Category: Financial Terms

Gearing Ratio What is a gearing ratio? Gearing ratios measure a company’s financial leverage by comparing debt to equity or other capital measures. They show how much of a firm’s operations and assets are financed with borrowed funds versus shareholders’ equity. Higher gearing means greater reliance on debt and typically higher financial risk. Common gearing…

Gearing Gearing, also called leverage, is the extent to which a company finances its operations with debt versus equity. It shows how much of a firm’s capital comes from lenders compared with shareholders and is a core indicator of financial risk and creditworthiness. Why gearing matters Indicates financial risk: higher gearing means more fixed obligations…

GDP Price Deflator What it is The GDP price deflator (or GDP deflator) is an economy-wide measure of price level changes. It shows how much of the change in nominal gross domestic product (GDP) is due to changes in prices rather than changes in real output. The deflator covers the prices of all final goods…

GDP Gap: Meaning, Calculation, and Example Key takeaways The GDP gap (or output gap) is the difference between actual GDP and potential GDP. A negative gap indicates underused resources and slack in the economy; a positive gap indicates the economy may be overheating. Policymakers monitor the GDP gap to guide fiscal and monetary policy aimed…

GDAX (now Coinbase Advanced Trade) GDAX — originally launched as Coinbase Exchange — was Coinbase’s professional trading platform for cryptocurrencies. Built for active traders, it offered advanced order types, real-time price charts, and an open order book, distinguishing it from Coinbase’s simpler wallet interface geared toward casual buyers. Rebranding and evolution 2015: Launched as Coinbase…

GBP (British pound sterling) Key points GBP is the ISO code for the British pound sterling, the United Kingdom’s official currency, symbolized by £ and commonly called “sterling” or the informal “quid.” The pound is the world’s oldest currency still in use as legal tender. Major trading pairs: EUR/GBP and GBP/USD (the latter nicknamed “cable”)….

Gazelle Company A gazelle company is a fast-growing enterprise that expands revenue rapidly over a sustained period. By the original, widely cited definition, a gazelle increases revenues by at least 20% annually for four consecutive years, starting from a revenue base of at least $100,000. Because the definition focuses on growth rate rather than size,…

Gate Provision: What It Is and How It Works What is a gate provision? A gate provision is a clause in a fund’s offering documents or prospectus that gives the fund manager the right to limit or temporarily halt redemptions. It is designed to protect the fund and remaining investors when a large volume of…

Gas Guzzler Tax The gas guzzler tax is a federal surcharge on new passenger cars in the U.S. that have poor fuel economy. Enacted as part of the Energy Tax Act of 1978, the tax is intended to discourage production and purchase of fuel‑inefficient cars. It is levied on the manufacturer or importer based on…

Gas (Ethereum) What is gas? Gas is the unit that measures the computational work required to execute transactions and smart contracts on the Ethereum network. Fees paid in gas compensate validators for processing and validating that work. Gas prices are quoted in gwei, where 1 gwei = 10⁻⁹ ETH. How gas works Every operation on…

Gartley Pattern What it is The Gartley pattern is a harmonic chart pattern that uses Fibonacci ratios to identify potential reversal zones in price action. First described by H.M. Gartley and later refined with Fibonacci levels, it helps traders anticipate the timing and magnitude of turnarounds in trending markets. Key characteristics Structure: a five-point formation…

Garnishment Explained: What It Is, How It Works, and How to Respond What is garnishment? Garnishment is a legal process that allows a creditor to collect unpaid debts by directing a third party—commonly an employer or a bank—to withhold funds from a debtor’s wages, bank account, tax refund, or other assets. Garnishment typically follows a…

Garn–St. Germain Depository Institutions Act Key takeaways Enacted in 1982 to ease pressure on banks and thrifts after rapid interest-rate increases. Authorized adjustable-rate mortgages and removed many deposit-rate ceilings. Allowed certain consumer protections (e.g., transfers into inter‑vivos trusts without triggering due‑on‑sale clauses). Loosening of regulation is widely viewed as a contributing factor to the Savings…

Garden leave: Definition, how it works, and pros and cons Key takeaways * Garden leave (also called gardening leave) is a paid period during an employee’s notice where they are relieved of workplace duties but remain on payroll and subject to restrictions. * Employers use it to protect sensitive information, client relationships, and business continuity…

GARCH Process What is GARCH? The generalized autoregressive conditional heteroskedasticity (GARCH) process is an econometric model for estimating and forecasting time-varying volatility in financial data. Introduced by Robert F. Engle in 1982 (building on ARCH), GARCH captures volatility clustering — the tendency for high-volatility periods to cluster together — and adapts as market conditions change….

