Definitions Starting with "T"

T+1, T+2, T+3

T+1, T+2 and T+3, as well as other "T+" numbers, refers to the number of days it takes to settle a financial transaction. Funds settlement refers to the transfer of funds from buyer to seller and the transfer of title to an asset from seller to buyer. Read more

T. Boone Pickens

T. Boone Pickens (1928-2019) was a well-known oil tycoon. Read more

Taft-Hartley Act

The Taft-Hartley Act, officially known as the Labor-Management Relations Act, is a federal labor law that regulates the actions of labor unions. Ratified in 1947, the Taft-Hartley Act sought to reform labor union law, largely to oversee management and collective bargaining practices were concerned. Read more

Tag-Along Rights

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. Let's say Company XYZ is a start-up firm looking for capital. Read more

Tail Risk

Tail risk is the risk that an investment will change by more than three standard deviations from its mean. Standard deviation is a measure of how much an investment's returns can vary from its average return. Read more


Tailgating occurs when a broker buys or sells a security after doing the same for a client. Let's say John Doe is a broker for Jane Smith. Read more

Tainted Alpha

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. Alpha is 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 rather by the skill of the investor or portfolio manager. Read more

Take a Bath

To "take a bath" means to take a large loss. John Doe buys Company XYZ shares at $10. Read more

Take a Flier

To take a flier means to invest in a highly risky asset or to try for the first time. John Doe starts his own business. Read more

Take Home Pay

Take home pay is the portion of one's salary left after all payroll taxes have been deducted. John Doe has a salary of $100,000. Read more

Take or Pay

Take or pay is a contract that obligates one party to either take possession of certain goods or pay a certain amount. Let's say John Doe is a beet farmer in Scranton, Pennsylvania. Read more

Take-Out Lender

A take-out lender is a lender whose loan replaces another loan. Let's say Company XYZ is a real estate development company. Read more

Take-Out Loan

A take-out loan is a loan that replaces another loan. Let's say Company XYZ is a real estate development company. Read more


The takedown is the price that an underwriter pays for a new issue. When a company decides it wants to issue stock, bonds or other publicly traded securities, it hires an underwriter to manage what is a long and sometimes complicated process. Read more


A takeover is the purchase of a company. A takeover is different from a merger, which occurs when the purchaser and the target both cease to exist and instead form a new, combined company. Read more

Takeover Target

A takeover target is a company that is a good candidate for purchase by an acquirer. Let's assume Company XYZ has developed an exciting new widget. Read more

Taking the Street

Taking the Street is slang for buying large amounts of stock from institutions so that those sellers have to buy more stock, which drives the price up.   Let's say John Doe has a Gordon Gekko complex and wants to make some money by manipulating the market for Company XYZ stock. Read more

Tangible Asset

A tangible asset is anything that has commercial or exchange value and has a physical form. Let’s assume XYZ Company intends to purchase an office building for $10 million. Read more

Tangible Book Value Per Share (TBVPS)

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 has a physical form. Read more

Tangible Common Equity (TCE)

Tangible common equity (TCE) is the common equity listed on the balance sheet minus preferred stock and intangible assets.   The formula for tangible common equity is: Tangible Common Equity = Common Equity - Preferred Stock - Intangible Assets Let's say Company XYZ has $40,000,000 of total assets and $25,000,000 of total liabilities. Read more

Tangible Common Equity Ratio

The formula for tangible common equity ratio is: Tangible Common Equity Ratio = (Common Equity - Intangible Assets)/Tangible Assets Some analysts also subtract preferred stock from common equity when calculating this ratio. Let's say Company XYZ has $40 million of assets and $25 million of liabilities. Read more

Tape Is Late

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. Let's say that trading volume on the NYSE quintuples one day after the government announces a sweeping tax reform and monetary policy change that prove very beneficial for some companies and very detrimental for other companies. Read more

Tape Shredding

Tape shredding occurs when a broker splits a large buy or sell order into a lot of smaller buy or sell orders. Let's say Company XYZ is a huge pension fund with billions of dollars under management. Read more

Target Date Funds

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 at the beginning of the cycle and capital preservation as the target date approaches. Read more

Target Market

A target market is an intended audience for a marketing campaign, product or service. Let's assume Company XYZ manufactures orthopedic shoes. Read more


