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T-Test

A t-test is a type of inferential statistic used to determine if there is a significant difference between the means of two groups, which may be related in certain features.

Tadawul All Share index

The Tadawul All Share Index is the primary stock market index of Saudi Arabia, including all stocks listed on the Tadawul stock exchange.Learn more

Tail risk

Tail risk refers to the risk of an asset or portfolio of assets moving more than three standard deviations from the mean, potentially leading to huge losses or gains.

Tail value at risk (TVaR)

Tail value at risk (TVaR), also known as conditional value at risk (CVaR), measures the average loss assuming that a loss is beyond a certain value at risk threshold, focusing on the tail of the distribution.

Taiwan OTC exchange

The Taiwan OTC Exchange, or TPEx, provides a platform for the trading of a wide range of financial products apart from those listed on the Taiwan Stock Exchange.

Taiwan Stock Exchange

The Taiwan Stock Exchange (TWSE) is the primary financial exchange in Taiwan, hosting the trading of stocks, bonds, and other securities.

Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX)

Taiwan Stock Exchange Capitalisation Weighted Stock Index measures the performance of stocks listed on the Taiwan Stock Exchange with a formula that weights total market capitalisation.Learn more

Taiwan Stock Exchange Corporation (TSEC) Weighted Index

The TSEC Weighted Index, now known as the TWSE Price Index, is the benchmark index for the Taiwan Stock Exchange, comprising all the listed stocks and reflecting the overall market performance.

Take-Profit Order

A take profit order is a type of limit order used by traders to specify the exact price at which to close out an open position for a profit.Learn more

Takeover bid

A takeover bid is an offer made by an individual, corporate entity, or group to purchase a controlling stake in a company, often aiming to take over its management and operations.

Tangible assets

Tangible assets are physical and measurable assets that are used in a company's operations, such as machinery, buildings, and equipment.Learn more

Tangible common equity (TCE)

Tangible common equity refers to a firm's common equity minus intangible assets such as goodwill, patents, and trademarks. It indicates the real physical assets that shareholders would have a claim on in liquidation.Learn more

Target Price

Target price is the projected price level of a stock stated by an analyst or advisor, based on assumptions of future activity. Investors use it to assess the potential investment risk and return.Learn more

Tax refund

A tax refund is a reimbursement to a taxpayer for any excess amount paid to the government during the tax year. This occurs when taxes paid on payroll or other sources exceed the actual amount owed.

Tax transparent fund (TTF)

A tax transparent fund is a fund structure that allows investors to be taxed on an individual basis as if they directly owned a share of the underlying assets, rather than being taxed at the fund level.Learn more

Taxation

Taxation refers to the compulsory financial charge or other levy imposed upon a taxpayer by a governmental organisation in order to fund various public expenditures.

TecDAX

The TecDAX is a stock index that tracks the performance of the 30 largest German technology companies trading on the Frankfurt Stock Exchange outside of the DAX index.

Technical Analysis

Trading technical analysis is a methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.

Telegraphic Transfer (TT)

Telegraphic transfer is an electronic method of transferring funds used primarily for overseas wire transactions. These transfers are used most commonly in reference to clearing of funds.Learn more

Tender

In finance, a tender is an invitation to bid for a project or to accept a formal offer such as a takeover bid.

Tender issue

A tender issue is a public invitation to subscribe to the debt of a company, often seen in the context of bonds, where the issuer invites bids for the bonds being issued.Learn more

Tender offer

A tender offer is a public, open offer or invitation (by a prospective acquirer) to all shareholders of a publicly traded corporation to tender their stock for sale at a specific price during a certain time frame.

Texas ratio

The Texas ratio is used to assess the financial health of banks. It is calculated by dividing the value of the lender's non-performing assets by the sum of its tangible common equity capital and loan loss reserves.

Texas two-step

Texas two-step is a corporate manoeuvre involving two steps: first, the creation of a new subsidiary or company, and second, merging with that subsidiary to shield assets from liabilities or to restructure.