Garage Liability Insurance What it is Garage liability insurance is a specialty business liability policy for companies in the automotive industry. Typical buyers include auto dealerships, repair and customization shops, service stations, parking facilities, and tow‑truck operators. The policy protects against third‑party bodily injury and property damage arising from the insured’s automotive operations. How it…

Gapping: Definition, Types, and Trading Strategies Gapping occurs when an asset opens at a price materially different from the previous close, with no trading in between. On a price chart, the empty space between the prior close and the new open is the gap. Gaps commonly happen after news or events that occur while markets…

What is gap insurance? Gap (guaranteed asset protection) insurance covers the difference between a vehicle’s actual cash value (what your primary auto insurer will pay after depreciation) and the remaining balance on your auto loan or lease when the car is totaled or stolen. It protects you from owing money on a vehicle you no…

Gap Analysis Key takeaways * A gap analysis compares an organization’s current performance with its desired future state and produces an action plan to close the gap. * Typical steps: define current state, clarify goals, identify gaps, prepare an action plan, implement and monitor change. * Common uses include strategic planning, product development, compliance, skill…

Understanding Stock Gaps: Types, Interpretation, and Trading Insights A stock gap is a discontinuity on a price chart where a security opens at a price significantly above or below the previous session’s close with no trading in between. Gaps often follow news or events that change market sentiment and can signal trend continuation, a new…

Gantt Chart: Definition, Benefits, and How It’s Used What is a Gantt chart? A Gantt chart is a horizontal bar chart that visualizes a project schedule. It shows tasks, their start and end dates, durations, dependencies, and progress. Named after Henry Gantt, the chart is widely used in project management to plan, schedule, and track…

Gann Fans Overview Gann fans are a technical-analysis tool created by W.D. Gann that use angled lines (Gann angles) to project potential support and resistance based on the relationship between price and time. They are drawn from a significant reversal point (a swing high or low) and extend into the future to help gauge trend…

Gann Angles What they are Gann angles are a technical analysis tool created by W.D. Gann that relate price movement to time using fixed geometric slopes. A set of these angles (a Gann fan) is drawn from a significant high or low to help gauge trend strength and potential support/resistance as price moves through different…

Gamma Neutral: What It Means and How It Works Key takeaways * A gamma neutral portfolio is structured so its delta does not change materially when the underlying security moves—i.e., the rate of change of delta (gamma) is offset. * Gamma neutrality is achieved by combining positions with offsetting gamma exposures, typically by adding options…

Gamma Hedging Gamma hedging is an options strategy designed to control the change in an option position’s delta as the underlying asset moves. Traders use it to reduce exposure to large or rapid price swings—especially near expiration—by keeping the portfolio’s rate of change of delta (gamma) near a desired level. Key concepts Delta: the sensitivity…

Gamma (Options) Definition Gamma (Γ) measures how much an option’s delta changes for a one-point move in the underlying asset. It is the second derivative of an option’s price with respect to the underlying price and quantifies convexity—how the rate of change of the option’s price itself changes as the underlying moves. Key points: *…

Key takeaways * Gamification applies game design elements to non-game activities to increase motivation, engagement, and goal achievement. * Common mechanics include points, badges, leaderboards, levels, and progress tracking. * Effective gamification improves engagement, loyalty, performance, and learning; poor design can distract, encourage gaming the system, or create ethical concerns. What is gamification? Gamification is…

Game Theory: Principles and Applications Game theory studies how two or more decision-makers (players) choose strategies in situations where each player’s payoff depends on the actions of others. As a framework for strategic interaction, it helps explain and predict behavior in economics, business, politics, biology, and psychology. Key takeaways Game theory models strategic decision-making among…

Game-Changer A game-changer is an individual, organization, product, or idea that significantly alters how things are done. By challenging the status quo and introducing new ways of thinking, operating, or producing, game-changers create lasting shifts across industries, communities, and sometimes entire societies. Key takeaways A game-changer fundamentally changes existing practices, markets, or behaviors. Both people…

Gambler’s Fallacy What it is The gambler’s fallacy (also called the Monte Carlo fallacy) is the mistaken belief that past independent random events influence future ones. People assume that a run of similar outcomes makes the opposite outcome more likely next, even when each event has the same probabilities and is independent. Key takeaways The…

Gains: Meaning and Examples of a Transaction Outcome A gain is a positive change in the value of an asset or property — that is, when the current price exceeds the original purchase price. In finance and accounting, gains are classified in different ways (for example, realized vs. unrealized, gross vs. net, short-term vs. long-term)…

GAFAM Stocks: What They Are and Why They Matter What is GAFAM? GAFAM is an acronym for five leading U.S. technology companies: Google (Alphabet), Apple, Facebook (now Meta), Amazon, and Microsoft. These firms are major drivers of the technology sector and carry outsized influence on market sentiment and indices. The companies (tickers) Alphabet — GOOG…

Futures Market A futures market is an organized exchange where standardized contracts—futures—are bought and sold for delivery (or cash settlement) at a specified date and price in the future. These markets enable hedging, price discovery, and speculation across commodities, financial instruments, and interest rates. How futures markets work Futures contracts obligate the buyer to purchase…

Futures Contract Key takeaways * A futures contract is a standardized agreement to buy or sell a specified quantity and quality of an asset at a predetermined price on a future date, traded on regulated exchanges. * Main uses: hedging (locking in prices) and speculation (betting on price moves); arbitrageurs also trade futures to exploit…

Futures Commission Merchant (FCM) A Futures Commission Merchant (FCM) is a firm or individual that accepts orders to buy or sell futures contracts or options on futures for customers, typically charging a commission or receiving other compensation. FCMs connect customers to exchanges and clearinghouses, collect and manage margin, and ensure contracts are properly executed and…