News stories over the past few years have focused on tariffs and rumors of “escalated trade wars” between the United States and another country. But what is a tariff? Are they taxes on all imported goods? Do they ultimately get passed down to the consumer? Here’s everything you need to know about tariffs. Read more

Tax Accounting

Tax accounting focuses on the preparation, analysis and presentation of tax returns and tax payments. For example, Company XYZ might use one accounting method for calculating depreciation when it reports financial results to investors, but tax laws may require it to use a different method for tax accounting purposes. Read more

Tax Advisor

A tax advisor is a person who advises clients about tax laws and strategies. For example, a tax advisor might help a client structure his assets such that his estate taxes are lower. Read more

Tax and Price Index (TPI)

Used primarily in the United Kingdom, a tax and price index measures the amount that a consumer’s income would have to increase to compensate for increases in inflation and taxes. Assume John Doe has $50,000 in disposable income this year. Read more

Tax Anticipation Note (TAN)

A tax anticipation note (TAN) is a short-term note that a state or local government issues and expects to repay with imminent tax receipts. Let's assume Town XYZ wants to purchase a new building to replace the old City Hall. Read more

Tax Arbitrage

Tax arbitrage refers to a strategy or practice where individuals or corporations profit from the ways different kinds of capital gains, income, and financial transactions are treated for tax purposes.  Read more

Tax Attribute

A tax attribute is a reduction that the IRS requires a taxpayer to make in a tax credit or tax loss when a lender cancels debt that the taxpayer owes. There are typically seven types of tax attributes: net operating losses, business credit carryovers, minimum tax credits, capital losses, property bases, passive activity loss and credit carryover, and foreign tax credit. Read more

Tax Avoidance

Tax avoidance is the legal act of minimizing one's taxes. It is not the same as tax evasion, which is illegal. Read more

Tax Base

A tax base is the total amount of assets or revenue that a government can tax. Taxes can be based on any kind of asset or revenue stream. Read more

Tax Benefit

A tax benefit is any tax advantage given by the IRS to a taxpayer that reduces his or her tax burden. It's also the name of an IRS rule requiring companies to pay taxes on income that was previously written off but is subsequently recovered. Read more

Tax Bracket

A tax bracket is range of incomes for which a certain tax rate applies. The United States has a progressive tax system, which means that different portions of a person's income is taxed at increasing rates (often referred to as "marginal rates"). Read more

Tax Break

A tax break is a tax deduction, tax credit or reduction in tax rate. For example, let's say John and his wife had a baby in 2011. Read more

Tax Clawback Agreement

In a tax clawback agreement, a company or organization agrees to repay government benefits via higher taxes at a later date. Company XYZ agrees to take $40 million from the federal government to prevent the company from going bankrupt. Read more

Tax Court

Tax court is a court of law in which administrative law judges manage disputes between taxpayers and the IRS. The tax court handles a wide variety of tax matters but does not have a jury system. Read more

Tax Credit

A tax credit is permission to reduce the amount of income that is subject to tax. A tax credit is not the same as a tax deduction. Read more

Tax Deduction

A tax deduction reduces the amount of income that is subject to tax. A tax deduction is not the same as a tax credit. Read more

Tax Deferred

In the investment world, "tax deferred" refers to investments on which applicable taxes (typically income taxes and capital gains taxes) are paid at a future date instead of in the period in which they are incurred. For example, consider the traditional Individual Retirement Account (IRA). Read more

Tax Differential View of Dividend Policy

The tax differential view of dividend policy is the idea that capital gains are better than dividends because the tax rate on capital gains is lower than the tax rate on dividends. For example, let's assume that the capital gains tax is 15% and the tax rate on dividends is 28%. Read more

Tax Drag

Tax drag is the reduction in returns attributable to taxes. For example, let's assume that John owns 100 shares of Company XYZ stock. Read more

Tax Efficiency

Tax efficiency involves making investing choices that reduce one's tax bill. For example, let's assume that John owns 100 shares of Company XYZ stock, which he bought six months ago for $5 a share. Read more

Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)

The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) became law on September 3, 1982. The TEFRA made it more difficult for individuals and corporations to reduce their tax liability. Read more

Tax Evasion

Tax evasion is the act of illegally avoiding tax liability. Tax evasion is a felony. Read more