The Big Four

The Big Four refers to the four largest professional services networks in the world, offering audit, assurance, tax, consulting, advisory, actuarial, corporate finance, and legal services: Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY), and KPMG.

The black swan theory

The Black Swan Theory describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalised after the fact with the benefit of hindsight.

The Financial Revolution

The Financial Revolution refers to a period between 1688 and 1750 when the structure of the English (later British) economy was transformed by the creation of a modern financial system.Learn more

The Watch Fund

The Watch Fund is a unique investment concept that allows participants to invest in a portfolio of high-end watches, offering a combination of personal enjoyment and investment.Learn more

Theoretical ex-rights price

The theoretical ex-rights price is the calculated price at which a stock should theoretically trade after a new rights offering. It is important for investors during rights offerings to understand dilution effects.Learn more

Thinkorswim

Think or Swim is a trading platform by TD Ameritrade that provides trading tools, analytics, and education to active traders interested in stocks, options, and futures.

Thomson Reuters league tables

Thomson Reuters League Tables are rankings of financial service firms based on quantitative metrics such as transaction size or volume. These tables are often used to gauge the activity levels and market share of firms in different financial sectors.

Tick size

Tick size is the minimum price increment change that can occur on the trading floor or electronic trading system for a specific security or asset.

Ticker

A ticker is a unique series of letters assigned to a security for trading purposes. It represents a specific stock or other security listed on an exchange.Learn more

Time at risk (TaR)

Time risk refers to the uncertainty associated with the period within which an investment is expected to yield returns, affecting both the timing and magnitude of cash flows.

Time consistency

Time consistency in financial decision-making means that decisions planned for future periods will still be optimal when the future becomes present.Learn more

TMX Group

TMX Group is an integrated, multi-asset class exchange group based in Canada, operating global markets for trading equities, derivatives, fixed income, and more.

Tokyo Stock Exchange

The Tokyo Stock Exchange is one of the largest stock exchanges in the world, located in Tokyo, Japan. It is home to many of Japan's largest and most well-known companies.

Top-ups

In finance, top-ups usually refer to additional investments or contributions made into an existing investment or fund to increase the total capital or maintain the proportionate ownership.Learn more

Total expense ratio

The total expense ratio (TER) is a measure of the total costs associated with managing and operating an investment fund, including management fees and additional expenses, relative to total fund assets.

Total return swap

A total return swap is a derivative contract in which one party receives the total return of a specified asset, including income and capital gains, and pays a regular fixed or floating rate to the other party.

Total revenue share

Total revenue share is a metric used to calculate the percentage of revenue generated by a particular entity or product within the broader context of an organization's total revenue.

Total shareholder return

Total shareholder return (TSR) is a measure of the performance of different companies’ stocks and dividends over time, combining share price appreciation and dividends paid to show the total return to the shareholder.

Total Value Locked (TVL)

Total value locked, or TVL, is a metric in decentralised finance (DeFi) that measures the total capital held within DeFi protocols, indicating the overall health and growth of the DeFi sector.

Trade

Trade involves the action of buying, selling, or exchanging goods or services between people, firms, or countries.Learn more

Trade mark

A trademark is a recognisable sign, design, or expression which identifies products or services of a particular source from those of others, ensuring legal protection.

Trade War

Trade wars occur when countries restrict each other's trade by imposing tariffs or quotas on imports, leading to reduced trade and economic tensions between the countries involved.

Trade-off model of capital structure

The trade-off model of capital structure is a financial theory that firms seek to balance the benefits of additional debt against the potential costs of financial distress.Learn more

Trader

A trader is an individual or entity engaged in the buying and selling of financial assets in any financial market, either for themselves, or on behalf of a financial company.

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Trading band

Band trading is a trading strategy that involves buying and selling securities within a certain price range or band, based on patterns of historical price movements and volatility.

Trading Capital

Trading capital refers to the amount of money allocated to buying and selling various securities. It represents the total assets available for conducting trades and managing investments.Learn more

Trading Floor

The trading floor is the area of a stock exchange where traders and brokers buy and sell securities. The term is synonymous with the hectic, bustling environment typical of stock exchanges.

