Definitions Starting with "W"

W-2 Form

A W-2 form is a tax form required from employers that reports wages paid and taxes withheld to the Internal Revenue Service (IRS), local state tax authorities and the Social Security Administration. Every calendar year, employers must fill out and deliver a W-2 form to every employee who worked for the company during the year. Read more

W-4 Form

A W-4 form is a standard IRS form an employee uses to report federal taxability status to an employer. An employer is required by law to withhold taxes from an employee's pay based on information reflected in the employee's W-4 form. Read more

W-8 Form

The W-8 form is a standard IRS form that exempts non-U. S. Read more

W-9 Form

The W-9 form is a standard IRS form that certifies an individual's Social Security number and taxpayer identification number. Employers and all types of brokers (for example, securities dealers and real estate agents) are required to report details of transactions to the Internal Revenue Service (IRS). Read more

W-Shaped Recovery

A W-shaped recovery refers to two consecutive cycles of economic decline and growth that graphically resemble the letter "W. "A W-shaped recovery graphically expresses what is frequently termed a "double-dip recession. Read more

Wage Assignment

A wage assignment refers to a forced payment of a financial obligation via automatic withholding from an employee's pay. Courts can subject individuals who become delinquent in their obligations to wage assignments. Read more

Wage Earner Plan

A wage earner plan, subsequently known as Chapter 13, is a bankruptcy protection scheme that allows income earners to satisfy outstanding debts -- in whole or in part -- within a specific time frame. In a Chapter 13 bankruptcy -- formerly called a wage earner plan -- a person petitions the court to reduce the total amount owed and provide a reasonable repayment schedule based on his or her income. Read more

Wage Execution

Also called garnishment, a wage execution is a process under which money owed or paid to a borrower is given to a creditor instead. Let's say John Doe has stopped paying child support to his ex-wife. Read more

Wage Expense

Wage expense is the total compensation a company pays its employees during a particular accounting period. The compensation a company pays its employees is treated as an expense on its income statement. Read more

Wage Garnishment

A wage garnishment is an obligatory payment of a debt where a portion of an employee's paycheck is automatically withheld to pay the debt. Courts can set wage garnishments on individuals who become delinquent on their debt payments. Read more

Wage-Price Spiral

Also called cost-push inflation, a wage-price spiral is an economic term that describes how prices increase when wages increase. The general idea behind a wage-price spiral is a simple one of supply and demand. Read more

Wage-Push Inflation

Also called cost-push inflation or a wage-price spiral, wage-push inflation is an economic term that describes how prices increase when wages increase. The general idea behind a wage-push inflation is a simple one of supply and demand. Read more

Waiting Period

The waiting period refers to the time period between a company filing a registration statement with the US Securities and Exchange Commission (SEC) and the SEC declaring that statement to be effective. This is also referred to as the "quiet period. Read more

Waiver

A waiver is a party's voluntary renunciation of rights in a contractual arrangement. When two parties enter into a contract, they often agree to forfeit some of their respective rights or claims. Read more

Waiver of Demand

Under a waiver of demand, a payee assumes responsibility for a check or bank draft that he or she endorses. Sometimes, the bank account a check or bank draft is drawn against does not contain the funds necessary to cover the payment amount. Read more

Waiver of Exemption

A waiver of exemption is a clause in a contract that allows a creditor to seize property that state laws may exempt from seizure. Let's assume 65-year-old John Doe borrows $250,000 to buy a house. Read more

Waiver of Notice

A waiver of notice is an agreement that allows people to conduct certain legal procedures without giving formal notification that he or she is going to do so. For example, let's assume that John Doe dies and his estate goes to a probate court so that the judge can dole out the assets to heirs and beneficiaries. Read more

Waiver of Premium Rider

A waiver of premium rider is language in an insurance policy that allows the insured to stop making premium payments if he or she becomes ill or disabled. For example, let's assume that John Doe has a life insurance policy with Company XYZ. Read more

Waiver of Subrogation

A waiver of subrogation prevents an insurer from seeking payments from third parties that cause losses to the person or business it is insuring. For example, let's say ABC Insurance sells a property insurance policy to 123 Shopping Center. Read more

Wall of Worry

In the finance world, a wall of worry is an increasing amount of negative information about a security or about the market. For example, a wall of worry might be information that the economy's GDP is flat, followed by reports of higher unemployment, followed by increases in foreclosure rates, followed by bankruptcies at several major companies. Read more

Wall Street

Wall Street is the name used to describe the place in New York City where much of the United States' financial industry is concentrated. The name "Wall Street" is also used frequently used to describe the financial services industry, generally. Read more

Wallflower

Wallflower is slang for a stock that analysts and investors tend to neglect. Usually used to describe individuals who are relegated to the sidelines in social events, in investing, wallflowers are stocks that investors and analysts tend to ignore. Read more

