notional value

Definition

The total value of a leveraged position's assets, as opposed to the actual cash you put up, which is usually much less. It's the difference between owning a $100,000 house and the $20,000 you put down.

Example Usage

The hedge fund controlled $2 billion in notional value with only $200 million in capital, which worked great until it didn't.

Origin

Derivatives and futures trading terminology from 1970s-80s financial innovation era

Fun Fact

During the 2008 crisis, the notional value of derivatives worldwide exceeded $1 quadrillion—yes, with a 'q'—though the actual at-risk amount was thankfully much smaller.

Source: Derivatives and structured finance terminology

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payoff

The moment when someone finally gets their money—whether it's a legitimate payment, a well-earned reward, or an envelope full of cash to look the other way. In finance, it's the return on investment; in real life, it's what makes sitting through terrible meetings almost worthwhile. The term conveniently covers everything from dividends to bribes.

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Market Cap

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waterfall distribution

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reimbursement

The delightful process of getting your money back after you've already spent it, typically involving byzantine expense report systems and a CFO who questions why you needed that airport coffee. It's the corporate promise that 'we'll pay you back'—eventually, maybe, if you have all seventeen required receipts. The business world's version of an IOU that actually gets honored.

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management carve-out

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