Financial Dictionary

A dark pool is a private trading venue where large orders are matched without being shown on public order books. It lets institutions trade big blocks without moving the market against them.

The DAX tracks the 40 largest companies listed on the Frankfurt Stock Exchange. It is Germany's main stock index and a guide to European industrial and export sentiment.

A day order is an order that is automatically cancelled if it has not filled by the end of the trading day.

Day trading, also called intraday trading, means opening and closing positions within the same trading day, with no positions held overnight. It avoids overnight funding charges but requires close attention and strict risk control.

A dead cat bounce is a brief recovery in a falling market that fails and is followed by further declines. It can tempt traders into buying too early.

A dealing desk is a model in which a provider acts as the counterparty to client trades rather than passing them straight to the market. Providers must manage the conflicts of interest this can create.

A death cross is when the 50 day moving average falls below the 200 day moving average. It is seen as a bearish long term signal, though it often comes after much of the fall has happened.

The debt ceiling is the legal limit on how much the US government can borrow. Standoffs over raising it can unsettle bond and currency markets.

The debt to equity ratio compares a company's total debt with its shareholders' equity. A high ratio means the company relies heavily on borrowing, which adds risk when rates rise.

Decentralised finance refers to financial services such as lending and trading that run on blockchains through smart contracts instead of banks. It carries risks including coding flaws, hacks and limited regulation.

A bond default is when a borrower fails to pay interest or repay principal on time. Bond prices usually fall sharply when default becomes likely.

Defensive stocks are shares in companies whose earnings hold up in downturns, such as utilities, healthcare and consumer staples. They tend to fall less than the wider market in recessions.

Deflation is a sustained fall in the general level of prices. It can lead households to delay spending, which slows the economy.

Delisting is the removal of a company's shares from a stock exchange, either by choice or because it no longer meets listing rules. Shares that are delisted can become hard to trade.

A demo account lets traders practise with virtual money on live market prices. It is useful for learning a platform, but it does not reproduce the emotions or execution conditions of real trading.

Currency depreciation is a fall in a currency's value against another currency. When a currency depreciates against the US dollar, imports priced in dollars become more expensive for that country.

Depth of market shows the buy and sell orders waiting at each price level for an asset. It helps traders judge liquidity and where large orders sit.

A derivative is a financial contract whose value depends on an underlying asset, such as a share, index, currency or commodity. CFDs, futures and options are all derivatives.

A descending triangle has a flat lower support line and a falling upper trendline. It is usually read as bearish, with a break below support taken as the signal.

Diluted earnings per share is profit per share calculated as if all options, warrants and convertible securities had been turned into shares. It is always equal to or lower than basic earnings per share.

Discounted cash flow is a valuation method that estimates what a company's future cash flows are worth today. The result depends heavily on the growth and discount rates assumed.

Disinflation is when inflation slows but prices are still rising. It is different from deflation, when prices actually fall.

Divergence is when price and an indicator such as RSI or MACD move in opposite directions. It can warn that a trend is losing momentum, though it may persist for some time before price turns.

Diversification means spreading capital across different assets, sectors or markets to reduce the impact of any single loss. It lowers risk but cannot remove it, especially when markets fall together.

A dividend is a payment a company makes to shareholders out of its profits, usually in cash. Share prices typically fall by about the dividend amount on the ex dividend date.

A dividend adjustment is a cash adjustment made to share or index CFD positions when the underlying shares go ex dividend. Long positions usually receive a credit and short positions are usually charged.

Dividend yield is a company's annual dividend per share divided by its share price. A very high yield can signal that the market expects the dividend to be cut.

Dogecoin is a cryptocurrency that began as a joke in 2013 and has become one of the most widely traded coins. Its price is highly sensitive to social media sentiment.

A doji is a candlestick where the open and close are almost the same, leaving a very small body. It shows indecision and can hint at a reversal when it appears after a strong move.

Donchian channels plot the highest high and lowest low over a set period, often 20 periods. A break above the upper band or below the lower band is used as a breakout signal.

The dot plot is a chart from the US Federal Reserve showing where each policymaker expects interest rates to be at the end of the next few years. It is published four times a year and shapes rate expectations.

A double bottom is a bullish reversal pattern where price falls to a similar low twice and holds. A rise above the high between the two lows is read as confirmation.

A double top is a bearish reversal pattern where price hits a similar high twice and fails to break above it. A fall below the low between the two peaks is read as confirmation.

Dovish describes a central bank stance that favours lower interest rates or looser policy to support growth. A dovish surprise usually weakens the currency.

The Dow Jones Industrial Average tracks 30 large US companies. It is weighted by share price rather than company size, so higher priced stocks have more influence.

A downtrend is a series of lower highs and lower lows. It continues until price breaks that pattern.

A drawdown is the fall in an account or strategy from its peak value to its lowest point before a new peak. Maximum drawdown is a key measure of how much risk a strategy carries.

Durable goods orders measure new US orders for goods meant to last three years or more, such as machinery and aircraft. They are a guide to business investment, though aircraft orders make the headline figure volatile.

Duration measures how sensitive a bond's price is to changes in interest rates, expressed in years. The longer the duration, the more the price moves when rates change.