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Glossary

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Abnormal Return

Abnormal Return refers to the difference between the actual return of a security and its expected return, often used to assess the impact of specific events on stock performance.

Absolute Return

Absolute Return refers to the total return on an investment, measuring the gain or loss from the initial investment, regardless of market conditions.

Account Abstraction

Account Abstraction is a blockchain concept that separates the logic of account management from the underlying blockchain protocol, allowing for more flexible and customizable account functionalities.

Accounting Method

An accounting method is a systematic approach used by businesses and organizations to record and report financial transactions. It determines how income and expenses are recognized and reported in financial statements.

Accrual Accounting

Accrual Accounting is an accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash transactions actually occur. This approach provides a more accurate picture of a company's financial health by recognizing economic events in the periods they happen, rather than when cash is exchanged. It contrasts with cash accounting, which only records transactions when cash changes hands.

Accrue

Accrue refers to the gradual accumulation or increase of something over time, often used in financial contexts to describe the way interest, benefits, or obligations build up. For example, interest on a savings account accrues daily, meaning it steadily grows as time passes.

Accrued Income

Accrued income is revenue that has been earned but not yet received or recorded by the end of an accounting period.

Accrued Interest

Accrued Interest refers to the interest that has accumulated on a loan or financial obligation but has not yet been paid or received. This interest is typically calculated on a daily basis and represents the amount owed from the last payment date up to the current date. Accrued interest is commonly used in the context of bonds, loans, and other fixed-income securities, and it is important for both borrowers and lenders to account for this interest in their financial statements.

Accrued Liabilities

Accrued Liabilities refer to expenses that a company has incurred but has not yet paid by the end of an accounting period. These liabilities are recorded on the balance sheet and typically include items such as wages, interest, and taxes that are owed but not yet disbursed. Accrued liabilities ensure that expenses are recognized in the period they are incurred, adhering to the matching principle in accounting.

Accrued Revenue

Accrued revenue is income that has been earned but not yet received or recorded by the end of an accounting period.

Accumulation Phase

The accumulation phase is the period in which an individual or entity builds up assets and investments, typically for long-term financial goals such as retirement.

Acid Test Ratio

The Acid Test Ratio, also known as the Quick Ratio, is a financial metric used to evaluate a company's short-term liquidity. It measures the ability of a company to meet its immediate obligations using its most liquid assets, excluding inventory. The ratio is calculated by dividing the sum of cash, marketable securities, and accounts receivable by current liabilities. A higher ratio indicates a stronger liquidity position, suggesting that the company can easily cover its short-term debts without relying on the sale of inventory.

Acquisition Premium

An acquisition premium is the additional cost paid by a buyer over the market value of a target company during a merger or acquisition.

Active Management

Active management involves a hands-on approach where portfolio managers make specific investments with the goal of outperforming an investment benchmark index.

Activist Investor

An activist investor is an individual or group that purchases significant shares in a publicly traded company with the goal of influencing its management and strategic direction. Unlike passive investors, activist investors actively engage with the company's leadership, often advocating for changes such as restructuring, cost-cutting, or shifts in business strategy to enhance shareholder value. Their actions can lead to significant changes within the company, including board member replacements, mergers, or divestitures.

Adam Back

Adam Back is a British cryptographer and cypherpunk known for inventing Hashcash, a proof-of-work system used in Bitcoin mining.

Adoption Curve

The Adoption Curve is a model that describes the process by which a new product, service, or innovation is adopted by different segments of the population over time, typically categorized into innovators, early adopters, early majority, late majority, and laggards.

Agency Problem

The agency problem arises when there's a conflict of interest between a principal (such as shareholders) and an agent (such as company executives), where the agent may act in their own best interests rather than those of the principal.

Agency Theory

Agency Theory is a concept in economics and organizational management that explores the relationship between principals (such as shareholders) and agents (such as company executives). It examines how to best align the interests of the agents, who are tasked with making decisions on behalf of the principals, with those of the principals themselves. The theory addresses issues of trust, incentives, and information asymmetry, aiming to mitigate conflicts of interest and ensure that agents act in the best interests of the principals.

Aggressive Investment Strategy

An aggressive investment strategy focuses on maximizing returns by taking higher risks, often involving a significant allocation to equities, high-yield bonds, and alternative investments.

