Definitions & Index Descriptions

Definitions

30-, 50-, 100-, or 200-day moving average: A line on a chart that represents the average closing price of a security over the past 30-, 50-, 100-, or 200 days. It is a technical indicator that traders and market analysts use to determine the long-term trend of the security and to identify potential support or resistance levels.
Agflation: Agflation describes the phenomenon when food prices rise more rapidly than the prices of other goods and services, due to the growing demand for crops as both food and for use in biofuels.
Annualized Return: Annual or annualized return is a measure of how much an investment has increased on average each year, during a specific time period.
Baker Hughes Rig Count: an important business barometer for the oil drilling industry. When drilling rigs are active they consume products and services produced by the oil service industry. The active rig count acts as a leading indicator of demand for oil products.
Basis Point: One hundredth of 1 percentage point.
Beta: A measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole.
Blue Sky Value: Also known as goodwill value, represents the intangible assets of a business that contribute to its overall value.
Bond Yield: Quarterly average of long-tern US Treasury rates.
Capital Expenditure (CapEx): Funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment.
Consumer Price Index (CPI): CPI measures the monthly change in prices paid by U.S. consumers.
Deflation: Deflation is a decline in the price level of goods and services, often caused by a contraction in the money supply or increased productivity.
Earnings Per Share (EPS): EPS is a company's net profit divided by the number of common shares it has outstanding.
Estimated EPS Growth: Estimated earnings per share growth measures the estimated growth rate of earnings-per-share using consensus estimates of three to five-year earnings.
Federal Deposit Insurance Corporation (FDIC): An independent agency that provides deposit insurance for bank accounts and other assets in the U.S. if a bank fails.
Fed Funds Rate: The Fed Funds rate is the target interest rate set by the Federal Open Market Committee (FOMC). This target is the rate at which commercial banks borrow and lend their excess reserves to each other overnight.
Flight to Safety: Flight to safety occurs when investors shift their asset allocation away from riskier investments and into safer ones, for instance out of stocks and into bonds, namely US Treasurys.
Futures Contract: A futures contract is a legal agreement to buy or sell a particular commodity asset, or security at a predetermined price at a specified time in the future.
Global Industry Classification Standard (GICS): GICS is a method for assigning companies to a specific economic sector and industry group that best defines its business operations.
Gross Domestic Product (GDP): GDP is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period.
Gross Margin: Gross margin is the difference between revenue and cost of goods sold (COGS), divided by revenue.
Historical Sales Growth: Sales growth is the increase (or decrease) in a company's sales from one period to the next. Shown as a percentage, sales growth illustrates the increases and decreases over time identifying trends in the business.
Hedge: A hedge is an investment that is made with the intention of reducing the risk of adverse price movements in an asset.
Inflation: A rise in prices, which can be translated as the decline of purchasing power over time.
Inflection Point: An event that results in a significant change in the progress of a company, industry, sector, economy, or geopolitical situation and can be considered a turning point after which a dramatic change, with either positive or negative results, is expected to result.
Initial Public Offering (IPO): Refers to the process of offering shares of a private corporation to the public in a new stock issuance for the first time. It allows a company to raise equity capital from public investors.
Large Capitalization: A large-capitalization company is a company with a market capitalization value of more than $10 billion.
Leverage: Leverage is an investment strategy of using borrowed money—specifically, the use of various financial instruments or borrowed capital—to increase the potential return of an investment.
Magnificent Seven: The Magnificent Seven stocks are a group of high-performing and influential companies in the U.S. stock market: NVIDIA Corporation, Amazon.com, Inc., Meta Platforms, Inc., Alphabet, Inc., Microsoft Corporation, Apple Inc. and Tesla, Inc.
Margin: In finance, margin is the collateral that a holder of a financial instrument has to deposit with a counterparty to cover some or all of the credit risk the holder poses for the counterparty.
Mega Capitalization: A mega-cap company is a company with a market capitalization above $200 billion.
Mid Capitalization: A mid-cap company is a company with a market capitalization value of $2-10 billion.
Option: In finance, an option is a contract which conveys to its owner, the holder, the right, but not the obligation, to buy or sell a specific quantity of an underlying asset or instrument at a specified strike price on or before a specified date, depending on the style of the option.
Price to Sales Ratio: The price-to-sales (P/S) ratio is a valuation ratio that compares a company’s stock price to its revenues. It is an indicator of the value placed on each dollar of a company’s sales or revenues.
Price/Earnings Ratio: The price to earnings ratio measures the current share price relative to earnings-per-share.
Producer Price Index: The Producer Price Index (PPI) measures the average change over time in the prices domestic producers receive for their output.
Purchasing Managers' Index (PMI): An index of the prevailing direction of economic trends in the manufacturing and service sectors. It summarizes whether market conditions are expanding, staying the same, or contracting as viewed by purchasing managers.
Put Option (or “put”): A put option is a contract giving the option buyer the right, but not the obligation, to sell a specified amount of an underlying security at a predetermined price within a specified time frame. Direxion does not offer or endorse options trading.
Quantitative Tightening (QT): QT is a contractionary monetary policy tool applied by central banks to decrease the amount of liquidity or money supply in the economy.
Return on Capital: Measures the profitability and value-creating potential of companies relative to the amount of capital invested by shareholders and other debtholders.
Risk Premium: A risk premium is a measure of excess return that is required by an individual to compensate being subjected to an increased level of risk. It is used widely in finance and economics, the general definition being the expected risky return less the risk-free return, as demonstrated by the formula below.
Small Capitalization: A small-capitalization company is a company with a market capitalization value of $300 million to $2 billion.
Spread: The difference or gap that exists between two prices, rates, or yields.
Standard Deviation: Measure of the dispersion of a set of data from its mean.
Strategic Petroleum Reserve (SPR): An emergency supply of crude oil that can be used to offset a severe oil supply shortage. The SPR was created to provide the United States with crude oil in the event of a severe oil supply or economic disruption.
Swaps: A swap is a derivative contract through which two parties exchange the cash flows or liabilities from two different financial instruments. Most swaps involve cash flows based on a notional principal amount such as a loan or bond, although the instrument can be almost anything. Usually, the principal does not change hands.
Treasury Securities: Treasury securities are government bonds from the United States. Investors find them attractive because they make twice yearly interest payments and they have the highest credit rating (AAA) of all debt securities, which means they are low risk.
Volatility: A statistical measure of the dispersion of returns for a given security or market index. Volatility is often measured from either the Standard deviation or variance between returns from that same security or market index.
Weighted Average Market Capitalization: Weighted average market capitalization is a type of market index in which each component is weighted according to the size of its total market capitalization. Market capitalization is the sum of the total value of a company's outstanding shares multiplied by the price of one share.
Weighted Median Market Capitalization: The calculation represented by the median market capitalization of the stocks in the portfolio, weighted by the amount of each stock. Weighted median price/book is a ratio comparing share price to book value or assets minus liabilities.
Yield Curve: The yield curve is a line that plots yields (interest rates) of bonds having equal credit quality but differing maturity dates. The slope of the yield curve gives an idea of future interest rate changes and economic activity.
Yield: The rate of return on an investment.

