CluenexLearn
Investing, in plain words.
147 terms and 6 short guides. The same explanations open beside every number in the Cluenex app.
Start here
2 min read
Read a stock page in two minutes
The four questions every Cluenex stock page answers, in the order to ask them.
4 min readHow Cluenex values a company
Fair value, the three cases, the buy price and why some stocks get no number at all.
5 min readHow the economy moves stocks
Rates, inflation and jobs in five minutes, with the history that matters.
5 min readOptions in five ideas
Calls, puts, time, volatility and risk. Enough to read any options page.
4 min readPicking an options strategy, the Cluenex way
Your view, how expensive options are, and how long you have. Three inputs, one shortlist.
6 min readProfessional tools in plain words
What chart indicators, risk numbers, backtests and screens tell you, and what they don’t.
Stock basics
Tickers, market cap, volume, dividends. The words every stock page uses.
52-week rangeThe lowest and highest prices of the past year.Analyst ratingsBuy, hold and sell recommendations from Wall Street research analysts.BetaHow much a stock tends to move when the whole market moves.CorrelationHow closely two stocks’ daily moves follow each other, from minus 1 to plus 1.Day changeHow much the price moved since the previous session’s close.Dividend yieldYearly cash dividends per share divided by the share price.Earnings estimatesWhat analysts expect a company to earn per share in coming quarters and years.Institutional holdersFunds, pension plans and asset managers that own a company’s shares, from their quarterly 13F filings.Market capThe total value of all a company’s shares: share price times shares outstanding.Market indexA basket of stocks tracked as one number, like the S&P 500.PeersCompanies that compete in the same business.Price targetWhere an analyst expects a stock to trade in about 12 months.Sector and industryThe part of the economy a company works in, from broad sector to narrow industry.Sector rotationMoney moving from one part of the market to another as the economy and rates change.Short interestThe number of shares sold short, betting the price will fall, usually shown as a percentage of the shares that trade.StockA small slice of ownership in a company.TickerThe short code a stock trades under, like AAPL for Apple.VolatilityHow much a price swings around, usually stated as a yearly percentage.VolumeHow many shares changed hands during a day.
Valuation
What a business is worth, and how its price compares.
Buy price (margin of safety)The fair value minus a safety margin. Below this price we call a stock undervalued.Cautious, base and optimistic casesThree fair values built from three sets of assumptions about growth and margins.Discount rateThe yearly return an investor demands for the risk of owning a business.Discounted cash flowValuing a business by adding up the cash it should produce in future, shrunk back to today’s dollars.Earnings per shareNet profit divided by the number of shares.EV/EBITDACompany value including debt, divided by profit before interest, tax, depreciation and amortization.Fair valueOur estimate of what one share is worth, based on the cash the business can produce.Growth priced inThe yearly growth the current price assumes, worked backwards from our model.P/B ratioPrice divided by book value (assets minus debts) per share.P/E ratioShare price divided by the last 12 months of earnings per share.P/S ratioMarket cap divided by the last 12 months of sales.Price verdictOur one word read on price: below fair value, within the fair range, above it, or speculative.Relative valuationComparing a company’s multiples (P/E, EV/EBITDA, P/S) with similar companies.
Business quality
Profits, growth, debt and the edge that keeps rivals away.
Business quality scoreA 0 to 10 score of how good the business is, scored against its own industry.BuybacksA company buying its own shares, so each remaining share owns more of the business.Debt and cashWhat the company owes lenders, against the cash it holds.Financial healthWhether the balance sheet can survive a bad year: debt, cash and the cash flow to pay debts.Free cash flowCash from operations minus what the company spends on equipment and buildings.Gross marginSales minus the direct cost of making the product, as a share of sales.MoatA lasting advantage that keeps competitors from taking a company’s profits.Net marginFinal profit after every cost, interest and tax, as a share of sales.Operating marginProfit from running the business, before interest and tax, as a share of sales.ProfitabilityHow much of each sales dollar the company keeps as profit.Return on equityNet profit divided by shareholders’ equity.Return on invested capitalProfit earned on all the money invested in the business, from shareholders and lenders.RevenueAll the money customers paid the company, before any costs.Revenue by segmentHow a company’s sales split across its products, divisions and regions, as reported in its filings.Revenue growthHow fast sales are rising compared with a year earlier.Supply chainThe suppliers a company buys from and the customers it sells to.
