Delivery price is the price at which the underlying commodity of a futures contract settles upon expiration of the contract.
A tax anticipation bill is a Treasury bill that matures in fewer than 273 days and is repaid with tax receipts.
A 10 bagger is a stock that increases in value by at least 10 times its purchase price, or by at least 900%.  The term 10 bagger was coined by legendary fund manager Peter Lynch in his best-
The objective of the 10-K and other SEC-required forms is to provide shareholders and prospective shareholders with accurate, relevant, and timely information about the financial and operating
A 10-Q is a report of a company's performance that must be submitted quarterly by all public companies to the Securities and Exchange Commission (SEC)
The 100-day moving average is a popular technical indicator which investors use to analyze price trends. It is simply a security's average closing price over the last 100 days.
A 12b-1 fee is a fee assessed by a mutual fund to its shareholders. The fees cover the fund's marketing expenses and are named after the section of the Investment Company Act of 1940 that makes them
The Form 13-F must be filed by institutional investors who exercise discretion over at least $100 million in investments.
The 150-day moving average is a popular technical indicator which investors use to analyze price trends. It is simply a security's average closing price over the last 150 days.
The 200-day moving average is a popular technical indicator which investors use to analyze price trends. It is simply a security's average closing price over the last 200 days.
The 30-day annualized yield is a measure of the yearly rate paid to investors of an interest-bearing account, based on the returns earned in a 30-day period.  
A 401(k) plan is a tax-deferred salary savings plan that companies can offer their employees as a retirement account.
A 403(b), commonly referred to as a Tax-Deferred Annuity (TDA) or Tax-Sheltered Annuity (TSA) plan, is a retirement savings plan available to employees of certain public education organizations, non-
The 50-day moving average is a popular technical indicator which investors use to analyze price trends. It is simply a security's average closing price over the last 50 days.
The 52-week high refers to the highest market price of a given security over a 52-week (one year) period.
The 52-week high and low refers to the highest and lowest market prices of a given security over a 52-week (one year) period.
The 52-week low refers to the lowest market price of a security over a 52-week (one year) time span.
The 7-day annualized yield is a measure of the yearly rate paid to investors of an interest-bearing account, based on the returns earned in a 7-day period.
A shares are a type of mutual fund share. They are distinguished from B Shares and C Shares by their load (fee) structure.
A+ and A1 are actually two ratings from different ratings agencies: Standard & Poor's uses the A+ rating, and Moody's uses the A1 rating. Both ratings indicate a relatively high level of
A- and A3 are actually two ratings from different ratings agencies: Standard & Poor's uses the A- rating, and Moody's uses the A3 rating. Both ratings indicate a relatively high level of
AARP stands for the American Association of Retired Persons.
Abandonment value refers to the value of a project or investment were it to be liquidated presently.
An abatement cost refers to the cost associated with the voluntary or compulsory removal of an undesirable result of a production process.
An ABC agreement is a contractual agreement between an investment house and its broker which allows the firm to purchase a seat (membership) on the New York Stock Exchange (NYSE).
Also called the residual income model, the abnormal earnings valuation model is a method for predicting stock prices.
Abnormal rate of return, also known as "alpha" or "excess return," is the fraction of a security's or portfolio's return not explained by the rate of return of the market.
Abnormal return, also known as "alpha" or "excess return," is the fraction of a security's or portfolio's return not explained by the rate of return of the market. Instead, it
When a bond's price is above par, the bond is selling at a premium above face value.
Above the market describes the price at which a person wants to buy or sell a security.
Above water is a term to describe being financially stable. In accounting, the term often refers to assets whose market value is higher than book value.
In an interest rate swap, the absolute rate is the sum of the fixed rate component and the variable bank rate.
The Accelerated Cost Recovery System (ACRS) is a depreciation method that assigns assets periods of cost recovery based on specific IRS criteria. Since 1986, the Modified Accelerated Cost Recovery
Accelerated depreciation is a depreciation method whereby an asset loses book value at a faster rate than the traditional straight-line method. Generally, this method allows greater deductions in the
Accelerated vesting occurs when a stock option becomes exercisable earlier than originally scheduled.
An accountant is trained to compile, inspect, interpret, and/or report financial statements and tax returns that comply with governmental and regulatory authority requirements.
An accountant's opinion is a concise written statement by a certified accountant concerning the accuracy of a company's financial records.
Accounting conventions are standards, customs or guidelines regarding the application of accounting rules.
Accounting earnings, or net income, represent the amount of money gained or lost after all costs, depreciation, interest , taxes and expenses have been deducted from a company's total sales.
An accounting error is an error in the process of systematically recording, measuring and communicating information about financial transactions.
An accounting period is the time interval reflected by the data in a financial statement.
Accounting principles govern the rules of accounting and reflect the latest accounting methodologies. 
The accounting rate of return (ARR) is a simple estimate of a project's or investment's profitability that subtracts money invested from returns without regard to interest accrual or applicable taxes
Accounting research bulletins (ARBs) are publications from the Accounting Principles Board of the American Institute of Chartered Public Accountants.
The accounts payable turnover ratio is a company's purchases made on credit as a percentage of average accounts payable. The formula for accounts payable turnover ratio is: Accounts Payable
Accounts receivable (AR) are amounts owed by customers for goods and services a company allowed the customer to purchase on credit. Said another way, when a company delivers a product or
Accounts receivable aging is a report showing the various amounts customers owe a company and the length of time the amounts have been outstanding.
Accounts uncollectible, also called allowance for doubtful accounts (ADA), is a reduction in a company's accounts receivable. Accounts uncollectible equals the amount of those receivables that the
An accreting principal swap is a swap in which the two parties to the contract agree to pay interest on a growing principal amount.
Accretion is growth, typically in earnings, usually after an acquisition or other significant event. In the bond world, accretion refers to the capital gains earned on a bond purchased at a discount
To be accretive is to increase earnings per share.
Accrual accounting is an accounting method whereby revenue and expenses are recorded in the periods in which they are incurred.
Accruals are records of revenue and expenses in the periods in which they are incurred. They are a key component of the accrual method of accounting.
To accrue is to record revenue and expenses in the periods in which they are incurred. Accruals, the result of accruing, are key components of the accrual method of accounting.  
An accrued expense refers to any expense incurred and reported during an accounting period, but for which payment has not yet been made.
Accrued interest refers to interest that builds up on a company's outstanding payables and receivables.  This interest has been accounted for, but not yet transacted.
Accrued market discount refers to the steady increase in value of a discounted bond from the time of purchase until maturity.
Accumulated depreciation is the sum total of the depreciation recorded for certain assets.
Accumulated earnings is the sum of a company's profits, after dividend payments, since the company's inception. It can also be called retained earnings, earned surplus, or retained capital.
The accumulated earnings tax is a charge levied on a company's retained earnings. Also called the accumulated profits tax, it is applied when tax authorities determine the cash on hand to be an
The acid-test ratio is a measure of how well a company can meet its short-term financial liabilities. 
An acquisition is the purchase of all or a portion of a corporate asset or target company.
An acquisition premium is the difference between the actual price paid to acquire a company and the estimated real value of the acquired company before the acquisition. It is often recorded as "
An active bond is a corporate bond that is traded actively on the New York Stock Exchange (NYSE).
Active bond crowd refers to the group of bond traders of the New York Stock Exchange (NYSE) that trades the highest volume of active bonds.
The opposite of passive investing, active investing is an investment strategy that advocates significant trading and a short-term horizon.
Active management is an investment strategy that tries to create excess returns through the recognition, anticipation, and exploitation of short-term investment trends.
Also called tracking error, active risk is the difference between a portfolio’s returns and the benchmark or index it was meant to mimic or beat. There are two ways to measure active risk.
An activist investor invests in a company for the purpose of changing or influencing the company's decisions.
Activity based management (ABM) is an administrative method which examines how a company incurs costs from the standpoint of its activities rather than its final products.
An activity ratio is a metric which determines the ability of a company to convert its balance sheet accounts into revenue.
Actual return refers to the nominal return made on an investment during a given period. 
Adjusted basis refers to the increase or decrease in an asset's value due to depreciation or capital enhancements.
Adjusted present value (APV) refers to the net present value (NPV) or investment adjusted for the interest and tax advantages of leveraging debt provided that equity is the only source of
Advance refunding occurs when a bond issuer, usually a municipality, invests the proceeds from the sale of new bonds in U.S. Treasurys with the intent of using the Treasurys to pay off the old bonds.
An adverse opinion refers to the conclusion by an auditor that a company's financial statements inaccurately characterize the company's financial standing.
In the finance world, an advisor (also spelled adviser) is an educated investment professional who helps people and businesses set and meet long-term financial goals.
An affirmative obligation is a responsibility incumbent upon New York Stock Exchange (NYSE) specialists to ensure that a market for a stock still exists in the absence of sufficient supply or demand.
After hours trading is the trading that occurs on electronic market exchanges after regular stock market trading hours have ended.
After the bell is a phrase referring to the end of an exchange's daily trading session.
After-tax operating income (ATOI) is a company's operating income after taxes. ATOI is very similar to net operating profit after tax (NOPAT)
After-tax profit margin is the percentage of revenue remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a
Agency bonds are bonds issued by agencies of the U.S. government.
Aggressive accounting refers to an accounting department's deliberate and purposeful tampering with its company's financials in order to outwardly characterize its revenues as higher than
An aggressive growth fund is a mutual fund which invests exclusively in high-risk/high-return stocks in an attempt to benefit from the potentially high returns on start-up companies and IPOs.
An aggressive investment strategy emphasizes a substantially higher portfolio allocation of high-return equity over debt in order to generate high returns through exposure to high risk.
An air pocket stock is one that experiences an abrupt and severe price decline.
All or nothing (AON), also known as an "all or none" order, is a condition used on a buy or sell order which instructs a broker to execute the order in its entirety or to do nothing.
An all weather fund is a mutual fund that performs well regardless of market conditions.
An allowance for doubtful accounts (ADA) is a reduction in a company's accounts receivable. The ADA equals the amount of those receivables that the company's management does not expect to actually
Alpha, also known as "excess return" or "abnormal rate of return," is one of the most widely used measures of risk-adjusted performance. The number shows how much better or worse a fund performed
An alternative asset is an item that has intrinsic value, but is not traditionally considered a financial asset.
An alternative order is a group of limit orders linked together within a brokerage account. If one order is executed, all other linked orders are automatically canceled.
The Altman Z-Score (named after Edward Altman, the New York University professor who devised it) is a statistical tool used to measure the likelihood that a company will go bankrupt.Though
Altman's Z-score is a financial statistic that is used to measure the probability of bankruptcy.
An American Depositary Receipt (ADR) is a certificate that represents shares of a foreign stock owned and issued by a U.S. bank. The foreign shares are usually held in custody overseas, but the
An American Income Trust is a type of royalty trust.
An American option is a put option or call option that can be exercised at any time on or before its expiration date. 
The American Stock Exchange (AMEX), sometimes referred to as the "Little Board," is a stock and options exchange in New York. 
The AMEX Biotech Index is the benchmark index for the Biotechnology industry. This index was started on October 18, 1991 with a value of 200. The index broke below 100 several times prior to 1999 and
Amortization is an accounting term that refers to the process of allocating the cost of an intangible asset over a period of time. It also refers to the repayment of loan principal over time.
An analyst gathers and interprets data about securities, companies, corporate strategies, economies or financial markets. Analysts are sometimes called financial analysts, securities analysts, equity
An analyst expectation is typically a prediction of a company's quarterly or annual earnings per share.
Annual percentage yield (APY) is the rate of interest an investor earns in a year after accounting for the effects of compounding. APY is not the same as annual percentage rate (APR). The formula for
An annual report is an audited corporate document that details the business activity and financial status of a publicly-held company over the previous year. 
Annualize means to express a rate in terms of its annual equivalent.
The anti-Martingale system is an investment strategy that doubles the position sizes of securities that experience gains. By using this method, investors will overweight their winning investments in
An any-and-all bid is an offer to acquire a company whereby the potential buyer offers to purchase any and all of the shareholders' shares at a specific price by a certain deadline.
An appraisal ratio is the ratio of a mutual fund's alpha to its risk.
Appreciation is an increase in the value of an investment.
Arbitrage pricing theory (APT) is a well-known method of estimating the price of an asset. The theory assumes an asset's return is dependent on various macroeconomic, market and security-specific
An arbitrage trading program is a software program that attempts to take advantage of very small price differences between securities, such as index futures and the underlying stocks represented. The
An arbitrageur is a person who exploits the differences in the price of a given security by simultaneously purchasing and selling that security.
The arithmetic mean is the average of a series of numbers.
The arithmetic mean average is the average of a series of numbers.
The Arms Index (Trin) uses the ratio of advancing issues to declining issues to signal when the market is deeply overbought or oversold.
The ascending triangle is marked by two significant technical features. At its top, there is a line of resistance. This is a supply line, or a price at which sellers step into the market and unload
The ask price is the lowest price a prospective seller is willing to accept in exchange for a specific security. 
Ask size is the number of shares a seller is selling at a quoted ask price. The ask size is the opposite of the bid size, which is the number of shares a buyer is willing to buy at the quoted bid
An asset is an economic resource that can be owned by an individual, company, or country. Assets are expected to provide future economic benefits like:  Increased value for a company or
Similar to diversification, asset allocation refers to the portioning of a portfolio among various types of investment asset classes so as to maximize return for a given level of risk.
Asset backed securities (ABS) are securities backed by the cash flows of a pool of assets. Home equity loans, auto loans, credit card receivables, and student loans commonly back this
An asset class is a group of investments that have similar characteristics, behave similarly and are subject to similar market forces, laws and regulations. 
Asset management has two general definitions, one relating to advisory services and the other relating to corporate finance. In the first instance, an advisor or financial services company
The asset turnover ratio is a measure of how efficiently a company's assets generate revenue. It measures the number of dollars of revenue generated by one dollar of the company's assets. 
An asset-or-nothing call option either pays the value equal to one unit of the underlying asset if that asset is above the strike price or pays nothing if the asset is below the strike price at
An asset-or-nothing put option is an option with two possible outcomes: a fixed amount if the market value is below the strike price and no payment at all if it is higher than the strike price.
Assets under management (AUM) refers to the total market value of investments managed by a mutual fund, money management firm, hedge fund, portfolio manager, or other financial services company.
An assignable contract allows a contract holder to assign his or her rights and obligations under the contract to a third party. The most common assignable contracts are futures contracts.
Asymmetric information occurs when information is held by one, but not all, of the parties to a transaction.
In the bond world, at par means "equal to face value." Face value, also known as par value, is the amount the issuer promises to pay the bondholder when the bond matures.
An auction market is a market in which buyers indicate the highest price they are willing to pay and sellers indicate the lowest price they are willing to accept. A trade occurs when the buyer and
In the tax world, an audit refers to the review of a taxpayer's tax return for accuracy.   In the accounting world, an audit is the examination and verification of a company's
An audit trail refers to the complete record of events that occurred in the execution of a transaction.
An auditor's report is a statement included in a company's annual financial report that certifies the validity of a company's financial statements according to an outside auditor.
The Automated Bond System (ABS) is a computerized platform that tracks the prices for inactive bonds on the New York Stock Exchange (NYSE).
The average annual growth rate (AAGR) is the arithmetic mean of a series of growth rates.
The average annual return (AAR) is the arithmetic mean of a series of rates of return.
Average down (or averaging down) refers to the purchase of additional units of a stock already held by an investor after the price has dropped. Averaging down results in a decrease of the average
Average true range (ATR) is a technical indicator that measures the volatility of an asset's average daily price movements.
B shares are a type of mutual fund share.  They are distinguished from A shares and C shares by their load (fee) structure.
A Baby Berkshire is a Class B share of Berkshire Hathaway (NYSE: BRK-B). The term also refers to the act of creating a portfolio of the same companies that Berkshire Hathaway invests in and then
Baby bonds are bonds with a par value below $1,000. Additionally, the term also refers to savings bonds issued by the Treasury Department from 1935 to 1941. In the United Kingdom, the term
A back charge is an unpaid bill attributable to a prior period.
A back door listing occurs when a private company acquires a publicly traded company and thus “goes public” without an initial public offering.
A back end load is a fee paid when an investor sells a specific investment. Back end load mutual funds are often referred to as "B Shares."
A back fee is associated with exercising a compound option.
Also called a far month contract, a back month contract is a futures contract that has an expiration date that is the farthest beyond the next approaching expiration date (called the “front
Back months are the expiration dates of futures contracts that fall furthest from the nearest expiration date.  
Banks use the back-end ratio to determine whether a mortgage applicant is a good credit risk. The formula for the back-end ratio, generally, is: Back-End Ratio = (All monthly loan payments
A back-stop purchaser buys leftover shares from the underwriter of an equity or rights offering.
In the finance world, backdating usually refers to the practice of changing the dates of option grants to one that is earlier than the actual grant date in order to place a lower exercise price on
An accounting method whereby the costs associated with producing a good or service are recorded only after the good or service is actually produced, completed or sold.
Backing away occurs when a market maker does not honor a quoted bid or ask price for a minimum quantity of a particular security.
Backpricing is a method for pricing commodities, whereby the buyer and seller agree to buy/sell a commodity but set the price at a later date.
A backspread is a trading strategy whereby the investor buys a set of options with one strike price and sells a similar set of options with a lower strike price.
Backtesting is the process of applying a trading strategy or analytical method to historical data to see how accurately the strategy or method would have predicted actual results.
Backwardation describes a downward sloping forward curve in a commodity market. This means that as the price of a commodity for future delivery is lower than the spot price -- the price of a
Bad debt expense is the portion of accounts receivable that became uncollectable during a given period.
Bad debt reserve, also called an allowance for doubtful accounts (ADA), is a reduction in a company's accounts receivable. The bad debt reserve is the amount of receivables that the company does
Bad paper refers to uncollateralized bonds (typically with short maturities) that are poorly rated and at high risk of default.
Badwill is essentially damage to a company's reputation. 
A bag holder is a person whose investment has become worthless or almost worthless. The investor is left "holding the bag."
A bailout bond is intended to help ailing companies. Bailout bonds were most common in the 1980s and 1990s when many savings and loans were failing; they are less common  now.
A balance sheet (also called a statement of financial position) is a statement that provides a snapshot of a company’s financial situation at a given date. It reports assets, liabilities, and
A balanced fund is a mutual fund that generally keeps to a 50-50 mix of stock and bond investments. 
In the bond world, balloon interest is an increase in the coupon rate of a bond issue corresponding to the maturity of the bond. Serial bonds often use balloon interest.
A balloon maturity is a the date on which a large payment is due, usually at or near the end of a loan term.In the bond market, a balloon maturity refers to the idea that a large portion of an issuer
The bandwagon effect is when people go along with what everyone else is doing.
The Barclays Capital U.S. Aggregate Bond Index is the most common index used to track the performance of investment grade bonds in the U.S.
A barrel of oil equivalent (or BOE) is a unit measure of unused energy resources. Expressed frequently in the financial statements of energy companies, BOEs are defined by the U.S. Internal Revenue
A basis point is one hundredth of one percent.
A basis point is the smallest measure used in quoting yields on fixed income products. Basis points also pertain to interest rates. One basis point is equal to one one-hundredth of one percentage
A bear has a negative outlook on the market (belief that the value of an asset or market will decrease).
A bear market is a period of several months or years during which securities prices consistently fall. The term is typically used in reference to the stock market, but it can also describe specific
A bear spread is a strategy used in options trading. A trader purchases a contract with a higher strike price and sells a contract with a lower strike price. This strategy is used to maximize profit
A bearish engulfing pattern occurs in the candlestick chart of a security when a large black candlestick fully engulfs the small white candlestick from the period before. This pattern usually
A bearish harami refers to a stock market trend indicating that the value of a stock is likely to experience a downwards, or bearish, momentum following a period of upward, bullish movement.
Beginning inventory refers to the value of goods that a company has for its use or sale at the start of an inventory accounting period.
Behavioral finance combines social and psychological theory with financial theory as a means of understanding how price movements in the securities markets occur independent of any corporate actions.
A bellwether is a security or indicator that signals the market's direction.
In the bond world, below par means "below face value." Face value is the amount the issuer promises to pay the bondholder when the bond matures.
A benchmark is a feasible alternative to a portfolio against which performance is measured.
The beneficial owner is the individual or entity that enjoys the benefits of owning an asset, regardless of whose name the title of the property or security is in.
The best ask is the lowest price offered by a stock's market makers. For stocks, the best ask is quoted in dollars. For bonds, the best ask is quoted as a percentage of face value or (for
The best bid is the highest price offered by a stock's market makers to buy a security. For stocks, the best bid is quoted in dollars. For bonds, the best bid is quoted as a percentage of face
The best-price rule refers to Securities and Exchange Commission (SEC) Rule 14d-10. This rule requires an entity making a tender offer for a certain class of shares to make the same offer to all
Beta is a measure of a stock's volatility relative to the overall market. It is most often calculated using a stock's movements relative to the S&P 500 Index over the trailing 12-month
The bid price is the highest price that a prospective buyer is willing to pay for a specific security. The "ask price," is the lowest price acceptable to a prospective seller of the same
Bid size is the number of shares a buyer is willing to purchase at a given price. For bond trading, bid size is measured in dollars.
The bid-ask spread (also known simply as "the spread") is the difference between a security's bid price and its ask price.