Index Descriptions

Bloomberg Commodity Index (BCOM): BCOM is a broadly diversified index that allows investors to track 19 commodity futures through a single, simple measure. One cannot directly invest in an index.
Bloomberg Galaxy Crypto Index: Bloomberg Galaxy Crypto Index is designed to measure the performance of the largest cryptocurrencies traded in USD. One cannot directly invest in an index.
Citigroup Economic Surprise Index: Measures the degree to which economic data is either beating or missing expectations.
Consumer Price Index (CPI): CPI measures the average change in prices over time that consumers pay for a basket of goods and services.
Core Personal Consumption Expenditure Price Index (PCE): The PCE is a measure of the prices that people living in the United States, or those buying on their behalf, pay for goods and services, excluding food and energy.
Deutsche Banc Liquid Commodity Optimum Yield Index (DBC CI): This index is composed of futures contracts on 14 of the most heavily-traded and important physical commodities in the world. One cannot directly invest in an index.
Dow Jones Industrial Average: Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indices. One cannot directly invest in an index.
Indxx USA Cloud Computing Index (IUCLOUN): Provided by Indxx, LLC. and includes domestic companies that deliver cloud computing infrastructure, platforms, or services. The companies included in the Index are involved in the delivery of computing services – servers, storage, databases, networking, software, analytics, and more, over the internet, which is often referred to as the “Cloud.” The Index Provider has defined cloud computing to include three themes: Infrastructure as a service; Platform as a service; and Software as a service.
ISM Services PMI (formerly the Non-Manufacturing NMI): compiled and issued by the Institute of Supply Management (ISM) and contains a diffusion index based on survey data.
MSCI ACWI Investable Market Index: This index captures large, mid and small cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. One cannot directly invest in an index.
Nasdaq Composite Index: A market capitalization-weighted index of more than 2,500 stocks listed on the Nasdaq stock exchange. It is a broad index that is heavily weighted toward the important technology sector. The index is composed of both domestic and international companies.
Nasdaq-100^® Index (XNDX): The Index includes 100 of the largest domestic and international non-financial companies listed on the NASDAQ Stock Market^® based on market capitalization. All companies listed on the index have an average daily trading volume of at least 200,000 shares. One cannot directly invest in an index.
Nasdaq-100^® Equal Weighted Index (NETR): The Index includes 100 of the largest non-financial securities listed on NASDAQ^®, but instead of being weighted by market capitalization, each of the constituents is initially set at 1.00%. The index is reviewed and adjusted annually in December, but replacements may be made any time throughout the year. The index is rebalanced quarterly in March, June, September and December. One cannot invest directly in an index.
Producer Price Index (PPI): The PPI measures the average change over time in the selling prices received by domestic producers for their output.
Russell 2000 Index: A small-cap stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index. One cannot directly invest in an index.
S&P 500 Index: Standard & Poor’s^® selects the stocks comprising the S&P 500^® Index on the basis of market capitalization, financial viability of the company and the public float, liquidity and price of a company’s shares outstanding. The Index is a float-adjusted, market capitalization-weighted index. One cannot directly invest in an index.
S&P Biotechnology Sector Select Index: The Index is provided by S&P Dow Jones Indices LLC and includes domestic companies from the biotechnology industry. The Index is a modified equal-weighted index that is designed to measure the performance of the biotechnology sub-industry based on the Global Industry Classification Standards (GICS).
S&P GSCI Agriculture Index: a sub-index of the S&P GSCI, provides investors with a reliable and publicly available benchmark for investment performance in the agricultural commodity markets. One cannot directly invest in an index.
S&P GSCI Index (S&P GSCI): The S&P GSCI is a composite index of commodity sector returns representing an unleveraged, long-only investment in commodity futures that is broadly diversified across the spectrum of commodities. One cannot directly invest in an index.
S&P Technology Select Sector Index (IXTTR): Provided by S&P Dow Jones Indices and includes domestic companies from the technology sector which includes the following industries: computers and peripherals; software; diversified telecommunications services; communications equipment; semiconductors and semi-conductor equipment; internet software and services; IT services; electronic equipment, instruments and components; wireless telecommunication services; and office electronics.