Accelerated approval:FDA approval for marketing of a new drug based upon preliminary or surrogate endpoint data. The company must agree to run more complete clinical trials or the drug will be pulled from the market.
Ari Gold and his friends:Gold stocks and the attendant metals (such as silver). Makes reference to Ari Gold, super agent from Entourage.
asset allocators:funds that shift their weighting (allocation) between the bond market and the stock market. These "programs" will typically create supply or demand (depending on which way the allocation is) throughout the course of the trading day.
at the money (ATM):when an option has an excercise price equal to or near the current price of the underlying asset.
basing:a technical analysis term, refers to when a stock (or the market in general) trades in a general zone for a period of time, creating a "base" that acts as support for a move higher.
bear costume:a metaphorical trading posture used to describe Toddo's posture on the short side. each appendage (two legs, two arms) represents 25% conviction (not exposure) that the market will trade lower.
bear raid:when traders/market participants spread negative stories in an attempt to pressure a particular stock.
bearish engulfing:the low is lower and high is higher than the prior day (and closes lower). The amount of prior days engulfed, the more significant the pattern becomes.
beta:relationship or correlation between one particular stock and the market. A beta of 1 implies that a stock will move in concert with the movement of the overall market.
Biologic drug:A drug with a live component like a preventative vaccine, a monoclonal antibody, or a therapeutic vaccine. Almost always administered by injection or IV.
bip:A basis point. One one-hundredth of one percent of yield. A 40 basis point move in yields for example 2.50% to 2.90%
BKX:Philadelphia Stock Exchange/Keefe, Bruyette & Woods Bank Index. A proxy for financials, the most "important' complex in the marketplace.
Blockbuster platform:A group of personalized therapies with a common core platform technology whose aggregate sales are over $1 billion
Boo the Bear:The resident bear of Minyanville. See "about us".
Boom Boom:Our friendly nickname for Federal Reserve Chairman Ben Bernanke (as coined by Prof. Succo).
breadth:number of stocks that are up vs. number of stocks that are down; an internal indication of the health of the market.
breakdown:a technical analysis term, when a stock (or market) breaches a predefined level of support. Perceived bearish.
breakout:a technical analysis term, when a stock (or market) breaches a resistance level. Perceived bullish.
build on strength/weakness:(scaling) A method of trading that uses weak (strong) prices to accumulate positions in a stock (or market).
bull costume:a metaphorical trading posture used to describe Toddo's posture on the long side. each appendage (two legs, two arms) represents 25% conviction (not exposure) that the market will trade higher.
bullish engulfing:the low is lower and high is higher than the prior day (and closes higher). The amount of prior days engulfed, the more significant the pattern becomes
buy side:hedge funds and mutual funds. See: Sell side
capitulation:the absence of hope. A total and complete give up in the marketplace when sellers want to "get out" at any price. From a trading standpoint, very bullish--if you have the ability to take the other side of the trade...which, by definition, you won't.
cash-led:when the price action of the market driven by the underlying stocks and not the futures; tends to be a truer tell of the underlying "tone" of the market.
catalyst:the reason for entering a trade. Once the catalyst, or reason you put the trade "on" has passed, the position should be unwound.
Cliff Branch:a reference to the great Raider wide receiver; the lone bullish element that is keeping the tape from falling off a cliff.
collars:a hedge through the derivative market that involves the simultaneous purchase of a put and sale of a call.
Commitment of Traders (COT) Report:The Commodity Futures Trading Commission (CFTC) provides inside information about purchases and sales of futures contracts. The largest players in each market are required to disclose their positions to the CFTC on a daily basis and this report is released weekly on Friday at 3:30 p.m. est. (the reporting requirement varies by commodity). These traders are separated into Commercial Hedgers and Large Speculators.
The positions of Small Traders are calculated by subtracting the total of contracts held by the reporting groups from all the contracts outstanding (Small traders are not required to report their positions).
Commercial Hedgers hold a significant informational edge over other traders as far as fundamental supply-and-demand statistics are concerned. They tend to be early, but they are usually right on the long run, quite contrary to the small traders. Extreme divergences in long and short positions of small traders, large speculators and commercial hedgers have proven to be reliable indicators of important trend changes.
commodity:a commodity is a investment vehicle that could be either an agricultural product, mineral, or other tangible asset that is traded on a commodities exchange, spot market on a cash or futures basis.
contra-hour:the notion that the price action, or direction, of the market from 2 p.m. ET to 3 p.m. ET will reverse itself in the last hour of trading. It's a freaky, nonsensical, goofy thing that has no legitimate reasoning but often occurs.
cup & handle:a chart pattern in which the first 2/3rd of the pattern makes a rounded base and the last 1/3rd makes another, yet smaller, rounded base
defined risk play:limited loss potential on a trade. Typically a function of trading with stop orders or being long options.