Tax Exempt

Generally, tax exempt means free from federal income taxation. Tax exemptions can apply to a portion of an individual's income or to the nature of an organization. Read more

Tax Expense

Tax expense is the amount of tax owed in a given period. It appears on the income statement. Read more

Tax Fairness

Tax fairness is the concept of having an equitable tax system. Tax fairness is a subjective term with no single hard-and-fast definition. Read more

Tax Fraud

Tax fraud is the willful and intentional act of lying on a tax return for the purpose of lowering one's tax liability. For example, let's say John owns a painting business. Read more

Tax Free

Tax free means not taxable. For example, many states and municipalities do not charge sales tax on food items. Read more

Tax Freedom Day

Tax Freedom Day is the day of the year by which the average American has earned enough money to pay his or her tax bill for the year. The average American spends about one-third of his or her income on federal, state, and local taxes. Read more

Tax Gain/Loss Harvesting

Tax gain/loss harvesting is a strategy for reducing taxes. John Doe made two major investment transactions this year: 1. Read more

Tax Haven

A tax haven is a country or jurisdiction known for generating little or no tax liability. Tax havens exist because countries are usually not obligated to provide customer information to foreign taxing authorities (though investigations of criminal activity, terrorism, or other behavior may require disclosure). Read more

Tax Holiday

A tax holiday is a day or period of time during which a government does not tax certain transactions. Sales tax holidays are especially common. Read more

Tax Home

A tax home is a taypayer's primary residence or place of business (if the taxpayer is an organization). Let's assume John lives in Montana during the summer and Arizona during the winter. Read more

Tax Incidence

Tax incidence is a term that describes whether producers or consumers bear the burden of a new tax. For example, let's assume that Congress passes a bill that places a $0. Read more

Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA)

The Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) was signed into law on May 17, 2006. TIPRA was passed to achieve five primary goals: Prevent a scheduled increase in the number of people subject to the alternative minimum tax (AMT) Preserve lower capital gains and dividends tax rates in effect through 2010 Preserve higher limits for expensing the purchase of certain assets Remove an income ceiling on certain IRA conversions Apply the so-called "kiddie tax" to more taxpayers under age 18 In general, TIPRA was a mishmash of tax changes, most of which benefited most taxpayers. Read more

Tax Indexing

Tax indexing is method for adjusting tax rates to account for inflation-related increases in income. For example, let's say that John makes $100,000 a year and is in the 28% federal income tax bracket. Read more

Tax Liability

Tax liability refers to the amount legally owed to a taxing authority as the result of a taxable event. A tax liability might also be called a "tax obligation. Read more

Tax Lien

A tax lien is a claim placed on a piece of real estate by a tax authority due to a taxpayer's failure to pay taxes.   When a taxpayer fails to pay either income taxes or property taxes, the taxing authority to whom the debt is owed may place a lien against the taxpayers property to ensure that the tax liability will eventually get paid. Read more

Tax Lien Certificate

A tax lien certificate is written proof that a taxing authority has placed a lien on a piece of property for unpaid property taxes. Let's assume that John owns a house in the country and the annual property taxes are $4,000. Read more

Tax Lien Foreclosure

A tax lien foreclosure occurs when a taxing authority seizes a piece of property after the property owner has failed to pay property taxes due. Let's assume that John owns a house in the country and the annual property taxes are $4,000. Read more

Tax Loss Carryforward

A tax loss carryforward is a "negative profit" for tax purposes. It usually occurs when a company's expenses exceed revenues, making the company unprofitable. Read more

Tax Lot Accounting

Tax lot accounting is a method of record keeping that tracks the cost, purchase date, and sale date for every unit of every security in a portfolio. For example, let's assume that you purchase 50 shares of Company XYZ at $5 a share on January 1. Read more

Tax Planning

Tax planning is the process of forecasting one's tax liability and formulating ways to reduce it. Tax planning entails creating portfolios or circumstances that are as tax efficient as possible. Read more

Tax Preference Item

A tax preference item is income that subjects a taxpayer to alternative minimum tax (AMT). These items are treated differently for regular tax and AMT purposes. Read more

Tax Rate

A tax rate is the percentage of income a person or company pays in taxes. The United States has a progressive tax system, which means that different portions of a person's income are taxed at different rates (the rates are often referred to as "marginal tax rates"). Read more

