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Abandon
To abandon is to surrender a claim to, or interest in, a particular asset. It's also used to describe an instance in finance when one party waives its rights to recover the debt owed so that trading can continue, with previously invested funds not affected.
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Above Par
Above Par is the price of a bond above face value.
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Accounts Payable
Accounts Payable represents a company's obligation to pay off a short-term debt.
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Accounts Receivable
Accounts Receivable is the amount of money that's due to a company but not yet paid by customers.
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Accreted Interest
Accreted Interest is interest accrued on a loan that is added to the principal amount instead of being paid as Interest as it accrues.
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Accrual Bond
Accrual Bonds defer periodic interest payments until maturity.
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Accrued Interest
The amount of interest that has been accrued but isn't paid out yet.
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Accumulation Bond
A type of security that is sold at a discount. The bond issuer is not required to make semi-annual interest payments.
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Acquisition
One company purchases the majority or all shares of another company in order to gain control.
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Active Management
Making buy and sell decisions about the holdings in a portfolio. It may or may not include a professional.
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Advanced Option
A short-term line of credit granted by the underwriter to an issuer of securities that can be drawn if the underwriter cannot successfully place the securities.
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After-hours Trading
The buying and selling of stocks after the close of the U.S. stock exchanges (4 PM US time).
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Aftermarket
The market for shares and bonds after their original issue date.
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Aggressive Growth Funds
A fund that seeks greater returns by taking higher risks in high-growth companies.
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All-or-None (AON)
An instruction to fill an order completely at the specified price or cancel it.
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Alpha
A measure of performance - the excess return of an investment relative to the return of a benchmark index.
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American Stock Exchange (AMEX)
AMEX is now known as the NYSE American. It was once the third-largest U.S. stock exchange dating all the way back to the 18th century.
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Amortization
Periodically lowering the book value of a loan or intangible asset over a set period of time.
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Annual Percentage Rate (APR)
The yearly cost of a loan represented as a percentage of the total value.
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Annual Percentage Yield (APY)
APY is the return rate of an investment over a period of one year, including compounding interest.
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Annual Report
A yearly company report that describes its ins and outs to stakeholders.
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Annual Report (Mutual Fund)
A yearly fund report that includes data and performance, presented to shareholders and potential investors.
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Annualized Returns
The rate of return for a period that's less than a year but calculated for a full year.
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Appreciation Funds
A fund that aims to increase the value of an asset by primarily investing in high growth and value stocks.
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Arbitrage
Taking advantage of the difference in the price of the same asset on two or more separate markets.
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Arms Index – TRading INdex (TRIN)
A technical analysis indicator which provides overbought and oversold levels by measuring the number of advancing and declining stocks and volume.
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Arrearage
An amount on a loan that is overdue.
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Asian Funds
A broad global emerging market that promises high growth.
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Asian Option
An option where the payoff depends on the average price of the underlying asset instead of its maturity.
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Ask (Asked Price)
The minimum price that a seller is willing to take.
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Ask Price (Mutual Funds)
Instead of paying the ask price, it is the fund manager that does it.
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Assessment Bond
General obligation bonds, usually created to fund development projects, where the interest is paid by taxes levied solely on the beneficiaries of that project.
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Asset Allocation Funds
A fund that provides investors with a diverse portfolio that includes different asset classes.
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Assignment
A notice that the options have been exercised.
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At-the-Money
An option's strike price is equal to the market value of the underlying asset.
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Auction (Treasury)
Treasury auctions reduce the costs of financing national debt with competitive bidding and liquid secondary market trading.
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Auction Market
A market is where buyers and sellers generate their offers at the same time and any matching offers get paired and executed.
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Average
A way to calculate the relative price of an index of stocks by adding the prices of all the stocks in the index and dividing by the total number of available stocks.
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Average Life
The period of time the principal of debt is expected to be outstanding.
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Average Maturity
The average amount of time before debt securities mature.
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Average Volume
The total volume for a specific period divided by the number of bars.
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Away From the Market
A limit order set to buy at a price lower than the current market price or sell higher than the current price.
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Baby Bond
A debt instrument that's valued at less than $1000.
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Back-End Load
The withdrawal fee for a mutual fund.
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Balance Sheet
A financial document that reports on a company's assets, liabilities and shareholder equity for a certain moment in time.
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Balanced Funds
A mutual fund that contains two or more different asset classes.
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Banker’s Acceptance
A financial instrument that guarantees a future payment by a bank.
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Bankruptcy
Businesses or individuals that are unable to repay their debts are considered bankrupt and file for bankruptcy.
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Basis
A trading strategy that capitalizes on small basis point changes.
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Basis Point
One basis point equals one-hundredth of one percentage point. It's a widely used unit of measure for interest rates.
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Bear
Bears are traders who believe that a financial instrument, an asset, a market or the entire market is going down.
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Bear Market
A synonym for a declining market.
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Bear Raid
An illegal push to drive the price down, this includes short selling, spreading false rumors and other methods.
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Bearer Securities
A security that's not registered in the issuer's books. Payable to the holder of the bond or stock certificate.
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Benchmark Index
A group of securities that are used to measure the performance of other securities on the market.
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Beneficial Owner
The owner of an asset or security that has a different legal name.
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Best 3-Month Return
The highest total return a stock has in a consecutive three-month period over the past five years.
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Beta
An indicator that determines how risky a stock is.
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Bid
An offer that indicates the highest price for a certain number of shares that a buyer is willing to pay.
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Bid/Ask Size
Bid size is the number of securities that an investor, trader or dealer is willing to pay at a certain bid price. Ask size is the number of securities that a seller is willing to sell at the ask price.
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Block
A large volume of trades that all occur at the same time.
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Blue-Chip
A recognized company that's considered a safe investment.
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Board of Directors
The governing body of a company that dictates strategy and supervises management.
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Bond
A security under which the issuer owes the holder a debt, and is obliged to repay the principal of the bond at the maturity date as well as any interest over a certain period of time.
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Bond Fund
A fund that invests primarily in bonds.
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Book Entry
A method of tracking ownership without giving investors physical certificates.
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Book Value
The value of a security or asset as written in the company's books. Book value is also the amount of money shareholders would receive if liabilities were paid and the assets were liquidated.
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Breadth of the Market
Breadth of the Market is a technical analysis technique that calculates the moves in a major index.
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Breakout
The movement of the price over an identified level of support.
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Breakpoint
A breakpoint is the dollar amount for buying a load of mutual fund shares that qualifies the investor for a reduced sales charge.
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Bull
Bulls are traders who believe that a financial instrument, an asset, a market or the entire market is going up.
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Bull Market
A market in which the prices are going up or are expected to rise.
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Bullish
An upward trend in the prices
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Buy-In
The repurchasing of shares by an investor because the seller couldn't deliver the shares.
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Buy/Write
A trading strategy that involves buying an asset and simultaneously selling an option on that asset.
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Buyer’s Option (Contract)
A contract between a seller and a buyer that defines the specifications and price for a sale over a certain period.
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Buying Power
The money a trader has available to invest with.
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Buyout
Buyout is when a company acquires a controlling share in another company.
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Call
An option contract and also the term for the formation of prices through a call auction.
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Call Date
The date when an issuer may exercise his call option to redeem.
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Call Protection
A provision in a bond that prevents the issuer from buying back during a certain period early in its life.
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Call Spread
A strategy which includes buying a call option and selling a less expensive one at the same time.
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Callable
Shares in a company that the issuer can buy back.
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Callable Bond
A bond that can be paid earlier than its maturity date.
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Capital Expenditures
The amount of money spent by an organization spends to buy, maintain or improve its assets.
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Capital Gain
The profit earned from the sale of an asset which has increased in price.
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Capital Growth
The increase in value of an asset measured by its current price and the buy price.
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Capital Loss
The loss caused by the sale of an asset that has decreased in price.
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Capital Stock
The number of common and preferred shares that a company can issue.
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Capitalization
The provision of capital or the conversion of assets or income into capital.
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Cash and Equivalents
Investment securities that can be converted into cash.
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Cash Dividend
The amount paid to stockholders as part of a corporation's current earnings or profits in the form of cash.
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Cash Flow
The net amount of cash equivalents and cash that are being transferred to and out of a company.
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Changes in Financial Position
A financial statement that reveals the sources and uses of funds, explaining any changes in cash or working capital.
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Class
A type of asset.
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Client (Account) Statement
A statement issued by a vendor that details the financial transactions between the vendor and the client over a certain period of time.
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Cliffing
Cliff vesting is when an employee becomes fully vested on a specified date as opposed to partial vesting over an extended period.
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CLO
Chief Legal Officer - head of the legal department, responsible for the legal affairs of the entire company.
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Close
The exiting of a trade, the final procedure in a financial transaction or the closing of a financial market.
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Closed-End Funds
A fund that raises capital with a one-time sale of a limited number of shares, which may then be traded on the markets.
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Closing Purchase
A settlement in which the purchaser' wants to reduce or eliminate a short position in a stock or in a series of options.
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Closing Sale
A settlement in which the purchaser' wants to reduce or eliminate a long position in a stock or in a series of options.
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Closing Transaction
A buy or sell transaction that terminates an already existing position
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Collateral Trust Bond
A bond that is secured by a financial asset that is deposited and held by a trustee.
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Combination Order
Any options trade that contains more than one type of option, strike price, or expiration date of the same asset.
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Commission
The amount of money charged by an investment professional for advice or making transactions.
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Common Equity
The amount that all shareholders have collectively invested in a company.
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Common Stock
A security that represents ownership in a corporation.
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Comparison /Chart/
The buying and selling of financial instruments between parties, through a stock exchange.
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Competitive Tender
An auction process that allows large institutional investors to purchase newly issued government debt.
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Consumer Price Index
The change over time in the prices paid by consumers for certain goods and services.
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Contingent Deferred Sales Charge (CDSC)
A fee paid by fund investors when selling Class-B fund shares.
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Contractual Plan
A mutual fund purchasing plan that requires the investor to commit to purchasing a set dollar amount and make payments over a certain period of time.
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Control Person
Someone who owns or controls 10% or more of the voting stock of a corporation. The officer or director of a corporation. Someone who can influence the decision-making of a corporation.
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Control Securities
Securities held by an affiliate of the issuing company
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Convertible Issue
An issue of corporate bonds that can be converted into the shares of the company that issued them.
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Cooling-Off Period
A period of time which must pass before someone can do something or before an agreement gets finalized.
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Corner a Market
To acquire enough market share, or to hold a large position, to be able to manipulate the price.
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Corporate Bonds
A type of debt security issued by a company and sold to investors.
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Coupon
The interest received by a bondholder from the issuance until the maturity of a bond.
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Coupon Yield
The return to an investor from the bond's interest payments ignoring the time value of money and any changes in the bond's price.
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Cover
Buying a security you sold short in order to close out a position.
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Covered Call
A covered call refers to a financial transaction in which the investor selling call options owns the equivalent amount of the underlying security.
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Covered Put
А strategy that is essentially a short version of the covered call.