Deflation:A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available currency and credit
Source: The American Heritage® Dictionary of the English Language, Fourth Edition
delta:the change of an option relative to a unit (dollar) move of the underlying security. For instance, if an option has a 0.25 delta, you would expect that option to move 25 cents per unit move of the underlying security.
Demark indicators:A detailed technical analysis charting system used to help forecast potential price action by identifying trend lines, support and resistance levels, and reversals.
Derivatives:Contributor John Succo has written an excellent six-part series on derivatives. Click on the following to read the series: Part one, Introduction to Derivatives; part two, Getting Graphic With Options; part three, Options Pricing; part four, Supply and Demand of Options; part five, Futures, the Easy Derivative and part six, Structures.
DIA:Nicknamed the Dow Diamonds, this is a unit investment trust designed to track the performance of the Dow Jones Industrial Average. It is traded on the American Stock Exchange as (DIA:Amex).
dollar index:the U.S. Dollar Index provides a general indication of the international value of the U.S. Dollar. The index is calculated by averaging a basket of exchange rates from 6 major world currencies against the U.S. dollar.
dry:describes the relative traction or resilience of a stock or sector in the face of a declining market. For instance, if a big cap technology stock is holding firm while the NDX futures are for sale, you might say that stock feels dry. It is also possible for the overall market to feel dry.
ducks lining up:having reasons for a thesis come together. Each "input" is a duck...when your ducks "line up," it simply means that you've got numerous inputs that support a thesis.
edge:as in "trading with an edge"; implies waiting for a time when you have an advantage in the risk/reward profile of a trade; rationale for entering a position.
Elliot wave:analysis measuring investor psychology in a distinct 5 wave pattern in an effort to identify possible market lows and highs suitable for buying or selling
equity put / call ratio:the total equity volume of puts divided by the total volume of calls traded on the CBOE
fade (fading):a trading style that takes the other side of the predominant direction of the tape (buying into weakness; selling into strength). If the market is looking higher on the opening, a fade would imply a sale of stocks. Conversely, if the tape is looking lower on the opening, a fade would imply buying.
Fast Track:An FDA designation allowing a company to file an NDA or BLA in sections instead of all at one. This is designed to shorten the FDA’s response time. Drug receiving fast track designations often receive accelerated review, but not always.
Fibonacci analysis:based on the work of 13th century Italian mathematician Leonardo de Pisa; forms the mathematical basis for Elliott Wave theory
filling the gap:the tendency of the market to eventually retrace the area that occurs after a "gap" in the market. in other words, say the S&P gaps lower. the tape will typically "fill" that gap (to the upside) before continuing lower.
flat base:pattern that has prices trading sideways within a relative small range for an extended period of time
flows:what I'm "seeing" on the Street. I talk with every major trading desk, so the "flows" relate to the buy and sell interest that's communicated to me by my sales coverage.
Four Sisters:Tuttle Asset Management term in reference to the major indices including INDU, SPX, NDX, and RTY
futures contract:a futures contract is an agreement, executed on the floor of a commodity exchange, that allows an investor to sell or buy a specific amount of a commodity or security at a specific price and time.
gamma:measures the rate of change of the delta. Having positive gamma (long volatility or "long vol"), your positions would become "longer" as the underlying stock rises and "shorter" as it falls. For that right, you are paying a premium for those options.
gap risk:the risk that a stock may open up or down a few (or many) points. It usually occurs when the market is closed or a stock is halted from trading and reopens.
GSEs:Government-sponsored enterprises are private companies that were established by the government. The group of GSEs includes the huge lenders Fannie Mae (FNM:NYSE) and Freddie Mac (FRE:NYSE).
head and shoulders:a technical pattern where there are symmetrical "shoulders" (lower prices) surrounding the "head" (higher prices). When the right "shoulder" price breaches the left "shoulder" price level, it's a negative "signal."
heavy:the same thesis as dry, but in reverse. If that same large-cap technology stock can't rally despite an overall strong tape, it implies sellers in the name, from which you infer that the stock is heavy.