AI Coins

AI Coins are a form of digital currency specifically designed to facilitate transactions and incentivize activities within artificial intelligence ecosystems. These tokens can be used to purchase AI services, access premium features, or reward contributors in AI-driven platforms. By leveraging blockchain technology, AI Coins ensure secure, transparent, and efficient exchanges, fostering innovation and collaboration in the AI community.

Air Gap

In cybersecurity, an air gap is a security measure that involves isolating a computer or network from external connections, including the internet and other unsecured networks. This physical separation prevents unauthorized access, data breaches, and cyberattacks, as the isolated system cannot be remotely accessed or infected by malware through traditional network channels. Air-gapped systems are often used for highly sensitive or critical operations, such as military, financial, or industrial control systems.

Algorithmic orders

Algorithmic orders refer to the use of computer algorithms to automatically execute trading orders in financial markets. These algorithms are designed to achieve specific objectives, such as minimizing market impact, optimizing execution speed, or achieving the best possible price. By leveraging advanced mathematical models and real-time data, algorithmic orders can efficiently manage large volumes of trades, reduce human error, and enhance overall trading performance.

Algotraders

An algotrader uses computer algorithms to automate trading decisions and execute trades in financial markets. These algorithms follow pre-set criteria to trade at high speed and accuracy, aiming to capitalize on market opportunities more efficiently than manual trading.

Altcoin Trader

Altcoin Trader is a cryptocurrency trading platform that allows users to buy, sell, and trade various altcoins and digital assets.

AML compliance

AML compliance refers to the adherence to laws, regulations, and procedures designed to prevent money laundering and other financial crimes. It involves implementing measures to detect and report suspicious activities, conducting customer due diligence, and maintaining accurate records. Organizations, particularly financial institutions, must establish robust AML programs to ensure they are not inadvertently facilitating illegal activities and to avoid legal penalties.

Anarcho-capitalism

Anarcho-capitalism is a political philosophy that combines elements of anarchism and capitalism. It advocates for the elimination of the state in favor of a stateless society where all services, including law enforcement, courts, and defense, are provided by private, voluntary institutions. Proponents believe that free-market principles and voluntary exchanges are the most ethical and efficient means of organizing society, ensuring individual liberty, property rights, and economic freedom.

Anchoring & Adjustment

Anchoring and Adjustment is a cognitive bias where individuals rely heavily on an initial piece of information (the "anchor") when making decisions, and make adjustments from that starting point to reach their final decision.

Annualized Rate of Return

The annualized rate of return is the geometric average amount of money earned by an investment each year over a given time period.

Antpool

Antpool is a major Bitcoin mining pool operated by Bitmain Technologies, providing mining services and tools for cryptocurrency miners.

Apeing

Apeing refers to the act of imitating or copying someone or something, often in a clumsy or unoriginal manner.

Arbitrageur

An arbitrageur is a financial professional who seeks to profit from price discrepancies in different markets or forms of an asset. By simultaneously buying and selling the same asset in different markets, or exploiting price differences between related assets, arbitrageurs aim to achieve risk-free profits. Their activities help to increase market efficiency by ensuring that prices do not deviate significantly from their fair value for extended periods.

Aroon Indicator

The Aroon Indicator is a technical analysis tool used in financial markets to identify the strength and direction of a trend. Developed by Tushar Chande in 1995, it consists of two lines: Aroon Up and Aroon Down. The Aroon Up line measures the number of periods since the highest high within a given time frame, while the Aroon Down line measures the number of periods since the lowest low.

Ascending Channel

Ascending channel is a strategy where traders identify and trade within a price range that is consistently moving upward, marked by parallel trend lines connecting higher highs and higher lows. Traders aim to buy near the lower trend line and sell near the upper trend line, capitalizing on the predictable upward price movement.

Asset Financing

Asset financing is a method of using a company's balance sheet assets, including short-term investments, inventory, and accounts receivable, to borrow money or get a loan.

Asset Swap

An asset swap in cryptocurrency is a financial agreement where two parties exchange the cash flows or returns of different assets. This can involve swapping a fixed interest rate for a floating rate, or one cryptocurrency for another, to hedge risk or speculate on price movements.

Astroturfing

Astroturfing is the practice of creating a deceptive appearance of grassroots support for a cause, policy, or product, often through fake online reviews, comments, or social media activity.