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Credit Agreement
А legally-binding agreement that documents the terms of a loan agreement.
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Credit Balance
The funds generated from a short sale that is credited to the client's account.
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Credit Risk
The possibility of loss due to a borrower's defaulting on a loan or not meeting contractual obligations.
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Cumulative Dividends
A sum that companies must remit to preferred shareholders without regard to the company's earnings or profitability.
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Cumulative Preferred Stock
Shares with a condition stating that, if any dividends were missed in the past, they must be paid out to preferred shareholders first.
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Current Assets
A balance sheet item that represents the value of all assets that could reasonably be expected to be converted into cash within one year.
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Current Income
Cash flows that are anticipated in the immediate to short-term.
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Current Maturity
An indicator used to value a bond based on the amount of time left until maturity.
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Current Ratio
A ratio that measures a company’s ability to cover its short-term obligations with the current amount of available assets.
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Current Share Price
The price at which a share was last traded.
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Current Yield
The annual income divided by the current price of a security.
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Cyclicals
Stocks that follow the trends in the economy, making them a very volatile asset.
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Dated Date
The date on which interest begins to accrue on a fixed-income security.
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Day Order
An order to buy or sell an asset at a specific price that expires if it is not executed on the same day it was placed.
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Day Trade
Buying and selling within the same trading day so all positions are closed before the market closes.
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Dealer
A person or firm who buys and sells securities for their own account, whether through a broker or otherwise.
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Debentures
A type of debt issued by governments and corporations that has no collateral and is dependent on the reputation and creditworthiness of the issuer.
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Debit Balance
A negative cash balance in a checking account with a bank
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Debt/Equity Ratio
The debt-to-equity ratio illustrates the debt a company is using to finance assets relative to the value of equity.
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Decile Rank
A decile is a method that splits data into ten equal parts. Decile ranks are used to sort the data in ascending or descending order.
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Declaration Date
The date on which the next dividend payment and the last date an option holder can exercise a company's option.
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Deed of Trust
A document used instead of a mortgage.
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Default
When a borrower fails to make payments on a debt.
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Defensive Stocks
A stock that provides a consistent dividend and stable earnings no matter the state of the market.
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Deferred (Income) Taxes
A liability on a balance sheet resulting from income.
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Delivery Balance Order (DBO)
An order issued by the clearing corporation to any firm that has delivery or sale positions remaining after the day's trades are netted.
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Depository
A facility where something is deposited for storage or safeguarding.
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Depository Trust Company (DTC)
A New York corporation that performs the functions of a Central Securities Depository as part of the US National Market System.
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Depreciation
The decline in an asset's value.
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Derivative
A securitized contract the value of which depends upon one or more underlying assets.
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Derivative Security
A financial instrument whose value depends upon the value of another asset.
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Designated Order Turnaround (DOT)
An electronic system that improves efficiency by routing orders for listed securities directly to a specialist on the trading floor instead of a broker.
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Diagonal Spread
An options strategy that uses a long and short position in calls or puts with different strike prices and expiration dates.
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Difference from S&P
A mutual fund's return minus the change in the Standard & Poor's 500 index for the same exact period
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Differential
The value adjustment of grade and value that a futures contract permits.
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Dilution
Dilution happens when new stock gets issued, resulting in a decrease in existing stockholder ownership percentage in the company.
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Discount Bond
A bond that issues for less than face value or that trades for less than its face value on the secondary market.
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Discount Rate
The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.
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Disposable Income
The amount of money that a person or household has left after taxes.
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Distributions
Distributions describe the gradual entry of large amounts of a security in smaller blocks that are slowly sold into the market to inundate the market with sell orders for the security and drive down its price.
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District Business Conduct Committee (DBCC)
The primary local enforcement arm of the NASD.
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Divergence
When the price of an asset and a technical indicator are moving in two different directions. It usually warns of a weakening price trend and may lead to price reversals.
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Diversification
An investment strategy that seeks to minimize risk by diversifying investment across different companies and asset classes.
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Dividend Reinvestment
Reinvesting dividend payments from assets you hold back into your portfolio instead than spending them.
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Dividend Reinvestment Plan
An arrangement that gives shareholders the option to automatically reinvest dividends into additional or fractional shares of the underlying company.
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Dividend Yield (Funds)
A fund where investment is made in the stocks of companies that regularly declare dividends.
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Dividend Yield (Stocks)
A financial ratio showing how much the company pays out in dividends relative to its stock price.
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Dividends
Money paid out regularly by a company to its shareholders.
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Dividends per Share
The total amount of dividends declared in a certain time period divided by the number of outstanding ordinary shares issued.
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Do-Not-Reduce (DNR)
A type of order with a specified price that isn't adjusted when the underlying security pays a cash dividend.
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Dollar Cost Averaging
A strategy where investors divide their total investment amount across periodic purchases.
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Dollar-Denominated
A dollar-denominated asset is an asset that has an underlying value in dollars.
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Double Taxation
Taxes that are paid twice on the same income source. This happens when investors get taxed on a corporate and personal level or in two different countries.
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Dow Jones Industrial Average (DJIA)
A popular stock market index that tracks 30 blue-chip stocks in the U.S.
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Downgrade
A negative change in the rating of a stock's expected performance issued by an analyst or financial services firm.
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Downtick
A transaction on an exchange that happens at a lower price than the previous transaction.
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Drag on Returns (Drag Grade) / Performance drag?
Calculating the return on an investment with no costs associated with it and the return after accounting for all the costs associated with it.
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Due Diligence (Meeting)
A special type of meeting conducted by an underwriter allowing brokers and analysts to ask corporate officials or representatives of the issuing company about a new security before its release.
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Duration
The time it takes to receive the true cost of a bond, weighing in the present value of all future coupons and the principal payments.
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Earnings
A company's after-tax income. Earnings are usually the big factor in determining a public company's share price.
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Earnings Before Interest and Taxes (EBIT)
An indicator of company profitability calculated as revenue minus expenses but excluding taxes and interest.
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Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
EBITDA stands for earnings before interest, taxes, depreciation, and amortization It's an indicator of the overall financial condition of a company.
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Earnings Growth %
The annual compound annual growth rate of earnings from investments.
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Earnings Per Share (EPS)
The portion of a company's profit allocated to each outstanding share of common stock, serving as a profitability indicator.
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Earnings Report
Earnings reports are quarterly financial statements issued by publicly traded companies. They reveal details about the profits earned by a company in a given quarter, sales volumes, revenue and profit margins.
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Earnings Yield
The quotient of earnings per share, divided by the share price. This valuation metric covers the last 12 months.
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ECN
ECN stands for an electronic communication network. A computerized system that automatically matches buy and sell orders for securities in the market.
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EE Savings Bond
Low-risk savings assets that earn interest until they reach 30 years or you cash them out, whichever happens first.
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Effective Date
The date when an agreement starts to operate.
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Endorsement
An amendment to a contract or document, an authorizing signature, or a public declaration of support. Public declaration of support for a service, product or person.
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Equipment Trust Bonds
A bond that is secured by a tangible property.
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Equity
The ownership of an asset without any debt involved. Total assets minus total liabilities
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Equity Options
A contract that conveys to its holder the right, but not the obligation, to buy or sell shares of the underlying security at a specified price on or before a given date.
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Equity-Income Funds
Funds that invest in securities from well-known, creditworthy companies pay out dividends regularly.
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Estimated EPS Growth
An indicator that illustrates the growth of earnings per share over time.
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Eurobonds
A bond issued in a currency that's different from the currency of the country or market in which it was originally issued.
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European-Style Option
An option that can only be exercised on its maturity date.
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Ex-Dividend Date
The timing of payment of dividends on stocks of corporations, income trusts, and other financial holdings, both publicly and privately held.
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Ex-Rights Date
The date on which a share of stock with rights on it begins trading ex-rights.
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Ex-Warrants Date
The date on which the bond and warrant will become completely separate financial instruments that can be bought and sold on their own.
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Excess Equity
A part of client assets that is over the required amount needed to be maintained by the company.
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Exchange
A marketplace where securities, commodities, derivatives and other financial instruments are traded.
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Exchange Traded Fund (ETF)
A basket of securities that tracks an underlying index. ETFs can contain investments such as stocks and bonds.
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Execution
The completion of a buy or sell order for a security in the market.
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Exercise
To put into effect the right to buy or sell an underlying financial instrument that's part of an option.
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Exercise Price
The price at which the underlying security can be bought or sold.
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Expense Ratio
The total costs of managing and operating an investment fund
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Expiration
The expiration date and time when an option is rendered null and void.
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Expiration Cycle
The cycle of expiry months for which an option for a security is available.
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Expiration Date
The last day that an option is valid.
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Expiration Month
The month a futures or options contract expires. It's also the month in which the terms of the contract are fulfilled if the buyer decides to take delivery.
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Extended Maturity
The option to extend the initial maturity to a later date.
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Factor
A trader who receives and sells goods on a commission.
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Fast Market
High levels of volatility, combined with unusually heavy trading.
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FDIC Insured Deposit Account
A bank or thrift account covered or insured by the FDIC.
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Federal Deposit Insurance Corporation (FDIC)
An independent agency created by US Congress to maintain stability and public confidence in the financial system.
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Federal Farm Credit System
A network of financial institutions that provide financing for agricultural companies in the United States.
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Federal Funds Rate
The target interest rate set by the Fed at which commercial banks can borrow and lend their extra reserves to one another.
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Federal Reserve Board
The governing body of the Federal Reserve System, the United States central bank in charge of creating the monetary policy.
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Federal Reserve System
The central bank of the U.S. that's responsible for the monetary and financial system.
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Fill or Kill (FOK)
An equity order that calls for immediate and complete execution of a trade or its cancellation. It is typically done with large orders.
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Financial Industry Regulatory Authority (FINRA)
A nongovernmental organization that creates and enforces rules for brokers and dealers.
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Fiscal Agent
An organization that acts on behalf of another party performing various financial actions.
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Fiscal Year
A period of one year used for financial reporting by businesses and other organizations.
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Fixed Annuity
An insurance contract that's used to protect against losses by providing fixed rates of return.
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Flat
A price that is neither declining nor rising.
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Flat (Bonds)
The price of a bond minus the interest that accrues between coupon payments.
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Floor Broker
Аn independent member of an exchange who is authorized to execute trades on an exchange floor.
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Flotation
The process of changing a private company into a public one. This is done by issuing shares and encouraging the public to purchase them.
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Fractional Shares
A share of equity that is less than one full share.
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Free Cash Flow
The amount by which a business's operating cash flow exceeds its working capital needs and expenditures.
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Free Cash Flow per Share
The cash available after operating expenses and capital expenditure that can be allocated into debt and equity.
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Free Stock
A stock that is paid for in full and is not pledged in any way as collateral.
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Frozen Account
An account that can't make purchases or withdrawals.