Wallpaper

Wallpaper is slang for a security with minimal to no market value. Once a security becomes worthless, its hard documentation (for example, its stock certificate) no longer has any practical function. Read more

Walmart Effect

The Walmart effect refers to the economic impact of a large discount retailer on a local market. Named after the large discount retailer, it is used to describe the crowding out and shuttering of smaller, local businesses that attempt to operate in the same market as a big box store. Read more

Walras's Law

Walras's law is the concept that a surplus in one market indicates the presence of a shortage in another. In 1844, neoclassical French economist Leon Walras posited that the existing markets of the world economy are predisposed toward equilibrium between supply and demand. Read more

Walrasian Market

In a Walrasian market, buy and sell orders are grouped together and then executed at specific times, rather than executed one by one continuously. Let's assume that the following buy orders for Company XYZ stock are received: Buy 1,000 shares @ $4. Read more

War Babies

War babies are securities issued by companies in the defense industry. Let's assume Company XYZ builds jets for the Navy, and Company ABC builds guns for the Army. Read more

War Bond

A war bond is a bond issued to finance war. Let's say that Country X attacks Country Y. Read more

War Chest

A war chest is the cash set aside to deal with unexpected changes in a business environment or to take advantage of a sudden opportunity. Uncertainties, unexpected events and opportunities occur regularly in business environments. Read more

War Economy

A war economy centers on producing goods and services that support war efforts. For example, if Country X spends most of its tax dollars on defense and/or uses most of the proceeds from borrowing money for maintaining military and defense efforts, Country X may be a war economy compared with, say, Country Y, which spends most of its tax revenue and borrowed money on infrastructure and domestic programs. Read more

Warehouse Financing

Warehouse financing occurs when a lender lends to a borrower who uses inventory as collateral. Let's assume Company XYZ wants to borrow $2 million to expand its operations. Read more

Warehouse Lending

Warehouse lending is credit provided to a mortgage lender to fund mortgages until the lender sells them in the secondary market. Let's say John Doe goes to Bank XYZ to borrow $200,000 to buy a house. Read more

Warehouse Receipt

A warehouse receipt is a piece of paper promising that a specific quantity and quality of a particular asset is in a given location. Let's say John Doe buys a coffee futures contract. Read more

Warehousing

Warehousing is the process of accumulating shares in a company for the purpose of eventually acquiring the firm. Let's say the John Doe Hedge Fund is thinking about acquiring a controlling interest in Company XYZ next year. Read more

Warm Card

A warm card is a bank card that allows the user to make one kind of transaction but not another. For example, let's assume that John works for Company XYZ and he is the manager of the Cleveland, Ohio, store. Read more

Warning Bulletin

A warning bulletin is a list of credit cards that are reported stolen, canceled or compromised in some way. A warning bulletin is also called a "hot list," "restricted card list" or "cancellation bulletin. Read more

Warrant

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. Warrants are not the same as call options or stock purchase rights. Read more

Warrant Coverage

Warrant coverage is an agreement to provide warrants to a shareholder. 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. Read more

Warrant Premium

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 warrant premium is: Warrant Premium = 100 x [(Warrant Price + Exercise Price – Current Share Price) / Current Share Price] 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. Read more

Warranty

A warranty is a guarantee, usually written, that a product or service works as expected. For example, when you buy a new car from a car dealer, the warranty states that the car works. Read more

Warranty Deed

A warranty deed is a real estate document which states that the owner owns the purchased property free and clear of any outstanding mortgages, liens, or other types of encumbrances against it. A general warranty deed legally transfers property from one individual or business to another (in most cases for real estate). Read more

Warren Buffett

Commonly referred to as "The Oracle of Omaha" because of his Nebraska roots, Warren Buffett is widely regarded as the world's most prominent value investor. Buffett caught the investing bug at the University of Nebraska, where he read Benjamin Graham's "The Intelligent Investor. Read more

Wash

A wash occurs when two actions cancel each other out (such as a gain and an equal loss), effectively creating a break-even situation. Let's assume XYZ Company sells $1,000 worth of products. Read more

Wash Sale

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. Let's assume an investor owns 100 shares of XYZ Company and sells these shares on May 1 for a $1,000 loss. Read more

Wash Trading

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. Let's assume an investor owns 100 shares of XYZ Company and sells these shares on May 1 for a $1,000 loss. Read more

Wash-Out Round

A wash-out round is a round of financing that dilutes the original shareholders so much that their voting power is essentially "washed out. " For example, let's assume that John starts Company XYZ, which makes a novel new product for wine-lovers. Read more

Wasting Asset

A wasting asset is a property or security that has a limited life and loses value over its life. Assets have a useful life, usually based on the period of time that they have productive capacity. Read more

