Learn Blog Get started

Home›Glossary

Trading Glossary

Key terms for active traders — catalysts, dark pools, options flow, AI signals, and more.

After-Hours Trading

Stock trading that occurs outside of regular market hours (9:30am–4pm ET), typically from 4pm–8pm ET. Most major earnings reports and catalyst events are released in after-hours, making this session critical for catalyst traders.

ATS (Alternative Trading System)

A non-exchange trading venue that matches buyers and sellers, including dark pools and electronic communication networks (ECNs), regulated under SEC Regulation ATS.

The difference between the highest price a buyer will pay (bid) and the lowest price a seller will accept (ask). The spread is the primary transaction cost for most stock trades.

A privately negotiated, large-volume securities transaction executed outside the public order book to minimize market impact.

Catalyst Family

A grouping of related catalyst types that tend to produce similar market behaviors. Used in TMS scoring to apply sector-appropriate historical patterns when classifying new events.

Circuit Breaker

A regulatory mechanism that temporarily halts trading when prices decline too rapidly, giving markets and participants time to stabilize before trading resumes.

A private exchange where institutional investors trade large blocks of shares without public visibility before execution.

Earnings Per Share (EPS)

A company's net profit divided by the number of outstanding shares. The primary metric in earnings reports and the most-watched number during earnings season.

Earnings Surprise

The difference between a company's reported earnings and the Wall Street consensus estimate. Positive surprises drive stock gains; negative surprises drive declines.

ECN (Electronic Communication Network)

An automated system that directly matches buy and sell orders for securities without routing through a traditional market maker, displaying an electronic order book with live bids and offers.

Float (Shares Available for Trading)

The number of a company's shares that are actually available for trading by the public, excluding locked-up insider and institutional holdings.

The proportion of a company's shares that are available for public trading, excluding shares held by insiders, major institutions with restricted holdings, and government entities.

A momentum trading strategy where a stock gaps up at the open on a catalyst and high volume, and the trader buys into the continuation of that directional move.

When a stock opens significantly higher than its previous closing price, creating a price "gap" on the chart with no trading occurring at the intermediate prices.

Implied Volatility (IV)

A forward-looking metric derived from options prices that reflects the market's expectation of future price movement magnitude.

Open-market stock purchases by company executives, directors, or 10%+ shareholders, disclosed via SEC Form 4. Considered a bullish signal reflecting informed confidence in the company's prospects.

IV Spike (Implied Volatility Spike)

A sudden increase in the implied volatility of a stock's options, indicating that the options market expects a large price move in the near future.

Real-time order book data showing all bid and ask prices from market makers and ECNs, revealing the depth of supply and demand at each price level.

How easily a security can be bought or sold at a stable price. High liquidity means tight bid-ask spreads, large order book depth, and the ability to execute large orders without significantly moving the price.

Market Capitalization

The total market value of a company's outstanding shares. Market cap determines which "tier" a stock falls into (micro-cap, small-cap, mid-cap, large-cap) and drives liquidity and volatility characteristics.

Market Catalyst

An event or announcement that triggers a significant price movement in a stock.

A firm that continuously quotes both bid and ask prices for a security, standing ready to buy or sell at those prices, providing liquidity and facilitating price discovery.

The real-time stream of options market activity, tracked to identify unusual buying or selling patterns that indicate institutional positioning.

A large, aggressive options order that fills across multiple exchanges simultaneously, indicating urgency and institutional conviction.

The FDA-set deadline for completing its review of a New Drug Application, representing the scheduled date of the binary approval or rejection decision for a drug candidate.

The FDA deadline to decide on a drug application — one of the most precisely dated and high-magnitude catalysts in biotech trading, often producing 30–100%+ moves.

A significant difference between a stock's previous closing price and its current premarket trading price, typically caused by overnight catalysts.

The tendency of stocks that have moved significantly in one direction to continue moving in that direction over the near term.

A sentiment indicator calculated by dividing options put volume by call volume, used to gauge bearish versus bullish positioning in a stock or the broader market.

Reaction Window

The brief period immediately following a catalyst event during which the initial price discovery occurs and the largest, fastest price moves happen.

Relative Volume (RVOL)

Current trading volume compared to the average volume for the same time of day. RVOL of 3x means volume is running at 3 times its typical pace — a key confirmation signal.

Risk/Reward Ratio

The ratio between the potential loss (risk) and the potential gain (reward) on a trade. A 3:1 risk/reward ratio means risking $1 to potentially make $3.

A rapid price increase triggered when short sellers are forced to cover their positions simultaneously, creating self-reinforcing buying pressure.

The practice of analyzing real-time price and volume data — the "time and sales" feed — to identify buying and selling pressure, momentum shifts, and institutional activity as it unfolds tick by tick.

TMS Score (Trade Momentum Score)

TradeAI News's proprietary 0–100 composite AI score measuring the strength and actionability of a trading signal.

A temporary suspension of trading in a stock, ordered by the exchange or the SEC, typically due to pending news, extreme volatility, or regulatory concerns.

Unusual Options Activity (UOA)

Options trading volume or characteristics that deviate significantly from a stock's historical norms, often interpreted as a signal of institutional directional positioning.

An abnormal increase in trading volume that often precedes or confirms a significant price movement in a stock.

VWAP (Volume-Weighted Average Price)

The average price of a stock weighted by volume throughout the day. Used by institutions as a benchmark and by day traders as a key support and resistance reference.

An IRS rule that disallows a tax loss if you repurchase the same or substantially identical security within 30 days before or after selling it at a loss.

In-depth guides →Blog →