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FTSE 100 Share Index
A share index of the 100 companies listed on the London Stock Exchange with the highest market capitalisation
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Fully Diluted Earnings per Share
The net income available to shareholders as calculated by the weighted average number of common shares outstanding, plus all dilutive securities, whether or not they are considered common stock equivalents.
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Fully Diluted Shares Outstanding
The total number of shares that a company would theoretically have if all dilutive assets were exercised and turned into shares.
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Fully Paid Securities Lending
A type of security lending where clients can earn passively by lending out stocks they've fully purchased through a broker.
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Fund Exchange
A fund that allows investors to diversify their positions without getting taxed for it.
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Fund Family
A fund family includes all the funds managed by a single investment company.
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Fundamental Analysis
A method of measuring the intrinsic value of a stock by taking into account various indicators such as the state of the economy, industry conditions, company management, and others.
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Futures
Derivative financial contracts that obligate parties to buy or sell an asset at a predetermined future date and price.
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Futures Contract
A standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other.
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Gearing
The ratio of a company's debt relative to its equity. If that ratio is high a company may be considered leveraged.
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General Obligation (GO) Bond
A bond that is backed by the credit and "taxing power" of the issuer.
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Good ‘Til-Canceled (GTC)
A buy or sell order that remains active until it is executed or cancelled.
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Good Delivery
The transfer of ownership from the seller to the buyer with all necessary requirements being met.
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Goodwill
A premium paid over the fair value of assets during the purchase of a company.
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Government Bond
A bond that is issued by a government at the federal, state, or local level to raise debt capital.
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Gross Profit
The profit a company makes after deducting the costs of buying or selling products or providing its services.
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Growth and Income Funds
Funds that invest in securities and combine both long-term growth and short-term income.
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Growth Stock
A publicly traded share in a company that is expected to grow at a rate higher than the market average.
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Head & Shoulders
A specific pattern in technical analysis that predicts a bullish or bearish trend reversal.
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Hedge
An investment that is meant to reduce the risk of sudden price movement.
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HH Savings Bonds
A 20-year savings bond that was issued by the U.S. government. It was non-marketable and paid semi-annual interest based on coupon rate.
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High-Yield Bond
A with a lower credit rating that pays a higher yield due to having more risk than other higher-rated bonds.
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Holding Company
A company that owns other companies and exists solely to oversee their operations.
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Hostile Takeover
The acquisition of one company by another without approval from the acquired company's management.
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House Maintenance Call
A house call is the call made when the account balance falls below the maintenance margin required by a brokerage firm.
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House Requirement
The minimum margin account equity that is required by a brokerage firm.
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Hypothecation
When an asset is pledged as collateral to secure a loan without giving up any of the rights associated with it.
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Immediate-or-Cancel (IOC)
An order that tries to fill as much as possible in the next few seconds and then cancels any balance right after.
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In-the-Money
An option has value or its strike price is favourable compared to the market price of the underlying asset.
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Income
The amount of money, property, and other transfers of value received over a set period of time as compensation for services, payments, investments, pension distributions, and others.
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Income Bonds
A bond that pays interest only if the issuing entity has earned income.
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Income Funds
Funds that pursue current income over capital appreciation by investing in dividend-paying stocks, bonds, and other income-generating securities.
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Income Stock
An equity security that pays regular dividends.
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Income Stream
A way of receiving regular income.
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Indenture
A contract between a bond issuer and bondholders.
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Index Fund
A mutual fund or exchange-traded fund that aims to track the returns of a market index.
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Indicated Dividend
An estimate of a security’s dividend payments for the next 12 months based on what it paid in the past.
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Indicated Yield
The dividend yield that a share of stock would return based on the most recent dividend.
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Industrial Revenue Bond
Municipal debt securities that are issued by a government agency on behalf of a private sector company. They're intended to build or acquire factories or tools.
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Inflation
A decrease in the purchasing power of money that leads to a general increase in the price of goods and services.
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Inflation Risk
The risk that your purchasing power will be reduced if the value of your investments does not surpass the inflation rate.
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Inflation-indexed Bonds
Bonds that are designed to help protect investors from inflation
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Initial Public Offering (IPO)
The process of offering shares of a company to the public.
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Inside Information
Information that can provide a financial advantage if it's used before it becomes known to the shareholders.
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Insider
An individual that possesses insider information.
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Insider Trading
The trading of company securities by individuals with access to confidential information about the company.
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Interest Coverage Ratio
A ratio that takes into account the debt and profitability of a company and is used to determine how easily a company can pay interest on its outstanding debt.
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Interest Expense
The cost incurred by an entity for borrowed funds.
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Interest Rate
The amount that a borrower pays to the lender for the loan of an asset as a percentage of the amount borrowed.
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Interest Rate Risk
The possibility that the value of a fixed-income investment will suffer as the result of a change in interest rates.
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Interim Dividend
A dividend paid ahead of a company's annual meeting and release of final financial statements.
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Intermediate-Term Bonds
Bonds with maturity dates between 2 and 10 years
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International Funds
A fund invests in companies located anywhere outside of its investors' country of residence.
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Inventory
The entire stock of a business, including materials, components, work in progress, and finished products.
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Issue Date
The date on which a company releases a new issue of securities.
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Issued Stock
The shares of a company distributed to investors
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Ladder
An exotic option that locks partial profits once the underlying asset reaches predetermined price levels.
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Large-Cap Stocks
Stocks of large-cap companies (those with over $10 billion in market capitalisation).
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Last Trading Day
The final day that a futures contract, or other derivatives with an expiry date, may trade or be closed out before the delivery of the underlying asset or cash settlement must occur.
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Level-Load Funds
A fund that entails mutual fund shares that carry a sales commission paid by the purchaser.
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Liability
Something a person or company owes, usually a sum of money.
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Limit Order
An order used to buy or sell a security at a pre-determined price. The order will not execute unless the specifications are met.
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Limited Tax Bond
A bond that allows municipalities to raise property taxes when it is necessary to meet the service payments of the debt.
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Limited Trading Authorization
With LTA an agent or broker is granted the power to place orders or make inquiries on a client's account.
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Liquidation
The process of bringing a business to an end and distributing its assets to claimants, when a company becomes insolvent.
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Liquidity
The ease with which an asset, or security, can be converted into ready cash without affecting the market price of the asset.
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Liquidity Ratio
A class of financial metrics used to determine a debtor's ability to pay off current debt obligations without external capital.
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Liquidity Risk
The risk of incurring losses resulting from the inability to meet payment obligations in a timely manner when they become due.
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Listed Options
A put or a call option that is traded on a national exchange
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Listed Securities
A financial instrument that is traded through an exchange.
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Listed Stock
Shares of a company that can be bought and sold on a stock market
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Load
A sales charge commission charged to an investor when buying or redeeming shares in a mutual fund.
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Load Fund
A mutual fund that comes with a sales charge or commission
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Loan Consent Agreement
A contract signed by a customer that permits the broker-dealer to lend securities in that customer's margin account.
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Loan Stock
Stock shares that are used as collateral to secure a loan from another party.
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Loan Value
The maximum amount an individual or company can borrow to buy securities.
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Long Position
An investor will purchase a security with the hope that it will increase in value.
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Long-Term Assets
Investments in a company that will benefit the company and remain on its books for many years to come.
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Long-Term Bond
A financial obligation that runs for 5 or more years.
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Long-Term Debt
A debt with a maturity greater than 12 months.
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Long-Term Debt/Capitalization
The debt to capitalization ratio, calculated by dividing long-term debt by available capital. The results reveal the financial leverage of a firm.
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Long-Term Liabilities
Financial obligations that are due more than one year in the future.
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Low
The lowest price at which a specific stock trades.
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Make a Market
An action where a dealer is ready, willing, and able to buy or sell a security at an appointed bid and ask price.
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Management Fees
The price charged by a fund manager to invest capital on behalf of clients.
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Management/Closely Held Shares
Shares of stock are held by a small group whose members have a close relationship with the issuing company.
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Margin
The difference between a product or service's selling price and the cost of its production.
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Margin Account
A brokerage account in which the broker lends the customer cash to purchase assets.
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Margin Call
The margin call requires additional money to be added to a margin account after it suffered a trading loss in order to meet the minimum capital requirements.
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Margin Requirement
The percentage of marginable assets that an investor must pay for with his/her own cash
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Margin Requirement (Options)
The margin requirement is 75% of the market value of a listed, long-term equity or equity index put or call option.
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Mark-to-Market
A method of measuring the fair value of accounts that can fluctuate over time. This includes assets and liabilities.
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Market Capitalization
The market value of a company represented in dollars.
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Market Cycle
Market cycles are proposed patterns that many argue may exist in stock markets.
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Market Data System
A system designed to meet the required analytical and application needs of marketers.
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Market Maker
A dealer in assets who takes up buying or selling at specified prices at all times.
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Market Not Held Order
An order that gives the broker the time and price discretion to get the best possible price.
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Market Order
An order to a broker to buy or sell stocks or other assets immediately at the best available price.
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Market Risk
The risk that an investor will experience losses due to factors that affect the overall performance of the markets.
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Market-Weighted Index
An index which weighs the participants according to the size of the company.
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Marketable Securities
Liquid financial instruments that can be easily converted into cash.
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Married Put
An options strategy where an investor, holding a long position in a stock, buys a put on the stock to mimic a call option.
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Maturity
A finite time period at the end of which the financial instrument will cease to exist. In that case, the principal is repaid with interest.
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Merger
Two existing companies uniting into one new company.
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Mid-Cap Stocks
Companies with a market cap between $2 and $10 billion.
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Mini-Refunding /the definition is for Refunding/
The process where the issuer refinances by retiring their outstanding bonds with new bonds, usually to reduce financing costs.
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Minimum Maintenance
The minimum amount of equity a brokerage asks you to keep in the account.
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Minority Interest
A partial ownership stake in a company where the majority of shares are controlled by a larger company.
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Minus Tick
When a security sells at a price less than the preceding sale
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Money Market
Trading in very short-term debt investments. They are characterized by a high degree of safety and low rates of return.
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Money Market Fund
A mutual fund that invests in high-quality, short-term debt instruments and cash equivalents.
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Money Market Instruments
Debt instruments that give the owner the unconditional right to receive a stated, fixed sum of money on a specified date.
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Moving Average
A technical analysis indicator that helps smooth out price action by filtering out the “noise” from random price fluctuations.
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Municipal Bond
А debt security issued by a state, municipality, or county to finance capital expenditures.
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Municipal Bond Funds
А fund that invests in municipal bonds.
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Municipal Note
Debt issued by state and local governments to finance capital expenditures.
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Municipal Securities Rule-Making Board (MSRB)
A regulating body that creates policies ensuring fair practices in the municipal trade industry.
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Mutual Fund
An investment vehicle consisting of different types of securities, overseen by a professional manager.
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Naked Call
An options strategy where an investor sells call options without owning the underlying security.
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NASDAQ
A stock exchange based in New York City, ranked second on the list of stock exchanges by market capitalisation of shares traded.
