Glossary

A call option is a contract giving the buyer the right, but not the obligation, to purchase an underlying asset at a set strike price before or at expiration, in exchange for a premium.

A capital gain is the profit you make when you sell an asset for more than you paid for it.

A brokerage account where you can only buy investments using money you have already deposited, with no borrowing. Trades settle from your own available cash.

Cash flow is the movement of money into and out of a business, investment, or personal account over a specific period, showing whether more cash is coming in than going out.

A contract for difference (CFD) is a derivative that pays the difference in an asset's price between opening and closing a position, without owning the underlying asset.

The practice of keeping customer funds in separate accounts from a company's own operating money, so client assets are identifiable and not used for the firm's business expenses.

Cold storage is a way of holding cryptocurrency by keeping the private keys completely offline, reducing exposure to hacking, phishing, and exchange failures.

Compound interest is the process of earning returns not only on your original money but also on the returns that money has already generated, causing balances to grow at an accelerating pace over time.

A corporate bond is a debt security issued by a company to raise money, in which the issuer promises to pay interest and repay the principal at maturity.

Correlation measures how two assets move in relation to each other, ranging from -1 (opposite directions) to +1 (same direction), and is a core input for diversification decisions.

The periodic interest payment a bond issuer makes to bondholders, usually expressed as an annual percentage of the bond's face value.

A credit rating is an independent assessment of how likely a borrower is to repay debt on time, expressed as a letter-grade scale that helps investors gauge default risk.

A crypto exchange is an online platform where users buy, sell, and trade digital assets such as bitcoin and ether, often acting as custodian of those assets until they are withdrawn.

A crypto wallet is a software application or hardware device that stores the private keys used to access, send, and receive cryptocurrency on a blockchain.

A digital asset secured by cryptography and recorded on a distributed ledger, typically a blockchain, that can be transferred peer-to-peer without a traditional intermediary.

A currency pair is the quotation of two currencies traded against each other, showing how much of the quote currency is needed to buy one unit of the base currency.

An investment or savings account that an adult manages on behalf of a minor beneficiary until the minor reaches a specified age.

Custody is the safekeeping of an investor's assets — in crypto, it comes down to who controls the private keys that move the coins: a third party or you.