Assignment refers to the process in options trading where the seller of an options contract is required to fulfill the terms of the contract. For call options, this means delivering the underlying asset (e.g., stock) to the buyer at the strike price. For put options, it means buying the underlying asset from the buyer at the strike price. The assignment typically happens when the option is exercised by the holder.

Absolute Valuation is a method of determining the intrinsic value of an asset, company, or investment based on its fundamental financial metrics and future cash flows, without relying on external benchmarks or market comparisons. This approach focuses on the inherent characteristics of the asset itself, such as earnings, cash flow, or net assets, to estimate its true value.

A bond is a debt security, similar to an IOU, issued by an entity (usually a government or corporation) in order to raise capital. When you buy a bond, you are lending money to the issuer in exchange for periodic interest payments (known as the coupon) and the return of the bond's face value when it matures.

A Bull Call Spread is an options trading strategy used when a trader expects a moderate rise in the price of the underlying asset. It involves buying a call option with a lower strike price and simultaneously selling a call option with a higher strike price, both with the same expiration date. The goal of this strategy is to profit from a modest increase in the price of the underlying asset, while limiting both the potential profit and the potential loss.

Cash Flow refers to the movement of money into and out of a business or individual’s account during a specific period. It is a key indicator of financial health, showing how much cash is generated or spent by a company’s operations, investments, and financing activities. Positive cash flow means a company is generating more cash than it is spending, while negative cash flow indicates that a company is spending more than it earns.

Capital Efficiency refers to a company’s ability to effectively utilize its capital (equity, debt, or retained earnings) to generate profits and achieve growth. It is a measure of how well a company deploys its available resources to generate income, and it reflects the effectiveness of a company’s management in using its capital to create shareholder value.

A Collateralized Loan Obligation (CLO) is a type of structured financial product backed by a pool of loans, typically corporate loans. CLOs are designed to provide investors with exposure to corporate credit risk while offering varying levels of risk and return based on the tranches or classes within the CLO structure. The underlying loans are typically high-yield or non-investment grade loans.

Cost Basis is the original value of an asset, such as a stock, bond, or real estate, for tax purposes. It includes the purchase price of the asset plus any additional costs incurred to acquire the asset, such as commissions, fees, and improvements. The cost basis is used to calculate capital gains or losses when the asset is sold.

Compounding Free Cash Flow (CFCF) refers to the process of reinvesting a company’s free cash flow (FCF) into its operations or growth initiatives, which then generates additional cash flow, resulting in exponential growth over time. Free Cash Flow is the cash a company generates after accounting for capital expenditures necessary to maintain or expand its asset base. When this cash flow is reinvested into the business and compounds, it can lead to increased profitability and value creation.

The Compound Annual Growth Rate (CAGR) is a metric used to measure the mean annual growth rate of an investment or a financial metric over a specified period of time, assuming the investment grows at a consistent rate compounded annually. It represents the rate at which an investment would have grown if it had grown at the same rate every year.

A Cyclical Downturn refers to a period of economic decline that is part of the natural business cycle, typically characterized by a decrease in economic activity, rising unemployment, reduced consumer spending, and declining business investment. These downturns occur as part of the cyclical fluctuations in an economy, driven by changes in demand, supply, and other economic factors.

Debt Level refers to the total amount of debt that a company or individual owes. In the context of a company, debt level represents the amount of borrowed funds the company has taken on to finance its operations, expansions, or other financial activities. 

Discounted Cash Flow (DCF) is a financial valuation method used to estimate the value of an investment, company, or asset based on its projected future cash flows, adjusted for the time value of money. The core principle of DCF is that money today is worth more than the same amount of money in the future, so future cash flows must be discounted to reflect their present value.

Discounted Net Income (DNI) is a financial valuation method that involves discounting a company’s projected net income to its present value using a discount rate. This method is used to estimate the intrinsic value of a company by adjusting its future net income for the time value of money. It provides a snapshot of the company's profitability while considering that earnings in the future are less valuable than earnings received today.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a financial metric used to assess a company's operating performance by focusing on its ability to generate earnings from core business operations without the impact of non-operating activities like financing and accounting decisions. EBITDA is often used as a proxy for cash flow from operations and is a widely used measure in valuation and financial analysis.

Earnings Per Share (EPS) is a key financial metric used to measure a company’s profitability on a per-share basis. It is calculated by dividing the company’s net income (profit) by the total number of outstanding shares. EPS provides insight into the company’s financial performance and helps investors assess the company's profitability relative to the number of shares outstanding. It is often used in the calculation of the Price-to-Earnings (P/E) ratio to evaluate the valuation of a company.

Free Cash Flow Yield (FCF Yield) is a financial metric used to assess the value of a company by comparing its free cash flow (FCF) to its market capitalization (market value). It is the ratio of a company’s free cash flow per share to its current market price per share. This metric is used by investors to evaluate the ability of a company to generate cash that can be used for dividends, reinvestment, or debt reduction relative to its market value.

Cash Flow refers to the movement of money into and out of a business or individual’s account during a specific period. It is a key indicator of financial health, showing how much cash is generated or spent by a company’s operations, investments, and financing activities. Positive cash flow means a company is generating more cash than it is spending, while negative cash flow indicates that a company is spending more than it earns.