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National Securities Clearing Corporation (NSCC)
A subsidiary of Depository Trust & Clearing Corporation (DTCC) that provides risk management, information, centralized clearing, and settlement services to the financial industry.
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Negotiable
The price of a good or security that is not firmly established or whose ownership is easily transferable from one party to another.
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Net Asset Value
The net value of an investment fund's assets minus liabilities, divided by the number of shares outstanding.
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Net Assets
The total assets of an entity, minus its total liabilities.
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Net Earnings (Net Income)
Sales minus the cost of goods sold, general expenses, taxes, and interest.
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Net Margin
The profit that is generated as a percentage of revenue.
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New Issue
A new security that is being issued for the first time.
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New York Stock Exchange (NYSE)
The New York Stock Exchange is the world's largest equities-based exchange in terms of total market capitalisation.
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NFT
Non-fungible tokens are cryptographic tokens that cannot be replicated. Different types of transactions use them, and they can create new markets.
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Nil Paid
A security that is tradeable but that originally posed no cost to the seller.
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No-Load
Shares that are sold without a commission or sales charge
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No-Load Fund
A mutual fund in which shares are sold without a commission or sales charge.
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Noise
Information or activity that confuses or misrepresents genuine underlying trends.
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Nominal Yield
The nominal yield is the coupon rate on a bond.
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Nominee Name
A name that is used by the corporation as a generic registered owner on a stock or bond certificate.
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Noncallable
A financial security that cannot be redeemed early by the issuer. The only way around that is to pay a penalty.
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Noncompetitive Tender
A bid made by a small investor to purchase a debt issue that has its price based on the average price of all competitive bids submitted.
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Noncumulative Preferred Stock
A type of preferred stock that does not pay stockholders any unpaid or omitted dividends
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Note
A financial security that generally has a longer term than a bill but a shorter term than a bond.
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NTF
No Transaction Fee
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Odd Lot
An order amount for a security that is less than the normal unit of trading for that particular asset.
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Offer Price (Mutual Fund)
An offer price is the per-share value at which publicly issued securities are made available for purchase.
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On-Balance Volume Index
A momentum indicator that uses volume flow to predict changes in stock price.
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Open Interest
The total number of outstanding derivative contracts that have not been settled.
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Open Outcry System
A method of communication between professionals on a stock or futures exchange.
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Open-End Fund
A mutual fund that can issue unlimited new shares, priced daily on their net asset value. The fund sponsor can sell shares directly to investors and buy them back.
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Open-End Management Company
An investment company responsible for the management of open-end funds.
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Opening Purchase
The initial buying or selling that establishes, or opens, a new position.
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Opening Sale
The first transaction that creates a short position for the investor.
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Opening Transaction
The initial buying or selling that creates an active position.
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Operating Margin
Measures the profit a company makes after accounting for the direct costs involved in earning those revenues.
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OPG
A qualifier that requests your order to be executed as close to the opening price as possible.
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Option
A contract which conveys to its owner, the holder, the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price on or before a specified date, depending on the style of the option
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Option Adjustments
The option to adjust an option contract due to a certain event with respect to an underlying security.
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Option Agreement
A written agreement between the company and an optionee setting forth the terms, conditions and restrictions of the option.
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Option Class
All the call options or all the put options for a particular underlying asset on a listed exchange.
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Option Series
The grouping of options on an underlying security with the same strike price and expiration month.
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Option-Income Fund
An option income fund generates current income for its investors by writing options.
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Options Clearing Corporation (OCC)
The Options Clearing Corporation works with regulators and acts as the issuer and guarantor for options and futures contracts.
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Order Book Official
An exchange employee in charge of keeping a book of public limit orders on exchanges utilizing the "marker-maker" system, as opposed to the "specialist system", of executing orders.
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Ordinary Shares
Ordinary shares give their owners the right to vote at company shareholder meetings and come with no guaranteed dividend.
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Original Issue Discount (OID)
The amount of discount or the difference between the original face value and the price paid for a bond.
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Original Issue Zeros
An original issue discount is a type of debt instrument, most often a bond, that is sold at a lower price than face value when it was originally issued.
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Other Current Assets
Things that a company owns, benefits from or uses to generate income that can be converted into cash within one business cycle.
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Over-the-Counter Market (OTC)
A decentralized market where the participants trade with one another directly, without the need for an exchange.
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Overbought\Oversold Indicator
Overbought - when a security makes an extended move to the upside. Oversold - when a security makes an extended move to the downside
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Par Value
The face value of a bond or the stock value stated in the corporate charter.
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Participating Preferred
A type of stock that gives the holder the right to earn dividends at a higher rate.
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Pass-Through Security
A pool of fixed-income securities backed by a package of assets.
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Payee
The party in an exchange who receives payment for goods and services of some type.
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Payout Ratio
The proportion of earnings paid out as dividends to shareholders.
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PEG Ratio
A valuation metric that determines the relative trade-off between the price of a stock, the earnings generated per share, and a company's expected growth.
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Penny Stocks
A small company's stock that trades for less than $5 per share and trades via OTC transactions.
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Percent in Top Five Holdings
A Proportion of the total assets in a mutual fund's biggest five positions.
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Phantom Interest / Stock?
A form of employee compensation that gives employees access to stock ownership without actually owning the stock.
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Pink Sheets
Listings for stocks that trade over-the-counter in the U.S. instead on a major stock exchange.
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Pit
A specific area of the trading floor that is designated for the buying and selling of a security through the open outcry system.
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Pivot
A significant price level known in advance that traders view as important.
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Point
A point in which commercial transactions take place or may take place.
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Point and Figure Chart
A chart that plots price movements as a series of stacked X's or O's that do not take into consideration the passage of time.
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Portfolio
A collection of financial investments such as stocks, bonds, commodities, cash, mutual funds, ETFs, and others.
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Portfolio Turnover
The rate at which securities are replaced within a fund.
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Position Limits
A preset level of ownership that limits the number of shares or derivatives that a trader may own.
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Pre-Tax Margin
An accounting tool used to measure the operating efficiency of a company.
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Preemptive Right
The right given to a shareholder to buy additional shares of a new issue in order to maintain the size of his ownership stake in the company.
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Preferred Stock
A type of stock that entitles the holder to a fixed dividend, the payment of which takes priority over that of common dividends.
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Premium (Bonds)
A bond trading above its face value.
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Premium (Options)
The price that traders pay for a put or call options contract.
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Price Spread
The spread is the gap between the bid and the ask prices of a security or asset, like a stock, bond, or commodity.
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Price-Weighted Index
A stock market index in which each stock makes up a fraction of the index that is proportional to its price per share.
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Price/Book
A ratio that compares a company's market value to its book value.
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Price/Cash Flow
A ratio that measures the value of a stock’s price relative to its operating cash flow per share.
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Price/Earnings Ratio
A ratio that measures the current share price relative to the per-share earnings.
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Price/Sales
A ratio that compares a company's stock price to its revenues, helping investors to make good investments.
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Primary Dealer
A pre-approved financial institution that is authorized to make business deals with the United States Federal Reserve.
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Primary Market
A market that issues new securities on an exchange, aided by underwriting groups and consisting of investment banks.
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Principal
The money lent to a borrower or put into an investment. The term can also be used to describe a private company’s owner or the main participant in a deal.
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Principal (Bond)
The amount of money an issuer agrees to pay the lender at the expiration date of the bond.
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Private Company
A company held under private ownership with shares that are not traded publicly on exchanges.
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Private Placement
A sale of stock shares to pre-selected investors and institutions instead of using the open market.
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Privatization
A piece of property or business that turns from government-owned to privately owned.
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Profit Margin
The degree to which a company or a business activity makes money.
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Program Trading
The use of computer-generated algorithms to make trades in large volumes with great frequency, surpassing the capabilities of regular human traders.
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Prospectus
A document that is required by and filed with the SEC providing details about an investment offering that is sold to the public.
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Proxy
The authority to represent someone else, especially in voting.
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Proxy Fight
When a group of shareholders join forces and gather enough proxy votes in order to win a corporate vote.
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Public Market
In public markets, companies sell shares to the general population, who can then buy, sell or trade those shares on a stock exchange
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Public Offering Date
The date of the underwriting agreement between the company and the underwriter managing the initial public.
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Purchase Price
The price an investor pays for a security.
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Put
An option that grants the right to the owner to sell some amount of the underlying security at a specified price, on or before the option expires.
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Quarterly Report
A summary or collection of unaudited financial statements issued by companies every three months.
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Quick Ratio
A calculation that measures a company’s ability to meet short-term obligations with its liquid assets.
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Quote
A price determined at a specific instance of time for a security traded on the market.
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R-Squared
A statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable.
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Range
The difference between a stock's low and high price for a particular trading period.
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Rate of Return
The gain or loss of an investment over a specified period of time expressed as a percentage of the cost of the investment.
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Rating
An assessment tool assigned by an analyst or rating agency to a stock or bond indicating its potential for opportunity or safety.
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Real-Time Quote
Shows the actual security prices at that moment in time without a time delay.
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Realized Gains/Losses
Realised gains - when an asset is sold for more than its buying price. Realised losses - when an asset is sold for less than its buying price.
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Record Date
The last date on which shareholders are eligible to receive a dividend or distribution.
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Red Herring
A preliminary prospectus filed by a company with the SEC, usually in connection with its initial public offering.
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Redemption
The repayment of a fixed-income security on or before its maturity date.
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Redemption (Mutual Fund)
The process where an investor sells mutual fund units back to the mutual fund.
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Redemption Date
The date on which a bond matures or gets redeemed.
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Redemption Fee
A fee charged to an investor when shares are sold from a fund.
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Redemption Notice
A notice in a form approved by the company by which a holder of public shares is entitled to require the company to redeem its public shares, subject to any conditions contained therein.
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Refunding
The process where an issuer refinances by retiring outstanding bonds with new bonds, usually to reduce financing costs.
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Registered Bond
A bond that has its owner's name and contact information recorded with the issuing entity, ensuring coupon payments are correctly distributed.
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Registered Form
A paper trail that notes who bought the security and when.
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Registered to Principal Only
A registration that requires the investor to clip coupons in order to receive the interest payments of a bond.
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Registered Trader
An exchange member who executes frequent trades for their own account.
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Registrar
An institution responsible for keeping records of bondholders and shareholders after an issuer offers securities to the public.
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Registration Statement
A set of documents which a company has to file with the United States SEC before it proceeds with a public offering.
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Regular Way
A regular-way trade (RW) is settled within the standard settlement cycle, which, depending on the transaction type, can range from one to five days.
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Regulation A
An exemption from the registration requirements mandated by the Securities Act, applicable to small public offerings of securities.
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Regulation T (Reg T)
Regulation that governs cash accounts and the amount of credit that broker-dealers can extend to investors for the purchase of securities.
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Reinvestment Opportunity
When income distributions received from an investment are ploughed back into that investment instead of receiving cash
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Reinvestment Rate
The return an investor expects after reinvesting the cash flows from an investment.
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Reinvestment Risk
The risk that an investor might be unable to reinvest cash flows at a rate comparable to their current rate of return.