Tax Reform Act of 1986

The Tax Reform Act of 1986, signed by President Ronald Reagan, was one of the most significant changes to the American federal income tax system. The Tax Reform Act of 1986 had several noteworthy components, not the least of which was the reduction in the number of tax brackets (from a little over a dozen down to four) and the reduction in the top tax rate (from 50% to 28%). Read more

Tax Reform Act of 1993

Also called the Revenue Reconciliation Act of 1993, the Tax Reform Act of 1993 was a major revision to the United States tax system. The Tax Reform Act of 1993 had several components that received a lot of attention. Read more

Tax Refund

A taxpayer gets a tax refund when he or she has overpaid taxes to the government. A tax refund is the difference between taxes paid and taxes owed. Read more

Tax Refund Anticipation Loan (TRAL)

A tax refund anticipation loan (TRAL) is a short-term loan from a third party. The loan is collateralized by the borrower's pending tax refund. Read more

Tax Relief

Tax relief is a tax deduction, tax credit, reduction in tax rate or forgiveness of a tax lien. For example, let's say John and his wife had a baby in 2011. Read more

Tax Return

A tax return is a set of forms that a taxpayer uses to calculate and report taxes owed to the Internal Revenue Service (IRS). April 15 is the annual deadline for filing a tax return, though some types of taxpayers must file tax returns quarterly. Read more

Tax Roll

A tax roll is a list of taxable property in a city, county, state or other taxing authority. For example, let's assume that the city of Investon has 1,500 residents. Read more

Tax Sale

A tax sale is a sale of property by a taxing authority. For example, let's say that John owns a home and he owes $4,000 in property taxes. Read more

Tax Season

Tax season is from January 1 to April 15 of each year. Tax season is the busiest part of the year for tax accountants, because the filing deadline for individual taxpayers is April 15. Read more

Tax Selling

Tax selling is a strategy used to reduce tax liability. Let's assume that John sold two different stocks that he originally bought five years ago: 1) He sold 1,000 shares of Company XYZ at $25 a share. Read more

Tax Service Fee

A tax service fee is paid by mortgage borrowers to mortgage lenders to ensure that a mortgaged property's property taxes are paid on time. For example, let's assume that John buys a house. Read more

Tax Shelter

A tax shelter is a means of minimizing one's tax liability. Tax shelters can be both legal and illegal. Read more

Tax Shield

A tax shield is a deduction, credit or other method used to reduce the amount of taxes owed. For example, let's say John and his wife have a baby in 2011. Read more

Tax Swap

A tax swap is a strategy that involves selling one investment with capital losses and replacing it with a similar, but not identical, investment. Let's assume that John owns 1,000 shares of Mutual Fund XYZ. Read more

Tax Table

A tax table shows the tax due for different income ranges. For example, according to the IRS 2011 tax table, if John makes a salary between $76,150 and $76,200 and is single, he owes $15,169 in taxes. Read more

Tax Treaty

A tax treaty is an agreement between two countries regarding how they tax each other's citizens. In the U. Read more

Tax Umbrella

A tax umbrella is a negative profit that reduces a company's tax liability. It usually occurs when a company's tax deductions exceed its taxable income (often because expenses exceeded revenues, making the company unprofitable). Read more

Tax Wedge

A tax wedge is the difference between gross income and after-tax income. In economics, it refers to the broader financial effects of a tax on a sector of the market. Read more

Tax Year

A tax year is the year for which a tax is calculated and paid. The United States has a January to December tax year for individual taxpayers. Read more


Tax-advantaged means that some or all of an investor's income is sheltered from taxation, allowing a taxpayer to minimize his or her tax burden. One of the best examples of tax-advantaged investing is the 401(k) plan. Read more

Tax-Deferred Annuity (TDA)

A tax-deferred annuity (TDA), commonly referred to as a tax-sheltered annuity (TSA) plan or a 403(b) retirement plan, is a retirement savings plan available to employees of certain public education organizations, non-profit organizations, cooperative hospital service organizations and self-employed ministers.   Organizations offer tax-deferred annuity plans to eligible employees for long-term investment growth, similar to a 401(k) plan. Read more