In the investing world, Black Friday refers to the gold crisis of September 24, 1869. It sometimes also refers to the New York Stock Exchange crash of September 19, 1873.   In the retail world
Black Monday, also called "The Crash of 1987," refers to the 509-point fall in the Dow Jones Industrial Average on October 19, 1987. It also refers to October 28, 1929, when the DJIA fell 12.
Black Thursday refers to October 24, 1929, when panicked sellers traded nearly 13 million shares on the New York Stock Exchange (more than three times the normal volume at the time), and investors
Black Tuesday refers to October 29, 1929, when panicked sellers traded nearly 16 million shares on the New York Stock Exchange (four times the normal volume at the time), and the Dow Jones Industrial
The Black-Scholes model is a formula used to assign prices to European options.
A blackout period is a time period of roughly 60 days during which a company's employees are unable to make changes to their savings or retirement plans.
Blank check preferred stock refers to the issuance of a class of preferred shares where the board of directors has authority determining voting rights, dividends, and conversion without separate
A blend fund, also called a hybrid fund, is a mutual fund composed of a combination of securities from different asset classes designed to increase diversification with just a single fund.
Blue sheets are petitions for information from the Securities and Exchange Commission (SEC) to investment companies whose trading activity has resulted in significant price movements.
A blue-chip stock is a stock of an established company that has consistently shown qualities like generating consistent earnings, paying generous dividends or increasing revenue.
A "Bo Derek" is a so-called perfect investment. The term comes from the 1979 movie "10," starring the actress Bo Derek, who depicted "the perfect woman."
A boiler room is a call center in which salespeople call potential investors in an attempt to sell risky, or even falsified, investment opportunities using aggressive and unethical tactics.
Bollinger Bands are used as a technical analysis indicator. They are formed by using a 20-day moving average as a centerline and then tracing two bands, each one standard deviation wide, on either
A bond is an agreement between an investor and the company, government, or government agency that issues the bond. When investors buy a bond, they are loaning money to the issuer in exchange for
The bond equivalent yield (BEY) is a formula that allows investors to calculate the annual yield from a bond being sold at a discount.
A bond fund is a mutual fund or exchange traded fund (ETF) composed of bonds.
A bond ladder is an investment strategy whereby an investor staggers the maturity of the bonds in his/her portfolio so that the bond proceeds mature and can be reinvested at regular intervals.
A bond option is a derivative contract that allows investors to buy or sell a particular bond with a given expiration date for a particular price (strike price). 
A bond quote refers to a bond's market price.
A bond rating is a "grade" assigned to a bond. These ratings can also be assigned to bond issuers, insurance companies or other entities or securities to indicate riskiness.
A bondholder is a person who owns a bond issued by a borrower, typically a company or a government. They are considered a creditor of a company.
Book value refers to the total amount a company would be worth if it liquidated its assets and paid back all its liabilities. Book value can also represent the value of a particular
Book value of equity per share, abbreviated as BVPS, is a company’s available equity to common shareholders apportioned by the number of outstanding common shares. "Book value” is based on the
A book-entry savings bond is a savings bond issued in electronic form rather than in paper form.
A company's book-to-bill ratio measures the company's number of outstanding orders as compared with the number of shipped or fulfilled orders. The book-to-bill ratio is a valuable tool for
Bottom fishing is an investment strategy in which investors seek out securities whose prices have recently dropped and are considered undervalued.
The bottom line represents the number of sales dollars remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a
Bottom-up investing focuses on individual securities rather than on the overall movements in the securities market or the prospects of particular industries.
Brady bonds are U.S. Treasury bonds issued by developing countries in an effort to reduce these countries’ external debt.
In the mutual fund world, a breakpoint is the size of an investment that qualifies the investor for a lower load.
Broken dates, also known as "odd dates," are arbitrary maturity dates that do not necessarily match the duration of the bond, option, futures contract, forward contract or other maturing
A broker of record is an insurance agent who manages an insurance policy with a carrier on behalf of a policyholder.
A broker-dealer is an individual or company that buys and sells securities for its clients and for itself. Broker-dealers differ from plain-vanilla brokers, which can only buy and sell for their
A brokerage fee compensates a broker for executing a transaction. It is usually, but not always, a percentage of the transaction value. In finance, stockbrokers most often come to mind, but real
A bull has a positive outlook on an asset class or an entire market. In investing terminology, bull is the opposite of bear.
A bull market is a period of several months or years during which asset prices consistently rise. The term is usually used in reference to the stock market, but it can describe specific sectors
The bull/bear ratio indicates overall investor sentiment in the market by comparing the number of bullish and bearish investors. This market indicator is calculated and published weekly by the
A bullish engulfing pattern occurs in the candlestick chart of a security when a large white candlestick fully engulfs the smaller black candlestick from the period before. This pattern usually
A bump-up certificate of deposit (CD), also called a step-up CD, is a certificate of deposit that allows the owner to “bump up” the interest rate if rates should rise during the CDs’ holding period
Burn rate is the amount of time it will take a company to exhaust its capital cushion. 
Buy and hold is an investment strategy whereby an investor holds securities for the long-term, regardless of short-term market fluctuations.
A buy limit order is an order to purchase a security at or below a given price.
Firms that buy securities and assets for their own or their clients' accounts are said to be on the buy side. Institutional investors like mutual funds, pension funds, hedge funds, private equity
A buy-write is an options strategy whereby an investor writes (sells) a call option at the same time he/she buys the underlying.
Buying on margin refers to borrowing from a brokerage firm (through a margin account) to make an investment.
Buzzword Bingo is a game involving business jargon.
C shares are a type of mutual fund share.  They are distinguished from A shares and B shares by their load (fee) structure.
A cabinet security is an inactive security (often a bond) that is listed on an exchange.
A cage is a department in a brokerage firm.
Compound Annual Growth Rate (or CAGR) is a widely used measure of growth. It is used to evaluate anything that can fluctuate in value, such as assets and investments. CAGR takes the initial
A calamity call, also known as a clean-up call, is a feature of a collateralized mortgage obligation (CMO) that requires the issuer to pay off a portion of the CMO if the underlying mortgages don
A calculation agent is a person or company that calculates how much the parties to certain derivatives owe each other.
A calendar effect is a theory that stock prices will perform differently at different times of the year.
The calendar year is the period between January 1 and December 31.
A call date is the date after which a bond issuer can redeem a callable bond.
In a call market, buy and sell orders are grouped together and then executed at specific times, rather than executed one by one continuously.
A call on a call is a type of compound option. It is a call option on a call option.
A call on a put is a type of compound option. It is a call option on a put option.
A call option is a contract between a buyer and seller. It gives the option holder the opportunity to purchase a specific stock, bond, or commodity at a defined price up until a set expiration date.
The phrase call over is used to describe the exercising of a call option.
A call premium is the price of a call option. It is not the same as the strike price. 
The call price is the price a bond issuer or preferred stock issuer must pay investors if it wants to buy back, or call, all or part of an issue before the maturity date.
Call protection is a period of time during which a bond issuer cannot call, or buy back, a bond.
A call provision is a clause in a bond's indenture granting the issuer the right to call, or buy back, all or part of an issue prior to the maturity date.
A call ratio backspread is a trading strategy whereby an investor uses long and short option positions to simultaneously hedge against loss and maximize profit if stock prices go up. The strategy
Call risk is the risk that a bond issuer will redeem its bonds before they mature.
The call rule is a rule that requires the official opening price of a cash commodity to be near the previous day's closing price of that commodity.
Call warrants are securities that give the holder the right, but not the obligation, to buy a certain number of securities (usually the issuer's common stock) at a certain price before a certain
A callable bond gives the borrower (issuer) the right to pay back the obligation to the lender (bondholder) before the stated maturity date.
Callable common stock is an equity stake in a company where either the issuer or a third party has the right, but not the obligation, to repurchase the stock at a specific price after a certain
Issuers of callable preferred stock have the right (but not the obligation) to repurchase the stock at a specific price after a certain date.
A callable security gives the issuer or a third party the right but not the obligation to repurchase the security at a specific price after a certain time.
"Called away" refers to an investing scenario in which one party to an options contract has the obligation to deliver an underlying asset to the other party to the contract.
A cambist is an expert in foreign exchange.
CAN SLIM is an investing system that uses seven fundamental and technical traits to pick stocks.
A Canada Learning Bond offers money to Canadian families to help them start saving for college.
A Canadian income trust is a type of investment trust that holds stable, income-producing assets and pays out at least 90% of its net cash flows to its unitholders (shareholders are known as
A canary call is a step-up bond that can't be called after a certain period.
Cancel former order is a specific type of trade order a client places with a broker in order to cancel an unfilled buy or sell order.
In the finance world, a canceled order is an order that is deleted before it is executed.
Candlestick charts are often used in technical analysis to track price movements of securities, derivatives and currency over time.
Capital appreciation (also called a capital gain) is an increase in the value of an investment. It is the difference between the purchase price (the basis) and the sale price of an asset. 
For firms, a capital asset is an asset that has a useful life longer than one year and is not intended for sale during the normal course of business.For individuals, capital asset typically refers
The capital asset pricing model (CAPM) is used to calculate the required rate of return for any risky asset. Your required rate of return is the increase in value you should expect to see based on
Capital expenditures, or capex, is money used to purchase, upgrade, improve, or extend the life of long-term assets. Long-term assets are typically property, infrastructure, or equipment with a
A capital gain is an increase in the value of an investment. It is the difference between the purchase price (the basis) and the sale price of an asset.
Capital gains distributions are capital gains that are passed on to investment company shareholders.
A capital loss is a decrease in the value of an investment. It is the difference between the sale price and the purchase price (the basis) of an asset. 
The capital markets are a source of financing for companies around the world. The most famous of the capital markets are the stock market and bond market. 
Capital stock is the number of shares that a company's charter authorizes for issuance.
In the business world, capitalization has two meanings. The first meaning, also called market capitalization, refers to the value of a company's outstanding shares. The formula for market
Capitalizing refers to the accounting practice of characterizing the costs of an asset purchase as a long-term asset on the balance sheet instead of an expense on the income statement. 
Capitulation occurs when investors attempt to exit an investment or market so quickly that they are willing to surrender any and all gains to do so. Panicked behavior often causes a capitulation, and
Under cash accounting, a business records revenue and expenses in the period in which they are actually received or paid, rather than in the period in which they are incurred.
Cash and cash equivalents (CCE) are company assets in cash form or in a form that can be easily converted to cash.
Cash budget is a review or projection of cash inflows and outflows. It can be used as a tool for analyzing the revenues and costs of a company or individual.
A cash cow is a business unit, product line, or investment that has a return on assets (ROA) greater than the market growth rate. The idiom refers to the idea that it produces "milk" (profit
Cash flow is simply the cash expected to be generated by an investment, asset or business. 
Cash flow after taxes (CFAT) is a measure of a company's ability to generate positive cash flow after deducting taxes.
The section of the cash flow statement titled Cash Flow from Financing Activities accounts for inflows and outflows of cash resulting from debt issuance and financing, the issuance of any new stock,
Cash from investing activities is a section of the cash flow statement that provides information regarding a company's purchases or sales of capital assets.
Cash flow from operating activities measures the cash-generating abilities of a company's core operations (rather than its ability to raise capital or buy assets).  Put another way, cash flow
Cash flow per share represents the portion of a company's cash flow allocated to each share of common stock.
The cash flow return on investment (CFROI) measures a company's cash return on invested assets. It is determined by dividing a company's gross cash flow by its gross investment.
A cash flow statement is the financial statement that measures the cash generated or used by a company in a given period.
Cash flow to capital expenditures is the ratio of a company's cash from operations to its capital expenditures for acquiring or upgrading assets, such as buildings or equipment, required to
Also called the spot price or the current price, a cash price is the current price of a commodity if it were to be sold or purchased today.
A cash settlement is a payment in cash for the value of a stock or commodity underlying an options or futures contract upon exercise or expiration.
Cash-flow matching is an investing strategy for investors who need to fund a series of future cash needs. 
Cash back, or cashback, often refers to the cash benefit paid to a credit card user after a certain amount is charged on their credit card. The cash back reward is offered by card issuers as a
A catalyst is news or information that changes a pricing trend in a security.
Catastrophe calls are provisions in bonds that allow the issuer to call the bonds if the item built or produced by the bond is destroyed.
Relatively new to the financial planning and advice sector, a Certified Kingdom Advisor (CKA) is a professional certification for financial advisors who work with clients who take a Christian values
The CFA Institute issues the CFA designation. CFA stands for Chartered Financial Analyst. A CFA charter signifies a mastery of investment management principles and usually takes at least three years
A Chartered Financial Analyst (CFA) is a highly-respected designation attained by an investment professional who has successfully completed all three parts of the CFA exam. Because it's
A Chartered Investment Counselor (CIC) is an individual certified by the Investment Counsel Association. The certification is available to CFA holders who are currently registered as investment
A Chartered Market Technician (CMT) is an individual who has been certified by the Market Technicians Association.
The Chicago Board of Trade (CBOT) is a commodity futures and options exchange. Several dozen types of contracts trade on the CBOT, and the exchange facilitates hundreds of millions of these trades
The Chicago Board Options Exchange (CBOE) is an exchange used for trading standardized options contracts, including stock options, LEAPS, interest rate options, foreign currency options, and index
The Chicago Mercantile Exchange (CME) is a commodities futures and options exchange. Several dozen types of contracts trade on the CME, and the exchange facilitates hundreds of millions of these
Class A shares are either 1) common stocks or 2) preferred stocks that offer enhanced benefits, such as greater voting rights and a higher dividend priority. 
Class B shares are either 1) common stocks or 2) preferred stocks that generally give fewer benefits to share holders than class A shares
A clean up call, also known as a calamity call, is a feature of a collateralized mortgage obligation (CMO) that requires the issuer to pay off a portion of the CMO if the underlying mortgages don't
A clearinghouse is an intermediary between buyers and sellers of financial instruments.
A closed end fund (CEF) is a publicly-traded security that offers its shareholders partial ownership in an underlying portfolio of assets.
The closing bell is a term used to describe the time that an exchange's daily trading session ends.
A closing price is the trading price of a security at the end of the trading day. In real estate, it is the price at which a piece of property sells.
The CNN effect refers to a major negative impact on consumer spending as a result of breaking news.
Cockroach theory refers to the notion that unfavorable reports about a company will, once publicized, be followed by similar reports about other companies in the industry.
A collar option strategy, also known as a "hedge wrapper," is used to lock in the maximum gain and maximum loss of a stock. To execute a collar, an investor buys a stock and an out-of-the-money put
A collateralized bond obligation (CBO) is a bond that uses a variety of high-yield junk bonds as collateral. These bonds are separated, or pooled, into tranches with higher and lower levels of risk.
A collateralized debt obligation (CDO) is a security that repackages individual fixed-income assets into a product that can be chopped into pieces and then sold on the secondary market. They are
A combination trade is an option strategy where the trader takes a position in both call and put options in the same underlying stock. While there are multiple types of combination trades, in this
A commission is a fee paid to an agent as compensation for executing a transaction. It is calculated either as a percentage of the transaction value or as a flat fee.
Commodification, also known as "commoditization", refers to a good or service becoming indistinguishable from similar products.
A commodity is any homogenous good traded in bulk on an exchange. 
The Commodity Futures Trading Commission (CFTC), was established in 1974 as an independent government agency with the purpose of regulating commodity futures and options markets.
A commodity index is an index of the prices of items such as wheat, corn, soybeans, coffee, sugar, cocoa, hogs, cotton, cattle, oil, natural gas, aluminum, copper, lead, nickel, zinc, gold and silver
A commodity market is a place where buyers and sellers can trade any homogenous good in bulk. Grain, precious metals, electricity, oil, beef, orange juice and natural gas are traditional examples of
Commodity parity price refers to the price of a commodity based on a single price or average of prices during a previous span of time.
The Commodity Research Bureau Index (CRB) tracks the general trend of the commodities markets.
Common stock represents ownership interests in corporations.
A common-size balance sheet is a balance sheet in which each line item is expressed as a percentage of assets.
A common-size financial statement is an income statement or balance sheet in which each line items are expressed as a percentage of sales or assets, respectively.
A common-size income statement is an income statement in which each line item is expressed as a percentage of sales.
A composite is a grouping of securities, indexes or other items.
A composite average is an average of the components of other averages.
In finance, to compound means to earn interest on principal plus interest that was earned earlier.
The financial world often refers to compound interest as magic. Compound interest can be thought of as “interest building on interest” which adds to your principal. In layman’s terms, it’s a
A compound option is the opportunity to buy or sell an option.
Compounding is the process of the exponential increase in the value of an investment due to earning interest on both principal and accumulated interest.
A consensus estimate is a shared prediction of a company's quarterly or annual earnings per share.
In the accounting world, to consolidate means to combine the financial statements of a company and all of its subsidiaries, divisions or suborganizations.
Consolidated financial statements are the combined financial statements of a company and all of its subsidiaries, divisions, or suborganizations.
Contango occurs when the current futures price of an asset (as quoted in the futures market) is higher than the current spot price of the underlying asset.
Also called a back-end load, a contingent deferred sales charge is a fee paid to sell a specific investment. It is expressed as a percentage of the amount invested, and may also be called an exit fee
Also called the Zaraba method, the continuous auction method is a method of trading securities.  
A contrarian is an investor that attempts to profit by deviating from conventional wisdom or "the herd." 
A conversion ratio is the number of one security given for another security (usually a convertible security).
A convertible bond gives the bondholder the right to convert the bond into a fixed number of shares of common stock in the issuing company.
Convertible preferred stock is preferred stock that holders can exchange for common stock at a set price after a certain date.
In the bond world, convexity refers to the shape of the yield curve and  how sensitive bond prices are to changes in interest rates.
Core earnings are the net income a company generates from the principle products and services it provides.
"Cornering the market" refers to the process of acquiring enough shares of a certain security or asset with the intention of illegally manipulating its price.
Corporate bonds are debt instruments created by companies for the purpose of raising capital. They are called fixed-income securities because they pay a specified amount of interest on a regular
Corporate Social Responsibility, or CSR, is a system of self-regulation for a business to become and remain socially accountable to its customers, employees, peers, and community.  Under CSR
A correction refers to a price decline of at least 10% of any security or market index after a temporary increase in market prices.
Correlation, as used in investing, is a measure of the return performance of two (or more) securities or asset classes relative to each other. Portfolio managers, traders, brokers, and
Cost-benefit analysis is used to analyze a potential investment that will impact a business. Whether a company is looking to purchase a new property – or expand its operations – cost benefit analysis
Cost of capital is an important business term for both investors and companies. Cost of capital can best be described as the ability to cover both asset and liability expenditures while generating a
Cost of equity refers to a shareholder's required rate of return on an equity investment. It is the rate of return that could have been earned by putting the same money into a different investment
Cost of goods sold (COGS) is an accounting term to describe the direct expenses related to producing a good or service. COGS is listed on the income statement.
Cost per unit is a measure of a company's cost to build or create one unit of product.
A countercyclical stock is a stock whose price tends to move in opposition to the overall business cycle. When the market rises, the stock price falls, and when the market falls, the stock price
A coupon bond, frequently referred to as a bearer bond, is a bond with a certificate that has small detachable coupons. The coupons entitle the holder to interest payments from the borrower. 
The coupon equivalent rate (CER), also known as the bond equivalent yield (BEY), is the effective yield on a zero-coupon bond when calculated as if it paid a coupon.
The coupon equivalent yield is the effective annual interest rate earned on a bond. It is used to understand what the annual return is or would have been on an investment lasing less than one year.
In the finance world, the coupon rate is the annual interest paid on the face value of a bond. It is expressed as a percentage.
The coupon rate of a bond is the amount of interest paid per year as a percentage of the face value or principal. 
A covenant is a promise a company makes, usually in return for a loan or bond issue.
A coverage ratio divides a company's income or cash flow by a certain expense in order to determine financial solvency.
A covered call is a call option that is sold against stock an investor already owns.
A credit default swap (CDS) protects lenders in the event of default on the part of the borrower by transferring the associated risk in return for periodic income payments.
A credit derivative is a financial instrument thats value is determined by the default risk of an underlying asset.
A credit spread is the difference between the yields of two bonds that offer the same coupon and have the same maturity. Since yield reflects the risk of a bond, the credit spread reflects the
Cross-listing (also known as interlisting or dual listing) is the listing of any security on two or more different exchanges.
Currency risk, also called foreign-exchange risk or exchange-rate risk, is the risk that changes in the relative value of certain currencies will reduce the value of investments denominated in a
Current assets (sometimes called current accounts) are any company assets that can be converted into cash within one fiscal year. There are multiple ways these assets can be converted, including sale
The current ratio is the ratio of current assets to current liabilities.
Current yield represents the prevailing interest rate that a bond or fixed income security is delivering to its owners.
CUSIP stands for "Committee on Uniform Securities Identification Procedures" and refers to a 9-digit alphanumeric code assigned to all security issues approved for trading in the United
A custodian is an institution or individual that can act as an agent and exercise legal authority over the financial assets of another individual or company.
Cyclical stocks are those that tend to move strongly higher and lower along with the overall business cycle. These stocks represent ownership in companies that are very sensitive to economic
D-mark is slang for deutschmark, the national currency of Germany until it joined the European Union in 2002.
Daily cut-off is a term signifying the end of the trading day for foreign exchange markets.
A daily trading limit is the maximum gain or loss allowed on a derivative or currency in one trading day.
A dark pool is trading activity that occurs directly between parties without the use of an exchange, thereby keeping the transactions private.