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Relative Strength
A technique used in momentum investing that focuses on investing in securities that have outperformed the market or a benchmark.
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Resistance (Resistance Level)
A level that the price action of an asset has difficulty rising above over a period of time.
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Restricted Account
A margin account that cannot purchase more stock on margin without putting more equity.
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Restricted Securities
A type of securities that have been acquired in a private, unregistered sale from the issuing company or from an affiliate of the issuer.
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Retained Earnings
The total net earnings or profit of a firm after accounting for dividends. Retained earnings are also known as earnings surplus.
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Retractment
The withdrawal of a bid, offer, or statement before any relevant party acts on the information provided.
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Return
The profit or loss resulting in from investing or saving.
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Return on Assets (ROA)
An indicator of how profitable a company is relative to its total assets.
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Return on Equity (ROE)
A measure of financial performance calculated by dividing net income by shareholders' equity.
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Revenue Anticipation Note (RAN)
Municipal bonds with which the government repays lenders with the revenue it generates from the financed project.
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Revenue Bond
A municipal bond supported by the revenue from a specific project. This project in question could be a toll bridge, a highway, a local stadium or something else.
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Revenues
The total income produced by a given source.
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Reverse Stock Split
The process of consolidating the number of existing shares of corporate stock into fewer, more valuable, shares.
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Rights Issue
A set of rights given to shareholders to purchase additional stock shares in proportion to their holdings.
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Rights Offering
A set of rights given to shareholders to purchase additional stock shares in proportion to their holdings.
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Risk
The risk associated with financing, including financial transactions that include company loans in the risk of default.
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Risk/Return Trade-off
The trade-off that an investor faces between risk and return while considering different investment decisions.
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Road Show
A sales pitch to potential investors that leads up to an initial public offering.
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Round Lot
A standard number of securities to be traded on an exchange. For stocks, it's any number divisible by 100.
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Rule 144
An SEC rule that regulates the resale of restricted or unregistered securities.
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Rules of Fair Practice
A code of conduct for United States broker-dealers that requires loyalty to and fair dealing with their clients.
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Russell 2000 Index
An index that measures the performance of the 2000 smaller stocks that are listed in the Russell 3000 Index.
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Sales Charge
A commission paid by an investor on an investment in a mutual fund.
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Same-Day Substitution
A purchase and a sale of securities of the same value on the same day in a margin account which does not require an additional deposit.
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Savings Bonds
A government bond sold to the general public, yielding variable interest.
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Secondary Market
A market where investors purchase securities or assets from other investors, instead of doing so directly from the issuing companies.
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Secondary Offerings
The sale of new or closely held shares of a company that has already made an initial public offering.
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Sector Funds
A fund that invests solely in businesses that operate in a particular sector of the economy.
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Securities
A tradable financial asset, that includes any form of financial instrument.
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Securities and Exchange Commission (SEC)
A United States government agency created by congress to regulate the securities markets and protect the rights of investors.
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Securities Investor Protection Corporation (SIPC)
SIPC oversees the liquidation of broker-dealers that go bankrupt and then returns their assets to their customers.
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Sell-Out
A situation where firms or individuals are forced to sell some of their assets in order to pay certain short-term obligations.
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Sell/Write
An investor selling a stock short and, at the same time, writing puts against it.
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Serial Bonds
A bond issue where a portion of the outstanding bonds matures at regular intervals until all of the bonds have matured.
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Series
A grouping of options on an underlying security with the same strike price and expiration month.
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Settlement
The process of settling an account.
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Settlement Date
The date a trade is settled.
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Settlement Date Inventory
The entire stock of a business on the date that a trade is settled.
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Share Repurchase
When a company buys back its own shares from the marketplace. This is done to increase demand for the shares and raise their price.
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Shareholder
An individual or legal entity that is registered by the corporation as the owner of shares of a public or private corporation.
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Shareholder Services Fee
The fees paid to individuals that respond to investor inquiries and provide them with information about their investments.
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Shareholders’ Equity
A company's owner's claim after subtracting total liabilities from total assets.
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Shares Outstanding
The shares of a corporation that have been authorized, issued and purchased by investors and are held by them
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Short Account
The account of a short seller. The total of open short sales in a given subject of trade or in the market as a whole.
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Short Exempt
A short sale order exempted from the uptick rule regulated under the SEC Regulation SHO.
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Short Interest
A market indicator and the total number of shares of a security that have been sold short and remain outstanding.
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Short Position
Selling a security first and buying it back later, with the anticipation that the price will drop and a profit can be made.
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Short Sell
An investor borrows a security, sells it on the open market, and expects to buy it back later for less money.
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Short-Term Bond
A bond that matures in one to four years.
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Short-Term Bond Funds
A mutual fund that invests in short-term debt instruments with a maturity of up to 3 years.
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Short-Term Government Bond
A government bond with maturity ranging from a few days to 52 weeks
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Size
The magnitude of an offering, an order, or a trade.
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Slippage
The discrepancy between the expected price of a trade and the price at which the trade is executed.
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Small Company Funds
A fund that focuses on investing in small-cap stocks.
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Small-Cap Stocks
The shares of companies with a total market cap that ranges between $300 million and $2 billion.
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Special-Purpose Bond
A municipal bond that is paid from taxes that are collected from those who will benefit from the project that is financed by the bond.
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Specialist
A member of an exchange who acted as the market maker to facilitate the trading of a given stock.
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Spin-off
An operational strategy used by a company to create a brand new business subsidiary from the parent company.
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Split Fund
A fund that offers two distinct classes of shares and invests in an underlying portfolio of dividend-paying companies.
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Sponsor
A range of providers and entities supporting the goals of an individual or a company.
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Spread
The difference between two prices of a security or asset.
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Spread Order
A combination of individual orders that work together to create a single trading strategy. It could combine stock/stock, stock/option, option/option and others.
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Standard Deviation
A statistical measure of market volatility, displaying how widely prices are dispersed from the average price.
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Statement of Additional Information
A supplement to a mutual fund's prospectus containing extra information about the fund and its operations.
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Statement of Cash Flows
A financial statement that provides aggregate data about all cash inflows that a company receives from its operations and investment sources.
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Stock
Stock is the shares of which ownership in a corporation or company is divided
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Stock Ahead
A situation in which an order is placed, but not executed, because of a previously sent order involving the same price.
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Stock Dividend
A reward to shareholders that is paid in additional shares rather instead of cash.
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Stock Power
A legal power of attorney form that transfers ownership of shares of stock to a new owner.
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Stock Splits
Stock splitting is when a company increases the number of outstanding shares of stock to boost the liquidity of the stock.
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Stop Limit Order
A set time frame that combines features of a stop with those of a limit order and is generally used to mitigate risk.
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Stop Order
An order type that is triggered when the price of a security reaches the stop price level.
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Stop-Loss
An order for a security to be bought or sold at a market when it reaches a certain price known as the stop price.
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Straddle
An options strategy in which an investor holds a position in both a call and put with the same strike price and expiration date.
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Strangle
An options strategy where an investor holds both a call and a put on the same underlying asset.
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Street Name
Street name is when a security is held by a brokerage that holds it on behalf of a client.
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Strike Price
The price at which a derivative contract can be exercised (bought or sold).
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Strips
Separating a coupon from a bond so the two can be sold separately.
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Subject Quote
A quote for the price of a certain security in which the price is subject to future change.
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Subordinated Debenture
A bond that is classified lower than more senior debt in the event of a default. This means that the holders of more senior debt are paid first and any residual funds are made available to the holder of the subordinated debenture.
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Subscription Right
A right that allows existing shareholders in a publicly-traded company to purchase shares of a secondary offering at a discounted price.
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Subsequent Investment
Subsequent investment is any additional investment, other than the initial investment, in the company made following the transaction closing by the subordinated investor or any affiliate, whether in the form of capital contributions, or purchases of additional securities of any nature, loans or otherwise.
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Support (Support Level)
A level that the price action of an asset has difficulty falling below over a period of time.
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Symbol
A certain arrangement of characters that represents publicly-traded securities on an exchange.
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Takeover
When a company successfully closes on a bid to assume control of or acquire a target company.
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Target Fund
An investment vehicle that an investor uses to save for retirement.
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Tax Anticipation Bill
A type of short-term treasury debt sold in periods when tax receipts did not cover short-term government spending.
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Tax Anticipation Note
A type of debt security issued by a state or local government to raise money for a capital project.
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Tax-Exempt Bonds
A bond with interest income that is not subject to taxation by the U.S. federal government.
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Technical Analysis
A trading methodology that aims to predict the direction of prices based on past market data.
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Tender Offer
An offer to purchase some or all of the shareholders' shares in a corporation.
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Tenure
Loan tenure is the amount of time you are given to repay the loan.
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Term Maturity /to maturity
The remaining life of a bond or other type of debt instrument.
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Term Structure of Interest Rates
The interest rates of similar quality bonds at different maturities.
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Tick Indicator
An indicator on the market, based on the number of stocks whose last trade was an uptick or a downtick.
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Ticker
A telegraphic or electronic machine that prints out stock market information on a strip of paper.
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Time Horizon (Investment Horizon)
The period of time one expects to hold an investment for a specific goal
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Time Value
One of two key components of an option's premium.
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TIPS
Transferable Insurance Policies are life insurance policies that can be transferred.
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Total Assets
All of the assets or items of value a business owns.
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Total Debt-to-Equity Ratio /same as D to E
A ratio that indicates how much debt a company is using to finance its assets relative to the equity value of shareholders.
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Total Liabilities
The combined debts that an individual or company owes.
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Total Return
A performance measure that reflects the actual rate of return of an investment or a pool of investments over a given period of time.
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Total Return (Mutual Funds)
Combining the dividends that have been distributed during the holding period, with the absolute change in NAV, and dividing it by the NAV on the starting date.
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Total Revenue
The total revenue from recurring and non-recurring revenue streams.
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Trade
The buying and selling at a specific price.
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Trade Confirmation
A receipt of an executed order sent to the trader by the broker
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Trade Date
The month, day, and year that an order is executed in the market.
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Trading Range
When a security trades between consistent high and low prices for a certain period of time.
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Trailing P/E Ratio
Trailing price-to-earnings is calculated by taking the current stock price and dividing it by the trailing earnings per share for the last 12 months.
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Transfer
Transfer is the movement of assets, monetary funds or ownership rights from one account to another.
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Transfer Agent
An individual who agent keeps records of who owns a publicly traded company's stocks and bonds. Transfer agents ensure that investors receive their dividends on time.
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Treasuries
Debt obligations issued by the U.S. Department of the Treasury.
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Treasury Bills (T-Bills)
A short-term debt obligation issued by the United States Treasury that is backed by the U.S. government with a maturity of less than one year.
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Treasury Bonds (T-Bonds)
A treasury bond is a marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years that pays periodic interest payments.