Tax-Deferred Savings Plan

A tax-deferred savings plan is an account that allows the account holder to postpone paying taxes on the investments in the account. A 401(k) plan is the most common example of a tax-deferred savings plan. Read more

Tax-Efficient Fund

A tax-efficient fund is a mutual fund or ETF that minimizes the fundholder's tax bill in some way. For example, let's say John is in a high tax bracket. Read more

Tax-Exempt Commercial Paper

Tax-exempt commercial paper is short-term debt for which the interest payments are tax-exempt at the federal, state or local level. Universities are some of the most common issuers of tax-exempt commercial paper. Read more

Tax-Exempt Interest

Tax-exempt interest is interest income that is exempt from federal and/or state taxes. For example, let's assume that John Doe purchases a municipal bond. Read more

Tax-Exempt Sector

In investing, a tax-exempt sector is a group of financial instruments that pay tax-exempt interest. However, it also refers to nonprofit organizations, which are tax-exempt. Read more

Tax-Exempt Security

Generally, tax-exempt securities are those whose interest, dividends or gains are free from federal income taxation. For example, let's assume that John purchases $1,000 of municipal bonds. Read more

Tax-Free Savings Account (TFSA)

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. Canadians with valid Canadian Social Insurance Numbers can open a tax-free savings account (TFSA). Read more

Tax-Free Spinoff

A tax-free spinoff occurs when a company divests a portion of its business in a manner that qualifies as a tax-free transaction under Section 355 of the Internal Revenue Code and thus does not require the company to pay capital gains tax on the divestiture. Assume Company XYZ has three divisions: the automotive division, the food division and the furniture division. Read more

Tax-Sheltered Annuity (TSA)

A tax-sheltered annuity (TSA), also referred to as a tax-deferred annuity (TDA) plan or a 403(b) retirement plan, is a retirement savings plan for employees of certain public education organizations, non-profit organizations, cooperative hospital service organizations and self-employed ministers. Organizations offer tax-sheltered annuity plans to eligible employees for long-term investment growth, akin to a 401(k) plan. Read more

Taxable Bond

A taxable bond is a bond whose interest payments are taxable at the federal, state and/or local level. The purchaser of a taxable bond is, in effect, lending money to a company or other entity that will make a predetermined number of interest and principal payments to the purchaser. Read more

Taxable Equivalent Yield

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 equivalent yield is commonly used when evaluating municipal bond returns. Read more

Taxable Estate

A taxable estate is the portion of a person's net assets that are taxable upon his or her death. An estate tax is often levied on the assets that the deceased leaves to his or her heirs. Read more

Taxable Event

A taxable event is any occurrence that creates a tax liability. Many day-to-day financial activities are taxable events, but in the investing world the most common are the receipt of income, interest or dividends, and the creation of capital gains (usually through selling assets for a profit). Read more

Taxable Gain

A taxable gain is an increase in the value of an investment. It is the difference between the purchase price (known as the "cost basis") and the sale price of an asset. Read more

Taxable Income

At the beginning of every year, most individuals and families start collecting their annual pay statements and receipts in order to determine their taxable income. If you’ve ever done taxes on your own, you know how hard finding this number can be. Read more

Taxable Preferred Securities

Taxable preferred securities are typically preferred stocks whose dividends are not tax-exempt. Preferred securities (usually called "preferred stocks") have characteristics of both stocks and bonds. Read more

Taxable Spinoff

A taxable spinoff occurs when a company divests a portion of its business in a manner that does not qualify as a tax-free transaction under Section 355 of the Internal Revenue Code. Under a taxable spinoff, the company is required to pay capital gains tax on the divestiture. Read more

Taxable Wage Base

A taxable wage base is the maximum annual wage on which a taxpayer must pay taxes. For example, let's assume that John earns $150,000 a year as CFO of Company XYZ. Read more

Taxation Without Representation

"Taxation without representation" is a phrase commonly thought to have been first made famous by Boston lawyer James Otis in 1765. It refers to the idea of imposing taxes on people who have no recourse against or control over the taxing authority. Read more


Taxes are required payments from citizens to governments. The payments fund projects and expenditures that serve the public interest. Read more


A taxpayer is a person or organization that must pay taxes to a federal, state, or local agency.   For example, let's assume that Jane is an employee of Company XYZ. Read more

Taxpayer Advocate Service (TAS)

The Taxpayer Advocate Service (TAS) is an organization within the Internal Revenue Service that is designed to help taxpayers resolve problems with the IRS.   The TAS was first formed in 1978. Read more

Taxpayer Bill of Rights

The Taxpayer Bill of Rights is a list of the protections available to all taxpayers when dealing with the Internal Revenue Service. In 1988, Congress passed the first Taxpayer Bill of Rights. Read more

Taxpayer Identification Number (TIN)

A Taxpayer Identification Number (TIN) is a 9-digit number that is used by the Internal Revenue Service (IRS) for tax purposes.