Wasting Trust

A wasting trust holds the assets of qualified plans when the qualified plans are frozen. Let's say Company XYZ has a pension plan for its employees. Read more

Watch List

A watch list is a list of securities that regulators, brokerages, research firms, or other entities are interested in monitoring. Watch lists can be good or bad. Read more

Water Damage Clause

A water damage clause is the section of an insurance contract that details whether and how much the insurer will pay the insured for damage caused by water. For example, let's assume that John has a homeowner's insurance policy for the house he lives in. Read more

Water ETF

A water ETF is an exchange-traded fund that invests in water-related companies. An exchange-traded fund (ETF) allow investors to purchase a basket of securities in a single transaction. Read more

Water Rights

Water rights are the legal permissions to use water in a specific way. For example, let's assume that John buys a house on the famous Yellowstone River in Livingston, Montana. Read more

Watered Stock

Watered stock is stock that is issued at a price far higher than the value of the issuer's assets. In technical terms, watered stock exists when the following is true: Stock price x Shares outstanding > Net assets (or in some cases, capital invested) For example, if the founders of Company XYZ invested $10 million in the company and then decided to take the company public by selling 50 million shares priced at $3 (a $150 million market capitalization), analysts might say that Company XYZ is issuing watered stock. Read more

Waterfall Concept

A waterfall concept is an insurance strategy whereby a child or grandchild inherits a tax-exempt whole-life insurance policy. For example, let's assume that John wants to buy life insurance but also wants to give money to his son before he dies. Read more

Waterfall Payment

A waterfall payment is a repayment system by which senior lenders receive principal and interest payments from a borrower first, and subordinate lenders receive principal and interest payments after. Imagine the cash generated by a company as a waterfall that flows from senior lenders down to subordinate lenders. Read more

Wave

In investing, a wave is a pattern found in stock prices, technology, consumer trends or other areas. In technical analysis, the term often refers to Elliot Wave Theory. Read more

Weak Currency

A weak currency is a currency that is going down in value. A currency's value fluctuates all the time. Read more

Weak Dollar

A weak dollar is used to describe the United States' currency decreasing in value relative to other currencies. The dollar's value is fluctuating all the time. Read more

Weak Form Efficiency

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 weak form efficiency or the weak form efficient-market hypothesis. Read more

Weak Hands

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, thus making their trading predictable. Read more

Weak Longs

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 longs tend to be traders, not investors. Read more

Weak Shorts

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. Short-term traders typically only enter a short position long enough to capture a quick gain on their investment. Read more

Weak Sister

A weak sister is a security, economy or operating unit that performs worse than all the others. Let's say John Doe's portfolio contains five stocks: Company A, Company B, Company C, Company D and Company E. Read more

Wealth

In the business world, wealth is a measure of financial resources. Wealth is usually a measure of net worth; that is, it is a measure of how much a person has in savings, investments, real estate and cash, less any debts. Read more

Wealth Management

Wealth management is an investment advisory service for high net worth individuals. Wealth management combines both financial planning and specialized financial services, including personal retail banking services, estate planning, legal and tax advice, and investment management services. Read more

Wealth Psychologist

A wealth psychologist is a person who helps people cope with the emotional aspects of money. Let's say that John and Jane get married. Read more

Wealth Tax

A wealth tax is based on a person's net worth or the value of his or her assets. Let's say John Doe makes $100,000 a year. Read more

Wedding Warrant

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. A bond with a wedding warrant, also known as a harmless warrant, requires the holder to return the bond to the issuer if the holder purchases another bond from the same company that quantitatively resembles the original bond. Read more

Weekend Effect

The weekend effect is a theory that stock prices rise on Monday and fall on Friday. The idea behind the weekend effect is that companies tend to release bad news on Fridays, when the market has the weekend to digest the news and not react as negatively on Monday. Read more

Weighted

Weighted refers to the mathematical practice of adjusting the components of an index to reflect the importance of certain characteristics. Here is information about five stocks. Read more

Weighted Average

Weighted average refers to the mathematical practice of adjusting the components of an average to reflect the importance of certain characteristics. Here is information about five stocks. Read more

Weighted Average Cost of Capital (WACC)

In investing terms, WACC shows the average rate that companies pay to finance their overall operations. WACC is calculated by incorporating equity investments from the sale of stock, as well as any operational debt they incur (with respect to the firm’s enterprise value). Read more

Weighted Average Market Capitalization

Weighted Average Market Capitalization refers to a stock market index in which larger companies (i. e. Read more

Weighted Average Maturity (WAM)

