Day trading glossary
The terms small-cap momentum traders use every morning, in plain English, with the exact rule wherever there is one. Where a rule changed over the years, the page says which version applies to which dates. Grouped by theme: the shares, the rules, the setups, reading the market, and getting your orders filled.
Float, dilution and share structure
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Float and low float
The shares free to trade, and why a small supply moves fast.
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Shares outstanding
Every share the company has issued, and how it differs from float.
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Dilution
New shares from offerings, warrants and notes, and what they do to a run.
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Offering (ATM, direct, registered direct)
How small caps sell new stock, and how each kind hits the price.
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Warrants
The company's own rights to buy new shares, and the supply they hold back.
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Reverse split
Fewer, higher-priced shares, the listing rule behind them, and the new float.
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SEC filings (S-1, 424B, 8-K)
The registrations, prospectuses and current reports that move small caps.
Halts and market rules
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LULD halt
Limit up-limit down bands, the five-minute pause, and the 2020 change.
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News halt (T1, T12 and other codes)
When the exchange stops a stock, what the halt codes mean, and the reopen.
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Market-wide circuit breaker
The 7%, 13% and 20% levels that halt the whole market, and the 2013 change.
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SSR (Rule 201)
The short sale restriction after a 10% drop, and how long it lasts.
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Short interest
Shares sold short, short float and days to cover, and how old the number is.
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Hard to borrow and locates
The Reg SHO locate, borrow fees, and why small-cap shorts cost more.
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Pattern day trader rule (PDT)
The old 25,000-dollar rule, and the intraday margin standard that replaced it in 2026.
Setups
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Gap and go
The morning setup: a stock that gaps up on news and keeps going.
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Bull flag
A sharp move up, a quiet pullback, and the break that follows.
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Micro pullback
A one- to three-candle dip in a fast runner, and the entry on the next high.
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First pullback
The first orderly dip after the opening surge, and the turn back up.
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ABCD pattern
A leg up, a higher low, and the break of the first high toward a measured target.
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Red to green
A stock that trades back up through yesterday's close.
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High of day break
A new high for the day, and what the book and tape show at the break.
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Opening range breakout (ORB)
The high and low of the first minutes, and the break out of them.
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Short squeeze
Shorts forced to buy back into a rising stock, and how the move ends.
Reading the market
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Pre-market
Trading from 4:00 to 9:30 a.m. ET, and what is different before the bell.
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VWAP
The day's volume-weighted average price, and why traders watch it.
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Relative volume (RVOL)
Today's volume against a stock's normal, the in-play filter.
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Level 2
The order book, price by price and exchange by exchange.
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Time and sales (the tape)
Every trade as it happens, and how traders read it.
Execution and risk
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Bid-ask spread
The gap between bid and ask, and what it costs on every round trip.
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Slippage
The gap between the price you expected and the price you got.
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Order types (market, limit, stop, stop limit)
What each order promises, and what it does not.
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Hotkeys
Whole orders in one key press, with size, type and price offset built in.
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Risk/reward and R multiple
1R as the risk to your stop, and every result counted in R.
Practice this on a real past day in Hindsight Markets
Every term here is something you can watch happen on a real past market day, from the 4:00 a.m. pre-market to the close, and trade with simulated money.