Dark pool liquidity refers to the amount of trading activity that occurs directly between parties without the use of an exchange, thereby keeping the transaction private.
Named after famous ballroom dancer Nicolas Darvas, the Darvas box theory is a trading technique based on 52-week highs and volumes.
Data smoothing is a statistical technique that involves removing outliers from a data set in order to make a pattern more visible.
David Ricardo was an English classical economist and one-time member of the country's Parliament who lived from 1772 to 1823. He is the author of The Principles of Political Economy and Taxation and
In the finance world, a dawn raid is the purchase of a large number of shares or securities as soon as the market opens, usually in a takeover effort.
A day order is an order to buy or sell a security by the end of the day.
Day trader is a term applied to a very active securities trader who holds securities for a short period of time. Day traders will often open and close a position within the same day.
A day-around order is an order that replaces an order from another day. It is most common in the equities markets.
A day-count convention is a method of counting the days between coupon dates.
Days sales of inventory is a ratio of inventory to sales. The formula is: Days Sales of Inventory = (Inventory/Cost of Sales) x 365
Days sales outstanding (DSO) is the ratio of receivables to the daily average of credit sales.
Days working capital is the ratio of working capital to sales. The formula is: Days Working Capital = (Average Working Capital x 365)/Annual Sales
A dead cat bounce refers to a temporary recovery in a stock price or a temporary market rally after a significant downward trend.
A death bond is a bond backed by life insurance policies.
A death cross is a technical indicator that occurs when a stock's short-term moving average falls below its long-term moving average.
A death put is an option added to a bond that gives the bondholder's estate the right, but not the obligation, to sell the bond back to the issuer at face value if the bondholder dies.
A death spiral is a kind of loan investors provide to a company in exchange for debt that can convert into stock, typically at below-market share prices.
A Death Star IPO is a wildly successful IPO. The term is a reference to the Star Wars movies, in which Darth Vader's Death Star battle station could pulverize other planets with a single laser
Debentures are bonds that are not secured by specific property or collateral. Instead, they are backed by the full faith and credit of the issuer, and bondholders have a general claim on assets that
Debt load is the total amount of debt that a company has on its balance sheet. All publicly traded companies must file financial statements, including balance sheets, every quarter.
A debt ratio is simply a company's total debt divided by its total assets. 
A debt security is an investment in a debt instrument issued by a corporation or government as it borrows money. Commonly, the security, also referred to as a bond or fixed income security, will be
A company's debt service coverage ratio (DSCR) refers to its ability to meet periodic obligations on outstanding liabilities with respect to its net operating revenue.
The debt-to-equity ratio (D/E) is an essential formula in corporate finance. It’s used to measure leverage (or the amount of debt a company has) compared to its shareholder equity. All
A deep discount bond is a bond that sells at a price which is 20% or more below the face value of the bond, and carries a low rate of interest during the term of the bond.  
Default risk is the chance that the bond issuer will not make the required coupon payments or principal repayment to its bondholders.
A defensive stock is a stock that is either stable or a market outperformer during an economic contraction.
A deferred interest bond is a bond which pays interest in full upon maturity.
A deferred payment option is an option contract for which the payment is deferred until, and paid not sooner than, the contract’s expiration date.
Deferred revenue refers to payments received in advance for services which have not yet been performed or goods which have not yet been delivered. These revenues are classified on the company's
A deferred stock purchase plan is an uncapped stock contribution with an employer matching the contribution that vests as the employee provides additional service during a deferral period. 
Deferred tax liability (DTL) is a balance sheet line item that accounts for the temporary difference between taxes that will come due in the future and taxes paid today. 
A defined benefit plan is a qualified retirement account that contractually agrees to pay a specified benefit at the plan holder's age of retirement. This type of qualified plan clearly defines
In general, a defined contribution plan is a tax-deferred savings plan that people fund with their own money (rather than an employer) and use to save for retirement. It is the opposite of a defined
Delisting refers to the removal of a security from active trading. It generally occurs when a company goes private, is bought out, declares bankruptcy or fails to meet listing requirements.
A delivery option is incorporated into an interest rate future contract and allows the writer to specify the time and place of delivery as well as the asset to be delivered.
Delta is the ratio comparing the change in price of an underlying asset to the change in price of a derivative. It is one of the four main statistics, known as "Greeks," used to analyze
A depletion allowance is a tax deduction allowed in order to compensate for the depletion or "using up" of natural resource deposits such as oil, natural gas, iron, timber etc.  The
The Depository Trust & Clearing Corporation (DTCC) is a subsidiary of the National Securities Clearing Corporation (NSCC). The DTCC, established in 1973, settles transactions between buyers and
Depreciated cost is the cost of an asset minus its accumulated depreciation. Another term for this concept is net book value. The formula for depreciated cost is: Depreciated Cost = Original Asset
Depreciation is an accounting method that measures the reduction in an asset’s value over the course of its useful life. It also represents how much of an asset’s value is depleted due to usage, wear
A derivative is a financial contract with a value that is derived from an underlying asset. Derivatives have no direct value in and of themselves -- their value is based on the expected future price
The descending triangle is a pattern observed in technical analysis. It is the bearish counterpart of the bullish ascending triangle pattern. The trendline connecting peak price levels should be
A detachable warrant is a warrant that can be sold separately from the security to which it was originally attached.
Devaluation refers to a decrease in a currency's value with respect to other currencies.
Diluted earnings per share is a measure of profit. The formula for diluted earnings per share is: Fully Diluted Earnings Per Share = (Net Income - Preferred Stock Dividends) / (Common Shares
Dilution is a reduction in proportional ownership caused when a company issues additional shares.
Direct access trading (DAT) refers to any computerized trading system which connects traders to markets, thereby eliminating the need for a broker.
A discount broker is a stockbroker who charges a reduced commission to buy and sell shares for clients.
Discount to net asset value (NAV) refers to a situation where shares of a closed-end stock fund are trading at a price lower than the fund’s net asset value per share. For example, a fund could
Discounted cash flow (DCF) analysis is the process of calculating the present value of an investment's future cash flows in order to arrive at a current fair value estimate for the investment.
Disposition refers to disposing of an asset through sale, assignment, or other transfer method. 
Diversification is a method of portfolio management whereby an investor reduces the volatility (and thus risk) of his or her portfolio by holding a variety of different investments that have low
A divestiture or divestment is the reduction of an asset or business through sale, liquidation, exchange, closure, or any other means for financial or ethical reasons. It is the opposite of
The dividend discount model (DDM) is a method for assessing the present value of a stock based on the growth rate of dividends.
A dividend ETF is a basket of dividend-paying securities that are bundled together into a single security that can be bought and sold like a stock.
A dividend fund is a type of mutual fund which invests exclusively in equity shares which pay regular dividends.
"Dogs of the Dow" is a stock-picking strategy whereby an investor buys equal amounts of the 10 highest-yielding stocks within the Dow Jones Industrial Average at the beginning of each year.
A doji candlestick is a significant signal in the technical analysis of financially traded assets. If prices finish very close to the same level (so that no body or a very small real
Investment advisors frequently suggest dollar-cost averaging in their articles and publications, but what does it mean? Why do many advisors believe it is the best strategy?
The double bottom -- one of the many charting patterns used in technical analysis -- is characterized by a fall in price, followed by a rebound, followed by another drop to a level roughly similar to
The Dow 30 is slang for the Dow Jones Industrial Average.
The Dow Jones Industrial Average (DJIA), sometimes referred to as simply the Dow, is one of several well-known stock market indices. The DJIA was created by Charles Dow, founder of the Wall Street
Dow Theory is an analysis that explores the relationship between the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA). When one of these averages climbs to an
A downgrade is an announcement of an analyst lowering their opinion on the desirability of a company as an investment. It can apply to either debt or equity.
Downside refers to an investment's potential loss in value.
Downside risk is the probability that an asset will fall in price. It is also the measure of the possible loss from that decline.
A dragonfly doji is the most uncommon candle of the four different types of doji candlesticks. As with any doji, the dragonfly depicts a situation in which supply and demand are in equilibrium, thus
A company has dual-class stock if it has more than one type of stock and the different classes have varying voting rights, dividend payments, or other characteristics.
Due diligence is the careful, thorough evaluation of a potential investment, whether on a corporate or individual level.
DuPont analysis examines the return on equity (ROE) analyzing profit margin, total asset turnover, and financial leverage. It was created by the DuPont Corporation in the 1920s.
The DuPont identity breaks down return on equity (ROE) into its components -- profit margin, total asset turnover, and financial leverage -- so that each one can be examined in depth.
A bond’s duration is a measure of the bond’s sensitivity to interest rate changes. Duration may also be thought of as a measurement of interest rate risk.  Many new bond investors confuse the
A Dutch auction is a method for pricing shares (often in an initial public offering) whereby the price of the shares offered is lowered until there are enough bids to sell all shares. All the shares
In the mortgage business, a dwarf is a group of mortgage-backed securities that mature in fewer than 15 years. The Federal National Mortgage Association (FNMA or Fannie Mae) issues dwarves.
Dynamic asset allocation is an investment strategy whereby an investor makes long-term investments in certain asset classes or securities and periodically buys and sells those securities in order to
The e-CBOT is an automated trading platform for trading futures on the Chicago Board of Trade (CBOT).
E-micro forex futures are currency futures contracts that are a 10th the size of a standard futures contract. 
An E-mini is a stock index futures contract that is electronically traded on the Chicago Mercantile Exchange (CME) and is 1/5 the size of a standard stock index futures contract.
Each way refers to a broker's act of earning a commission from both the buyer and the seller in a transaction.
Early amortization refers to the accelerated repayment of bond principal, generally for an asset-backed security (ABS).
An early call refers to the accelerated repayment of bond principal, normally on an asset-backed security (ABS).
Earned surplus is the sum of a company's profits, after dividend payments, since the company's inception. It can also be called retained earnings, retained capital, or accumulated earnings.
Earnings are the corporate profits of a company over a specific time period after taxes and other expenses have been paid.
An earnings announcement is a public statement of a company's profits, usually on a quarterly basis.
Earnings before interest after taxes (EBIAT) is a measure of a company's operating performance. EBIAT is a measure of how profitable a company would be if it paid taxes on its operating profit
Earnings before interest and depreciation (EBID) are a post-tax measure of a company's operating performance.
Earnings Before Interest and Taxes (EBIT) measures the profitability of a company without taking into account its cost of capital or tax implications.
Earnings before interest, tax, depreciation and amortization (EBITDA) is a measure of a company's operating performance. Essentially, it's a way to evaluate a company's performance without having to
Earnings before tax (EBT) measures a company's operating and non-operating profits before taxes are considered. It is the same as profit before taxes.
An earnings call is a public announcement, usually via conference call, of a company's profits, usually on a quarterly basis.
An earnings estimate is an estimate of a company's future quarterly or annual profits by a market analyst.
The earnings multiplier, also called the price-to-earnings ratio (P/E), is a valuation method used to compare a company’s current share price to its per-share earnings.
The term earnings per share (EPS) represents the portion of a company's earnings, net of taxes and preferred stock dividends, that is allocated to each share of common stock. The figure can be
Earnings season refers to the four times per year when most public companies announce their quarterly and/or annual earnings.
An earnings surprise in an unexpected difference between a company's actual earnings per share and analysts' expected earnings per share.
The earnings yield is the ratio of a company's last twelve months (LTM) of earnings per share (EPS) to its stock price. It is the inverse of the price-to-earnings (P/E) ratio.
An easy-to-borrow list is a brokerage firm's list of securities that are available for shorting.  
The phrase "eat well, sleep well" refers to the risk-return trade-off that most investors must make.
Eating stock occurs when a broker/dealer or market maker has to purchase stock because there are not enough buyers.
Earnings before Interest, Depreciation, and Amortization (EBIDA) is a post-tax measure of a company's operating performance.
Earnings before interest, tax and depreciation (EBITD) is a pre-tax measure of a company's operating performance. Essentially, it's a way to evaluate a company's performance without having to factor
EBITDA margin is a measurement of a company's EBITDA (its earnings before interest, taxes, depreciation, and amortization) as a percentage of its total revenue.  
Earnings before interest, taxes, depreciation, amortization and exceptional items (EBITDAE) are a measure of a company's operating performance.
Earnings before interest, taxes, depreciation, amortization, and special losses (EBITDAL) is a measure of a company's operating performance. Essentially, it's a way to evaluate a company's
EBITDAR, which stands for earnings before interest, tax, depreciation, and either restructuring or rent costs (depending on what you're measuring) measures a company's profitability without
A variation of EBITDA, EBITDAX is a measure used by natural resource exploration companies to reflect ongoing or core profitability. The acronym stands for earnings before interest, taxes,
An ECN broker is a person who uses electronic communications networks to give clients access to buyers and sellers in the currency markets.
Economic profit is a measure of performance that compares net operating profit to total cost of capital
Economic value added (EVA) is an internal management performance measure that compares net operating profit to total cost of capital. Stern Stewart & Co. is credited with devising this
The EDGAR Public Dissemination Service (PDS) System is an electronic system that receives SEC filings.
EE Bonds are one of two types of savings bond sold by the U.S. Treasury (the other is I Bonds).
Effective duration is a calculation used to approximate the actual, modified duration of a callable bond. It takes into account that future interest rate changes will affect the expected cash flows
For bonds, effective yield is an annual rate of return associated with a periodic interest rate.
An efficiency ratio is a measure of a bank's overhead as a percentage of its revenue.
Different combinations of securities produce different levels of return. The efficient frontier represents the best of these securities combinations -- those that produce the maximum expected return
To get eighthed is to be outbid or undercut by one-eighth of a dollar (12.5 cents).
An either-or order is a group of limit orders linked together within a brokerage account. If one order is executed, all other linked orders are automatically canceled.
An election period is a window of time during which a person can take a certain action. In the bond world, the term refers to the period of time a holder of an extendible or retractable bond can
Commonly known as an ECN, an electronic communication network is a system for trading financial instruments that takes place outside of the markets and is sanctioned by the Securities and Exchange
EDGAR, the Electronic Data Gathering, Analysis and Retrieval system, is an automated system of submission used by public companies required to file forms with the U.S. Securities and Exchange
Elves make up a group of analysts and money managers who appeared on the PBS show "Wall Street Week," which was hosted by Louis Rukeyser.
An embedded option is a provision in a security (typically a bond) that gives either the issuer (the company) or the investor the right to take some action in the future.
An emerging markets fund is a fund that invests in the securities of companies and governments in developing countries.
The Employee Benefits Security Administration (EBSA) is the branch of the United States Department of Labor responsible for overseeing the administration and planning of employee pension funds by
An employee contribution plan is an employer-sponsored retirement plan where employees deposit (contribute) their own money to a special account.
Th Employee Retirement Income Security Act of 1974 (ERISA) is an American federal statute that protects the retirement assets of Americans by establishing a set of rules that must be followed by
Employee stock options (ESOs) are  call options on a company's common stock granted to a select group of its employees. Certain restrictions on the option provide a financial incentive for
An employee stock ownership plan (ESOP), also known as a stock purchase plan, is a defined contribution plan whereby an employer invests the fund's assets in its own stock.
Ending inventory is the book value of inventory at the end of a financial or accounting reporting period.
Enterprise multiple is a financial indicator used to determine the value of a company. It is equal to a company’s enterprise value divided by its EBITDA (Earnings Before Interest, Taxes,
  Enterprise value represents the entire economic value of a company. More specifically, it is a measure of the theoretical takeover price that an investor would have to pay in order to
Enterprise value to cash flow from operations (EV/CFO) is the ratio of the entire economic value of a company to the cash it produces. The formula for EV/CFO is: EV/CFO = (Market Capitalization +
Put simply, equity is ownership of an asset of value. Ownership is created when the owner contributes to the financing of the asset purchase. Another way to finance the asset purchase is with debt.
Equity financing is the method of raising capital by selling company stock to investors. In return for the investment, the shareholders receive ownership interests in the company.
An equity fund is an open or closed-end fund that invests primarily in stocks, allowing investors to buy into the fund and thus buy a basket of stocks more easily than they could purchase the
An Equity Linked Foreign Exchange Option (or ELF-X) is a put option or call option that shelters an investor from foreign exchange risk. It enables an investor to sell a foreign stock position or
An equity linked note (or ELN) is a debt instrument that varies from a standard fixed-income security in that the coupon is built on the return of a single stock, basket of stocks, or equity index,
The equity multiplier is a ratio used to determine the financial leverage of a company. 
The equity risk premium is the difference between the rate of return of a risk-free investment and the rate of return of an individual stock over the same time period. Since all investments carry
As the name implies, equity-linked securities (ELKS) are hybrid debt securities whose return is connected to an underlying equity (usually a stock). ELKS pay a higher yield than the underlying
An equivalent taxable interest rate (also called equivalent taxable yield) is the return that is required on a taxable investment to make it equal to the return on a tax-exempt investment. The
An escrow agreement is a certificate from an approved bank guaranteeing that an indicated financial security is deposited at that particular bank.
A eurobond is a bond denominated in a currency not native to the issuer's home country. Eurobonds are commonly issued by governments, corporations, and international organizations.
A European option is a type of put or call option that can be exercised only on its expiration date.
The bearish evening star candlestick formation is a major reversal candlestick pattern.
Event risk is the risk of a negative impact on a company's financial position as a result of an unexpected event like a natural disaster, industrial accident or hostile takeover.
An exceptional item is an unusually large and uncommon transaction charge that must be disclosed on the balance sheet in accordance with GAAP.
Excess return, also known as "alpha" or the "abnormal rate of return the portion of a security's or portfolio's return not explained by the overall market's rate of return.
An exchange rate between two countries' currencies indicates the value of one currency relative to the other. 
Exchange-rate risk, also called currency risk, is the risk that changes in the relative value of certain currencies will reduce the value of investments denominated in a foreign currency.
Exchange-traded funds (ETFs) are securities that closely resemble index funds, but can be bought and sold during the day just like common stocks. These investment vehicles allow investors a
An exchangeable bond gives the holder the option to exchange the bond for the stock of a company other than the issuer (usually a subsidiary) at some future date and under prescribed conditions. This
An exercise price is the price at which the holder of a call option has the right, but not the obligation, to purchase 100 shares of a particular underlying stock by the expiration date.
An exotic option is any option contract comprising attributes not common to most contracts which result in complicated valuation schemes. It is the opposite of a plain vanilla option.
Expectations theory suggests that the forward rates in current long-term bonds are closely related to the bond market's expectation about future short-term interest rates. 
The expense ratio is the recurring management fees for a mutual fund. A fund company charges its fund holders the expense ratio each year (expressed in terms of a percentage of the fund's assets
The expiration date is the last day an options contract can be exercised. After that, the contract becomes null and void.
An exponential moving average (EMA) is a moving average for time-series data which places greater weight on more recent data.
Extended trading is the pre-market or after-market trading that occurs on electronic market exchanges either before or after regular stock market trading hours.
An extraordinary item is an accounting term used to describe expenses that are infrequent, unusual and significant in size.
FAAMG is an acronym that describes five of the most popular tech stocks whose parent companies have come to influence so many of our purchases and a large part of the market: Facebook, Apple, Amazon
FAANG is an acronym that describes five of the most popular tech stocks whose parent companies have come to influence so many of our purchases and a large part of the market: Facebook, Apple, Amazon
Face value, also referred to as par value or nominal value, is the value shown on the face of a security certificate, including currency. The concept most commonly applies to stocks and bonds, so it
FactSet is a financial data and software company.
A fade is an investment strategy devoted to doing the opposite of the prevailing wisdom. In the brokerage sector, it also refers to a dealer's inability or refusal to fill an order at the
Fair value is an estimate of a security's worth on the open market. There is no one way to calculate the fair value for a security, but calculations typically take into account future growth
A fallen angel is a bond which once carried a high rating and displayed exceptional performance, but has since experienced a serious sustained decline in ratings and market demand.
A falling knife describes a stock which has experienced a rapid decline in value in a short amount of time. Just like a falling knife, you don't want to catch these companies on their way down
FANG is an acronym that describes the four most popular tech stocks whose parent companies have come to dominate our lives and the market: Facebook, Amazon, Netflix, and Google (now called Alphabet
The Federal Open Market Committee (FOMC) is main policy-making body of the Federal Reserve. The FOMC is responsible for conducting open market operations.An open market operation is the buying or
Fill or kill (FOK) is a client's instruction to his or her broker to either fill the entire order immediately or to cancel the order.
A final maturity date is the date upon which all principal and interest must be repaid.
The Financial Accounting Standards Board (FASB) is an independent non-profit body responsible for the institution and interpretation of Generally Accepted Accounting Principles (GAAP).
A financial analyst gathers and interprets data about securities, companies, corporate strategies, economies, or financial markets. Financial analysts are sometimes called securities analysts, equity
Financial engineering is the quantitative, technical development of financial strategies and products.
A financial market is a location where buyers and sellers meet to exchange goods and services at prices determined by the forces of supply and demand.
Issued by the Global Association of Risk Professionals (GARP), the Financial Risk Manager (FRM) designation recognizes individuals who have expert knowledge in the field of financial risk assessment
First in, first out (FIFO) is an accounting method for inventory valuation that assumes that goods are sold or used in the same chronological order in which they are acquired.
A fiscal quarter is a consecutive three-month period within a company’s fiscal year. These calendar divisions are used by publicly-traded companies to schedule the release of financial reports and
A fiscal year is an accounting period of 365(6) days that does not necessarily correspond to the calendar year beginning on January 1st. The fiscal year is the established period of time when an
A fixed asset is anything that has commercial or exchange value, generates revenue, has a life longer than one year and has a physical form.