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Taxpayer Relief Act of 1997

The Taxpayer Relief Act was created in 1997 and signed by President Bill Clinton. It represented a major overhaul of the U. Read more


A teaser is a document that advertises the potential future sale of a security. The teaser's job is to create demand for a security. Read more

Teaser Loan

A teaser loan is usually an adjustable-rate mortgage (ARM) with an artificially low initial interest rate. The interest rate on the ARM corresponds to a specific benchmark (often the prime rate, but sometimes LIBOR, the one-year constant-maturity Treasury, or other benchmarks) plus an additional spread (which is also called the margin and is often based on the borrower's credit score). Read more

Teaser Rate

A teaser rate is usually an artificially low initial interest rate on an adjustable-rate mortgage (ARM). The interest rate on the ARM corresponds to a specific benchmark (often the prime rate, but sometimes LIBOR, the one-year constant-maturity Treasury, or other benchmarks) plus an additional spread (which is also called the margin, and its size is often based on the borrower's credit score). Read more

Technical Analysis

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 is being analyzed. Read more

Technical Rally

A technical rally is a price increase brought on by traders reacting to signals from technical analysis. A technical rally occurs after a security has experienced a substantial price decline and begins to recover its market value. Read more

TED Spread

The TED spread was originally calculated as the difference between interest rates on 3-month T-bills and 3-month Eurodollar contracts with identical expiration months. The acronym is derived from the word "Treasuries" and the ticker symbol for Eurodollars, which is ED. Read more

Tele Tax

Tele Tax is an automated phone service offered by the IRS. Tele Tax allows callers to select from a phone menu of 151 tax topics. Read more

Telephone Booth

In the trading world, a telephone booth refers to a phone bank on the floor of the New York Stock Exchange. When an investor wishes to buy or sell a security listed on the NYSE, she "places a trade" or an "order" by calling her broker or going to her online trading account. Read more

Tenancy at Will

Tenancy at will is a legal term describing an arrangement whereby a tenant occupies a piece of property with the permission of the property owner. Let's say John Doe is a bachelor trying to make it in Hollywood. Read more

Tenancy by Entirety

Tenancy by entirety is property ownership in which all joint owners have equal portions of ownership that are immediately allocated to remaining owners if one owner dies.  Also called joint tenants with right of survivorship (JTWROS), property owned according to tenancy by entirety is wholly owned by all living owners. Read more

Tenants in Common (TIC)

Tenants in common (TIC) describes an ownership status that applies when a property is severally owned by two parties. If two co-owners of a property are tenants in common, they own the property independent of one another. Read more


A tenbagger is a stock that increases by a factor of ten. Let's say Company XYZ is trading at $5 a share. Read more

Tender Offer

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.  The prospective acquirer typically offers a higher price per share than the corporation's stock price. Read more

Tennessee Valley Authority (TVA)

The Tennessee Valley Authority (TVA) is the largest public power company in the United States. It supplies electricity, economic development assistance and natural resource management to millions of people in Tennessee and parts of Mississippi, Kentucky, Alabama, Georgia, North Carolina and Virginia. Read more


In the finance world, a term is the length of time until a debt matures. A term can also be a condition of a deal, as evidenced by the phrase term sheet, which describes the terms of a deal. Read more

Term Deposit

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 maturities that can range from a few months to a few years. Read more

Term Life Insurance

Term life insurance is a policy which provides financial coverage during a set amount of time. Often considered the "simplest" form of life insurance, it is best suited for providing coverage or income for a short term and on a limited budget. Read more

Term Loan

A term loan has a set maturity date and usually has a fixed interest rate. Let's say Company XYZ wants to borrow $1 million to build a factory. Read more