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 to mature. Read more

Wells Notice

A Wells Notice is a letter from a regulator such as the Securities and Exchange Commission that warns a financial institution or financial professional that the SEC is beginning an investigation into the institution's or professional's activities. Specifically, a Wells Notice informs a person or institution that a regulator intends to recommend that the Justice Department or other authority begin enforcement proceedings against the person or institution. Read more

Wet Loan

A wet loan is a mortgage in which the borrower gets the funding before all the paperwork is done. Let's assume John Doe wants to buy the house for sale at 123 Main Street. Read more

Whipsaw

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. For instance, if a trader buys shares of Apple at $250/share, and over the course of the day the price drops to $230, the trader has been whipsawed. Read more

Whisper Number

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. Read more

White Knight

A white knight is a company that acquires another company that is trying to avoid acquisition by a third party. For example, let's assume that Company XYZ wants to acquire Company ABC. Read more

Wholly Owned Subsidiary

A wholly owned subsidiary is a subsidiary company whose parent company owns 100% of the company's outstanding common stock. In a wholly owned subsidiary, the parent company owns all of the shares of the company and there are no minority shareholders. Read more

Wide Economic Moat

A wide economic moat is a significant competitive advantage that is extremely difficult to copy or emulate, thereby creating a barrier to entry for competing firms. Castles were traditionally part city and part defensive fortress. Read more

Widow and Orphan Stock

Widow and orphan stocks are low-risk securities that pay high dividends. Widow and orphan stocks typically maintain their dividend payments to shareholders even through difficult financial times, especially in bear market conditions. Read more

Wildcat Drilling

Wildcat drilling is the process of looking for oil and natural gas wells in non-typical areas. Drilling oil and gas wells can be a good opportunity for risk-tolerant investors, particularly if the field where the new well is to be drilled has consistently produced oil or gas or both in the past and is expected to continue. Read more

Will

A will is a legal document that indicates how a person wants his or her estate (money and property) to be distributed after death. Wills must expressly state to whom the will belongs and be signed, dated and include the signatures of at least two witnesses. Read more

Williams %R

Often combined with stochastics to detect overbought and oversold conditions, Williams %R -- or %R for short -- is a momentum indicator developed by Larry Williams. While stochastics compares the close of a security/index to its lowest low over a specific time period, Williams %R compares the close to its highest high over a specified period. Read more

Wilshire 5000 Index

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 computers made the daily computation of such a large index possible. Read more

Window Dressing

Window dressing is a term that describes the act of making a company's performance, particularly its financial statements, look attractive. Let's assume Company XYZ wants to look attractive to potential acquirers. Read more

Wire Room

In a brokerage firm, a wire room receives customer orders from brokers, sends the orders to the exchanges, and sends back notices of execution. For instance, let's say John Doe is a broker at Brokerage XYZ. Read more

Wire Transfer

A wire transfer is a method of transferring money electronically between two people or institutions. A wire transfer is made between two financial institutions by a person issuing instructions to one institution. Read more

Witching Hour

The witching hour is the last hour of the trading day. The witching hour occurs between 3 and 4 p. Read more

Withdrawal Penalty

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. Individual retirement accounts (IRAs) are one type of investment often associated with withdrawal penalties. Read more

Withholding Allowance

A withholding allowance reduces the amount of income tax an employer withholds from an employee's paycheck. Withholding allowances are indicated by employees on the IRS Form W-4 and appropriate state income tax form. Read more

Withholding Tax

Withholding tax, also sometimes referred to as simply "withholding," is an amount that employers withhold from an employee's paycheck and remit to local and federal taxing authorities on behalf of the employee. For example, let's say John Doe's salary is $72,000 a year. Read more

Work in Process (WIP)

Work in process refers to items in a manufacturing plant that are in the stages between raw materials and finished goods (or inventory). In-process goods are expected to be finished and moved into inventory soon, but they aren’t quite complete yet. Read more

Working Capital

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. Read more

Working Capital Loan

A working capital loan is a loan used by companies to cover day-to-day operational expenses. In many cases, companies are unable to generate the revenue needed to meet expenses incurred by day-to-day business operations. Read more

Working Ratio

A company's working ratio measures its ability to cover its annual expenses. A company's working ratio indicates whether or not it is capable of at least breaking even by dividing its annual expenses by its annual revenues as shown:Working Ratio = Yearly Expenses – (Debt + Depreciation) / Yearly Gross RevenueA company with a ratio of 1 or less is capable of covering its expenses. Read more

World Bank

The World Bank is an international financial institution dedicated to reducing poverty around the world through capital investment and the facilitation of trade. Based in Washington, D. Read more

World Trade Organization (WTO)

The World Trade Organization (WTO) establishes rules of trade among its member nations. To this end, the WTO also handles trade disputes, monitors trade policies, provides technical assistance for developing countries and cooperates with other international trade organizations. Read more

Write-Down

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. Read more

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