A fixed exchange rate pegs one country's currency to another country’s currency. It is also known as a pegged exchange rate.
Fixed income is a category of investments where an investor is lending money to the issuer and receives a fixed interest payment periodically until the investment matures. At maturity, the original
The flag formation is a technical analysis pattern that occurs when there is a straight upward move in a stock. 
Flat yield curve refers to a yield curve which reflects little or no disparity between short-term and long-term interest rates.
A company's float is an estimate of the number of outstanding shares available for the public to trade.
A floating exchange rate refers to changes in a currency's value relative to another currency (or currencies).
A floor broker, also known as a pit broker, is a brokerage firm employee who executes orders on the floor of a stock or commodity exchange on behalf of clients.
Fool's gold is a shiny mineral called pyrite which bears great resemblance to, and is often confused with, real gold.
Forced liquidation is the sale of all investments within a customer's margin account by a brokerage firm, usually after the account has failed to meet margin requirements and margin calls.
Foreign currency effects refer to the fluctuations in returns on offshore investments as a result of changes in the value of the investment's denominated currency against that of the domestic
Foreign Exchange, also known as  Forex or FX, is an over-the-counter market. Forex trading is how individuals, banks, and businesses convert one currency into another.  It is considered the
Foreign-exchange risk refers to the potential for loss from exposure to foreign exchange rate fluctuations.
Forensic accounting is a form of investigative accounting which examines financial records in order to find evidence for a lawsuit or criminal prosecution.
Forensic auditing examines individual or company financial records as an investigative measure that attempts to derive evidence suitable for use in litigation.
A forward contract is a private agreement between two parties that simultaneously obligates the buyer to purchase an asset and the seller to sell the asset at a set price at a future point in time
Forward earnings are the profits a company (or companies) expect to generate during a future period of time.
The forward price-to-earnings ratio (forward P/E) is a valuation method used to compare a company’s current share price to its expected per-share earnings.
Forward pricing is the SEC-mandated policy of processing buy and sell orders for open-ended mutual fund shares at the net asset value (NAV) as of the next market close (not the most recent market
Usually reserved for discussions about Treasuries, the forward rate (also called the forward yield) is the theoretical, expected yield on a bond several months or years from now.
Forward trading, also called front running, occurs when stockbrokers personally purchase shares of a particular stock while knowing that their firm plans to purchase numerous shares of the same stock
A foul weather fund is a mutual fund that outperforms the market during poor market conditions. The goal of the fund is to minimize or benefit from the effects of a downward move in the market.
Free asset ratio refers to the net assets of an insurance company as a percentage of its total assets.  Free assets are the same as net assets, that is, assets that are not obligated to
Free cash flow (FCF) is a measure of how much cash a business generates after accounting for capital expenditures such as buildings or equipment. This cash can be used for expansion, dividends,
Free cash flow per share is a measure of how much cash per share a business generates after accounting for capital expenditures like equipment or buildings. Free cash flow is available to be used for
Free cash flow to the firm (FCFF) is the cash available to pay investors after a company pays its costs of doing business, invests in short-term assets like inventory, and invests in long-term assets
A company's free float refers to the number of outstanding shares that are available to the public for trade.
Front running, also called forward trading, occurs when stockbrokers know their firm plans to purchase numerous shares of a particular stock, so they purchase shares of the same stock for themselves
A front-end load is a fee paid to purchase a specific investment. It is expressed as a percentage of the amount invested. Front-end load mutual funds are often referred to as "A Shares."
A full-service broker executes trades for clients, but also provides research, advice, retirement planning and tax assistance.
With a fully depreciated asset, the accumulated depreciation equals the original cost of the asset.
Fund usually refers to mutual fund, which is an open-ended investment company that pools investors' money into a fund operated by a portfolio manager. This manager then turns around and invests this
A fund manager is an investment professional who oversees the investments within a portfolio.
Fundamental analysis attempts to understand and predict the intrinsic value of stocks based on an in-depth analysis of various economic, financial, qualitative, and quantitative factors.
Funds from Operations (FFO) is a measure of cash generated by a real estate investment trust (REIT). It is important to note that FFO is not the same as Cash from Operations, which is a key component
Funds from operations per share (FFOPS) is a measure of cash generated by a real estate investment trust (REIT). It is important to note that FFOPS is not the same as Cash from Operations Per Share,
Funds settlement refers to the transfer of funds from buyer to seller and the transfer of an asset's title from seller to buyer.
Future value (FV) refers to a method of calculating how much the present value (PV) of an asset or cash will be worth at a specific time in the future.
Futures are financial contracts giving the buyer an obligation to purchase an asset (and the seller an obligation to sell an asset) at a set price at a future point in time.
A futures commission merchant (FCM) is a company or individual certified to negotiate the sale and purchase of futures contracts, as well as oversee the delivery of underlying commodities to
Futures contracts give the buyer an obligation to purchase an asset (and the seller an obligation to sell an asset) at a set price at a future point in time.
Futures markets are places (exchanges) to buy and sell futures contracts. There are several futures exchanges. Common ones include The New York Mercantile Exchange, the Chicago Board of Trade, the
G7 bonds are generally regarded as less risky than bonds issued by other countries. Accordingly, they are often more liquid than sovereign debt from other countries and are sometimes preferred by
A gain, also called a capital gain, is an increase in the value of an investment. It is the difference between the purchase price (the basis) and the sale price of an asset. Thus the formula for gain
The gambler's fallacy is a situation in which a gambler believes that a string of past events will change the probability of future events occurring.  
A general obligation bond is a municipal debt issue that is secured by a broad government pledge to use its tax revenues to repay the bond holders.
Generally Accepted Accounting Principles (GAAP) is a framework of accounting standards, rules and procedures defined by the professional accounting industry, which has been adopted by nearly all
Gifted stock is stock that one person gives to another person or entity.
Gilts are bonds issued by the British government. India's government bonds are also called gilts.
Going concern refers to the assumption that a company has the resources to continue operating in the foreseeable future. A bankrupt company or a company near bankruptcy is the opposite of a going
Going public refers to a company's first issuance of stock on the open market. In most cases, the offering, called an initial public offering (IPO), makes the company's stock accessible to a
Gold bugs are people who are fans of investing in gold.
The AMEX Gold BUGS Index (also known as HUI) is one of two major gold indices that dominate the market. BUGS is an acronym for "Basket of Unhedged Gold Stocks." The index was
A gold bull is someone who believes the price of gold will go up. 
A gold certificate is a piece of paper that entitles the bearer to a certain amount of actual gold.
A gold fix occurs when the The London Gold Market Fixing Ltd. sets the price of gold.
A gold fund is an exchange-traded fund (ETF) or mutual fund that invests in gold.
A gold option gives the holder the right, but not the obligation, to purchase or sell a specific quantity of gold at a specified strike price on the option's expiration date.
The Gold Reserve Act of 1934 nationalized gold and fixed its price.
The gold-silver ratio is measure of how many ounces of silver it takes to buy an ounce of gold.
Goldbrick shares are shares of stock that appear valuable but are actually worthless or worth very little.
In the trading world, a golden cross occurs when a stock's short-term moving average rises above its long-term moving average.
The Goldman Sachs Commodity Index (GSCI) is a commodities index now owned by Standard & Poor's.
Good delivery occurs when all the requirements for transferring title to a security from the seller to the buyer have been met.
Good this month refers to a type of trading order is automatically canceled if it is not filled by the end of the month in which the client makes the order.
Good this week is a type of trade order that is automatically canceled if it is not filled by the end of the week in which the client makes the order.
A good through order is a trade order with a deadline. Usually, it is a stop loss or limit order. 
Good til Cancelled, or GTC, is used to refer to an order to buy or sell a stock at a set price that remains in effect until the investor cancels the order or the trade is completed.
Goodness of fit (also known as a chi-square goodness of fit) is a statistical term referring to how far apart the expected values of a financial model are from the actual values.
Also known as work in process (WIP), goods in process are the component of a company's inventory that is partially completed. 
Goodwill is the excess of purchase price over the fair market value of a company's identifiable assets and liabilities. 
Generally, a goodwill impairment occurs when a company A) pays more than book value for a set of assets (the difference is the goodwill), and B) must later adjust the book value of that goodwill.
The goodwill-to-assets ratio describes the percentage of a firm's total assets that can be explained by the amount of goodwill on the balance sheet. 
A government bond is debt issued by the government.
In the investing world, a gray market exists when people begin trading shares that have not been issued yet. In the business world, a gray market is the novel but not always illegal process of
The Great Depression is a severe global economic contraction that began in the United States and spread throughout the rest of the world in the 1930s.
A green shoe option is a clause contained in the underwriting agreement of an initial public offering (IPO). Also known as an over-allotment provision, it allows the underwriting syndicate to buy up
Gross margin is a required income statement entry that reflects total revenue minus cost of goods sold (COGS).  Gross margin is a company's profit before operating expenses, interest payments
Gross profit – also referred to as gross income or sales profit – is the total sales of a company minus the total cost of goods (COGS) sold. Gross profit margin is an important indicator of a company
Gross profit margin is a measure of a company’s profitability, calculated as the gross profit as a percentage of revenue. Gross profit is the amount remaining after deducting the cost of goods sold (
Growth at a reasonable price (GARP) is an investment strategy that combines tenets of both growth and value investing by finding companies that show consistent earnings growth but don't sell at
A growth company is characterized by a rate of growth higher than that of the overall economy.
Growth stocks are fast-growing, higher-risk companies. They tend to be young. They offer a higher chance of higher returns and a higher chance of bankruptcy.
A guaranteed bond is a bond whose interest and principal payments are guaranteed by a third party.
H-shares are shares of Chinese companies that are listed on the Hong Kong Stock Exchange.
A half stock has a par value that is 50% of what is considered normal.
The hammer candlestick is a technical indicator that typically appears after a prolonged downtrend. Here is an example of a hammer candlestick:
A hands-on investor has a substantial interest in a company and chooses to take an active role in its management. It is the opposite of a hands-off investor.
The hangman candlestick has a very long shadow and a very small real body. Typically, it has no upper shadow (or at the very most, an extremely small one). To be an official hangman, the lower shadow
A hard asset is a physical, or tangible, asset. It is the opposite of an intangible asset.
Hard call protection is a provision in a callable bond that limits the issuer's ability to exercise the call feature.
Hard currency is currency that has been adopted as an acceptable payment method in multiple countries.
Hard dollars are money paid to a broker or investment adviser in return for consultation or investment research. Hard dollars do not include fees related to trading.
Hard money is a broad term used in connection with currency and transfer payments.
A hard stop is a standing instruction from a brokerage client to sell units of a security if the market price declines to a specific level. It is a generic term that can refer to both a stop-loss
A hard-to-borrow list outlines the securities that a brokerage house cannot provide to investors for short selling.
A hardship withdrawal is a premature withdrawal of money from a retirement account on account of special circumstances.
A harmless warrant is a bond provision that instructs a holder to relinquish the bond to the issuer should the holder purchase another bond from the same company with comparable features.
The head and shoulders pattern consists of four distinct parts: The left shoulder, the head, the right shoulder, and the neckline. Each of these four must be present for the formation to exist.
Headline earnings are a measurement of a company's earnings based solely on operational and capital investment activities. It specifically excludes any income that may relate to staff reductions
The healthcare sector is the sector of the economy made up of companies that specialize in products and services related to health and medical care.
In the investing world, heavy refers to a security whose price can't seem to rise.
In finance, a hedge is a strategy intended to protect an investment or portfolio against loss. It usually involves buying securities that move in the opposite direction than the asset being protected
Hedge accounting is a portfolio accounting method that combines the values of both a security and its offsetting hedge instrument.
A hedge fund is an investment structure designed to allow management of a private, unregistered portfolio of assets. 
A hedge fund manager is an individual responsible for directing all activities associated with the operation of a hedge fund.
A hedged tender is a strategy used to ensure a profit as a part of a tender offer.
Held-to-maturity securities refer to debt securities which an investor holds until maturity.
A herd instinct is emotional pressure to agree with other members of a group. The herd instinct results in failures to think critically about an issue, situation or decision.
High frequency trading (HFT) is a computerized trading strategy used to exploit fleeting market inefficiencies. These ultra-short-term positions can be in a wide range of assets: stocks, options,
The high wave candlestick has a very small real body, and it typifies a stock or index plagued by uncertainty.  The spinning top has small upper and lower shadows, whereas in the high wave the
A high yield savings account is a savings account that pays an account holder a higher-than-average interest rate. If the average US savings account offers an interest rate of 1%, for example,
High-income trigger securities (HITS) are senior unsecured debt securities that pay an annual coupon rate and repay their original principal either in cash or shares, depending on the issuer's
A high-yield bond is a corporate bond with a credit rating below BBB (also called a junk bond).
A high-yield bond fund is a mutual fund that invests in corporate bonds rated below BBB (i.e., high-yield bonds, also called junk bonds).
A high-yield bond spread is simply the difference in yield between two high-yield debt securities or, more commonly, two classes of high-yield debt securities.
The Hindenburg Omen is a technical indictor that attempts to predict market crashes.
A histogram is a visual display of information. It uses bars to show the frequency of an item of data in successive intervals.
Holding period refers to the time during which an investor holds a given security.
An investor is left "holding the bag" when his or her investment has gone from valuable to worthless or almost worthless.
Home bias is a tendency to invest in companies that reside in the investor's home country.
A hot IPO is an IPO for which there is great demand.
A hurdle rate is an investor's minimum rate of required return on an investment.
A hybrid security is a security that has characteristics of one or more asset classes.
An I Bond is one of two types of savings bonds sold by the U.S. Treasury (the other is the EE Bond).
An Icahn Lift is a rise in stock price associated with an investment by famed activist shareholder Carl Icahn.
An iceberg order is a large order that has been split into several smaller orders to conceal the "real" size of the order.
Also called unsystematic risk, idiosyncratic risk is price risk associated with a company's particular circumstances.
Idle funds are monies that are not invested.
Illiquid describes an asset or security that cannot be sold quickly due to a shortage of interested buyers or a lack of an established trading market. Illiquid assets cannot be easily converted into
Immunization is a dedicated-portfolio strategy used to manage a portfolio with the goal of making it worth a specific amount at a certain point, usually to fund a future liability. Immunization
An impact day is the day on which a company's secondary offering begins trading.
Securities are held in street name when the name of the broker, not the individual owner, is listed on the certificate. Almost all securities held in brokerage accounts are held in street name.
An inactivity fee is a fee charged by brokerages to clients whose infrequent trading does not satisfy a minimum trading requirement.
An Incentive share option, or ISO, is a type of company share option granted exclusively to employees.  It confers an income tax benefit when exercised. ISOs are also referred to as "
Incentive stock option (ISO) is a type of company stock option granted exclusively to employees. It confers an income tax benefit when exercised. 
An income deposit security (IDS), also known as an "enhanced income security," is an exchange-traded security composed of both an issuer's common shares and its subordinated notes.
Income elasticity of demand is a measure of how much demand for a good/service changes relative to a change in income, with all other factors remaining the same.
Income from operations is income that is generated by the normal operations of a business.
The income statement is one of the three primary financial statements used to assess a company’s performance and financial position (the two others being the balance sheet and the cash flow statement
An income stock is a stock in which a taxable payment is declared by a company's board of directors and is given to the shareholders from the current or retained earnings that occur, usually
An income-oriented ETF is an exchange-traded fund that pays frequent dividends or interest payments to investors in the ETF.
An indenture agreement is the formal contract between a bond issuer and the bondholders. It sets forth the details of all the terms and conditions of the bonds, such as the exact day of their
An index is a statistical aggregate that measures change. In finance, they usually refer to measures of stock market performance or economic performance.
Like other ETFs, an index ETF is essentially a passive mutual fund -- similar to traditional index funds -- that allows investors to purchase a basket of securities in a single transaction. An index
Index funds are mutual funds that are designed to track the performance of a particular index.
An index hugger is a type of mutual fund whose performance closely tracks a major stock index.
Introduced in 1981, index options are call or put options on a financial index comprising many stocks. 
Indexing is a passive investment strategy that seeks to mimic or exceed the returns of a designated market index or other proxy.
An Individual Retirement Account (IRA) is a government sponsored, tax-deferred personal retirement plan. 
Inflation risk, also called purchasing power risk, is the chance that the cash flows from an investment won't be worth as much in the future because of changes in purchasing power due to
Inflation eats away at the value of every stream of cash flows, including salaries, pension payments and coupon payments. In many cases, the real interest rates on savings accounts are negative. For
Inflation-indexed securities are a form of savings that protects the principal and interest from the erosion of inflation.
The Federal Reserve Bank of New York provides, among other things, gold storage for foreign governments and central banks. This gold is in the form of bars, which allows the bank to weigh it, stack
An initial margin, or initial margin requirement, is the amount an investor must pay in cash for securities before the broker will lend money to that investor to buy more securities. This
An initial public offering (IPO) refers to the first time a company publicly sells shares of its stock on the open market. It is also known as "going public."
Insider information refers to confidential information about a company that has not been publicly disclosed.
Insider trading refers to the trading of securities by corporate insiders such as managers or executives. Insider trading can be legal or illegal depending on if the information used to base the
An institutional investor is an organization, rather than an individual, that invests on behalf of the organization's members. 
Institutional ownership refers to the ownership stake in a company that is held by large financial organizations, pension funds or endowments. Institutions generally purchase large blocks of a
Institutional shares are simply shares that can be bought in bulk. Usually, they do not come with additional rights or privileges; they exist to encourage institutions to make large investments in
An intangible asset is an asset that lacks a physical substance. 
The interest coverage ratio, also known as times interest earned, is a measure of how well a company can meet its interest-payment obligations.
Interest Only Strips (IO Strips) are securities with cash flows based entirely on the monthly payments received from a mortgage pool.
Interest rate risk is the chance that an unexpected change in interest rates will negatively affect the value of an investment.
An interest rate swap is a contractual agreement between two parties to exchange interest payments.
Internal rate of return (IRR) is the discount rate that makes the net present value of all cash flows (both positive and negative) equal to zero for a specific project or investment.  IRR:
International bonds are debt securities issued by foreign companies or governments and sold domestically.
International bond funds invest in bonds issued by foreign governments or foreign companies in a variety of markets, industries, and currencies. They allow investors to have an easy way to gain a
An international currency exchange rate is the rate at which one currency converts to another.
International fund usually refers to an investment or mutual fund composed of international bonds and foreign company stocks.
An international securities identification number (ISIN) is a universally accepted identifier exclusive to a particular issue of a security.
Intraday refers to price movements of a given security over the course of one day of trading.  It is generally used to describe the high and low price of a stock or option during a given trading
Intrinsic value has two primary connotations in the finance world. In the options-trading world, the term refers to the difference between the option's strike price and the market value of the
Inventory is the collection of unsold products waiting to be sold. Inventory is listed as a current asset on a company's balance sheet. See also inventory management.
Inventory management is the process of ensuring that a company always has the products it needs on hand and that it keeps costs as low as possible.
An inventory reserve is an accounting entry that reflects a reduction in the market value of a company's inventory.
The inventory turnover ratio measures the rate at which a company purchases and resells products to customers. There are two formulas for inventory turnover:       
An inverted yield curve, also called a negative yield curve, is a yield curve indicating that short-term yields are higher than long-term yields.
Investing is the strategic purchase or sale of assets in order to produce income or capital gains.
An investment is an asset intended to produce income or capital gains.
The role of an investment banker is to serve as a middle-man between prospective investors and companies that intend to raise capital through the issuance of new stock. Investment bankers are often
Joining an investment club is an excellent way to learn more about investing, and it is not unusual for investment clubs to experience outstanding returns. It is important that members of
An investment consultant is an educated investment professional who helps people and businesses set and meet long-term financial goals.
Investment grade is a quality designation ascribed by rating agencies to bonds that have little risk of default.
Investment management has two general definitions, one relating to advisory services and the other relating to corporate finance. In the first instance, a financial advisor or financial services
An investment manager is an educated investment professional who helps people and businesses set and meet long-term financial goals.
An investor is any person or entity, like a firm or mutual fund, who commits capital with the expectation of receiving financial returns. Individuals use investments in order to increase their
Investor relations (IR) refers to the function within a public company that is responsible for managing and communicating information to the public pertaining to the company's operations,
IPO Lockup refers to the period of time after a company initially goes public during which company insiders are not allowed to sell company shares.
Created by Barclays Global Investors, iShares are a trademarked brand of exchange-traded funds (ETFs).
Issued shares include all shares that are currently owned by stockholders, company officials, and investors in the public domain. Issued shares do not include shares repurchased by a company.
Issuer refers to a legal entity -- i.e., government, corporation, or investment trust -- that develops, registers and sells securities to the investing public in order to finance its operations
A jackpot is a big winning -- often the largest a competition or event has to offer.
The January Effect refers to a pattern exhibited by stocks -- particularly small-cap stocks -- in which they've shown a tendency to rise during the last several trading days in December and then
Jekyll and Hyde is a term to describe volatile corporate earnings.
Jensen's measure is a statistical measurement of the portion of a security's or portfolio's return that is not explained by the market or the security's relationship to the market but
A job lot is a commodities futures contract where the underlying commodity is denominated in smaller amounts than a regular futures contract.
Jobber is a slang term for an agent in business, particularly trading.
