Time-related Financial Vocabularies

Black Friday

Black Friday describes a precipitous drop in a financial market. The original Black Friday occurred on 24 September 1869, when prospectors attempted to corner the gold market.

Weekend Effect

The weekend effect refers to the common recurrent low or negative average return from Friday to Monday in the stock market.

Investment Time Horizon

An investment time horizon, or just time horizon, is the amount of time until the investor needs to get back the money they're investing. Time horizons are largely dictated by investment goals and strategies. For example, holding blue-chip stock for 2 years, would be considered short-term time horizon, while saving for college a medium term time horizon, and investing for retirement a long-term time horizon.

Monday Effect

The Monday effect is a theory that describes market trends in which the trading trends and the stock market on Mondays will follow the trading patterns from the previous Friday.

Time Decay

Time decay is a measure of the rate of decline in the value an options contract due to the passage of time. Time decay accelerates as an option's time to expiration draws closer since there's less time to realize a profit from the trade.

Time Value

In options trading, time value refers to the portion of an option’s price that is in excess of the intrinsic value, due to the amount of volatility in the stock; it is sometimes referred to as premium. Time value is positively related to the length of time remaining until expiration.

Block Time

Block time, in the context of cryptocurrency, is the length of the time it takes to produce and validate a new block in blockchain network.

Index Fund

An Index fund is an investment fund designed to match the returns on a stock market index. A mutual fund's portfolio matches that of a broad-based index such as the S&P 500 and its performance is meant to mirror the market as represented by that index.

Expiration Time

The time of day by which all exercise notices must be received on the expiration date. Technically, the expiration time is currently 11:59AM on the expiration date, but public holders of option contracts must indicate their desire to exercise no later than 5:30PM on the business day preceding the expiration date. The times are Eastern Time.

Time Deposit

Time deposit is an interest-bearing deposit at a savings institution that has a specific maturity.

May Day

May day refers to May 1, 1975, the date when brokers were first allowed to charge varying brokerage commission rates, rather than a mandatory rate.

Black Tuesday

This term refers to Tuesday, October 29, 1929, when the price of shares on the New York Stock Exchange reached its lowest level and the period called the Great Depression began.

Wednesday Scramble

The Wednesday scramble describes a flurry of activity as U.S. banks adjust their reserve levels to ensure they hit the minimum level required by the Federal Reserve each Wednesday.

Black Wednesday

This term refers to Wednesday, September 16, 1992, when the UK left the European Exchange Rate Mechanism and the pound (£) collapsed in value.

Black Thursday

This term refers to Thursday, October 24, 1929, when prices on the New York Stock Exchange started to lose a lot of their value and the period called the Great Depression began.

Silver Thursday

In finance, the term "Silver Thursday" refers to an event on March 27, 1980, where the billionaires Nelson Hunt, William Hunt and Lamar Hunt tried to manipulate the silver market.

January Effect

The January effect refers to the historical pattern that stock prices rise in the first few days of January. Studies have suggested this holds only for small-capitalization stocks. In recent years, there is less evidence of a January effect.

Blackout Period

Blackout period refers to a period of time before the earnings release of a public company during which its directors and specific employees deemed insiders cannot trade the company’s stock.

Calendar Effect

Calendar effect describes the tendency of stocks to perform differently at different times. For example, a number of researchers have documented that historically, returns tend to be higher in January compared to other months (especially February). Others have documented returns patterns across days of the week and within the day. Some of these patterns are found in volume and volatility as well as returns.

Option Cycle

The cycle of option expiration months. The most common cycles are January, April, July, and October (JAJO); February, May, August, and November (FMAN); and March, June, September, and December (MJSD).

Triple Witching Hour

This term refers to the four times a year when stock index futures, stock options, and stock index options expires at the same time. It is the last trading hour on the third Friday of March, June, September, and December, when stock options, futures on stock indexes, and options on these futures expire concurrently. Massive trades in index futures, options, and underlying stock by hedge strategists and arbitrageurs cause abnormal activity (noise) and volatility.

Fiscal year (FY)

Fiscal year (FY) is an accounting period covering 12 consecutive months over which a company determines earnings and profits. The fiscal year serves as a period of reference for the company and does not necessarily correspond to the calendar year.

Day Around Order

A day order that supersedes (cancels and replaces) the previous order by altering its size or price limit.

Day Order

In the context of general equities, this refers to a request from a customer to either buy or sell stock, that, if not canceled or executed the day it is placed, expires automatically. All orders are day orders unless otherwise specified. Traders often make calls before the opening to check for renewals.