Cluenex scores
How our scores, verdicts and forecasts are built and how to use them.
20-day forecastOur machine learning model’s odds that the price is higher in 20 trading days, and the typical move.ConvictionHow much the forecast model trusts its own call on this stock right now.Fear and greedA 0 to 100 gauge of investor mood across the market.Insider activityShares bought or sold by a company’s own executives and directors, from SEC Form 4 filings.Moving averageThe average closing price over a set number of days, drawn as a line.Price setupA recognised chart pattern with a frozen entry, stop and target, tracked until it resolves.Price trendWhether the recent price action is leaning up, down or sideways.Signal ScoreOur 0 to 100 summary of a stock, combining business quality, valuation, insider activity and price trend.
Events
Earnings reports and the price moves around them.
Earnings reportThe quarterly results a public company must publish: sales, profits and usually guidance.Earnings surpriseHow far a company’s reported earnings per share beat or missed the analysts’ average estimate.Expected moveThe size of move the options market is pricing for a stock by a given date.
Economy
Interest rates, inflation, jobs and growth, and how each moves stocks.
FOMC (the Fed’s rate meeting)The Federal Open Market Committee: the Fed group that sets the target for short-term interest rates, eight times a year.InflationThe rate at which prices rise across the economy, usually measured over a year.IPOAn initial public offering: when a private company sells shares to the public for the first time.Sahm ruleA recession signal: the 3-month average unemployment rate rising 0.5 points above its low of the past year.Yield curveThe line connecting Treasury yields from short (3 months) to long (30 years) maturities.
Insiders and Congress
Trades by company insiders and members of Congress, from official filings.
Cluster buyTwo or more insiders buying the same company’s shares on the open market within a short period.Congress tradesStock trades by members of Congress and their families, disclosed under the STOCK Act.Form 4The filing a company insider must send the SEC within two business days of buying or selling the company’s shares.Late filingA Congress trade disclosed more than 45 days after it happened.Planned sale (10b5-1)A sale scheduled months in advance under an SEC Rule 10b5-1 trading plan.
Options
Calls, puts, volatility and the Greeks, from the first idea to strategies.
AssignmentWhen the buyer of an option you sold exercises it, and you must deliver or buy the shares.BreakevenThe stock price at expiration where the position neither makes nor loses money.Call optionThe right to buy 100 shares at the strike price before expiration.Cash secured putSelling a put while holding the cash to buy the shares at the strike.CollarOwning shares, buying a put below and selling a call above to pay for it.Covered callOwning 100 shares and selling a call against them for income.Credit and debitA debit trade costs money up front; a credit trade pays you up front.Days to expirationHow many calendar days remain until an option expires.DeltaHow much an option’s price changes when the stock moves $1. Also a rough chance of finishing in the money.ExpirationThe last day an option exists. After it, the option is exercised or worthless.GammaHow fast delta changes as the stock moves.Historical volatilityHow much the stock actually moved, measured from recent daily closes and stated yearly.Implied volatilityThe yearly volatility that today’s option prices imply. Higher IV means pricier options.In, at and out of the moneyWhere the strike sits against today’s price.Intrinsic and extrinsic valueIntrinsic is an option’s exercise value now; extrinsic is everything else, paid for time and uncertainty.Iron condorSelling a put spread below and a call spread above the price, for a credit.IV percentileThe share of days in the past year when implied volatility was lower than today.IV rankWhere today’s implied volatility sits between its lowest and highest level of the past year, from 0 to 100.LiquidityHow easily you can trade without moving the price, shown by tight bid and ask prices and real volume.Max profit and max lossThe most a position can make and lose, if held to expiration.Modelled option chainOption prices Cluenex calculates from the stock’s real end of day volatility data, rather than live quotes.Open interestThe number of option contracts that are open and not yet closed or expired.OptionA contract giving the right, not the obligation, to buy or sell 100 shares at a set price by a set date.PremiumThe price of an option, quoted per share.Probability of profitThe modelled chance a position makes money if held to expiration.Protective putBuying a put on shares you own to set a floor under losses.Put optionThe right to sell 100 shares at the strike price before expiration.Put/call ratioPut contracts traded divided by call contracts traded.SkewHow much more out of the money puts cost than calls, in volatility terms.Straddle and strangleBuying both a call and a put, to profit from a big move either way.Strike priceThe price at which an option lets you buy (call) or sell (put) the shares.ThetaHow much value an option loses each day from time passing, all else equal.VegaHow much an option’s price changes when implied volatility moves 1 point.Vertical spreadBuying one option and selling another of the same type and expiration at a different strike.Volatility crushThe sharp drop in implied volatility right after an event like earnings.