Term Structure of Interest Rates

The term structure of interest rates is a graph that plots the yields of similar-quality bonds against their maturities (from shortest to longest). It is also referred to as the yield curve. Read more

Texas Ratio

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 throughout the banking industry. Read more

The Big Board

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 largest stock exchange by market capitalization of listed companies (more than $30 trillion as of 2019). Read more

The Wealth Effect

The wealth effect is an increase in consumer spending directly proportional to strong stock portfolio performance. The wealth effect is a behavioral economic theory which posits that consumer spending increases significantly when overall portfolio performance is high. Read more

Thin Market

The opposite of a liquid market, a thin market is characterized by a small number of participants and high price volatility.  The small number of buyers and sellers in a thin market results in low transaction volume and relative illiquidity. Read more

Thinly Traded

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. Things that are thinly traded are essentially illiquid. Read more

Third Market

The third market is an over-the-counter (OTC) market in which brokers and large institutional investors trade exchange-listed securities between one another. The third market is an OTC venue in which brokers and institutional investors (e. Read more


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. Read more

Tick Test Rules

Also called short sale rules, tick test rules are restrictions on when traders can short a stock. Also known as a minus tick, a downtick occurs when a security sells at a price less than the preceding sale. Read more

Ticker Symbol

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. When a company goes public or issues securities to the public, it selects an exchange on which those securities will trade and a ticker symbol that will identify those securities. Read more

Ticker Tape

Ticker tape was the paper strip used to transmit stock prices before the use of computers. A typical ticker tape quote has five components: the ticker symbol, shares traded, price, change direction, and change in price. Read more

Time Deposit

A time deposit is an interest-bearing deposit held by a bank or financial institution for a fixed term whereby the depositor can only withdraw the funds after giving notice. Time deposits generally refer to savings accounts or certificates of deposit, and banks and financial institutions usually require 30 days notice for withdrawal of these deposits. Read more

Time Value

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 second is time value. Read more


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. Stocks are ranked on a 1 - 5 scale, with one the highest achievable score. Read more

Times Interest Earned

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: Earnings Before Interest and Taxes/ Interest Expense Here is some information about Company XYZ: Net Income    $350,000 Interest Expense    ($400,000) Taxes    ($50,000) Using the formula and the information above, we can calculate that XYZ’s times interest earned is: This means that XYZ Company is able to meet its interest payments two times over. Read more

Title Insurance

Title insurance is a type of insurance policy that protects property owners and their lenders against losses resulting from problems with a property title. It provides coverage for financial costs caused by pre-existing or future property ownership issues. Read more

Tobin's Q Ratio

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 For example, let's say Company XYZ has $40 million of assets, 10 million shares outstanding and a current share price of $3. Read more

Top Line

The top line, also called gross sales, usually refers to a company's revenue before subtracting discounts and returns. Let's assume restaurant chain XYZ had $1,000,000 in sales for the year. Read more

Torpedo Stock

A torpedo stock is a stock that rapidly loses market value and follows a downward trend without any sign of recovery. Torpedo stocks are named for the manner in which a ship descends, sinking into the sea following a torpedo attack on its hull. Read more

Total Cost of Ownership (TCO)

Total cost of ownership is an asset's cost to the purchaser in addition to the costs associated with using and maintaining it. Total cost of ownership (TCO) can be best exemplified by owning a home. Read more

Toxic Assets

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. Read more

Toxic Waste

Toxic waste is an idiomatic expression referring to high-risk assets with reputedly low liquidity. Named in reference to the hazardous byproducts of industrial processes, toxic waste frequently describes the riskiest tranches of many collateralized mortgage obligation mortgage obligations (CMOs). Read more

Tracking Error

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. Read more

Tracking Stock

A tracking stock is a security that is issued to track the performance of a wholly-owned subsidiary. A large, diversified company may issue a tracking stock based on one of its wholly-owned subsidiaries. Read more

Trade Balance

The trade balance, also known as the "balance of trade (BOT)", is the calculation of a country's exports minus its imports. When a country imports more than it exports, the resulting negative number is called a trade deficit. Read more

Trade Bloc

A trade bloc (or trading bloc) is a type of agreement between governments where barriers to international trade are eliminated or reduced between participating nations/regions.   Reducing or eliminating barriers (such as tariffs and non-tariffs) allows members within the agreement to trade amongst each other more easily and freely. Read more