John D. Rockefeller (1839-1937) was the founder of Standard Oil Company and became one of the world's wealthiest people.  Widely regarded as the richest person in American history, Rockefeller's
A joint bond is a bond that is backed by an issuer and one or more additional guarantors.
Joint probability is the likelihood of more than one event occurring at the same time.
A joint stock company is a company whose stockholders have the same privileges and responsibilities as an unlimited partnership. 
Joint supply is the simultaneous output of two or more products from a single process or material.
The Joseph Effect is a statistical measure that indicates whether certain price movements are part of a long-term trend.
A jumbo pool is a security backed by mortgages from several issuers.
A junk bond is a fixed-income security that is rated below investment grade by one or more of the major bond ratings agencies. 
Also known as a Matilda bond, a kangaroo bond is a bond issue in the Australian market by a non-Australian company.
A Keogh Plan is a tax-deferred retirement plan available to self-employed individuals or unincorporated businesses. Congress passed legislation called the Self Employed Individuals Tax Retirement
A key currency is a currency used to set the exchange rate in an international transaction.
Key rate duration is not the same as effective duration. Effective duration is an estimate of a security's sensitivity to a parallel shift in interest rates, meaning that it assumes that interest
A key ratio is any financial ratio that is especially important, prevalent, or necessary in analyzing a company's performance in relation to other companies, the industry or the market.
A key reversal is a one-day trading pattern that may signal the reversal of a trend. Other frequently-used names for key reversal include "one-day reversal" and "reversal day."
Keynesian economics is a school of thought named after economist John Maynard Keynes.
In the finance world, a kicker is a feature that makes a security more attractive.
Kicking the tires refers to researching multiple aspects of a prospective investment in order to become as familiar as possible with the potential risks and rewards.
In the trading world, kill refers to half of a fill or kill (FOK) order, which is a client's instruction to his or her broker to either fill an order immediately and completely or cancel the
The Korean Composite Stock Price Index (KOSPI) is the main tracking index in South Korea.
A ladder option is an option contract that allows the holder to earn a profit as long as the underlying asset's market price reaches one or more strike prices before the option expires.
Laddering is a bond investment strategy whereby an investor staggers the maturity of  the bonds in his/her portfolio so that the bond proceeds can be reinvested at regular intervals.
Laggard describes a stock that fails to perform as well as the overall market or a group of peers.
Generally speaking, large cap companies have at least $8 billion of market capitalization.
A large trader is a person or entity that trades more than 2 million shares or $20 million worth of shares in a single day, or 20 million shares or $200 million worth of shares in a single month.
A large-value stock is a stock whose intrinsic value is greater than its market value.
Last fiscal year (LFY) refers to a company's most recent completed fiscal year.
The last trading day is the last time traders may trade a derivative contract before it expires.
Last twelve months (LTM), also known as trailing twelve months (TTM), is the 12-month interval occurring before a given point in time. 
Last-in, first-out (LIFO) describes a method for accounting for inventories. Under this system, the last unit added to an inventory is the first to be recorded as sold.
Last-sale reporting refers to the submission of trade details in the Nasdaq market.
Late-day trading is the practice of illicitly recording trades executed after hours as having occurred prior to the end of market trading.
Layered fees are management fees, typically in investment products, that investors pay to financial managers for the same group of assets.
In the securities industry a lead underwriter is a company, usually an investment bank, that helps companies introduce their new securities into the market by leading a syndicate of investment banks
A learning curve is the time it takes to master a concept. It is more of an idea than a chart or other visual representation of learning.
The left-hand side of a stock quote is the bid.
In the brokerage world, a leg is an individual component of a multistep trade.
Legging out means to unwind part of a transaction.
A lemming is an investor who does whatever the crowd does.
A level I quote is the current best bid and offer for a security that trades on the Nasdaq or over-the-counter markets.
A level II quote is a set of real-time trading information, including the best bid/ask prices from market makers, for a security that trades on the Nasdaq or over the counter (OTC) markets.
A level III quote is pricing information made available to registered Nasdaq market makers.
A level-load is a periodic fee (usually annual) paid by the investor during the time he or she owns the investment.  Level-load mutual funds are often referred to as "C Shares."
Liability matching is an investing strategy for investors who need to fund a series of future liabilities.
Limit orders allow you to set a price at which you want to buy or sell a stock. Unlike market orders, your purchase or sale will go though only when the price reaches the level that you
Liquid refers to the ability to transfer hard assets to cash or the state of being in a position where one has sufficient cash on hand to accommodate any and all necessary financial obligations.
Liquid market refers to any market in which there are many buyers and sellers present and in which transactions can take place with relative ease and low costs.
In the financial world, to liquidate something means to sell it for cash. Although this sounds harmless, in the corporate world the term often carries a connotation of failure, because it is most
Liquidation value refers to the value of a project or investment if it were to be sold or abandoned immediately.
Liquidity is the ability to sell an investment at or near its value.
A listed security is a stock, bond, derivative, ETF, mutual fund, or other security that trades on a national exchange such as the New York Stock exchange or the Nasdaq.
A load is a fee paid to purchase or sell a specific investment. It is expressed as a percentage of the amount invested. The term is most often used when discussing mutual funds.
A load fund is a mutual fund that carries a fee to purchase or sell its shares. This load is expressed as a percentage of the amount invested.
A locked market, also called a daily trading limit, is the maximum gain or loss allowed on a derivative or currency in one trading day.
The London Spot Fix occurs when the members of the London Gold Pool (five banks) have a conference call and set the price per ounce for several metals (gold, platinum, silver and palladium).
A long bond is a Treasury bond that is issued for an extended period of time (twenty to thirty years). 
A long straddle is an options trading strategy that involves purchasing both a call option and a put option for a particular asset with identical strike prices and expiration dates.
Long-legged doji candlesticks are one of four types of dojis -- common, long-legged, dragonfly and gravestone. All dojis are marked by the fact that prices opened and closed at the same level. If
Long-Term Equity AnticiPation Securities (LEAPS) is a registered trademark of the Chicago Board Options Exchange (CBOE). LEAPS are virtually identical to traditional exchange-traded options, but they
A lot is a securities trade for a “standard” number of trading units. In stock trading, a lot is 100 shares (also called a "round lot"). However, inactive stocks generally trade
The Macaulay duration (named after Frederick Macaulay, an economist who developed the concept in 1938) is a measure of a bond's sensitivity to interest rate changes. Technically, duration is the
Made to Stock (MTS) is a production and inventory strategy in which companies manufacture products or provide services according to their forecast of customer demand.
Main Street refers collectively to members of the general population who invest in the capital markets.
A maintenance margin is a limit after which a brokerage firm can make a margin call.
A major downtrend, or bear market, is when financial assets and markets -- as with the broader economy -- fall steadily for an extended period of time.
Major pairs are the four pairs of currencies that are most commonly traded in the foreign exchange markets.
A major uptrend, or bull market, is when financial assets and markets -- as with the broader economy -- move in an upward direction for extended periods of time.
A majority shareholder refers to a shareholder who owns over 50% of stock in a company.
Making a market is a process whereby a person or brokerage house that is always prepared to buy and sell securities in order to provide liquidity to the markets.
A make-whole call provision is a call provision attached to a bond, whereby the borrower must make a payment to the lender in an amount equal to the net present value of the coupon payments that the
A managed account is an investment account in which a financial advisor or other kind of money manager is responsible for managing in the best interests of a client or beneficiary.
A managed futures fund is an alternative asset created and maintained by a commodity trading advisor (CTA). The fund invests in commodity futures contracts. 
A management buyout (MBO) occurs when the current management of a company acquires a controlling interest or the entire interest in a company from existing shareholders.
Mandatory Convertibles are hybrid securities (bonds linked to equities) that automatically convert to equity (stock) at a pre-determined date. Common names are PERCS (Preferred Equity Redemption
The term margin has two main definitions. The first refers to the ratio of profit to revenue. The second refers to money borrowed from a brokerage firm in order to leverage an investment.
A margin account is a brokerage account that allows investors to borrow money (leverage) from the broker in order to purchase securities.
A margin call is a brokerage firm's demand that a margin-account client deposit securities or cash into their account in order to bring the account balance up to the minimum maintenance margin
Margin of safety is the amount by which a company's shares are trading below their intrinsic value.
Mark-to-management is an accounting practice that prices an asset based on what management estimates its potential value to be under normal market conditions. It is the opposite of mark-to-market.
Mark-to-market (MTM) is an accounting method that records the value of an asset according to its current market price.
Mark-to-market losses are losses in an asset's value caused solely by a decline in market price.
Mark-to-model is an accounting method where asset prices are assigned using the results of a financial model.
Markdown refers to the negative spread between the price a broker charges a client for a security and the highest price at which that security is sold between brokers. It is the opposite of markup.
A market average is the general level of prices in a stock market as expressed by a basket of frequently traded stocks.
Market breadth is a ratio that compares the total number of rising stocks to the total number of falling stocks.
Market capitalization refers to the value of a company's outstanding shares. 
The market conversion price is the price at which a convertible security is exchanged for common stock.
A market correction refers to a price decline of at least 10% of any security or market index following a temporary upswing in market prices.
Market depth refers to a security's ability to tolerate the execution of large market orders without having a large effect on the security's price.
Market discount is the loss in market value sustained by a bond following an increase in interest rates.
The strong form of market efficiency essentially proclaims that it is impossible to consistently outperform the market, particularly in the short term, because it is impossible to predict stock
Market exposure is the degree to which a portfolio invests in a particular stock or market sector.
A market identifier code (MIC) is a four-letter or digit abbreviation that represents a specific stock market.
Market if touched (MIT) is an order that will be executed only if a security reaches (touches) a specific price.
A market index is a metric that tracks the performance of a group of stocks. Some indices are designed to indicate the overall performance of the market, while others follow a particular sector.
A market index target-term security (MITTS) is a debt security that offers potential upside based on gains in a market index while limiting downside losses by guaranteeing the initial investment will
A market letter is a publication that offers information and advice about specific market sectors and types of securities.
A market maker is a person or brokerage house that is always prepared to buy and sell securities in order to provide liquidity to the markets.
A market maker spread is the difference between the bid and ask prices offered by a market maker.
A market maven is a person who keeps abreast of market news and is a successful investor.
Market momentum is the perceived strength of a positive or negative change in market prices.
Market neutral refers to an investing strategy that seeks to generate similar returns regardless of the market climate.
A market neutral fund is a mutual fund whose goal is consistent returns in any market climate.
Market on close (MOC) is a market order that is executed at the latest possible time during a trading session.
A market order is an order to trade a stock at the current market price. If you do not give your broker additional instructions, the trade will automatically be entered as a market order.
Market overhang refers to a decline in a stock's price driven by expectations that the price will experience further declines.
A market proxy is a variable that theoretically simulates the behavior of the overall market.
Market psychology refers to the manner in which the market reflects its participants' collective emotional state.
Market risk is the fluctuation of returns caused by the macroeconomic factors that affect all risky assets.
Market sentiment is the general feeling about the climate of the market as expressed by the direction of market prices.
A market strategist is an individual who makes investment recommendations based on available market information.
A market swoon is an abrupt fall in the value of a market index.
The Market Technicians Association (MTA) is a professional association for technical analysts.
Market timing is the practice of buying and selling securities based on economic trends, corporate information, and market factors. 
Market value refers to the current or most recently-quoted price for a market-traded security. It can also refer to the most probable price an asset, like a house, would fetch on the open market
Market Value Added is the difference between the capital contributed to the company by bondholders and shareholders and the final market value of the product.
Market value of equity is the total market value of all of a company's outstanding shares.
A market-linked certificate of deposit (CD), also called an indexed or equity-linked CD, is a type of CD where the rate of return is based on either a market index, a basket of equities, or a
Marketable securities are financial instruments that can be sold or converted into cash (at reasonable value) within one year. They are highly liquid investments that are generally issued by
A marketing mix is a combination of tactics a company uses to promote itself or its products. Its origins date back to the 1960s.
The Markowitz efficient set, also called the efficient frontier, is a mathematical concept that reflects the combinations or portfolios that generate the maximum expected return for various levels of
A master limited partnership (MLP) is a publicly traded limited partnership. Shares of ownership are referred to as units. MLPs generally operate in the natural resource, financial services, and real
The term matching contribution refers to a matching dollar amount contributed by an employer to the retirement savings account of an employee who makes a similar contribution, usually to a
Also known as a kangaroo bond, a Matilda bond is a bond issue in the Australian market by a non-Australian company.  
Maturity is the date on which a bond or preferred stock issuer must repay the original principal borrowed from a bondholder or shareholder.
Maturity date refers to the date on which the principal and interest associated with a debt security must be repaid to the holder in its entirety.
The McClellan Oscillator was first designed by Sherman and Marian McClellan in 1969. It is an excellent tool for determining the overbought or oversold condition of the stock market.
The measuring principle allows traders to set a specific minimum price target when trading a stock. This technique works with any well-defined technical analysis pattern, such as a head and shoulders
Medicaid is a U.S. government program that provides free or low-cost health insurance coverage for low-income people.
Mega cap is a designation for any company with a market capitalization in excess of $200 billion.
Coined the "Junk Bond King" during the 1980s, Michael Milken was instrumental in engineering a lucrative junk-bond market before being indicted on numerous counts of securities fraud. After
Generally speaking, a micro cap is a company worth between $50 million and $300 million.
A mid cap is generally described as a company with a market capitalization between $2 billion and $10 billion.
"Mine" and "yours" are colloquial references to buy and sell transactions.
Mini-sized Dow options are leveraged option contracts that use the Dow Jones Industrial Average as the underlying asset.
Minimum investment is the least amount of money an investor must invest to take part in a specific investment.
A minimum price contract is a futures contract with a price floor.
A minor downtrend is a corrective movement in the market -- lasting less than three weeks -- that goes against the direction of a secondary uptrend.
A minor uptrend is a corrective movement in the market -- lasting less than three weeks – that goes against the direction of a secondary downtrend.
Also known as a downtick, a minus tick occurs when a security sells at a price less than the preceding sale. A minus tick is the opposite of an uptick.
The Monday effect predicts that performance in equity markets will reflect the trends that were influencing the market toward the end of trading the previous Friday.
A money manager is an individual responsible for managing an investment portfolio, providing investment advice and planning portfolio strategies.
The money market yield is the interest rate earned by investing in highly liquid and short-term securities. It is calculated by adjusting the holding period to its bank year (360 days) equivalence
Moody's Corporation (NYSE:MCO) is a publicly traded financial services company.
The Morningstar risk rating is Morningstar's evaluation of a mutual fund's level of risk.
In the finance world, the mosaic theory refers to a research approach whereby the analyst arrives at a conclusion by piecing together bits of publicly available information.
The moving average is a popular technical indicator which investors use to analyze price trends. It is simply a security's average closing price over the last specified number of days.
Moving Average Convergence Divergence, or MACD (pronounced "Mack-Dee") is a technical analysis indicator developed by famous market technician Gerald Appel. 
A multiple is a relative valuation metric used to estimate the value of a stock.
A municipal bond, commonly referred to as a "muni" bond, is a debt security issued by a state or local government.
A municipal bond fund is a mutual fund that invests primarily in securities issued by municipalities. 
Municipal investment trusts (MITs) are entities that hold a stake in numerous municipal bonds and then sell shares to the public that represent an interest in those bonds. When the municipal bonds
The Municipal Securities Rulemaking Board (MSRB) regulates municipal bond underwriters and dealers in an attempt to prevent fraud and manipulation in the issuance and trading of municipal bonds.
Mutual funds are open-ended investment companies that pool investors' money into a fund operated by a portfolio manager. This manager then turns around and invests this large pool of shareholder
A naked call is an options strategy in which an investor sells a call option unassociated with units of the underlying security.
Naked option refers to an option contract which does not comprise ownership of the underlying security by the purchasing or selling party. It is the opposite of a covered option.
Naked position refers to any securities holding which has not been hedged for risk by any accompanying options or futures contracts.
A naked put is a put option which is unaccompanied by the actual units of the underlying security specified in the contract.
Naked shorting refers to the practice of shorting units of a given security in advance of ensuring whether or not they can be borrowed.
A naked warrant is a warrant that is not attached to a bond or preferred stock.
A nano cap is a company with the smallest market capitalizations in the market place, typically below $50 million.
In the futures market, a narrow basis occurs when the spot price of a commodity is close to the futures price of the same commodity.
Nasdaq, which stands for the National Association of Securities Dealers Automated Quotation system, is a computerized system for stock trading.
The Nasdaq 100 index is one of the most frequently cited "technology" indexes.
The Nasdaq Composite is a broad market index that encompasses about 4,000 issues traded on the NASDAQ National Market. The index first started in February of 1971 with a base value of 100.
The National Best Bid and Offer (NBBO) is the highest bid and lowest offer price quoted on Nasdaq.
The national market system (NMS) is a system that regulates the disclosure and execution of trades across all exchanges.  
Near money is a term for highly-liquid assets that are quickly and easily converted into cash. They may also be referred to as cash equivalents.  Examples of Near Money  Examples of
Negative amortization occurs when the principal balance on a loan (usually a mortgage) increases because the borrower's payments don't cover the total amount of interest that has accrued.
Negative arbitrage occurs when the interest rate a borrower pays on its debt is higher than the interest rate the borrower earns on the money that will be used to repay the debt.
A negative assurance is an auditor's written statement that an audit did not uncover any signs of fraud or violations of accounting rules.
Negative butterfly refers to a change in the yield curve whereby medium-term yields change by a greater magnitude than short-term and long-term yields. It is important to note that the negative
Used in foreign exchange (forex), a negative carry pair refers to a situation in which the investor buys the currency of a country with low interest rates and shorts the currency of a country with
Negative convexity refers to the shape of a bond's yield curve and the extent to which a bond's price is sensitive to changing interest rates.
Negative correlation describes a relationship in which changes in one variable are associated with opposite changes in another variable.
A negative directional indicator (known as negative DI) is a technical measure of a downtrend's momentum.
Negative equity occurs when liabilities exceed the value of assets.
Negative gearing is an investment strategy whereby an investor can deduct any shortfall in income from an investment that does not cover the interest expense and maintenance costs associated with
Negative goodwill, also called a bargain-purchase amount, occurs when a company buys an asset for less than its fair market value. Negative goodwill is the opposite of goodwill.
In the trading world, negative obligation refers to a stock specialist's responsibility to avoid buying or selling shares for their own accounts in order to match orders. The New York Stock
A negative return is a loss on an investment.
A negative volume index (NVI) identifies days in which trading volume of a particular security is substantially lower than other days.
Net Advantage to Leasing (NAL) refers to the money a company or individual saves from leasing an asset rather than buying it.
Most commonly used in reference to mutual or closed-end funds, net asset value (NAV) measures the value of a fund's assets, minus its liabilities. NAV is typically calculated on a per-share basis.
In finance, the net asset value (NAV) of a company is its total assets minus total liabilities. It is more often referenced concerning investment funds where NAV is the underlying value of one share
In finance, the net asset value per share (NAVPS) is the value of one share of a mutual fund.
Net assets are what a company owns outright, minus what it owes. Net assets provide a rough guide for the value of company resources. Typically, the higher a company's net asset value, the higher the
Net book value is the value at which a company carries an asset on its balance sheet. It is equal to the cost of the asset minus accumulated depreciation. 
Net cash flow refers to the difference between a company's cash inflows and outflows in a given period. In the strictest sense, net cash flow refers to the change in a company's cash balance as
Net change refers to the difference in closing price of a stock, bond, mutual fund, ETF or other traded financial instrument from one period to the next.
The net current asset value per share (NCAVPS) equals a company's current assets divided by its number of shares outstanding.
Net debt is a company's total debt less cash on hand.
Net debt to assessed valuation is a term used in the municipal bond world to compare the value of debt to the value of the issuer's assets purchased or assessed.
Net debt to estimated valuation is a term used in the municipal bond world to compare the value of debt to the market value of the issuer's assets. It is not the same as net debt to assessed
Net earnings represent the amount of sales revenue left over after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a
For businesses, net income indicates how well a company is managing its profit (both earnings and expenses). For individuals, this number is defined more loosely: it can refer to your gross
Net income after taxes (NIAT) is the number of sales dollars remaining after all operating expenses, interest, depreciation, taxes and preferred stock dividends have been deducted from a firm's
Net interest cost (NIC) is a way to compute the average annual interest expense for a bond issue. 
Net interest income is the difference between interest received from assets and interest paid on liabilities. 
Net interest margin is the ratio of net interest income to invested assets. 
Net interest rate differential is the difference in interest rates associated with two different currencies or two different economic regions.
Net investment is the measure of a company's investment in capital assets, such as the property, plants, software and equipment that it uses for operations.
Net investment income is what an investment company receives in capital gains, dividends and interest payments, less administrative fees. 
Net liquid assets are cash and securities that can be converted to cash quickly, minus current liabilities.
An investor is net long when he or she has more long positions than short positions for a particular asset, market sector or portfolio. The concept also applies to commodities trading. Net long is
A company reports a net loss when its expenses exceed revenues during a specific period of time. A net loss is the opposite of net income or net profit, which is when a organization's 
Net margin is the percentage of revenue remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's
A net operating loss (NOL) is a negative profit for tax purposes. It usually occurs when a company's tax deductions exceed its taxable, making the company unprofitable.