Hoofy the Bull:The resident Bull of Minyanville. See "character bios".
HotSpots:a special case of support, pivot and resistance levels using hourly bars with weekly support, pivot and resistance levels superimposed
See the following tutorial from Hamzei Analytics
in the money (ITM):when the current market price of the underlying stock on an option is higher than the strike price of a call option, or lower than the strike price of a put option
index put / call ratio:the total weekly volume of puts divided by the total weekly volume of calls on a specific index (ex. S&P, NDX, DJIA, Comp, XAU, OEX)
Inflation:A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services. Source: The American Heritage Dictionary of the English Language, Fourth Edition
internals:the health of the market; usually refers to the breadth and upvolume vs. downvolume on any given day.
inverse dandruff:potential formation of a reverse head and shoulders (positive); technical formation
Joel:one of Toddo's close friends; was taken from us when he was hit by a drunk driver. his spirit lives on at www.joelpollack.com . had a bad day in the market? visit Joel for some perspective!
Kaplan-Meier survival curve:A common tool of biostatistical analysis that compares a treatment arm and a control arm in a trial via two curves lines. Time is on the y-axis, the percentage of patients alive is on the y-axis. This tool is use to correct for the problem that not all patients enroll at the same time and to correct for incomplete data.
kiss of death:refers to a negative technical condition in which the 50 and 200 day moving averages cross, usually seen as a signal of potential weakness
limit down:futures trade to a limit level where trading is halted in a single direction. When futures go limit down, only trades that would take the price higher are permitted. It allows the market to cool off after periods of high volatility.
macro hedge funds:also known as macros or gorillas. large multibillion dollar hedge funds that trade all asset classes and global markets.
metric base:the four legs under the trading table: fundamentals (state of business), technicals (charts and levels), psychology (perception is reality) and structural (financial mechanics).
mojo:our trading superstition, or our trading energy. As I believe trading energy to be cyclical (as is everything), sometimes we'll attempt to "shake up our collective mojo" by zigging when we should be zagging.
momentum players:traders who buy stocks as they're rallying and short them when they're selling off.
NDA (New Drug Application):What a company files with the FDA when they want a drug approved to be marketed in the US. See also BLA
NDX:the Nasdaq 100 stock index. Distinct from the larger Nasdaq Composite index, this index trades through the NDX futures and is the underlying instrument that the Nasdaq 100 unit trust (QQQ:Amex) is priced off.
offsides:when too many traders (hedge funds) are 'caught' leaning the wrong way in the marketplace.
ORR (Objective Response Rate):The percentage of patients in a cancer clinical trial that had their tumor shrink by a certain significant percentage (usually 50%) or more during the trial. A common endpoint in oncology trials.
out of the money (OTM):when an option's strike price is higher than the current market price of a call option, or lower than the current market price of a put option
Overnight risk:Biotech investing is characterized by huge gaps in stock price due to news. These news items are generally released outside of trading hours. This term refers to risk represented by the differential between the prior close and where an investor might first be able to trade a stock. This refers to both upside and downside risk exposure from a position as well as opportunity cost of not being in a position.
p-value:The statistical threshold a trial must meet in order to be termed a success. In most trials, p(less than or equal to) 0.05 is the threshold. In layman’s terms, that means there is a 95% chance the results of the trial were not due to random chance.
pairs trade:buying the stock of one company while selling the stock of another company in the same industry; dollar neutral.
PDUFA date:The date upon which the FDA is mandated by statute to respond to a company who has submitted a drug for marketing approval.
Pepe:refers to Minyanville Managing Editor, Kevin "Pepe" Depew, formerly an analyst at Dorsey Wright and Associates (as well as former professional thoroughbred handicapper)
PFS (Progression-free survival):The time measured from when a patient enrolls in a trial until they die or their disease progresses, whichever comes first. A common endpoint in clinical trials.
Phase I:A first-stage clinical trial where the goal is to determine whether the drug is safe in humans.
Phase II:A middle-stage clinical trial where the normal goal is to find the proper dose for a drug or to discover other characteristics of the drug in the intended patient population.
Phase III:The last pre-approval clinical trial whose sole purpose is to determine the efficacy of a drug in its target patient population.
pin:a process that usually occurs around expiration whereby arbitrageurs cause stocks to gravitate toward strike prices that have a large open interest (relative to the average daily volume). The synthetic pressure for a stock to close at a strike price on expiration.