Trade Deficit

When the value of a country's imports exceeds the value of its exports, the resulting negative number is called a trade deficit. Balance of trade (BOT; also called the "trade balance") is a measure of a country's exports minus its imports. Read more

Trade Surplus

When the value of a country's exports exceeds the value of its imports, the resulting positive number is called a trade surplus. First, let's back up and define another important term. Read more


A tradeline is a record of activity for a credit account. A tradeline is created on your credit report when you borrow money from a bank or lender who then reports the activity of that account to one of the three credit bureaus, Equifax, TransUnion, or Experian. Read more


A trademark is any legally-protected abstract or figural representation or slogan associated with a company or product that deliberately differentiates it in the market. A trademark is a marketing device that visually sets a company or product apart from similar items trying to gain market share. Read more

Trading Below Cash

A company's stock "trades below cash" if its market capitalization is less than the difference between its cash holdings and its liabilities. Trading below cash can be illustrated by a company which holds $1m in cash reserves, has $500k in outstanding liabilities, and has a total market capitalization equal to $400k. Read more

Trailing Stop Loss

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 certain percentage below the market price. Read more

Trailing Twelve Months (TTM)

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.   TTM is a helpful statistic for reporting, comparing, and contrasting financial figures. Read more


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 part of the pool with similar risks and rewards. Read more

Transaction Costs

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. Read more

Transaction Risk

Transaction risk is the risk that a company will incur losses in a transaction comprising multiple currencies due to exchange rate movements. Companies often engage in transactions involving more than one currency. Read more

Transfer Agent

A transfer agent manages and maintains records of who owns a corporation's or mutual fund's stock or bonds. Most transfer agents are banks or trust companies, although some companies act as their own transfer agents. Read more

Transfer Tax

A transfer tax is a tax on the value of goods that one party gives to another. Individuals and organizations frequently give and accept property with no exchange of monetary payment. Read more

Traveler's Check

A traveler's check is a certified note issued by a bank that may be used by travelers as a risk-free substitute for paper currency. When individuals travel, particularly abroad, they often need cash to cover certain expenses. Read more


Treasuries refer to all the tradable and negotiable debt obligations issued by a country's government. Broadly speaking, when an investor is referring to "Treasuries," he or she is referring to U. Read more

Treasury Bill

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 in various denominations as low as $1,000. Read more

Treasury Bond

Treasury bonds ("T-Bonds") are long-term, semiannual bonds issued by the U. S. Read more

Treasury Inflation-Protected Securities (TIPS)

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 (CPI). Let's assume you purchase a 10-year TIPS for $1,000, and the annual coupon rate is 5%. Read more

Treasury Market

The Treasury market is where the United States government raises money by issuing debt. The U. Read more

Treasury Note

Treasury notes, also known as T-notes, are intermediate-term bonds issued by the U. S. Read more

Treasury Stock

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 outstanding. Read more


TreasuryDirect is the website used by the U. S. Read more

Trend Analysis

Trend analysis is a technical analysis of the movement of a stock based on past performance. A trend analysis is a method of analysis that allows traders to predict what will happen with a stock in the future. Read more

Trickle Down Theory

Trickle down theory suggests that a policy of tax cuts and other financial benefits to businesses and rich individuals will indirectly benefit the broader and poor population. The basic principle of trickle down theory is that if top income earners have more money, they will invest their money in businesses that will produce goods at lower prices and employ more people. Read more

Triple Witching Hour

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 is the final trading hour on those days. Read more

Troubled Asset Relief Program (TARP)

The Troubled Asset Relief Program (TARP) is a U. S. Read more

Troubled Assets

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. Read more

Trust Unit Preferred Shares (TruPS)

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 traditional preferred stock (issued by companies). Read more


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. Read more

Truth in Lending Act (TILA)

The Truth in Lending Act (TILA) was implemented to protect consumers when they borrow money. TILA requires the disclosure of certain credit terms so that consumers are not deceived. Read more


A turnaround occurs when a company takes successful steps to correct a period of deteriorating financial performance. To turn a business' financial results around, companies often obtain special financing for revitalization projects or hire managers with a proven track record of improving the financial results at struggling companies. Read more

Tweezers Candlestick Pattern

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. Read more