Net operating profit after tax (NOPAT) is a measure of profit that excludes the costs and tax benefits of debt financing. put another way, NOPAT is earnings before interest and taxes (EBIT) adjusted
Net operating profit less adjusted taxes (NOPLAT) is a measure of profit that includes the costs and tax benefits of debt financing. put another way, NOPLAT is earnings before interest and taxes (
A net option premium is the difference between the price paid to purchase an option and the price received from the sale of a different option.
Net present value (NPV) reflects a company’s estimate of the possible profit (or loss) from an investment in a project. Companies must weigh the benefits of adding projects versus the benefits of
Net Present Value of Growth Opportunities (NPVGO) is the simply the present value of additional cash flows associated with an acquisition, net of the purchase price of the acquisition. Essentially,
The net present value rule is the idea that investors and managers should only engage in deals, projects or transactions that have positive net present value (NPV). 
Net profit impacts the “take-home” profit of a company. It’s used to calculate net profit margin, which puts a value metric on a company. For this reason, net profit and net profit margin are useful
Net profit margin is the percentage of revenue remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company
Net profits interest is the proportion of net profits paid out to a particular investor, according to his or her percentage stake in the company. 
The net realizable value (NRV) of an asset is the money a seller expects to receive for the sale of an asset after deducting the costs of selling or disposing of the asset.
Net receivables refers to the net amount of money remaining after deducting the provision for bad debt. It is primarily used in businesses that sell on credit.
A net revenue pledge requires issuers of municipal bonds to use their net revenues (revenue minus expenses) to pay the principal and interest of the municipal bonds before any other use.
In finance, net short refers to holding more short positions than long positions in a given security, sector or portfolio. Net short is the opposite of net long.
Net unrealized appreciation (NUA) refers to the difference between the cost of a security or investment and the current market value of that security or investment.
In trading, net volume refers to the difference between a security's uptick volume and its downtick volume.
As the name implies, new highs/new lows represents the number of all stocks making new 52-week highs or lows. The result is graphed, and the aggregate number of new highs and new lows is used as a
A new issue is a never-before-offered security.
The New York Board of Trade (NYBOT), founded in 1870, is a physical commodity futures exchange located in New York City. The NYBOT trades options and futures on cotton, sugar, coffee, orange juice,
The New York Mercantile Exchange (NYMEX), founded in 1872, is the world's largest physical commodity futures exchange, headquartered in lower Manhattan. NYMEX handles trades worth billions of dollars
The New York Stock Exchange (NYSE) is the oldest stock exchange in the United States, and it's located on Wall Street in lower Manhattan. It is the world's largest stock exchange by market
A no load fund, also called a "no transaction fee mutual fund," is a mutual fund that does not charge a sales commission to investors. Shares of no load funds are purchased directly from the fund
A non-cash item is an entry on an income statement or cash flow statement correlating to expenses that are essentially just accounting entries rather than actual movements of cash.
A non-financial asset has a value based on its tangible characteristics and properties.
Non-GAAP earnings (GAAP stands for Generally Accepted Accounting Principles) are measures of profit that don't follow a standard calculation for companies and are not necessarily required in their
In banking, non-interest income is revenue derived mostly from fees and other activities outside the core activity of lending.
A non-operating asset is an asset that generates income, but is unrelated to the core operations of the company.
A non-qualified plan is a retirement plan to which the IRS does not grant specific tax benefits.
Noncallable refers to a security that cannot be redeemed by the issuer prior to maturity.  Sometimes, it is referred to as non-redeemable.
A nonqualified option (NQO) is the right but not the obligation to purchase shares of a company, usually the option holder's employer, for a fixed price by a certain date.
Also called a positive yield curve, a normal yield curve is one in which short-term yields are lower than long-term yields.
Notional principal amounts never change in an interest rate swap, and they are the core of the calculations involved in these transactions.
Notional values are most discussed in derivatives and currency transactions because those transactions often involve hedging, which means that a small amount of money can influence a very large
The null hypothesis (H0) suggests that there is no statistical significance in a given set of observations. This implies that any kind of deviation or importance you see in a data set is only the
People who enjoy numismatics often have rare coins that can be quite valuable. But not all numismatics fans have to have money to keep collections. Using a fun site such as wheresgeorge.com, which
The New York Stock Exchange (NYSE) is open Monday through Friday from 9:30 a.m. to 4:00 p.m. Eastern Time. However, the NYSE does observe certain holidays.
Obsolete inventory is inventory that is essentially useless and/or unsellable.
The October Effect is the theory that stock prices will fall in the month of October.
An odd lot is an order for anything less than 100 shares. This is the opposite of a "round lot," which are orders in multiples of 100 shares. However, thinly traded stocks sometimes trade in
The odd-lot theory states that an increase in odd lot activity is a buy signal in a market.
An odd-lotter buys securities in odd lots. An odd lot is a group of shares that is not a multiple of 100 (100 shares is called a round lot).
OEX is the ticker symbol of index options on the S&P 100, which trade on the Chicago Board Options Exchange (CBOE).
Off-balance-sheet financing is an accounting method whereby companies record certain assets or liabilities in a way that keeps them from appearing on the balance sheet.
An off-floor order is an investor's request to a broker to buy or sell securities.
An off-the-run Treasury is any Treasury bill or note that is not part of the most recent issue of the same maturity.
An off-the-run Treasury yield curve is a yield curve based on the maturities, prices, and yields of Treasury bills or notes that are not part of the most recent issue of Treasury securities.
An offering circular is an abbreviated prospectus.
An offset is a transaction that cancels out the effects of another transaction.
An offsetting transaction is a transaction that cancels out the effects of another transaction.
An offshore banking unit is a bank branch in another country.
An offshore mutual fund is a mutual fund based in another country.
Also called tar sands, oil sands are areas of the ground that contain a viscous form of oil called bitumen.
On Balance Volume (OBV) was designed by Joseph Granville to track the flow of volume in and out of a stock or index. Essentially, OBV is a running total of volume. An OBV line typically takes the
A One-Cancels-All (OCA) order is a group of limit orders linked together within a brokerage account. If one order is executed, all other linked orders are automatically canceled.
In trading, a one-cancels-the-other order is an instruction given when placing two orders simultaneously. If one part of an order on a security is executed, then the other part is canceled. Such an
Most investors have made decisions that they eventually regret. One-night-stand investments are simply decisions that investors regret sooner rather than later, turning what are supposed to be long-
One-sided markets can be volatile and very stressful for market makers. Market makers are obligated to facilitate trading in particular stocks even if doing so is inconvenient or less profitable. In
One-way markets can be volatile and very stressful for market makers. Market makers are obligated to facilitate trading in particular stocks even if doing so is inconvenient or less profitable. In
In the stock markets, open refers to the beginning of the trading day or the price of a security at the beginning of the trading day.
An open order is an instruction to buy or sell securities that has not been executed or cancelled.  Another term used is "backlog order."
Open outcry is a trading mechanism that uses verbal bids and offers. It is usually conducted in trading pits on futures and options exchanges.
Opening bell refers to the beginning of the trading day on an exchange. However, in the United States, only the New York Stock Exchange (NYSE) rings an actual bell every day.
The open is the start of a new day, though it is important to note that that doesn't necessarily mean trading hasn't been going on right before the open. After-hours markets remain open as do
Operating cash flow (OCF) is a measure of the cash generated or used by a company in a given period solely related to core operations. OCF is not the same as net income, which includes transactions
Operating cash flow margin is cash from operating activities as a percentage of sales in a given period. 
The operating cash flow ratio is cash from operating activities as a percentage of current liabilities in a given period. 
Operating earnings is a measure of profitability that tells investors how much of revenue will eventually become profit for a company. The formula for calculating operating earnings is:Operating
An operating expense is a day-to-day expense incurred in the normal course of business. These expenses appear on the income statement.
The operating expense ratio (OER) is equal to a company's operating expenses divided by its revenues. The measure is very common in real estate analysis, whereby analysts are measuring the costs to
Operating income is the amount of revenue left after subtracting operating expenses and cost of goods sold (COGS). Operating income is a measure of profitability directly related to a company’s
Operating income before depreciation and amortization (OIBDA) is a measure of the income generated or used by a company in a given period exclusive of the company's capital spending decisions and its
Operating leverage is the ratio of a company's fixed costs to its variable costs. 
Operating margin is a measure of profitability. It indicates how much of each dollar of revenues is left over after both costs of goods sold and operating expenses are considered. The formula is
Operating netback is a measure used in the oil and gas industry to reflect the net profit on oil and gas after royalties, production, and transportation expenses. 
Also called earnings before interest and taxes (EBIT), operating profit calculates the profits earned from a company’s core business after subtracting the cost of goods sold (COGS), operating costs,
Operating ratio is the ratio of operating expenses to net sales. Operating ratio is also a common term in the insurance business, where it refers to an issuer's profit from underwriting and
Operating revenue is the sales associated with a company's core, day-to-day operations.
Opportunity cost is the return on an investment/opportunity you missed out on, compared to the return on the investment that you chose. To determine what was lost (or gained), opportunity cost may be
An option is a financial contract that gives an investor the right, but not the obligation, to either buy or sell an asset at a pre-determined price (known as the strike price) by a specified date (
Option pricing theory is the theory of how options are valued in the market. The Black-Scholes model is the most common option pricing theory.
Options backdating occurs when a company grants an option that is dated prior to the date the company granted the option.
The Options Clearing Corporation (OCC) is a clearinghouse for equity options and is a guarantor of the obligations in listed options contracts. 
An options contract is an agreement between a buyer and seller that gives the purchaser of the option the right to buy or sell a particular asset at a later date at an agreed upon price. 
Thanks to an ability to spot undervalued companies and purchase them on the cheap, Buffett has made many people very wealthy over the course of his five-decade career.
Ordinary income is not a capital gain, dividend or other income subject to special taxation.  
Original cost is the total cost attributed to purchasing an asset.
Orphan stocks is a colloquial term for stocks that analysts and investors seem to disregard.
"Out of the money" describes an option that is worthless if exercised today. In the case of a call option, the option has no intrinsic value because the current price of the underlying stock
Outstanding shares are common stock authorized by the company, issued, purchased and held by investors.
An over the counter security is traded through a dealer network rather than through a centralized, formal exchange (such as the NYSE, Nasdaq, or London Stock Exchange). Assets traded OTC are usually
The over-the-counter (OTC) market, also known as the over-the-counter bulletin board (OTCBB), is a quotation service offered by the National Association of Securities Dealers (NASD) that provides
Overvalued describes a security for which the market price is considered too high for its fundamentals. Some metrics used to evaluate whether a security is overvalued are: P/E ratio, growth potential
Overweight refers to a given security which has been disproportionately allocated in an investment portfolio relative to a benchmark. It is the opposite of underweight.
The p-value is used in hypothesis testing to determine whether to accept or reject the null hypothesis. It is the smallest level of significance where the null hypothesis can be rejected. The p-
The Pacific Exchange (PCX) was a stock exchange based in San Francisco and Los Angeles.
In the finance world, painting the tape means to trade securities in a manipulative way in order to influence the reported trading data for those securities.
A pairoff, also known as "pairing off," occurs when a brokerage firm buys and sells short and long positions that offset one another and then settles those trades in cash.
A pairs trade occurs when an investor buys two stocks in the same industry.
Panic buying refers to the purchase of a stock immediately after a sudden, substantial price increase.
Panic selling is the sudden and widespread selling of a security.
Paper loss refers to the amount that would be lost on a security if it were sold.
Paper profit refers to the amount you would gain on a security if it were sold.
Paper trading is simulating market trading (buying and selling). 
Par value is the face value of a bond. It is the principal amount that the lender (investor) is lending to the borrower (issuer).
The Paris Hilton Stock Index is a list of companies that benefit from the actions of and associations with Paris Hilton.
A partial redemption occurs when an investor withdraws some of a security's value.  
Participating preferred stock gives stock holders priority over common stock holders for payment of dividends and proceeds from liquidation of a company.
Pass-through income is sent from a pass-through entity to its owners. The income is not taxed at the corporate level -- it is only taxed at the individual owners' level.A pass-through entity is a
Pass-through securities receive payments from an intermediary that collects payments from a pool of assets.
Passive income is income generated from any business activity in which the earner does not participate. When people describe the dream of "getting rich quick" and "striking it big," they are
Passive investing is a strategy focused on achieving long-term appreciation of portfolio values with limited day-to-day management of the portfolio itself.
A passive loss is a financial loss from rental property, limited partnership or other activities in which the investor is not materially involved.
The term "payee" refers to an individual or entity that will receive a payment. It can also be referred to as the beneficiary in situations that pertain to a benefactor. 
A payment in kind (PIK) bond is a bond that pays interest in additional bonds instead of cash.
The payout ratio, also known as the dividend payout ratio, is the percentage of a company's earnings paid out to investors as cash dividends.
Penny stocks are small-cap equity shares that trade in the over-the-counter market for prices between several cents and ten dollars.
Per share basis is a carefully scrutinized metric that is often used as a barometer to gauge a company's profitability per unit of shareholder ownership. In many cases, cash flow per share is one
In finance, a perfect hedge is an investing strategy intended to protect an investment or portfolio against all losses. It usually involves securities that move in the opposite direction than the
A perpetual bond is a debt with no maturity date. Investors may collect interest from these bonds indefinitely much as they would expect from a dividend-paying stock or preferred stock. Such a bond
A personal financial advisor (also spelled personal financial adviser) is an educated investment professional who helps people set and meet long-term financial goals.
Petrocurrency, also commonly referred to as "petrodollars," is cash -- usually U.S. dollars -- resulting from the sale of oil and deposited by oil exporters into foreign (usually American) banks
The Philadelphia Gold and Silver Index (Nasdaq: XAU) is traded on the Philadelphia Stock Exchange and is made up of 16 precious metal mining companies.
The Philadelphia Semiconductor Index, or SOX, is an index created by and traded on the Philadelphia Stock Exchange. It was introduced on December 1, 1993 with a split-adjusted value of 100. The
Pink Sheets is a publication compiled daily by the National Quotation Bureau that shows over-the-counter (OTC) stocks' bid and ask prices and the dealers that exchange them. 
A point-and-figure chart is a graph which records discrete price changes without accounting for an associated period of time. They are often used in technical analysis as a means of predicting future
Political risk is the risk of financial, market or personnel losses because of political decisions or disruptions. Also known as "geopolitical risk."
A Ponzi scheme is an investment scam that pays existing investors out of money invested by new investors, giving the appearance of earnings and profits where there are none. Ponzi schemes are also
Pork Bellies are a major commodity traded on the Chicago Mercantile Exchange.
Portfolio hedging describes a variety of techniques used by investment managers, individual investors and corporations to reduce risk exposure in an investment portfolio. Hedging uses one investment
Portfolio management refers to the professional management of securities and other assets. Also referred to as "asset management" and "wealth management."
A portfolio manager is responsible for investing a fund's assets, overseeing investment strategy and carrying-out day-to-day trading.
Position limit refers to the ceiling placed on the number of contracts on a single security which may be held by an individual or cooperative group.
Positive correlation describes a relationship in which changes in one variable are associated with the same kind of changes in another variable.
Pre-market trading is the trading that occurs on electronic market exchanges before regular stock market trading hours begin.
Pre-tax operating income is a company's operating income before taxes. The formula for pre-tax operating income is: Pre-Tax Operating Income = Gross Revenue - Operating Expenses –
Preferred shares represent an ownership stake in a company -- in other words, a claim on its assets and earnings. However, as the term suggests, "preferred" shares carry certain advantages.
Like shares of common stock, shares of preferred stock represent an ownership stake in a company -- in other words, a claim on its assets and earnings. However, as the term suggests, "preferred
A premium put convertible bond is a bond that can be redeemed by the investor at premium before its maturity date.
Premium to net asset value (NAV) refers to a situation where shares of a closed-end stock fund are trading at a price higher than the fund's net asset value per share. For example, a fund could
Prepayment risk is the risk that a borrower will pay off a loan earlier than expected.
Present value describes how much a future sum of money is worth today. 
Preservation of capital is an investment strategy that focuses on preventing any losses of an investment's face value.
Previous close shows what the price of a stock or market index was when the market closed on the previous trading day.
Price action is a term often used in technical analysis to interpret and describe price movements of securities. 
A price band is a price floor and a cap between which a seller will let buyers place bids on a security, usually during an initial public offering (IPO)
A price by volume (PBV) chart is a horizontal histogram that shows a cumulative total of how many shares of a stock traded at a given price.
A price cap regulation places a ceiling on the amount companies in a given industry (typically utilities and telecommunications providers) can charge for services.
In the stock market, a price change is the difference in trading prices from one period to the next or the difference between the daily opening and closing prices of a share of stock.
In technical analysis, a price channel is an upper limit (called the resistance) and a lower limit (called the support) in which a security's price tends to stay.
Price efficiency simply refers to whether the price of a security incorporates all the available information about the security.
A price multiple is a ratio that combines some measure of a company's performance and the company's stock price.
Price per flowing barrel is a measure of an oil and gas company's valuation as compared to the number of barrels of oil or gas it produces.
Also called relative strength, price persistence is the tendency of a security's price to stay on trend relative to a market index such as the S&P 500. It is a measure of momentum.
A price ratchet is a trigger that changes the price of a security.
The price rate of change is simply the percentage change in a security's price between two periods. 
Price risk is simply the risk that the price of a security will fall.
Price talk refers to discussions about the price of a pending initial public offering (IPO) or upcoming bond issue. 
A price target is an analyst's expectation for the future price of a security. 
Price tension refers to the presence of a large bid-ask spread.
Price transparency is the ability to know all of the bid prices, ask prices, and trading quantities for a given stock, good, or service at any point in time.
A price-based option is a derivative based on the price of an underlying debt security, usually a bond.
The price-earnings relative is a comparison of a stock's P/E ratio to the cumulative P/E ratio of a related market index.
The price-to-book ratio measures a company's market price in relation to its book value. The ratio denotes how much equity investors are paying for each dollar in net assets. Book value, usually
The price-to-cash flow ratio (P/CF) is used to evaluate the price of a company's stock as compared to the amount of cash flow it generates.
The price-to-earnings ratio (P/E) is a valuation method used to compare a company’s current share price to its per-share earnings.
The price-to-free cash flow ratio (P/FCF) is a valuation method used to compare a company’s current share price to its per-share free cash flow.
The price-to-innovation-adjusted earnings ratio is used to evaluate the price of a company's stock as compared to its earnings when adjusted for the amount the company spends on R&D.
The price-to-research ratio is used to evaluate the price of a company's stock as compared to its ability to generate future profits from new products.
The price-to-sales ratio helps determine a stock’s relative valuation. The formula to calculate the P/S ratio is:P/S Ratio = Price Per Share / Annual Net Sales Per Share
The price-to-tangible book value ratio measures a company's market price in relation to its tangible book value. The ratio denotes how much investors are paying for each dollar of physical assets.
A price-weighted index is an index in which the member companies are weighted in proportion to their price per share, rather than by number of shares outstanding, market capitalization or other
The price/earnings-to-growth and dividend yield ratio (PEGY) demonstrates how much the market is willing to pay for earnings growth and dividend yield. By incorporating dividend yield, the PEGY ratio
The PEG ratio is a derivative of the P/E ratio that takes into account future growth in earnings. 
Principal-only STRIPS are synthetic zero-coupon bonds that are based on the principal component of Treasury securities.
Private equity is money for investments made directly in private companies or in public companies that become private.
A private-purpose bond is a municipal bond that uses a significant amount of its proceeds to fund private activities or benefit private parties.
Pro rata refers to the proportional distribution of a sum across a number of units.
Profit and loss (P&L) statements are one of the three financial statements used to assess a company’s performance and financial position. The two others are the balance sheet and the cash flow
Profit before tax measures a company's operating and non-operating profits before taxes are considered. It is the same as earnings before taxes.
Profit taking is the act of selling stock to take advantage of a sharp rise in the stock price.
A profit warning is a public communication from a company that its earnings will fall below expectations.
Program trading refers to automated trading by investors using computer programs. 
A prospectus is a legal document that is required by the Securities Exchange Commission (SEC) to accompany securities or investment offerings for sale. A prospectus contains key facts and information
An investor employs a protective put strategy when he purchases a put option of a stock of which he already owns shares.
A protective stop is a stop-loss order put in place to guard against losses beyond a specific threshold.
A public limited company is a company which offers equity shares with limited liability to public investors on a registered exchange.
A public offering is a process of issuing new securities for sale to the public.  
Public offering price (POP) refers to the price at which shares of a company are issued in an initial public offering (IPO)
A public-purpose bond is a municipal bond that is used to fund projects that benefit the general public rather than private groups or individuals. Public-purpose bond contrast with private-purpose
Pump and dump refers to an investment scam wherein optimistic, but untrue, statements are publicized about a specific stock in order to artificially increase the price through higher demand.
A pure yield pickup swap describes an investing strategy where an investor exchanges lower yield bonds for higher yield bonds.
A put bond permits the bond holder to force the issuer to repurchase the security before maturity. 
A put option is a financial contract between the buyer and seller of a securities option allowing the buyer to force the seller (or the writer of the option contract) to buy the security.
Put-call parity refers to the relationship between put and call options for a given security, strike price and expiration date. Under put-call parity, the option prices should match, yielding no
The put/call ratio is a popular sentiment indicator based upon the trading volumes of put options compared to call options. The ratio attempts to gauge the prevailing level of bullishness or
Putable bonds are bonds that give the holder the right to sell his or her bond to the issuer prior to the bond's maturity date.
Pyramiding refers to purchasing additional units of a security with unrealized profits on open trades.