Pivotal trial:A company will call a clinical trial “pivotal” when it is the last one they expect to conduct before filing for regulatory approval.
positive gamma:an option position that causes your position to become longer if the market goes higher, and shorter if the market goes lower.
pretzel twisting:when the stochastic oscillator is overbought (oversold) and continues to offer a signal overtime. the longer the stochastics pretzel, the more fierce the eventual move in the other direction.
punting, punts:process of buying cheap out-of-the-money calls or puts around expiration on the chance that there is a large move.
QQQ:Nasdaq 100 Trust, traded on the American Stock Exchange, is designed to track the value of the Nasdaq 100.
ratio:trading an underlying stock against a call or a put when it's not hedged one up. The resulting delta position becomes longer as the stock rises and shorter as the stock falls (positive gamma).
renting exposure:to buy (or sell) a trading position intraday with the hope of securing incremental performance. Renting infers "going home," or flattening the position by the end of the day.
resistance:a technical term. An inflection point that may impede a stock's upward momentum. Past support, when broken, becomes future resistance.
rolling stops up/down:an extension of the strategy for stops. Rolling a stop is adjusting it to a higher price if the stock is moving your way. For instance, if you buy a stock at $50 and set a $48 stop, you would place a market sale order when the stock ticks at $48. If you bought that stock at $50 and it rallied to $54, you could roll your stop up to $53, which would lock in your profit and define your risk. Conversely, if you're trading from the short side and a stock trades down, you can lower your buy stop (roll it down) to lock in your profit that way.
Ruby:Todd's grandfather. was his best friend, sage and spirit. passed away in April 2001. His initials appear at the bottom of the trading journal.
S's:stocks that are part of the S&P 500 index. When we say it's an "S's over N's type of tape," we're implying the relative outperformance of the S&P over the NDX.
salty:as in "salt in the wounds." Unnecessary gloating as others are getting hurt in the marketplace.
scale(s):buying or selling partial positions at different levels, enabling participation if the tape improves or lower average prices if it goes down.
schnitzeling:or, to schnitzel. A nonsensical term we've used to describe trading a little stock around. A schnitzel could be a small trade, or it could imply taking some of a trade off for a profit. "We schnitzeled in some XYZ" simply means that we took some for a trade.
Semis:Semiconductor stocks, see also SOX.
shakeout formation pattern:a technical term; occurs when a stock fails at a previous top, falls to break a previous bottom and reverses up a few points and hopefully completes the breakout above the previous tops.
SHO List:The Regulation SHO Threshold Securities list. Comprised of stocks with "naked" short sales where a failure to properly secure a borrow has been in place for at least 5 consecutive days. Appearance of a stock on the SHO list for 13 consecutive days forces the naked short position to be closed.
short covering:When a short sale is bought back in the marketplace creating an additional bid in the marketplace. Considered negative for the bigger supply/demand thesis as this "support" will be alleviated once done.
short squeeze:a situation in which a stock has a tremendous short base and any slight upward movement causes massive buying (short covering); causes a short-term uptrend in market.
Small molecule drug:A drug made up of inert chemicals. Some improperly use this term as a synonym for an oral drug. Many small molecule drugs are given by injection or IV.
Snapper the Turtle:the resident turtle of Minyanville. See "character bios". A quick rise in the market (snapback rally).
SPA (Special Protocol Assessment):The FDA and a company agree on all aspects of the design and analysis of a clinical trial before it begins. With an SPA, the FDA makes the tacit agreement that if the trial is run exactly as designated in the SPA and the results are positive, the FDA will approve the drug.
spot:a product or market in which either the commodity transaction will be delivered and settled in cash immediately or in which a futures contract will expire in one month or less.
SPR:Support, Pivot and Resistance levels
See the following tutorial from Hamzei Analytics
Spring:(Change in trend) In a sustained downtrend, for moves of the same magnitude, if the market makes a new low and then returns into congestion, the market has probably formed a Change in Trend Pattern.
SPY:Standard & Poor's Depository Receipts, often referred to as SPDRs. An Exchange Traded Fund, the SPY is designed to track the value of the S&P 500.
