Markets have their own language, and it is designed, it sometimes seems, to keep newcomers out. “The curve steepened.” “Shares fell on guidance.” “The peso rallied on carry.” This glossary decodes 63 essential stock-market terms in plain English, each with a real 2026 example from Wall Street or Colombia, so you can read any financial headline with confidence, whether you invest from New York, Bogotá or anywhere in between.
Stock (a slice of a company), index (a market gauge like the S&P 500 or COLCAP), ETF (a basket you buy as one share), dividend (profits paid to you) and volatility (how much prices swing). These five unlock most market news.
How to read a stock quote in 10 seconds
Latest traded price
Versus prior close
Shares traded today
Price × shares
Price ÷ EPS
Dividend ÷ price
Oct. 27, 2026 close. Source: TradingView.
The most powerful idea in investing: compound interest
Bulls, bears and everything in between
A sustained advance. In 2026 the S&P 500 is up 12.3% and Colombia’s iCOLCAP 21.9%.
A 20%+ fall from a peak. The Nasdaq lost more than 30% in 2022.
A 10%–20% pullback; routine even in bull markets.
A sudden, severe drop over days, as in March 2020.
Glossary A to Z
A
ADR (American Depositary Receipt)
A certificate that lets a foreign company’s shares trade on a U.S. exchange in dollars.
2026 example: Ecopetrol trades in New York as EC and is up 71.7% in dollars in 2026.
Ask and bid
The bid is the highest price a buyer will pay; the ask is the lowest a seller will accept. The gap is the spread, a hidden trading cost.
B
Basis point (bp)
One hundredth of a percentage point; 100 bp = 1%.
2026 example: A TES yield moving from 13.00% to 13.25% rose 25 bp.
Bear market
A decline of 20% or more from a recent high, with widespread pessimism.
2026 example: In 2022 the Nasdaq fell more than 30%.
Benchmark
The index used to judge an investment’s performance.
2026 example: A Colombian equity fund is measured against the MSCI COLCAP.
Blue chip
A large, financially solid, heavily traded company.
2026 example: Apple, Microsoft and Ecopetrol.
Bond
A loan to a government or company in exchange for interest (coupons) and repayment at maturity.
2026 example: Colombia’s government bonds are called TES.
Bull market
A sustained market advance driven by optimism.
2026 example: The S&P 500 is up 12.3% in 2026.
BVC
The Colombian Stock Exchange (Bolsa de Valores de Colombia), now part of the regional holding nuam.
C
Capital gain
The profit from selling an asset for more than you paid.
Carry trade
Borrowing in a low-yield currency to invest in a high-yield one and earn the spread.
2026 example: A key driver of the Colombian peso’s 2026 rally.
CDS (credit default swap)
Insurance against a borrower’s default; its price signals perceived credit risk.
2026 example: Colombia’s 5-year CDS is about 160 bp, above Brazil’s 117.
CDT
Colombia’s certificate of deposit: a fixed-term bank deposit with a fixed rate, insured by Fogafín up to COP 50 million.
Close
The final price of the trading day.
2026 example: The COLCAP closed at 2,512.42 on Oct. 27, 2026.
COLCAP (MSCI COLCAP)
Colombia’s benchmark stock index of the largest, most liquid local companies.
Compound interest
Earning returns on previous returns, the engine of long-term wealth.
2026 example: $10,000 at 8% a year grows to about $46,600 in 20 years.
Correction
A 10%–20% decline from a recent high; common even in bull markets.
Coupon
The periodic interest payment on a bond.
2026 example: A COP 1 million TES at 13% pays COP 130,000 a year.
D
Diversification
Spreading money across assets, sectors and countries to reduce risk.
Dividend yield
Annual dividend divided by share price.
2026 example: SCHD yields about 3% a year.
Dow Jones Industrial Average
A price-weighted index of 30 large U.S. companies, Wall Street’s oldest benchmark.
2026 example: Closed at 52,429.92 on Oct. 27, 2026.
E
ETF (exchange-traded fund)
A fund that tracks an index or basket and trades on an exchange like a stock.
2026 example: iCOLCAP is up 21.9% in pesos in 2026.
Ex-dividend date
The date from which new buyers are no longer entitled to the next dividend.
Expense ratio
A fund’s annual fee as a percentage of assets.
2026 example: VOO charges 0.03%: $3 a year per $10,000.
F
Federal Reserve (Fed)
The U.S. central bank; its rate decisions move global markets, including the Colombian peso.
Fundamentals
Financial data such as revenue, earnings and debt used to value a company.
G
Guidance
A company’s forecast for future results, often more market-moving than the quarter itself.