The Q ratio is a measure of how overpriced or underpriced the whole stock market is. It is based on Tobin's Q, which measures a firm's assets in relation to its market value. The formula for
QQQQ was the ticker for the Nasdaq 100 Index Trust ETF (it is now QQQ).
Quadrix is a system that calculates stock values.
Quadruple witching refers to the third Friday of every March, June, September and December. On these days, market index futures, market index options, stock options and stock futures expire, usually
A qualified automatic contribution arrangement (QACA) is a way to automatically enroll employees in a defined contribution plan like a 401(k). 
A qualified distribution refers to a tax and penalty-free withdrawal from a Roth IRA.
A qualified opinion is a cautionary written notice from an auditor stating that a company has not complied with generally accepted accounting principles (GAAP). 
A qualified reservist is a member of the military reserves who is eligible to make an early withdrawal from an individual retirement account (IRA).
A qualified retirement plan is a plan to which the IRS grants specific tax benefits.
A qualified special representative agreement (QSR) is a National Securities Clearing Corporation (NSCC) agreement that allows one broker-dealer to send a trade to a clearinghouse on behalf of another
A qualified stock option is a type of company share option granted exclusively to employees.  It confers an income tax benefit when exercised. Qualified stock options are also referred to as
A qualifying disposition is the sale, transfer or exchange of stock that an investor acquires from an incentive stock option (ISO) or employee stock purchase plan (ESPP) and is taxed at the capital
A qualifying investment is a contribution to a retirement plan made with pre-tax income.
Qualitative analysis is the use of non-quantifiable methods to evaluate investment or business opportunities and make decisions. This is different from quantitative analysis, which relies on a
A quant fund is typically a mutual fund that picks investments based solely on mathematical analysis.
Quantitative analysis is the use of math and statistical methods to evaluate investment or business opportunities and make decisions.
Quantitative trading is an investment strategy based on picking investments solely on mathematical analysis.
A quarterly report is a set of financial statements issued by a company every three months. Public companies in the United States file this report via the Securities and Exchange Commission (SEC)
A quartile is one of four equal parts.
Quick assets are assets that can be converted to cash quickly. Typically, they include cash, accounts receivable, marketable securities, and sometimes (not usually) inventory.
The quick ratio (also known as the acid-test ratio) offers insight into how well a company can meet its short-term obligations. As in chemistry, an acid test provides fast results. The quick ratio
Quid pro quo is a Latin phrase that literally means "something for something." The phrase usually indicates an exchange of goods or services of roughly equivalent value.
The quiet period refers to the waiting period between a company filing a registration statement with the US Securities and Exchange Commission (SEC) and the time when the SEC declares the statement
A quintile is one of five equal parts.
Quota can refer to a measure that sets the limits, either minimum or maximum, on a particular activity.
Quotation is the long form of quote, which refers to stock quote. A stock quote is an estimate of price or a price at which one party is willing to buy or sell a certain number of shares of stock
A quote is an estimate of price or a price at which one party is willing to buy or sell from the other. In the trading markets, a quote is the bid and ask price for a security.  
Also called secondary currency or counter currency, a quote currency is the currency in a currency pair.
Quote stuffing occurs when traders place a lot of buy or sell orders on a security and then cancel them immediately afterward, thereby manipulating the market price of the security. Manipulating the
Quoted price refers to stock, bond or other security quotes. A stock quote is an estimate of price or a price at which one party is willing to buy or sell a certain number of shares of stock from the
R-squared, usually represented as R2, is a technique that evaluates the statistical relationship between two series of events. It is commonly used to describe the portion of a security's movement
A rainbow option is an option linked to two or more underlying assets.
A rally is a period of hours, days, weeks, months, or sometimes years during which securities prices consistently rise.  
The random walk theory states that market and securities prices are random and not influenced by past events. The idea is also referred to as the "weak form efficient-market hypothesis."
Rate of Change (ROC), is the percentage change in price over a specified time frame. It is one of the most basic ways to measure momentum.
A rate of return is measure of profit as a percentage of investment.
A rate trigger is a change in interest rates that prompts a bond issuer to call its bonds.  
Ratio analysis is the exercise of calculating various pieces of financial data in relation to one another.
A real interest rate is an inflation-adjusted interest rate.
A real rate of return is a return on an investment that is adjusted for inflation, taxes or other external factors.
A real-time quote is a stock quote that feeds directly from the exchange and does not have a time delay.  
Rebalancing is the adjustment to an investment portfolio that realigns the investor's holdings with their targeted allocation of assets.
The receivables turnover ratio is a company's sales made on credit as a percentage of average accounts receivable. The formula for receivables turnover ratio is: Receivables Turnover = Net
A recession-proof investment does well or at least remains stable during economic contractions.
A record high is the highest price a security achieves in a given time period.
A record low is the lowest price a security achieves in a given time period.  
A rectangle formation describes a price pattern where supply and demand are in approximate balance for an extended period of time. In such a scenario, the shares tend to move in a narrow range,
Recurring revenue is revenue that a company has reasonable assurance will occur at regular intervals in the future.  
A redundant asset is an asset that generates income, but is not linked to the fundamental operations of the company.
Refunding protection is bond provision that keeps an issuer from using cheaper debt to redeem a bond issue before it matures.
Regression is a statistical method used in finance and other fields to make predictions based on observed values. It is a measure of how correlated a group of actual observations are to a model
Reinvestment rate is the rate at which an investor can reinvest cash flows from an investment.
Reinvestment risk is the chance that an investor will not be able to reinvest cash flows from an investment at a rate equal to the investment's current rate of return.
Also called price persistence, relative strength is the tendency of a security's price to follow the trend of an index like the S&P 500. It is a measure of momentum.
The Relative Strength Index (RSI) was first developed by renowned technical analyst J. Welles Wilder. It is not to be confused with relative strength, which compares a stock's price performance to
The relative strength line compares a stock's price performance against that of the overall market, usually as measured by the S&P 500. However, if the trader desires, the comparison can be
Also called systematic risk or non-diversifiable risk, relevant risk is the fluctuation of returns caused by the macroeconomic factors that affect all risky assets.  Diversifiable risk is
A reserve report is filed by companies in the oil and gas industry. It estimates remaining quantities of oil and gas (reserves) expected to be recovered from existing properties.
Also called the abnormal earnings valuation model, the residual income model is a method for predicting stock prices.
In technical trading analysis, resistance is an upper limit in a price channel in which a security’s price tends to stay.
Restricted stock is stock that the owner cannot sell immediately or under certain conditions.
A retail investor is an individual who purchases securities for his or her own personal account rather than for an organization. Retail investors typically trade in much smaller amounts than
Retained capital is the sum of a company's profits, after dividend payments, since the company's inception. It can also be called retained earnings, earned surplus, or accumulated earnings.
A retracement is a temporary reversal in the movement of a stock's price. 
Return of capital (ROC) is a payment from a security to an investor from funds that were not derived from net income.
Return on assets (ROA) is a financial ratio that can help you analyze the profitability of a company. ROA measures the amount of profit a company generates as a percentage relative to its total
Return on capital is a profitability ratio. It measures the return that an investment generates for capital contributors, i.e. bondholders and stockholders. Return on capital indicates how effective
Return on invested capital (ROIC) is a profitability ratio. It measures the return that an investment generates for those who have provided capital, i.e. bondholders and stockholders.  ROIC
Return on net assets is a metric which measures a company's financial performance with regard to fixed assets combined with working capital.
Return on total capital is a profitability ratio. It is a measure of the return an investment generates for those who contribute capital, i.e. bondholders and stockholders.  Return on total
Revenue bonds are municipal bonds that are issued to fund specific projects that generate their own revenue.
Revenue per available room, or RevPAR for short, is a ratio commonly used to measure financial performance in the hospitality industry. The metric, which is a function of both room rates and
Revenue per employee measures the average revenue generated by each employee of a company. 
A reverse split is a consolidation of a corporation's shares according to a predetermined ratio.
Rising star companies have a low credit rating (often "junk"), but only because they are new to the bond market or still establishing a track record. 
Risk averse is an oft-cited assumption in finance that an investor will always choose the least risky alternative, all things being equal.
A risk free rate of return, often denoted in formulas as rf,, is the rate of return associated with an asset that has no risk (that is, it provides a guaranteed return). It is also commonly referred
A risk lover is an investor who has a high propensity to engage in risky investments. A risk lover is the opposite of a risk-averse investor.
A risk-free asset is an asset that provides a virtually guaranteed return. 
A road show is a presentation made about an investment opportunity usually given by a representative of a company at the offices of potential investors. 
ROI (Return on Investment) measures the gain or loss generated on an investment relative to the amount of money invested. ROI is usually expressed as a percentage and is typically
The rolling EPS is a variation of the earnings per share (EPS) metric which measures a company's profitability.
Rolling returns are the returns on an investment measured over several periods.
A Roth IRA is a type of Individual Retirement Account (IRA) for individuals who fall below certain income thresholds. One of the primary benefits to investing in a Roth IRA is that
A round lot is a securities trade for 100 trading units. In stock trading, a round lot is 100 shares. However, inactive stocks generally trade in 10-share lots.
A rounding error is a mistake made when rounding a number up or down.  
Roy's safety-first rule is a measure of the minimum returns an investor requires from a portfolio. The formula for Roy's safety-first rule is: Roy's Safety-First Rule = (Expected
A royalty trust is a type of corporation created to act as the owner of the mineral rights to wells, mines and similar properties.  It exists only to pass income generated from the sale of the
The RSI indicator mirrors and anticipates price patterns in the underlying stock or index chart. The indicator's designer, Welles Wilder, intended for the RSI Indicator to help traders spot chart
The "rule of 72" is a method of estimating how long it will take compounding interest to double an investment.
A runs test is a statistical procedure that can be used to decide if a data set is being generated randomly, or if there is some underlying variable that is driving results.
The Russell 1000 Index is designed to track the performance of most major large-cap companies. Though it is not usually cited by individual investors, it is the third most widely used benchmark by
The Russell 2000 index measures the performance of the 2,000 smallest companies in the Russell 3000 index. The Frank Russell Company created the index in 1984, and it was one of the first broad
Started in 1984, the Russell 3000 Index attempts to capture the return of the overall market. The index can be subdivided into two segments: the Russell 1000 (consisting of the 1000 largest
A Russian option is a type of lookback option which does not have an expiration date.
The S&P 500 Index is a diverse index that includes 500 American companies that represent over 70% of the total market capitalization of the U.S. stock market. 
The S&P Small- Cap 600 Index consists of 600 small-cap stocks.  A small-cap company is generally defined as a stock with a market capitalization between $300 million and $2 billion. The S
The S&P Europe 350 index is made up of 350 individual European company stocks drawn from 17 major European markets and represents approximately 70% of the region's market capitalization.
The S&P Frontier Broad Market Index (also known as the S&P Frontier BMI) measures the performance of markets in 34 small countries. The individual country indices that make up the S&P
The S&P Global 1200 index is comprised of seven indices with stocks from 29 representative countries. The index is used as a benchmark for global equity markets.
The S&P Global Broad Market Index (also known as the S&P Global BMI) is a widely encompassing, rules-based index that measures global stock market performance.
The S&P Global Equity Index series is comprised of three indices: The S&P Frontier Broad Market Index, The S&P Global Broad Market Index and the S&P/IFCI.
The S&P Mid-Cap 400 Index tracks a diverse basket of medium-sized U.S. firms. A mid-cap stock is broadly defined as a company with a market capitalization ranging from about $2 billion to $10
The S&P/IFCI Composite is a liquid and investable leading emerging market index. It is a subset of the S&P Emerging Plus Broad Market Index, with the addition of South Korea.
A safe asset (usually a physical asset rather than a security) carries a low degree of liability for its owner. In more technical financial terms, safe assets are similar to cash -- they carry little
A safekeeping certificate is a document that proves that a person owns a security or a certificate of deposit (CD).
The safety-first rule, also called Roy's safety-first rule, is a measure of the minimum returns an investor requires from a portfolio. The formula for the safety-first rule is: Safety-First
Also called commission or a load, a sales charge is a fee paid to purchase or sell a specific investment. It is expressed as a percentage of the amount invested. The term is most often used when
The term sales per share represents the portion of a company's revenue that is allocated to each share of common stock. The figure can be calculated simply by dividing sales earned in a given
The sales to cash flow ratio measures the level of a company's sales against its total cash flow.
Same-day substitution is the act of withdrawing money from and adding money to a margin account on the same day.  
Same-store sales measures the increase in revenue over a particular period for the same set of stores in each period.
Samurai bonds are corporate bonds issued in Japan by a non-Japanese company. 
Samurai Market is slang that refers to the Japanese stock market.
Sandbag is slang for lowering expectations.
A Santa Claus rally is a surge in the stock market that occurs between Christmas and New year's Day. 
Saturday night specials are illegal rules that give preferential treatment to some shareholders and pressure others during tender offers.
Savings bonds are bonds sold by the U.S. Treasury. They are used to raise money from the public to fund its operations and administer the economy. When the government sells bonds, it is essentially
The Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) is a salary savings plan that small companies can offer their employees. The plan allows employers to match their employees
The term scalpers refers to securities traders who manipulate the market.  Scalpers may also refer to traders who earn relatively small amounts of money from the arbitrage between bid prices and
Scalping is a form of day trading that involves earning small profits on large volumes of securities.
Scrap value, also called salvage value, is the value of an asset after it has come to the end of its useful life.
A seasoned issue, also called follow-on offering or secondary offering, is a sale of stock by a company or by an existing shareholder of a company that is already publicly held.
A seat is a license to trade on the floor of the New York Stock Exchange, either as an agent for someone else or for his or her own personal accounts (in which case, the person is called a floor
SEC Form 10-Q is a quarterly performance report that public companies must submit to the SEC.
A secondary offering refers to a large-scale market sale of a company's shares by a major shareholder.
Sector rotation is a strategy based on moving investments across business sectors to take advantage of cyclical trends in the overall economy.
A secular market is a market that is for all intents and purposes captive to broader economic forces or traumas.  
A securities analyst gathers and interprets data about securities, companies, corporate strategies, economies or financial markets. Securities analysts are sometimes called financial analysts, equity
A sell-off is the rapid selling of a security leading to a sharp decline in its price. 
STRIPS stands for Separate Trading of Registered Interest and Principal of Securities. They are securities that represent the separate interest and principal components of Treasuries. The U.S.
Serial bonds (or installment bonds) describes a bond issue that matures in portions over several different dates.  Instead of facing a large lump-sum principal re-payment at maturity, an issuer
Administered by the Financial Industry Regulatory Authority (FINRA) and designed by the North American Securities Administrators Association (NASAA), the Series 65 is an exam and professional license
Settlement price refers to the market price of a derivatives contract at the close of a trading day.
Shadow pricing is the practice of allotting a dollar-value to an abstract commodity for the purpose of cost-benefit analysis.
Share classes refers to the division of a company's equity into different classes, which have different rights.
A share purchase right is an instrument that entitles the holder to purchase a specified number of shares at a specified price.
Shareholder value added (SVA) represents a company's worth to shareholders in the absence of liabilities and capital costs.
Shareholders equity is a measure of how much of a company's net assets belong to the shareholders.
Shares outstanding refers to all shares currently owned by stockholders, company officials, and investors in the public domain, but does not include shares repurchased by a company.
The Sharpe ratio is measure of risk. It is named after Stanford professor and Nobel laureate William F. Sharpe.
A shelf offering is a sale of stock by a company over time.
The shooting star candlestick is a chart formation consisting of a candlestick with a small real body, and a large upper shadow. This pattern represents a potential reversal in an uptrend. It is also
Short covering refers to the practice of purchasing securities to cover an open short position. To close out a position, a trader purchases the same number and type of shares that he sold short.
Short interest is the number of shares or units of a security that have been sold short and not yet covered or repurchased. It is typically expressed as a percentage of the total securities
A short interest ratio is the number of shares or units of a security that have been sold short and not yet covered or repurchased. It is typically expressed as a percentage of the average daily
Short interest theory suggests that a high level of short interest indicates an imminent rise in the price of a stock.
In regards to investing, “short-term” refers to an investment made that can easily be converted to cash in under five years. Usually, these investments are high-quality and very liquid assets or
Silicon Valley is the area around San Jose and San Francisco, California that is home to a number of well-known internet, software, and computer companies.
Simple interest is a basic formula for calculating how much interest to apply to a principal balance. Simple Interest Formula:Simple Interest = Interest Rate x Principal Balance
A sinking fund is a part of a bond indenture or preferred stock charter that requires the issuer to regularly set money aside in a separate custodial account for the exclusive purpose of redeeming
Small-cap stock refers to a company with a market capitalization (calculated by taking a firm's current share price and multiplying that figure by the total number of shares outstanding)
Social security is a federal program that provides income and health insurance to retired persons, the disabled, the poor, and other groups. The program started in 1935 with the signing of the Social
Socially responsible investment (SRI) is an investment strategy that seeks both financial return and social good.
Sour crude is a type of unrefined oil that contains sulfur.  It is difficult to refine and usually fetches a lower price.
Special assessment bonds (also known as special assessment obligations) are municipal bonds that are repaid with taxes assessed on the land that benefits from the improvements financed by the bonds.
Special assessment obligations (also called special assessment bonds) are municipal bonds that are repaid with taxes assessed on the property that benefits from the improvements financed by the bonds.
Specific risk is a discrete risk to which only a specific asset or type of asset is exposed. It is the opposite of systematic risk.
Speculation is a method of short-term investing whereby traders essentially bet on the direction an asset's price will move.
The speculation index measures the volume of trades on the American Stock Exchange (AMEX) versus trade volume on the New York Stock Exchange (NYSE).
A speculator is a person or an entity that trades securities essentially as bets that the price will go up or down, and as such, typically has an above-average risk tolerance.
A spider (SPDR) is an exchange-traded fund (ETF) that tracks the Standard & Poor's 500 Index. SPDR stands for S&P Depository Receipts. However, the term can also refer to any ETF that
Spinning tops have small real bodies, and they portray a stock or index plagued by uncertainty. The spinning top has small upper and lower shadows. The spinning top candle looks like this:
Also called the cash market or the physical market, the spot market is where assets are sold for cash and delivered immediately.
The spot price is the current market price at which an asset is bought or sold for immediate payment and delivery.  It is differentiated from the forward price or the futures price, which are
A spot trade is an asset or commodity transacted and delivered immediately.
A spread trade occurs when an investor simultaneously buys and sells two related securities that are bundled as a single unit. Each of the transactions is referred to as a "leg."
Springs are false breakouts that can trap the unsuspecting trader. Spring patterns quickly reverse, with the stock or index then often testing the opposite end of the trading range. A spring is a
Springs and upthrusts are false breakouts that can trap the unsuspecting trader. Both patterns quickly reverse, with the stock or index then often testing the opposite end of the trading range. A
Standard & Poor's (S&P) is a financial services company and a division of The McGraw-Hill Companies, Inc. S&P does business in six main areas: credit ratings, indices, equity research
Standard deviation is a measure of how much an investment's returns can vary from its average return. It is a measure of volatility and in turn, risk. The formula for standard deviation is:
The statement of income is one of the three primary financial statements used to assess a company’s performance and financial position at the end of an accounting period (the two others being
The statement of operations is one of the three primary financial statements used to assess a company’s performance and financial position (the two others being the balance sheet and the cash
A step-up bond is a bond with a coupon that increases ("steps up"), usually at regular intervals, while the bond is outstanding. Step-up bonds are often issued by government agencies.
The stochastic oscillator is a momentum indicator that shows the location of the current closing price of a security (or index) relative to the high/low range over a set number of periods. The
The stochastics indicator is a momentum indicator that shows the location of the current closing price relative to the high/low range over a set number of periods.
Stock, also known as equity, represents ownership interests in corporations. Whether you own one, 100 or 100 million shares of stock in a company, you're an owner of the company.
Dividends are a distribution of corporate earnings to shareholders and usually take place in one of two forms -- cash or stock. A stock dividend is the latter of these two kinds of dividends. Each
The Stock Exchange Daily Official List code is a unique identifier generated by the London Stock Exchange for securities issued in the U.K.
The stock market crash of 1929 is the most famous stock market crash of all time. On just one day (October 24, 1929), panicked sellers traded nearly 13 million shares on the New York Stock Exchange (
A stock market index measures the change in the stock prices of the index's components.
A stock option gives the holder the right, but not the obligation, to purchase (or sell) 100 shares of a particular underlying stock at a specified strike price on or before the option's
A stock quote is an estimate of price or a price at which one party is willing to buy or sell a certain number of shares of stock from the other. A stock quote consists of a bid price and an ask
Stock Return Income Debt Securities (STRIDES) are callable debt securities linked to an underlying stock. STRIDES are similar to callable preferred shares in that they take part in the fluctuation
A stock savings plan is a Canadian taxation system that offers tax benefits to Canadian residents who purchase the initial public offerings (IPOs) of local companies.
A stock split is a procedure that increases or decreases a corporation's total number of shares outstanding without altering the firm's market value or the proportionate ownership interest of
A stock symbol -- also known as a ticker symbol -- is a string of letters used to identify a stock, bond, mutual fund, ETF or other security traded on an exchange.
A stockbroker is a person or a company that acts as an intermediary between buyers and sellers of stocks.
A stop order (also called a stop-loss order or stop market order) is a trade order whereby the investor instructs the broker to automatically sell the stock if it drops to a certain price.