Stagflation:Sluggish economic growth coupled with a high rate of inflation and unemployment. Source: The American Heritage Dictionary of the English Language, Fourth Edition
stochastic divergence:when the ST stochastic crosses the LT stochastic, for a second time, at a higher level as the prices are at lower level (or vice-versa)
stochastics:an oscillator that measures price action in stocks or indices. When the stochastics "cross" at the bottom, it generally leads to a nice rally. When they cross at the top, it usually portends lower prices. Usually a decent indicator of the future direction of a stock or market, but sometimes unreliable on the timing.
stop levels:levels at which you liquidate (or cover) a position if that position drops below or rises above a predetermined price.
stops:a trading approach that defines risk if your bet goes against you. If you buy a stock at $50 and set a $48 stop, you would place a "market sale" order when the stock ticks at $48. In the recent environment, I've found this to be a consistently disciplined approach to trading. See rolling stops up/down.
straddle:a transaction consisting of a put option and a call option on the same underlying security with the same strike price and maturity date, or at different strike prices and the same maturity date. For futures, a straddle is a combination of long and short contracts on the same security, but with different delivery months.
strangle:the combination of a call option with a strike price above the current price of the underlying security and a put option with the same expiration date and a strike price below the current market price on the same underlying security. Long strangles indicate buying puts and calls with the same expiration dates but different strike levels. Greater volatility is required to put a position in-the-money. Short strangles require less volatility and are taken when the market is relatively calm.
strike price:the price at which you have the right to buy (in the case of a call) or sell (in the case of a put) a particular stock on or by expiration.
support:A technical analysis tool, it's a price point (or area) that should produce an underlying support for a stock (or market). If breached, deemed negative.
sweeping:the process of removing the remnants of negativity from past trades so you can focus on new opportunities.
technical inflection point:a resistance or support level; usually at this point, the stock (or index) is actionable, either breaking out or failing.
tells:stocks or indices that provide microcosms of the overall tenor of the market. Many times they are catalyst-driven, while other times they're just what I consider a proxy for signs of direction. There are no distinct criteria for choosing a tell, just a trader's instinct.
Therapeutic index:The theoretical ratio between a numerator of drug effect and a denominator of drug side effects. Higher therapeutic indexes are better.
Thumper:Snapper's cousin, she is a beaver who is typically associated with sharp market drops. She is also Boo's main squeeze.
trading around a core position:actively manicuring your risk profile while maintaining a point of view or thesis.
trading in-between:using smaller size or increments. usually a good idea in a thin/whippy tape or if you've seemingly lost your mojo.
trin:a calculation based on the number of listed stocks on the New York Stock Exchange (NYSE) that are advancing versus the number that are declining for divided by the total volume of advancing shares versus the total of declining shares. * A rising index indicates a weak market whereas a falling index shows strength.
TTP (Time To Progression):The time measured from when a patient enrolls in a trial until their disease progresses. A common endpoint in clinical trials.
two headed monster:Tuttle Asset Management term for a head and shoulders top chart pattern with 2 heads
underneaths:out-of-the-money puts that make it possible to speculate on the direction the stock will move without putting too much cash on the line.
Upthrust:(Change in trend) In a sustained uptrend, for moves of the same magnitude, if the market makes a new high and then returns into congestion, the market has probably formed a Change in Trend Pattern.
upvolume/downvolume:an internal measure of the market. the volume of stocks that are up on the day vs. the volume of stocks that are down on the day.
VIX:Chicago Board Options Exchange Volatility Index. A measure of fear in the marketplace. A high VIX is considered bullish by contrarians.
vix:the Chicago Board Options Exchange SPX Volatility Index reflects a market estimate of future Volatility. It is calculated by taking a weighted average of the implied volatilities for a wide range of strikes prices.
vol:slang for 'volatility'; refers to either the implied volatility of an option (derivative) contract or the option itself.
volatility play:attempts to benefit from stock price movement in either direction; used when the trader is unsure of the direction in a stock but anticipates movement.
wasabi:a very spicy, bright green horseradish paste used as a condiment in Japanese cuisine, particularly sushi. But used in Minyanville as a way to say "What's up?".
whippy and trippy:also known as "choppy and sloppy," this describes a tape that is volatile and illiquid.
WTI Crude:West Texas Intermediate (WTI) crude oil, the U.S. benchmark grade, is one of the most actively traded domestic crudes and is the primary deliverable grade under the New York Mercantile Exchange, Inc., light, sweet crude oil futures contract.
XBD:The American Stock Exchange Broker/Dealer Index (XBD:Amex), is designed to measure the performance of highly capitalized companies in the U.S. securities broker/dealer industry.