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Trading jacket

A trading jacket is a brightly-coloured jacket worn by traders on the exchange floor to make them easily identifiable. It often features the trader's name and the name of their trading company.Learn more

Trading Plan

A trading plan is a comprehensive decision-making tool for your trading activity. It helps traders define what, when, why, and how they will trade, setting out strategies, risk management rules, and goals.

Trading Strategy

Trading strategies are methods used by traders to determine when to buy and sell securities. Strategies can be based on technical analysis, fundamental analysis, and other market signals.

Trading turret

A trading turret is a specialised telecommunication system for financial traders on trading desks. It allows for rapid communication with brokers, clients, and financial exchanges.Learn more

Trading volume

Trading volume is the total number of shares or contracts traded for a particular security or market during a specific period. It is often used as an indicator of the security's stability and liquidity.

TradingView

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Trailing Stops

Trailing stops are a type of stop order that moves with the market price. They are set at a percentage or a dollar amount below the market price for a long position and lock in profit while protecting against significant losses.Learn more

Tranche

Tranche is a term used in finance to describe a portion or slice of a pool of securities, often used in the context of structured finance or during a phased investment such as in venture capital.

Transfer agent

A transfer agent manages and maintains records of who owns a company's stocks or bonds. They handle securities transactions between buying and selling parties by transferring the ownership of securities.

Transferable securities

Transferable securities are investment assets such as shares or debt securities that can be transferred from one party to another without the need for a new contract between the issuer and the investor.Learn more

TransUnion

TransUnion is a global consumer credit reporting agency that collects and aggregates information on over one billion individual consumers in more than thirty countries.

Treasury bills

Treasury bills are short-term government securities with maturities of one year or less. They are issued through a competitive bidding process at a discount from par value.

Treasury Yields

Treasury yields are the returns on the US government's debt obligations, which are seen as a benchmark for interest rates and a gauge of the overall US economy.

Trend trader/trading

A trend trader is an investor who attempts to make profits by following the prevailing trends in the market, buying securities in an uptrend and selling them when they are in a downtrend.

Treynor ratio

The Treynor ratio is a performance metric for determining how much excess return was generated for each unit of risk taken on by a portfolio, using beta as the risk measure.

Tri-party agreement

A tri-party agreement is a business agreement between three separate parties. In the finance industry, these can often involve transactions involving collateral or intermediary services.

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Trial Balance

A trial balance is a bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal. It is a step in the preparation of financial statements.

Triangular arbitrage

Triangular arbitrage is the process of converting one currency to another, to a third currency, and finally back to the original currency in a short amount of time to exploit differences in rates for a profit.Learn more

Trinidad and Tobago Stock Exchange (TTSE)

The Trinidad and Tobago Stock Exchange (TTSE) is the primary securities trading facility in Trinidad and Tobago, where shares and other securities of publicly held companies are traded.

Triparty Required Value

Triparty required value generally refers to the collateral or value required to be posted by one party in a triparty agreement, particularly in a repo transaction where three parties are involved, including a securities buyer, seller, and a third-party custodian.

Trust Fund

A trust fund is a legal entity that holds assets, such as money, real estate, or other investments, for the benefit of another party, managed by a trustee who controls the fund according to the trust’s terms.

TSX-60 index

The TSX 60 Index is a stock market index of the 60 largest companies listed on the Toronto Stock Exchange, representing leading companies in various industries of the Canadian economy.Learn more

Turnaround stock

A turnaround stock refers to shares of a company that has been performing poorly but shows potential for recovery due to operational improvements, restructuring, or changes in external conditions.

Turquoise (trading platform)

Turquoise is a pan-European equities trading platform, offering trading in a wide range of European securities. It combines a traditional lit order book with an innovative dark pool to improve the execution of large trades.

Twin crises

Twin crises refer to situations where a country experiences both a currency crisis and a banking crisis simultaneously, often exacerbating each other and leading to severe economic downturns.

Typical price

The aseet typical price in trading is an average price indicator calculated using the high, low, and closing prices. It's often used in technical analysis to smooth out price data and create a moving average.