Pro tools
Chart indicators, risk, backtests and screens: what professionals use, in plain words.
ADX and directional movementADX measures how strong a trend is; +DI and −DI show whether buyers or sellers drive it.AroonHow recently the stock made its 25-day high (Aroon Up) and its 25-day low (Aroon Down).Average true range (ATR)The average daily price range in dollars, counting gaps between days.BacktestTesting a trading rule on past prices to see how it would have done.Bat patternA harmonic pattern where B retraces 0.382 to 0.50 of XA and D completes at 0.886 of XA.Bollinger BandsA band two standard deviations above and below the 20-day average price.Butterfly patternA harmonic pattern where B retraces 0.786 of XA and D extends to 1.27 of XA, beyond X.Chaikin Money FlowWhether a stock closes near its daily highs (buying) or lows (selling), weighted by volume, over 20 days.Chart templateA saved set of indicators you can load on any stock.Commodity Channel IndexHow far the price is from its 20-day average, scaled by how far it usually strays.Crab patternA harmonic pattern whose D stretches to 1.618 of XA, the most extreme of the set.Cypher patternA pattern where C runs beyond A, then D pulls back 0.786 of the whole X to C swing.Donchian ChannelsThe highest high and lowest low of the last 20 days.Exponential moving average (EMA)An average price that counts recent days more than older ones.Function codesShort codes you can type into search to jump straight to a tool, like AAPL FA for Apple’s financials.Gartley patternA harmonic pattern where B retraces 0.618 of XA and D completes at 0.786 of XA.Golden crossThe 50-day average price crossing above the 200-day average.Harmonic patternsPrice swings whose lengths match Fibonacci ratios, grouped into named shapes like the Bat and the Crab.Ichimoku CloudA Japanese system of five lines that shows trend, momentum and support in one view.Investing every monthPutting the same amount in at regular intervals, whatever the price.Keltner ChannelsA channel around a 20-day EMA, set by the average daily range.MACDMomentum shown as the gap between a fast (12-day) and a slow (26-day) average of the price.Maximum drawdownThe biggest fall from a high to a later low, before a new high was reached.Money Flow IndexRSI that also counts volume, from 0 to 100.On-balance volumeA running total that adds the day’s volume when the price rises and subtracts it when it falls.Parabolic SARDots that trail the price and jump to the other side when the trend turns.Potential reversal zoneThe price band where a harmonic pattern’s separate measurements agree.Price alertA message from Cluenex when a stock reaches a price or does something you asked to hear about.Rate of changeThe percent change in price over the last N days.Relative strength vs the S&P 500How a stock has done compared with the whole market over the same period.RSI (Relative Strength Index)A 0 to 100 gauge of how hard a stock has been bought or sold over the last 14 days.SeasonalityHow a stock has done in each calendar month, averaged over past years.Shark patternA five point harmonic (0, X, A, B, C) that completes at 0.886 to 1.13 of the 0 to B swing.Stochastic oscillatorWhere today’s close sits within the last 14 days’ high to low range, from 0 to 100.Stochastic RSIThe stochastic formula applied to RSI instead of price.Stock screenerA filter that finds every stock matching the rules you set, like “P/E under 20 and dividend above 3%”.SuperTrendA trailing line set a few average ranges away from the price.Trading costsWhat each buy or sell costs you, mostly the gap between the bid and ask prices.Volume weighted average priceThe average price paid for the stock over a period, counting busy days more.Williams %RLike the stochastic, drawn upside down: 0 is the top of the recent range and −100 the bottom.Win rateThe share of completed trades that made money.Yearly return (CAGR)The steady yearly growth rate that would turn the starting amount into the ending amount.Your own indicatorA line you define with a formula, such as (close / sma(close, 200) − 1) × 100.