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Treasury Direct
A website run by the Bureau of the Fiscal Service under the U.S. Department of the Treasury that allows US investors to purchase securities such as Treasury Bills directly from the government
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Treasury Notes (T-Notes)
A marketable U.S. government debt security that has a fixed interest rate and a maturity between 2 and 10 years.
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Trust Indenture
An agreement in a bond contract made between a bond issuer and a trustee that represents the interest of the bondholder.
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Turnover Ratio
A ratio that depicts how much of a portfolio has been replaced in a year.
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Type
The types of orders are market orders, limit orders, and stop-loss orders.
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Uncovered Call
When a call option is sold by itself without any offsetting positions.
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Uncovered Put
A put option contract where the option writer does not hold the underlying position to cover the contract in case of assignment.
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Underwriter (Investment Banker)
The process where a bank raises capital for a client from investors in the form of equity or debt securities.
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Uniform Practice Code
A series of rules, interpretations and explanations designed to make uniform, where practicable, custom, practice, usage, and trading technique in the investment banking and securities business, particularly with regards to operational and settlement issues.
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Unit
A combination of assets or types of assets packaged together and sold as one
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Unit Investment Trust (UIT)
UITs buy a fixed portfolio of securities and allow investors to redeem their "units," much like a mutual fund.
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Unlisted Security
A financial instrument that is not traded on a formal exchange as it doesn't meet the necessary requirements.
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Unwind
To close out a complex or large trade, or correct a trading error.
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Up-Tick Rule
A trading restriction that states that short selling a stock is only allowed on an uptick.
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Uptick
An increase in the price of a financial instrument since the preceding transaction.
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Volatility
The degree of variation of a trading price series over time.
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Volume
The amount of a certain security that was traded during a given period of time.
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Voting Trust
A legal trust created to combine the voting power of shareholders by temporarily transferring their shares to the trustee.
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W-Type Bottom
A technical analysis charting pattern that describes a bottom, a rebound, another bottom and a final rebound, forming the letter "W".
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Warrant
A warrant allows the holder to buy or sell shares of stock to or from the issuing public company at a certain price before a given date.
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Wash-Sale Rule
A regulation that prohibits a taxpayer from claiming a loss on the sale of stock while still maintaining a position.
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Weighted-Average Maturity
The average time until a portfolio's securities mature, comparative to the amount invested in the portfolio.
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White Knight
An individual or a company that saves a company from a hostile takeover by acquiring the firm at a fair consideration instead.
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Withdrawal Plan
A financial plan that allows shareholders to withdraw money from a mutual fund or another investment account at specific intervals.
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Workout Quote
A non-firm quote that requires conditions to be worked out between the sides, before the trade.
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Worst 3-Month Return
The lowest total return a stock has in a consecutive three-month period over the past five years.
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Writer
The seller of an option that collects the premium payment from the buyer.
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Yellow Sheets
Bulletins that provide bond traders with updated information.
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Yield (Bond)
The amount of return an investor will get from a bond. It is calculated by dividing the face value by the amount of interest it pays.
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Yield (Stock)
Stock yield measures the growth of an investment over time compared to the buying price.
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Yield Curve
A line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates.
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Yield Elbow
The point along the yield curve where the highest interest rates are achieved.
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Yield to Call
The yield of a bond or note if you buy and hold the security until the specified call date.
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Yield to maturity
The total return expected on a bond if the bond is held until its maturity.
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Zero-Coupon Bonds
A bond that doesn't pay interest but makes up for it by trading at a deep discount, rendering profit at maturity when it is redeemed.
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Zero-Coupon CD
A zero-coupon certificate of deposit is bought at a discounted rate. It doesn't pay out interest yearly but as a flat amount at maturity.
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Zero-Minus Tick
A security trade that occurs at the same price as the preceding trade but at a lower price than the last trade of a different price.
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Zero-Plus Tick
A security trade that occurs at the same price as the preceding trade but at a higher price than the last trade of a different price.
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Abandon
To abandon is to surrender a claim to, or interest in, a particular asset. It's also used to describe an instance in finance when one party waives its rights to recover the debt owed so that trading can continue, with previously invested funds not affected.
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Above Par
Above Par is the price of a bond above face value.
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Accounts Payable
Accounts Payable represents a company's obligation to pay off a short-term debt.
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Accounts Receivable
Accounts Receivable is the amount of money that's due to a company but not yet paid by customers.
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Accreted Interest
Accreted Interest is interest accrued on a loan that is added to the principal amount instead of being paid as Interest as it accrues.
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Accrual Bond
Accrual Bonds defer periodic interest payments until maturity.
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Accrued Interest
The amount of interest that has been accrued but isn't paid out yet.
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Accumulation Bond
A type of security that is sold at a discount. The bond issuer is not required to make semi-annual interest payments.
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Acquisition
One company purchases the majority or all shares of another company in order to gain control.
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Active Management
Making buy and sell decisions about the holdings in a portfolio. It may or may not include a professional.
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Advanced Option
A short-term line of credit granted by the underwriter to an issuer of securities that can be drawn if the underwriter cannot successfully place the securities.
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After-hours Trading
The buying and selling of stocks after the close of the U.S. stock exchanges (4 PM US time).
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Aftermarket
The market for shares and bonds after their original issue date.
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Aggressive Growth Funds
A fund that seeks greater returns by taking higher risks in high-growth companies.
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All-or-None (AON)
An instruction to fill an order completely at the specified price or cancel it.
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Alpha
A measure of performance - the excess return of an investment relative to the return of a benchmark index.
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American Stock Exchange (AMEX)
AMEX is now known as the NYSE American. It was once the third-largest U.S. stock exchange dating all the way back to the 18th century.
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Amortization
Periodically lowering the book value of a loan or intangible asset over a set period of time.
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Annual Percentage Rate (APR)
The yearly cost of a loan represented as a percentage of the total value.
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Annual Percentage Yield (APY)
APY is the return rate of an investment over a period of one year, including compounding interest.
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Annual Report
A yearly company report that describes its ins and outs to stakeholders.
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Annual Report (Mutual Fund)
A yearly fund report that includes data and performance, presented to shareholders and potential investors.
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Annualized Returns
The rate of return for a period that's less than a year but calculated for a full year.
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Appreciation Funds
A fund that aims to increase the value of an asset by primarily investing in high growth and value stocks.
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Arbitrage
Taking advantage of the difference in the price of the same asset on two or more separate markets.
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Arms Index – TRading INdex (TRIN)
A technical analysis indicator which provides overbought and oversold levels by measuring the number of advancing and declining stocks and volume.
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Arrearage
An amount on a loan that is overdue.
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Asian Funds
A broad global emerging market that promises high growth.
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Asian Option
An option where the payoff depends on the average price of the underlying asset instead of its maturity.
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Ask (Asked Price)
The minimum price that a seller is willing to take.
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Ask Price (Mutual Funds)
Instead of paying the ask price, it is the fund manager that does it.
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Assessment Bond
General obligation bonds, usually created to fund development projects, where the interest is paid by taxes levied solely on the beneficiaries of that project.
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Asset Allocation Funds
A fund that provides investors with a diverse portfolio that includes different asset classes.
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Assignment
A notice that the options have been exercised.
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At-the-Money
An option's strike price is equal to the market value of the underlying asset.
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Auction (Treasury)
Treasury auctions reduce the costs of financing national debt with competitive bidding and liquid secondary market trading.
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Auction Market
A market is where buyers and sellers generate their offers at the same time and any matching offers get paired and executed.
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Average
A way to calculate the relative price of an index of stocks by adding the prices of all the stocks in the index and dividing by the total number of available stocks.
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Average Life
The period of time the principal of debt is expected to be outstanding.
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Average Maturity
The average amount of time before debt securities mature.
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Average Volume
The total volume for a specific period divided by the number of bars.
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Away From the Market
A limit order set to buy at a price lower than the current market price or sell higher than the current price.
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Baby Bond
A debt instrument that's valued at less than $1000.
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Back-End Load
The withdrawal fee for a mutual fund.
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Balance Sheet
A financial document that reports on a company's assets, liabilities and shareholder equity for a certain moment in time.
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Balanced Funds
A mutual fund that contains two or more different asset classes.
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Banker’s Acceptance
A financial instrument that guarantees a future payment by a bank.
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Bankruptcy
Businesses or individuals that are unable to repay their debts are considered bankrupt and file for bankruptcy.
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Basis
A trading strategy that capitalizes on small basis point changes.
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Basis Point
One basis point equals one-hundredth of one percentage point. It's a widely used unit of measure for interest rates.
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Bear
Bears are traders who believe that a financial instrument, an asset, a market or the entire market is going down.
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Bear Market
A synonym for a declining market.
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Bear Raid
An illegal push to drive the price down, this includes short selling, spreading false rumors and other methods.
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Bearer Securities
A security that's not registered in the issuer's books. Payable to the holder of the bond or stock certificate.
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Benchmark Index
A group of securities that are used to measure the performance of other securities on the market.
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Beneficial Owner
The owner of an asset or security that has a different legal name.
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Best 3-Month Return
The highest total return a stock has in a consecutive three-month period over the past five years.
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Beta
An indicator that determines how risky a stock is.
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Bid
An offer that indicates the highest price for a certain number of shares that a buyer is willing to pay.
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Bid/Ask Size
Bid size is the number of securities that an investor, trader or dealer is willing to pay at a certain bid price. Ask size is the number of securities that a seller is willing to sell at the ask price.
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Block
A large volume of trades that all occur at the same time.
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Blue-Chip
A recognized company that's considered a safe investment.
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Board of Directors
The governing body of a company that dictates strategy and supervises management.
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Bond
A security under which the issuer owes the holder a debt, and is obliged to repay the principal of the bond at the maturity date as well as any interest over a certain period of time.
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Bond Fund
A fund that invests primarily in bonds.
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Book Entry
A method of tracking ownership without giving investors physical certificates.
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Book Value
The value of a security or asset as written in the company's books. Book value is also the amount of money shareholders would receive if liabilities were paid and the assets were liquidated.
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Breadth of the Market
Breadth of the Market is a technical analysis technique that calculates the moves in a major index.
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Breakout
The movement of the price over an identified level of support.
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Breakpoint
A breakpoint is the dollar amount for buying a load of mutual fund shares that qualifies the investor for a reduced sales charge.
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Bull
Bulls are traders who believe that a financial instrument, an asset, a market or the entire market is going up.
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Bull Market
A market in which the prices are going up or are expected to rise.
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Bullish
An upward trend in the prices
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Buy-In
The repurchasing of shares by an investor because the seller couldn't deliver the shares.
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Buy/Write
A trading strategy that involves buying an asset and simultaneously selling an option on that asset.
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Buyer’s Option (Contract)
A contract between a seller and a buyer that defines the specifications and price for a sale over a certain period.
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Buying Power
The money a trader has available to invest with.
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Buyout
Buyout is when a company acquires a controlling share in another company.
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Call
An option contract and also the term for the formation of prices through a call auction.
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Call Date
The date when an issuer may exercise his call option to redeem.
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Call Protection
A provision in a bond that prevents the issuer from buying back during a certain period early in its life.