A stop-limit order is a conditional type of stock trading that combines the features of a stop order and a limit order. Once a stock reaches the stop price, a limit order is automatically
A stop-loss order (also called a stop order or stop market order) is an order whereby the investor instructs the broker to automatically sell the stock if it drops to a certain price.
Straight line basis refers to a method of calculating the depreciation of an asset. 
Strategic asset allocation is the practice of realigning a portfolio's asset composition in order to accommodate changes in market climate.
A stratified sampling approach is an indexing strategy whereby a fund manager divides an index into different "cells" that represent different characteristics of the index. The fund manager
The street expectation is the commonly-held estimate of a company's future performance by market analysts.
The strike price is the specified price at which an option contract can be exercised.
STRIPS stands for Separate Trading of Registered Interest and Principal of Securities. They are securities that represent the separate interest and principal components of Treasury securities.
A structured portfolio is a type of passively managed portfolio whose cash inflows are designed to meet the cash outflow requirements to fulfill a future obligation.
Subscription privileges are a clause in an option, security, or merger agreement that gives the investor the right to maintain his or her percentage ownership of a company by buying a proportionate
Subscription rights are a clause in an option, security, or merger agreement that gives the investor the right to maintain his or her percentage ownership of a company by buying a proportionate
The Super Bowl Indicator, also known as the Super Bowl Effect, is a theory that stock prices will fall if the AFC team wins the Super Bowl.
In technical trading analysis, support is a lower limit in a price channel in which a security’s price tends to stay.
A support level is the price at which stock buyers jump in to purchase shares, establishing a floor beneath which it's difficult for the price to fall.
A surrender fee is a fee paid by an annuity investor to withdraw some or all of his or her principal before the annuity's surrender period has expired.
The surrender period is the time an investor of annuity must wait until they may take a withdrawal from their annuity without paying a penalty or surrender fee.
Survivorship bias occurs when companies that no longer exist -- due to bankruptcy, acquisition or any other reason -- are not accounted for when calculating investment returns. 
A swap spread is the difference between the fixed rate component of a given swap and the yield on a Treasury item or other fixed-income investment with a similar maturity.
A sweep account is a bank or brokerage account that automatically transfers amounts above a certain threshold into a higher interest-earning investment option. These transfers are made at the close
Sweet crude is a type of yet-to-be refined oil which contains minimal amounts of impurities.
Swing trading is a short-term strategy used by traders to buy and sell stocks whose technical indicators suggest an upward or downward trend in the near future -- generally one day to two weeks.
The term swipe fees, also known as interchange fees, refers to the hidden cost paid by merchants to card-issuing banks and credit card companies for processing credit card and debit card transactions.
The symmetrical triangle is one of three important triangle patterns defined in classical technical analysis. The other two triangles are the bullish ascending triangle pattern and the bearish
Synergy is the benefit that results when two or more agents work together to achieve something either one couldn't have achieved on its own.  It's the concept of the whole being greater than the
A synthetic collateralized debt obligation is a collateralized security which is backed by derivatives such as swaps and options contracts.
A synthetic futures contract comprises call options accompanied by put options in order to imitate the attributes of a futures contract.
Also called market risk or non-diversifiable risk, systematic risk is the fluctuation of returns caused by the macroeconomic factors that affect all risky assets.  Unsystematic risk is the risk
T. Boone Pickens (1928-2019) was a well-known oil tycoon. His first initial stands for Thomas.
Also called co-sale rights, tag-along rights allow minority shareholders to sell their stakes in a company if a majority shareholder wishes to sell its stake in a company.
Tail risk is the risk that an investment will change by more than three standard deviations from its mean.
Tailgating occurs when a broker buys or sells a security after doing the same for a client.
Tainted alpha is the portion of a security's or portfolio's return that is not attributable solely to the skill of the investor or portfolio manager.
To "take a bath" means to take a large loss.
The takedown is the price that an underwriter pays for a new issue.  
Tangible book value per share (TBVPS) equals a company's net tangible assets divided by its number of shares outstanding. A tangible asset is anything that has commercial or exchange value and
Tangible common equity (TCE) is the common equity listed on the balance sheet minus preferred stock and intangible assets. 
When trading volume is so high that the ticker quotes are lagging behind to keep up with reporting the trades, we say the tape is late.
Tape shredding occurs when a broker splits a large buy or sell order into a lot of smaller buy or sell orders.
Target date funds are mutual funds designed to target the date of an investor’s goal, such as retirement or college education funding. The strategy of the fund will focus on capital appreciation
Tax accounting focuses on the preparation, analysis and presentation of tax returns and tax payments.
Tax expense is the amount of tax owed in a given period. It appears on the income statement.
A tax-deferred savings plan is an account that allows the account holder to postpone paying taxes on the investments in the account.
A tax-efficient fund is a mutual fund or ETF that minimizes the fundholder's tax bill in some way.
In Canada, a tax-free savings account (TFSA) is a federal program that allows Canadians to avoid paying taxes on interest earned in specific savings accounts.
A taxable bond is a bond whose interest payments are taxable at the federal, state and/or local level.
Taxable equivalent yield (also called equivalent taxable interest rate) is the return that is required on a taxable investment to make it equal to the return on a tax-exempt investment. The taxable
Technical analysis is a methodology that makes buy and sell decisions using market statistics. It primarily involves studying charts showing the trading history and statistics for whatever security
A technical rally is a price increase brought on by traders reacting to signals from technical analysis.
A tenbagger is a stock that increases by a factor of ten.
A tender offer is a proposal by an investor to all current shareholders of a publicly traded corporation to tender their shares for sale at a certain price at a certain time. 
Also referred to as a time deposit or a certificate of deposit (CD), a term deposit is a type of fixed-term deposit, typically at a banking institution. Term deposits will usually have short-term
The term structure of interest rates, also called the yield curve, is a graph that plots the yields of similar-quality bonds against their maturities, from shortest to longest. 
The Texas ratio was developed by RBC Capital Markets' banking analyst Gerard Cassidy as a way to predict bank failures during the state's 1980s recession. The ratio is still widely-used
The Big Board, a popular term for the New York Stock Exchange (NYSE), is the oldest stock exchange in the United States.  It's located on Wall Street in lower Manhattan, and is the world's
The opposite of a liquid market, a thin market is characterized by a small number of participants and high price volatility. 
Thinly traded refers to an investor's inability to sell his or her investment at or near its value in a short amount of time.
The third market is an over-the-counter (OTC) market in which brokers and large institutional investors trade exchange-listed securities between one another.
A tick is a minimum change in the price of a security. Also known as a downtick, a minus tick occurs when a security sells at a price less than the preceding sale. A minus tick is the opposite of an
Also called short sale rules, tick test rules are restrictions on when traders can short a stock.
A ticker symbol -- also known as a stock symbol -- is a string of letters used to identify a stock, bond, mutual fund, ETF or other security traded on an exchange.
Ticker tape was the paper strip used to transmit stock prices before the use of computers.
In the options trading world, there are two components that make up an option's price. The first is intrinsic value (which accounts for the underlying security's perceived value), and the
Timeliness is a ranking criterion of stocks based on the likely price performance of a stock over a short time period – usually less than 12 months.
The times interest earned, also known as interest coverage ratio, is a measure of how well a company can meet its interest-payment obligations. The formula for times interest earned is:
The Tobin's Q ratio is a measure of firm assets in relation to a firm's market value. The formula for Tobin's Q is: Tobin's Q = Total Market Value of Firm / Total Asset Value of Firm
A torpedo stock is a stock that rapidly loses market value and follows a downward trend without any sign of recovery.
Total cost of ownership is an asset's cost to the purchaser in addition to the costs associated with using and maintaining it.
Toxic assets are assets that have experienced a significant drop in value and lack an active market where they can be sold. Toxic assets are also known as troubled assets.
Toxic waste is an idiomatic expression referring to high-risk assets with reputedly low liquidity.
Tracking error is the difference between a portfolio's returns and the benchmark or index it was meant to mimic or beat. Tracking error is sometimes called active risk. There are two ways to
A tracking stock is a security that is issued to track the performance of a wholly-owned subsidiary.
A company's stock "trades below cash" if its market capitalization is less than the difference between its cash holdings and its liabilities.
Trailing twelve months (TTM), sometimes referred to as last twelve months (LTM), is the 12-month interval of a company's financial performance that occurs before a designated point in time. 
A trailing-stop loss order (or trailing-stop) is a special type of trade stop order that manages risk and offers profit protection. This exit strategy adjusts the stop price of a stock or stocks by a
A tranche is a “slice” of an investment in pooled securities, commonly debt instruments such as mortgages, that is sold separately to investors. Tranching allows investors to choose to invest in a
Transaction costs are fees incurred during the process of buying or selling a good or service. These costs may include brokers' commissions and spreads in the sale and purchase of securities.
A Treasury Bill, or T-bill, is short-term debt issued and backed by the full faith and credit of the United States government. These debt obligations are issued in maturities of four, 13 and 26 weeks
Treasury bonds ("T-Bonds") are long-term, semiannual bonds issued by the U.S. Treasury. Their maturities range from 10 to 30 years. T-Bonds are issued with $1,000 par values.
Treasury Inflation-Protected Securities (TIPS) are Treasury bonds that are adjusted to eliminate the effects of inflation on interest and principal payments, as measured by the Consumer Price Index (
The Treasury market is where the United States government raises money by issuing debt.The U.S. Treasury currently markets four types of debt instruments: Treasury Bills, Treasury Notes, Treasury
Treasury notes, also known as T-notes, are intermediate-term bonds issued by the U.S. Treasury. They mature in two, three, five, or ten years
Treasury stock is stock repurchased by the issuer and intended for retirement or resale to the public. It represents the difference between the number of shares issued and the number of shares
TreasuryDirect is the website used by the U.S. Treasury Department to sell Treasury securities directly to investors.
Trend analysis is a technical analysis of the movement of a stock based on past performance.
On the third Friday of every March, June, September, and December, contracts for stock index futures, stock index options, and stock options all expire at the end of the day. The triple witching hour
Troubled assets are assets that have experienced a significant drop in value and lack an active market where they can be sold. Troubled assets are also known as toxic assets. 
Trust preferred shares (TruPS) are preferred shares typically issued by banks. And although they're called "preferred shares," there is a big difference between trust preferred stock and
A trustee holds or manages cash, assets or a property title for a beneficiary. The trustee has a fiduciary duty to act in the best interest of the beneficiary.   Trustees play an important
A turnaround occurs when a company takes successful steps to correct a period of deteriorating financial performance.
The tweezers candlestick pattern is a formation that always involves two candles. At a tweezers top, the high price of two nearby sessions are identical, or very nearly so. Conversely, a tweezers
Unannualized refers to a rate of return or other measure for a period that is not one year.
In the stock world, unchanged means that the closing quote at the end of a trading day for a particular stock is the same as the closing price for the stock the day before.
Also known as “being naked,” an uncovered option is the sale of an option involving securities the seller does not own. It is the opposite of a covered option.
An underlying asset is a security on which a derivative is based.
An underlying security is a security on which a derivative is based.
The term underperform refers to an analyst recommendation that a stock is expected to do slightly worse than the overall market return.
Underpricing occurs in the finance world when a company prices its shares too low in an initial public offering.
In the securities industry, undersubscribed means that an offering does not have enough buyers.
Undervalued describes a security for which the market price is considered too low for its fundamentals. Some metrics used to evaluate whether a security is undervalued are P/E ratio, growth potential
A unit investment trust is a type of investment fund comprising a fixed portfolio of securities that is sold in units to potential investors similar to a mutual fund.
A unitholder is an investor who owns the securities of a trust, like a real estate investment trust (REIT) or a master limited partnership (MLP). The securities issued by trusts and MLPs are called
Unrealized gain is increases in the value of an asset that has not been sold. This concept is often called paper profit.
An unrealized loss is a paper loss from holding an asset that has lost value but has not yet been sold.
An Unsponsored American Depository Receipt (ADR), though backed by the common stock of an offshore company, is not directly sanctioned by that company and renders the holder un-entitled to the
The term unsubscribed describes the portion of the shares in an IPO that are not sold prior to the IPO.
An unweighted index has components that are not adjusted to reflect importance or certain characteristics.
Upside refers to an investment's potential gains in value.
Upthrusts are false breakouts that can trap the unsuspecting trader. Upthrust patterns quickly reverse, with the stock or index then often testing the opposite end of the trading range.
Uptick refers to the increase in the market price of a security over the preceding transaction.
Known as Rule 10(a)(1) of the Securities Exchange Act of 1934, the uptick rule allows investors to short a security only at a price higher than the security's last trade.
Uptick volume is the number of shares of a particular stock that trades when the price is increasing.
A useful life is the number of years in which an asset can reliably produce benefits.
Value averaging is a strategy in which an investor places a variable dollar amount into a given investment (usually common stock) on a regular basis to ensure that the investment grows by a certain
A value stock is a security that is trading at a lower price than expected given the performance of the company and key performance indicators of the stock itself.
The Vanguard Federal Money Market Fund, or VMFXX, is an investment fund offered through Vanguard that invests in U.S. government securities. As its main goal is to provide current income and
The Vanguard Prime Money Market Fund, or VMMXX, is an investment fund offered through Vanguard that invests in U.S. government securities and foreign bonds. As its main goal is to provide current
A vanilla option refers to a normal option with no special features, terms, or conditions.
Variability is the degree to which a data series deviates from its mean (or in the accounting world, how much a budgeted value differs from an actual value).
Variance is a statistical measure of how much a set of observations differ from each other. In accounting and financial analysis, variance also refers to how much an actual expense deviates from
A vault receipt is a document that proves ownership of gold, silver or other precious metals stored elsewhere.
A Venn diagram is an illustration of common characteristics.
The Volatility Index (VIX) is a contrarian sentiment indicator that helps to determine when there is too much optimism or fear in the market. When sentiment reaches one extreme or the other, the
Volume represents the total number of securities traded during a certain period of time.
Voodoo accounting refers to any accounting practices that artificially inflate the profits reported on a company's financial statements.
Wage expense is the total compensation a company pays its employees during a particular accounting period.
In the finance world, a wall of worry is an increasing amount of negative information about a security or about the market.
Wallflower is slang for a stock that analysts and investors tend to neglect.
Wallpaper is slang for a security with minimal to no market value.
A war bond is a bond issued to finance war.
A warehouse receipt is a piece of paper promising that a specific quantity and quality of a particular asset is in a given location.
Warrants are securities that give the holder the right, but not the obligation, to buy a certain number of securities (usually the issuer's common stock) at a certain price before a certain time.
Warrant coverage is an agreement to provide warrants to a shareholder.
A warrant premium is the percentage difference between the market price of a security and the price an investor pays for that security when buying and exercising a warrant. The formula for the
A wash occurs when two actions cancel each other out (such as a gain and an equal loss), effectively creating a break-even situation.
A wash sale occurs when an investor sells a security at a loss but then purchases the same or a substantially similar security within 30 days of the sale.
Wash trading occurs when an investor sells a security at a loss, then purchases the same or a substantially similar security within 30 days of the sale.
A wash-out round is a round of financing that dilutes the original shareholders so much that their voting power is essentially "washed out."
A wasting asset is a property or security that has a limited life and loses value over its life. 
A watch list is a list of securities that regulators, brokerages, research firms, or other entities are interested in monitoring.
A water ETF is an exchange-traded fund that invests in water-related companies.
Watered stock is stock that is issued at a price far higher than the value of the issuer's assets.
A weak currency is a currency that is going down in value.
A weak dollar is used to describe the United States' currency decreasing in value relative to other currencies.
In futures trading, weak hands are investors who do not intend to take delivery of the underlying asset. In currency trading, weak hands are investors who tend to follow traditional trading rules,
Weak longs are investors who buy a stock (known as being "long"), but who will sell it at the first sign of a price decline.
Weak shorts are investors who short sell a stock (known as being "short"), but who will buy it back at the first sign of a price increase.
A wedding warrant is a bond provision that requires the holder of a bond to relinquish the bond to the issuer if the holder purchases another bond with similar features from the same company.
The weekend effect is a theory that stock prices rise on Monday and fall on Friday.
Weighted refers to the mathematical practice of adjusting the components of an index to reflect the importance of certain characteristics.
Weighted average refers to the mathematical practice of adjusting the components of an average to reflect the importance of certain characteristics.
Weighted average cost of capital (WACC) is the average rate of return a company expects to compensate all its different investors. The weights are the fraction of each financing source in the company
Weighted Average Market Capitalization refers to a stock market index in which larger companies (i.e. with higher market capitalization) have more influence on the index's performance.
Weighted average maturity or WAM is the weighted average amount of time until the securities in a portfolio mature. The higher the WAM, the longer it takes for all of the holdings in the portfolio
A trader is said to be "whipsawed" when the price of a security suddenly moves in the opposite direction of a trade that he just placed. 
A whisper number is an unofficial, unpublished earnings per share (EPS) forecast for a public company. It is not the same as a consensus estimate.
Widow and orphan stocks are low-risk securities that pay high dividends. 
Wildcat drilling is the process of looking for oil and natural gas wells in non-typical areas.
Often combined with stochastics to detect overbought and oversold conditions, Williams %R -- or %R for short -- is a momentum indicator developed by Larry Williams.
The Wilshire 5000 Index is considered the "total market index." Designed to track the value of the entire stock market, the index was started in 1974 by Wilshire Associates soon after
Window dressing is a term that describes the act of making a company's performance, particularly its financial statements, look attractive.
A withdrawal penalty occurs when a depositor or investor withdraws funds from an account before an agreed-upon withdrawal date for disallowed purposes or in a disallowed manner.
Working capital is money that’s available to a company for its day-to-day operations. Simply put, working capital indicates a company's operating liquidity and efficiency.  A company's
A company's working ratio measures its ability to cover its annual expenses.
A write-down is the accounting term used to describe a reduction in the book value of an asset due to economic or fundamental changes in the asset. A write-down is the opposite of a write-up.
X is an extension to a ticker symbol. It denotes that the security is a mutual fund.  
XDIS is a symbol to indicate that a security is trading ex-dividend (or ex-distribution, as the abbreviation suggests).
Xenocurrency is a currency that trades in foreign markets.
An XPO is a perpetual option.
XRT is an extension to a ticker symbol. It denotes that the security is trading without rights.
XW is a ticker-symbol extension that signifies that a stock is trading ex-warrant.
Y is a ticker-symbol extension that signifies that a stock is an American Depository Receipt.
Also called institutional shares, Y shares are mutual fund shares that are available for sale only to institutions.  
Yankee bonds are bonds issued in the U.S. bond market by a foreign entity, and they are denominated in U.S. dollars. Governments, companies, and other entities issue Yankee bonds.
A Yankee CD is a certificate of deposit issued by a foreign bank in the United States and denominated in U.S. dollars.
Yankee Market is slang for the U.S. stock market.
In the finance world, yard is slang for one billion. The term comes from the French word milliard, which means one billion.
Year to date (YTD) refers to the period extending from the beginning of the year to the present. In business, note that the beginning of the year is not always January 1; many companies have fiscal
Similar to the Pink Sheets, the Yellow Sheets are information about the prices of corporate bonds traded on the over-the-counter market (that is, bonds not listed on the mainstream exchanges).
Yield refers to the cash return to the owner of a security or investment. 
Yield advantage is the difference between yields on two different securities issued by the same company. It is the additional amount an investor can expect to earn if he or she chooses one security
Yield basis refers to the act of quoting bond prices in terms of yield percentages rather than in dollars.
Yield burning is the illegal practice of excessively marking up municipal and/or Treasury bonds in order to complete a bond offering.
The yield curve, also known as the "term structure of interest rates," is a graph that plots the yields of similar-quality bonds against their maturities, ranging from shortest to longest. (Note that
Yield curve risk refers to the probability that the yield curve will shift in a manner that affects the values of securities tied to interest rates -- particularly, bonds.
A yield elbow is the highest point on the yield curve.
Yield pickup is the increase in yield an investor gets by selling one bond and buying another one with a higher yield.
Yield spread is the difference in yield between two securities or, more commonly, two classes of securities.
The yield to average life is the yield on a security based on the security's average maturity rather than the maturity date of the issue. The concept is usually applied to bonds with sinking
Yield to call is a measure of the yield of a bond if you were to hold it until the call date.
Yield to maturity (YTM) measures the annual return an investor would receive if he or she held a particular bond until maturity.
Yield to worst (YTW) is the lowest yield an investor can expect when investing in a callable bond.
A yield-based option is a financial instrument that gives the owner the right but not the obligation to purchase a debt security. The value of the yield-based option depends on the difference between
Yo-yo is slang describing volatility in the market.
A Z-bond is a bond representing the last tranche of a bond that relies on payments from underlying securities.
Z-shares are shares of mutual funds for the employees of those mutual funds.
A Z-tranche is the last tranche of a bond that relies on payments from underlying securities.
A zero-beta portfolio is a portfolio built with zero systematic risk.
A zero cost collar is a short-term option trading strategy that offsets the volatility risk by purchasing a cap and a floor for the price of a derivative.
Also called a zero downtick, a zero minus tick is a trade that occurs at the same price as the trade preceding it but lower than the last trade at a different price. A zero minus tick is the opposite
Also called a zero uptick, a zero plus tick is a trade that occurs at the same price as the trade preceding it but higher than the last trade at a different price. A zero plus tick is the opposite of
A zero-coupon bond is a bond that makes no periodic interest payments and is sold at a deep discount from face value. The buyer of the bond receives a return by the gradual appreciation of the
In finance, a zero-sum game refers to trades or investments in which one investor gains when another investor loses.