2026 example: Boeing fell 10.8% on Oct. 27, 2026 after cutting its delivery target.
H
Holding company
A company whose main business is owning other companies.
2026 example: Grupo Sura and Grupo Argos.
I
Index
A gauge of a group of stocks’ performance.
2026 example: S&P 500, Nasdaq, Dow and MSCI COLCAP.
Inflation
A general rise in prices that erodes purchasing power.
IPO (initial public offering)
A company’s first sale of shares to the public.
L
Leverage
Investing with borrowed money; magnifies gains and losses.
2026 example: At 5-to-1 leverage, a 20% drop wipes out your capital.
Limit order
An order that executes only at your price or better.
Liquidity
How easily an asset can be traded without moving its price.
2026 example: iCOLCAP is liquid; many small BVC stocks are not.
M
Market capitalization
Share price times shares outstanding: a company’s total stock-market value.
Market order
An order to buy or sell immediately at the best available price.
N
Nasdaq
A U.S. exchange and index heavy in technology companies.
2026 example: The Nasdaq Composite closed at 26,502.62 on Oct. 27, 2026.
O
Open
The start of the trading session: 9:30 a.m. ET in New York; 9:30 a.m. Colombia time at the BVC.
P
P/E ratio
Share price divided by earnings per share: how many years of profits investors are paying for.
Portfolio
The full set of an investor’s holdings.
R
Rebalancing
Restoring a portfolio to its target weights by trimming winners and adding to laggards.
Recession
A sustained decline in economic activity, often defined as two straight quarters of falling GDP.
Revaluation and devaluation
Revaluation: the local currency strengthens. Devaluation: it weakens.
2026 example: The peso has appreciated about 20% against the dollar in 2026.
Risk profile
How much volatility and loss an investor can tolerate.
S
S&P 500
The index of 500 leading U.S. companies, the world’s main equity benchmark.
2026 example: Closed at 7,727.03 on Oct. 27, 2026.
Short selling
Selling borrowed shares to buy them back cheaper; losses can be unlimited.
Stock split
Dividing each share into several cheaper ones without changing total value.
Superintendencia Financiera (SFC)
Colombia’s financial regulator for banks, brokerages and funds.
Support and resistance
Price levels where declines tend to stall (support) or rallies tend to stall (resistance).
2026 example: COLCAP support near 2,500, resistance near 2,550.
T
TES
Colombian government bonds; their yields anchor the local financial system.
2026 example: The 10-year TES yields 13.18%.
Ticker
The short code identifying a security.
2026 example: AAPL for Apple; ECOPETROL on the BVC.
TRM
Colombia’s official exchange rate (Tasa Representativa del Mercado), published by the Superintendencia Financiera.
2026 example: The TRM for Oct. 27, 2026 was COP 3,157.94.
V
Volatility
How much an asset’s price swings; more volatility means more risk and opportunity.
Volume
The number of shares or amount of money traded over a period.
W
Wall Street
Shorthand for the U.S. stock market, after the New York street where the exchange sits.
Withholding tax
Tax deducted at source when a payment is made.
2026 example: The U.S. withholds 30% of dividends paid to Colombian residents.
Y
Yield curve
A chart of bond yields by maturity; an inverted curve has often preceded recessions.
2026 example: Colombia’s TES curve: 12.13% at 1 year, 13.18% at 10 years.
YTD (year to date)
Performance from Jan. 1 to today.
2026 example: The S&P 500 is up 12.3% YTD through October 2026.
Frequently asked questions
What does it mean when the market is up or down?
The main index, such as the S&P 500 or COLCAP, rose or fell: on average the largest stocks are worth more or less than the previous close.
What is the difference between a stock and a bond?
A stock makes you a part-owner; a bond makes you a lender who receives interest and principal at maturity.
What is a bull market versus a bear market?
A bull market is a sustained rise; a bear market is a decline of 20% or more from a peak.
What is a ticker symbol?
A short code identifying a security, such as AAPL for Apple or ECOPETROL on the Colombian exchange.
What is a basis point?
One hundredth of a percentage point; 100 basis points equal 1%.
What does YTD mean?
Year to date: performance from Jan. 1 to today.
What is the TRM?
Colombia’s official dollar exchange rate, calculated daily by the Superintendencia Financiera.
What is a limit order?
An order that executes only at your chosen price or better.
Keep learning: What is an ETF? · What are TES? · Invest in Wall Street from Colombia · Stock market today · Leer en español
Examples use market data as of the Oct. 27, 2026 close (TradingView, Banco de la República, Set-FX). Bolsa al Día informs and explains; we do not tell you what to do with your money. Updated Oct. 28, 2026.
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