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Call Spread
A strategy which includes buying a call option and selling a less expensive one at the same time.
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Callable
Shares in a company that the issuer can buy back.
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Callable Bond
A bond that can be paid earlier than its maturity date.
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Capital Expenditures
The amount of money spent by an organization spends to buy, maintain or improve its assets.
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Capital Gain
The profit earned from the sale of an asset which has increased in price.
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Capital Growth
The increase in value of an asset measured by its current price and the buy price.
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Capital Loss
The loss caused by the sale of an asset that has decreased in price.
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Capital Stock
The number of common and preferred shares that a company can issue.
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Capitalization
The provision of capital or the conversion of assets or income into capital.
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Cash and Equivalents
Investment securities that can be converted into cash.
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Cash Dividend
The amount paid to stockholders as part of a corporation's current earnings or profits in the form of cash.
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Cash Flow
The net amount of cash equivalents and cash that are being transferred to and out of a company.
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Changes in Financial Position
A financial statement that reveals the sources and uses of funds, explaining any changes in cash or working capital.
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Class
A type of asset.
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Client (Account) Statement
A statement issued by a vendor that details the financial transactions between the vendor and the client over a certain period of time.
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Cliffing
Cliff vesting is when an employee becomes fully vested on a specified date as opposed to partial vesting over an extended period.
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CLO
Chief Legal Officer - head of the legal department, responsible for the legal affairs of the entire company.
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Close
The exiting of a trade, the final procedure in a financial transaction or the closing of a financial market.
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Closed-End Funds
A fund that raises capital with a one-time sale of a limited number of shares, which may then be traded on the markets.
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Closing Purchase
A settlement in which the purchaser' wants to reduce or eliminate a short position in a stock or in a series of options.
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Closing Sale
A settlement in which the purchaser' wants to reduce or eliminate a long position in a stock or in a series of options.
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Closing Transaction
A buy or sell transaction that terminates an already existing position
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Collateral Trust Bond
A bond that is secured by a financial asset that is deposited and held by a trustee.
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Combination Order
Any options trade that contains more than one type of option, strike price, or expiration date of the same asset.
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Commission
The amount of money charged by an investment professional for advice or making transactions.
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Common Equity
The amount that all shareholders have collectively invested in a company.
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Common Stock
A security that represents ownership in a corporation.
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Comparison /Chart/
The buying and selling of financial instruments between parties, through a stock exchange.
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Competitive Tender
An auction process that allows large institutional investors to purchase newly issued government debt.
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Consumer Price Index
The change over time in the prices paid by consumers for certain goods and services.
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Contingent Deferred Sales Charge (CDSC)
A fee paid by fund investors when selling Class-B fund shares.
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Contractual Plan
A mutual fund purchasing plan that requires the investor to commit to purchasing a set dollar amount and make payments over a certain period of time.
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Control Person
Someone who owns or controls 10% or more of the voting stock of a corporation. The officer or director of a corporation. Someone who can influence the decision-making of a corporation.
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Control Securities
Securities held by an affiliate of the issuing company
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Convertible Issue
An issue of corporate bonds that can be converted into the shares of the company that issued them.
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Cooling-Off Period
A period of time which must pass before someone can do something or before an agreement gets finalized.
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Corner a Market
To acquire enough market share, or to hold a large position, to be able to manipulate the price.
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Corporate Bonds
A type of debt security issued by a company and sold to investors.
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Coupon
The interest received by a bondholder from the issuance until the maturity of a bond.
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Coupon Yield
The return to an investor from the bond's interest payments ignoring the time value of money and any changes in the bond's price.
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Cover
Buying a security you sold short in order to close out a position.
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Covered Call
A covered call refers to a financial transaction in which the investor selling call options owns the equivalent amount of the underlying security.
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Covered Put
А strategy that is essentially a short version of the covered call.
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Credit Agreement
А legally-binding agreement that documents the terms of a loan agreement.
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Credit Balance
The funds generated from a short sale that is credited to the client's account.
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Credit Risk
The possibility of loss due to a borrower's defaulting on a loan or not meeting contractual obligations.
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Cumulative Dividends
A sum that companies must remit to preferred shareholders without regard to the company's earnings or profitability.
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Cumulative Preferred Stock
Shares with a condition stating that, if any dividends were missed in the past, they must be paid out to preferred shareholders first.
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Current Assets
A balance sheet item that represents the value of all assets that could reasonably be expected to be converted into cash within one year.
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Current Income
Cash flows that are anticipated in the immediate to short-term.
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Current Maturity
An indicator used to value a bond based on the amount of time left until maturity.
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Current Ratio
A ratio that measures a company’s ability to cover its short-term obligations with the current amount of available assets.
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Current Share Price
The price at which a share was last traded.
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Current Yield
The annual income divided by the current price of a security.
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Cyclicals
Stocks that follow the trends in the economy, making them a very volatile asset.
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Dated Date
The date on which interest begins to accrue on a fixed-income security.
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Day Order
An order to buy or sell an asset at a specific price that expires if it is not executed on the same day it was placed.
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Day Trade
Buying and selling within the same trading day so all positions are closed before the market closes.
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Dealer
A person or firm who buys and sells securities for their own account, whether through a broker or otherwise.
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Debentures
A type of debt issued by governments and corporations that has no collateral and is dependent on the reputation and creditworthiness of the issuer.
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Debit Balance
A negative cash balance in a checking account with a bank
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Debt/Equity Ratio
The debt-to-equity ratio illustrates the debt a company is using to finance assets relative to the value of equity.
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Decile Rank
A decile is a method that splits data into ten equal parts. Decile ranks are used to sort the data in ascending or descending order.
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Declaration Date
The date on which the next dividend payment and the last date an option holder can exercise a company's option.
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Deed of Trust
A document used instead of a mortgage.
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Default
When a borrower fails to make payments on a debt.
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Defensive Stocks
A stock that provides a consistent dividend and stable earnings no matter the state of the market.
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Deferred (Income) Taxes
A liability on a balance sheet resulting from income.
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Delivery Balance Order (DBO)
An order issued by the clearing corporation to any firm that has delivery or sale positions remaining after the day's trades are netted.
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Depository
A facility where something is deposited for storage or safeguarding.
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Depository Trust Company (DTC)
A New York corporation that performs the functions of a Central Securities Depository as part of the US National Market System.
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Depreciation
The decline in an asset's value.
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Derivative
A securitized contract the value of which depends upon one or more underlying assets.
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Derivative Security
A financial instrument whose value depends upon the value of another asset.
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Designated Order Turnaround (DOT)
An electronic system that improves efficiency by routing orders for listed securities directly to a specialist on the trading floor instead of a broker.
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Diagonal Spread
An options strategy that uses a long and short position in calls or puts with different strike prices and expiration dates.
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Difference from S&P
A mutual fund's return minus the change in the Standard & Poor's 500 index for the same exact period
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Differential
The value adjustment of grade and value that a futures contract permits.
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Dilution
Dilution happens when new stock gets issued, resulting in a decrease in existing stockholder ownership percentage in the company.
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Discount Bond
A bond that issues for less than face value or that trades for less than its face value on the secondary market.
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Discount Rate
The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.
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Disposable Income
The amount of money that a person or household has left after taxes.
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Distributions
Distributions describe the gradual entry of large amounts of a security in smaller blocks that are slowly sold into the market to inundate the market with sell orders for the security and drive down its price.
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District Business Conduct Committee (DBCC)
The primary local enforcement arm of the NASD.
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Divergence
When the price of an asset and a technical indicator are moving in two different directions. It usually warns of a weakening price trend and may lead to price reversals.
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Diversification
An investment strategy that seeks to minimize risk by diversifying investment across different companies and asset classes.
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Dividend Reinvestment
Reinvesting dividend payments from assets you hold back into your portfolio instead than spending them.
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Dividend Reinvestment Plan
An arrangement that gives shareholders the option to automatically reinvest dividends into additional or fractional shares of the underlying company.
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Dividend Yield (Funds)
A fund where investment is made in the stocks of companies that regularly declare dividends.
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Dividend Yield (Stocks)
A financial ratio showing how much the company pays out in dividends relative to its stock price.
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Dividends
Money paid out regularly by a company to its shareholders.
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Dividends per Share
The total amount of dividends declared in a certain time period divided by the number of outstanding ordinary shares issued.
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Do-Not-Reduce (DNR)
A type of order with a specified price that isn't adjusted when the underlying security pays a cash dividend.
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Dollar Cost Averaging
A strategy where investors divide their total investment amount across periodic purchases.
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Dollar-Denominated
A dollar-denominated asset is an asset that has an underlying value in dollars.
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Double Taxation
Taxes that are paid twice on the same income source. This happens when investors get taxed on a corporate and personal level or in two different countries.
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Dow Jones Industrial Average (DJIA)
A popular stock market index that tracks 30 blue-chip stocks in the U.S.
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Downgrade
A negative change in the rating of a stock's expected performance issued by an analyst or financial services firm.
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Downtick
A transaction on an exchange that happens at a lower price than the previous transaction.
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Drag on Returns (Drag Grade) / Performance drag?
Calculating the return on an investment with no costs associated with it and the return after accounting for all the costs associated with it.
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Due Diligence (Meeting)
A special type of meeting conducted by an underwriter allowing brokers and analysts to ask corporate officials or representatives of the issuing company about a new security before its release.
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Duration
The time it takes to receive the true cost of a bond, weighing in the present value of all future coupons and the principal payments.
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Earnings
A company's after-tax income. Earnings are usually the big factor in determining a public company's share price.
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Earnings Before Interest and Taxes (EBIT)
An indicator of company profitability calculated as revenue minus expenses but excluding taxes and interest.
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Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
EBITDA stands for earnings before interest, taxes, depreciation, and amortization It's an indicator of the overall financial condition of a company.
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Earnings Growth %
The annual compound annual growth rate of earnings from investments.
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Earnings Per Share (EPS)
The portion of a company's profit allocated to each outstanding share of common stock, serving as a profitability indicator.
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Earnings Report
Earnings reports are quarterly financial statements issued by publicly traded companies. They reveal details about the profits earned by a company in a given quarter, sales volumes, revenue and profit margins.
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Earnings Yield
The quotient of earnings per share, divided by the share price. This valuation metric covers the last 12 months.
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ECN
ECN stands for an electronic communication network. A computerized system that automatically matches buy and sell orders for securities in the market.
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EE Savings Bond
Low-risk savings assets that earn interest until they reach 30 years or you cash them out, whichever happens first.
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Effective Date
The date when an agreement starts to operate.
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Endorsement
An amendment to a contract or document, an authorizing signature, or a public declaration of support. Public declaration of support for a service, product or person.
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Equipment Trust Bonds
A bond that is secured by a tangible property.
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Equity
The ownership of an asset without any debt involved. Total assets minus total liabilities
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Equity Options
A contract that conveys to its holder the right, but not the obligation, to buy or sell shares of the underlying security at a specified price on or before a given date.