IV Crush (Implied Volatility Crush) refers to the sharp and sudden drop in implied volatility of an option—most commonly after a major anticipated event, such as an earnings announcement. This drop reduces the extrinsic value of the option, often causing a loss for buyers even if the stock moves as expected.

Loss Aversion is a psychological principle suggesting that individuals experience the pain of losses more intensely than the pleasure of equivalent gains. In other words, the discomfort of losing something is psychologically stronger than the satisfaction of gaining something of equal value. This concept is a key component of Prospect Theory, developed by psychologists Daniel Kahneman and Amos Tversky in the late 20th century. Their groundbreaking research demonstrated how people make decisions based on potential losses and gains, with losses having a disproportionately greater impact.

A Municipal Bond (Munis) is a debt security issued by a state, municipality, or county to finance its capital expenditures, such as building schools, highways, or other infrastructure. Municipal bonds are typically exempt from federal taxes and, in some cases, state and local taxes, making them attractive to investors in higher tax brackets.

A Negative PEG Ratio occurs when a company’s Price-to-Earnings (P/E) Ratio is not justified by its expected earnings growth. The PEG Ratio is calculated by dividing the P/E ratio by the annual earnings growth rate. A negative PEG ratio typically arises when the company is expected to experience negative earnings growth, meaning the company's earnings are expected to decline over time. This scenario can signal a fundamental problem in the company’s operations or market conditions that are expected to suppress earnings.

Operating Leverage refers to the degree to which a company can increase its operating income by increasing revenue. It arises from the proportion of fixed costs in a company's cost structure. A company with high operating leverage will see larger increases in operating income as sales rise, but it also bears more risk if sales decline, as fixed costs must still be covered regardless of sales volume.

Assignment refers to the process in options trading where the seller of an options contract is required to fulfill the terms of the contract. For call options, this means delivering the underlying asset (e.g., stock) to the buyer at the strike price. For put options, it means buying the underlying asset from the buyer at the strike price. The assignment typically happens when the option is exercised by the holder.

The PEG Ratio (Price-to-Earnings Growth Ratio) is a financial metric used to assess the valuation of a company's stock while considering its earnings growth rate. It is calculated by dividing the company’s PE Ratio by its expected earnings growth rate over a specific period (usually one to five years). The PEG ratio helps investors determine whether a stock is overvalued or undervalued relative to its growth potential.

The Price-to-Book (P/B) Ratio is a financial metric used to compare a company’s market value (price) to its book value. It is calculated by dividing the market price per share by the book value per share. The P/B ratio is a common indicator used by investors to assess the relative value of a company's stock, particularly in industries where assets and tangible value are significant, such as in financials or real estate.

The Price-to-Sales (P/S) Ratio is a financial metric that compares a company's market capitalization to its total revenue (sales). It is calculated by dividing the company’s stock price by its sales per share. The P/S ratio is used by investors to assess whether a stock is undervalued or overvalued relative to its sales, and it’s particularly useful when a company is not yet profitable or its earnings are volatile.

Quality of Earnings refers to the proportion of a company’s earnings that are derived from its core business activities, as opposed to being influenced by non-operational factors such as accounting adjustments, one-time gains, or financial engineering. High-quality earnings are sustainable, consistent, and supported by cash flow, while low-quality earnings may be driven by short-term gains, accounting tricks, or unsustainable sources.

Relative Valuation is a method used to estimate the value of an asset, company, or investment by comparing it to similar assets or companies in the market. Unlike absolute valuation, which seeks to determine the intrinsic value of an asset based on its fundamental characteristics (e.g., cash flows or earnings), relative valuation looks at the market values of comparable companies or assets to assess whether the asset is underpriced or overpriced.

The Strike Price (also known as the exercise price) is the price at which an option holder can buy or sell the underlying asset (e.g., stock, bond, commodity) when the option is exercised. For call options, the strike price is the price at which the holder can buy the asset, and for put options, it is the price at which the holder can sell the asset.

A Sideways Market (also known as a Range-Bound Market) is a market condition in which the price of an asset, such as a stock, bond, or commodity, moves within a horizontal range for an extended period. During a sideways market, the price fluctuates within a narrow band, neither rising nor falling significantly. This often occurs when market participants are uncertain about the direction of the asset or when there is a lack of strong economic or market-moving news.

Share Buybacks (also known as Share Repurchases) refer to a company’s action of buying back its own shares from the market. This reduces the number of outstanding shares, which can increase the value of remaining shares and improve financial metrics such as earnings per share (EPS). Share buybacks are typically executed using the company’s cash reserves or through debt financing.

Tax Implications refer to the potential tax consequences or effects of a particular financial decision, investment, or transaction. Understanding tax implications is crucial for managing personal and business finances effectively, as it helps determine the amount of tax owed or saved based on specific activities, such as earning income, selling assets, or receiving dividends.

Volatility refers to the degree of variation in the price of an asset over time. It is a measure of how much an asset’s price fluctuates, indicating the level of risk or uncertainty associated with that asset. In options trading, volatility is crucial because it directly affects option prices. High volatility typically leads to higher option premiums, as the potential for large price movements increases.

A Yield Curve is a graphical representation of the interest rates (or yields) on debt for a range of maturities, typically government bonds. It plots the yields of bonds with varying maturities, from short-term to long-term, on the vertical axis and the time to maturity on the horizontal axis. The shape of the yield curve can indicate future interest rate changes, economic growth, and inflation expectations.