Glossary
Terms, defined plainly
- Covered callOptions
- Owning shares and selling a call against them: premium income, capped upside, stock downside remains.
- Lesson: Covered calls and protective puts
- EMATechnicals
- Exponential moving average, weighting recent prices more heavily so it reacts faster than an SMA.
- Lesson: Moving averages
- Net incomeFundamentals
- Profit remaining after all costs, interest and tax. Also called the bottom line.
- Lesson: Revenue, earnings, and what sits between
- Systematic riskRisk
- Risk affecting the whole market, such as recessions or rate shocks. Diversification cannot remove it.
- Lesson: Diversification and the risk you cannot remove