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Equity-Income Funds
Funds that invest in securities from well-known, creditworthy companies pay out dividends regularly.
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Estimated EPS Growth
An indicator that illustrates the growth of earnings per share over time.
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Eurobonds
A bond issued in a currency that's different from the currency of the country or market in which it was originally issued.
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European-Style Option
An option that can only be exercised on its maturity date.
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Ex-Dividend Date
The timing of payment of dividends on stocks of corporations, income trusts, and other financial holdings, both publicly and privately held.
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Ex-Rights Date
The date on which a share of stock with rights on it begins trading ex-rights.
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Ex-Warrants Date
The date on which the bond and warrant will become completely separate financial instruments that can be bought and sold on their own.
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Excess Equity
A part of client assets that is over the required amount needed to be maintained by the company.
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Exchange
A marketplace where securities, commodities, derivatives and other financial instruments are traded.
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Exchange Traded Fund (ETF)
A basket of securities that tracks an underlying index. ETFs can contain investments such as stocks and bonds.
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Execution
The completion of a buy or sell order for a security in the market.
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Exercise
To put into effect the right to buy or sell an underlying financial instrument that's part of an option.
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Exercise Price
The price at which the underlying security can be bought or sold.
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Expense Ratio
The total costs of managing and operating an investment fund
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Expiration
The expiration date and time when an option is rendered null and void.
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Expiration Cycle
The cycle of expiry months for which an option for a security is available.
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Expiration Date
The last day that an option is valid.
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Expiration Month
The month a futures or options contract expires. It's also the month in which the terms of the contract are fulfilled if the buyer decides to take delivery.
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Extended Maturity
The option to extend the initial maturity to a later date.
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Factor
A trader who receives and sells goods on a commission.
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Fast Market
High levels of volatility, combined with unusually heavy trading.
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FDIC Insured Deposit Account
A bank or thrift account covered or insured by the FDIC.
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Federal Deposit Insurance Corporation (FDIC)
An independent agency created by US Congress to maintain stability and public confidence in the financial system.
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Federal Farm Credit System
A network of financial institutions that provide financing for agricultural companies in the United States.
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Federal Funds Rate
The target interest rate set by the Fed at which commercial banks can borrow and lend their extra reserves to one another.
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Federal Reserve Board
The governing body of the Federal Reserve System, the United States central bank in charge of creating the monetary policy.
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Federal Reserve System
The central bank of the U.S. that's responsible for the monetary and financial system.
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Fill or Kill (FOK)
An equity order that calls for immediate and complete execution of a trade or its cancellation. It is typically done with large orders.
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Financial Industry Regulatory Authority (FINRA)
A nongovernmental organization that creates and enforces rules for brokers and dealers.
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Fiscal Agent
An organization that acts on behalf of another party performing various financial actions.
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Fiscal Year
A period of one year used for financial reporting by businesses and other organizations.
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Fixed Annuity
An insurance contract that's used to protect against losses by providing fixed rates of return.
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Flat
A price that is neither declining nor rising.
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Flat (Bonds)
The price of a bond minus the interest that accrues between coupon payments.
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Floor Broker
Аn independent member of an exchange who is authorized to execute trades on an exchange floor.
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Flotation
The process of changing a private company into a public one. This is done by issuing shares and encouraging the public to purchase them.
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Fractional Shares
A share of equity that is less than one full share.
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Free Cash Flow
The amount by which a business's operating cash flow exceeds its working capital needs and expenditures.
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Free Cash Flow per Share
The cash available after operating expenses and capital expenditure that can be allocated into debt and equity.
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Free Stock
A stock that is paid for in full and is not pledged in any way as collateral.
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Frozen Account
An account that can't make purchases or withdrawals.
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FTSE 100 Share Index
A share index of the 100 companies listed on the London Stock Exchange with the highest market capitalisation
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Fully Diluted Earnings per Share
The net income available to shareholders as calculated by the weighted average number of common shares outstanding, plus all dilutive securities, whether or not they are considered common stock equivalents.
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Fully Diluted Shares Outstanding
The total number of shares that a company would theoretically have if all dilutive assets were exercised and turned into shares.
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Fully Paid Securities Lending
A type of security lending where clients can earn passively by lending out stocks they've fully purchased through a broker.
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Fund Exchange
A fund that allows investors to diversify their positions without getting taxed for it.
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Fund Family
A fund family includes all the funds managed by a single investment company.
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Fundamental Analysis
A method of measuring the intrinsic value of a stock by taking into account various indicators such as the state of the economy, industry conditions, company management, and others.
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Futures
Derivative financial contracts that obligate parties to buy or sell an asset at a predetermined future date and price.
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Futures Contract
A standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other.
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Gearing
The ratio of a company's debt relative to its equity. If that ratio is high a company may be considered leveraged.
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General Obligation (GO) Bond
A bond that is backed by the credit and "taxing power" of the issuer.
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Good ‘Til-Canceled (GTC)
A buy or sell order that remains active until it is executed or cancelled.
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Good Delivery
The transfer of ownership from the seller to the buyer with all necessary requirements being met.
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Goodwill
A premium paid over the fair value of assets during the purchase of a company.
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Government Bond
A bond that is issued by a government at the federal, state, or local level to raise debt capital.
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Gross Profit
The profit a company makes after deducting the costs of buying or selling products or providing its services.
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Growth and Income Funds
Funds that invest in securities and combine both long-term growth and short-term income.
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Growth Stock
A publicly traded share in a company that is expected to grow at a rate higher than the market average.
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Head & Shoulders
A specific pattern in technical analysis that predicts a bullish or bearish trend reversal.
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Hedge
An investment that is meant to reduce the risk of sudden price movement.
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HH Savings Bonds
A 20-year savings bond that was issued by the U.S. government. It was non-marketable and paid semi-annual interest based on coupon rate.
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High-Yield Bond
A with a lower credit rating that pays a higher yield due to having more risk than other higher-rated bonds.
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Holding Company
A company that owns other companies and exists solely to oversee their operations.
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Hostile Takeover
The acquisition of one company by another without approval from the acquired company's management.
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House Maintenance Call
A house call is the call made when the account balance falls below the maintenance margin required by a brokerage firm.
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House Requirement
The minimum margin account equity that is required by a brokerage firm.
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Hypothecation
When an asset is pledged as collateral to secure a loan without giving up any of the rights associated with it.
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Immediate-or-Cancel (IOC)
An order that tries to fill as much as possible in the next few seconds and then cancels any balance right after.
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In-the-Money
An option has value or its strike price is favourable compared to the market price of the underlying asset.
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Income
The amount of money, property, and other transfers of value received over a set period of time as compensation for services, payments, investments, pension distributions, and others.
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Income Bonds
A bond that pays interest only if the issuing entity has earned income.
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Income Funds
Funds that pursue current income over capital appreciation by investing in dividend-paying stocks, bonds, and other income-generating securities.
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Income Stock
An equity security that pays regular dividends.
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Income Stream
A way of receiving regular income.
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Indenture
A contract between a bond issuer and bondholders.
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Index Fund
A mutual fund or exchange-traded fund that aims to track the returns of a market index.
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Indicated Dividend
An estimate of a security’s dividend payments for the next 12 months based on what it paid in the past.
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Indicated Yield
The dividend yield that a share of stock would return based on the most recent dividend.
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Industrial Revenue Bond
Municipal debt securities that are issued by a government agency on behalf of a private sector company. They're intended to build or acquire factories or tools.
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Inflation
A decrease in the purchasing power of money that leads to a general increase in the price of goods and services.
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Inflation Risk
The risk that your purchasing power will be reduced if the value of your investments does not surpass the inflation rate.
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Inflation-indexed Bonds
Bonds that are designed to help protect investors from inflation
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Initial Public Offering (IPO)
The process of offering shares of a company to the public.
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Inside Information
Information that can provide a financial advantage if it's used before it becomes known to the shareholders.
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Insider
An individual that possesses insider information.
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Insider Trading
The trading of company securities by individuals with access to confidential information about the company.
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Interest Coverage Ratio
A ratio that takes into account the debt and profitability of a company and is used to determine how easily a company can pay interest on its outstanding debt.
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Interest Expense
The cost incurred by an entity for borrowed funds.
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Interest Rate
The amount that a borrower pays to the lender for the loan of an asset as a percentage of the amount borrowed.
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Interest Rate Risk
The possibility that the value of a fixed-income investment will suffer as the result of a change in interest rates.
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Interim Dividend
A dividend paid ahead of a company's annual meeting and release of final financial statements.
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Intermediate-Term Bonds
Bonds with maturity dates between 2 and 10 years
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International Funds
A fund invests in companies located anywhere outside of its investors' country of residence.
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Inventory
The entire stock of a business, including materials, components, work in progress, and finished products.
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Issue Date
The date on which a company releases a new issue of securities.
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Issued Stock
The shares of a company distributed to investors
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Ladder
An exotic option that locks partial profits once the underlying asset reaches predetermined price levels.
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Large-Cap Stocks
Stocks of large-cap companies (those with over $10 billion in market capitalisation).
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Last Trading Day
The final day that a futures contract, or other derivatives with an expiry date, may trade or be closed out before the delivery of the underlying asset or cash settlement must occur.
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Level-Load Funds
A fund that entails mutual fund shares that carry a sales commission paid by the purchaser.
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Liability
Something a person or company owes, usually a sum of money.
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Limit Order
An order used to buy or sell a security at a pre-determined price. The order will not execute unless the specifications are met.
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Limited Tax Bond
A bond that allows municipalities to raise property taxes when it is necessary to meet the service payments of the debt.
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Limited Trading Authorization
With LTA an agent or broker is granted the power to place orders or make inquiries on a client's account.
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Liquidation
The process of bringing a business to an end and distributing its assets to claimants, when a company becomes insolvent.
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Liquidity
The ease with which an asset, or security, can be converted into ready cash without affecting the market price of the asset.
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Liquidity Ratio
A class of financial metrics used to determine a debtor's ability to pay off current debt obligations without external capital.
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Liquidity Risk
The risk of incurring losses resulting from the inability to meet payment obligations in a timely manner when they become due.
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Listed Options
A put or a call option that is traded on a national exchange
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Listed Securities
A financial instrument that is traded through an exchange.
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Listed Stock
Shares of a company that can be bought and sold on a stock market
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Load
A sales charge commission charged to an investor when buying or redeeming shares in a mutual fund.
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Load Fund
A mutual fund that comes with a sales charge or commission
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Loan Consent Agreement
A contract signed by a customer that permits the broker-dealer to lend securities in that customer's margin account.
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Loan Stock
Stock shares that are used as collateral to secure a loan from another party.
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Loan Value
The maximum amount an individual or company can borrow to buy securities.
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Long Position
An investor will purchase a security with the hope that it will increase in value.
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Long-Term Assets
Investments in a company that will benefit the company and remain on its books for many years to come.
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Long-Term Bond
A financial obligation that runs for 5 or more years.
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Long-Term Debt
A debt with a maturity greater than 12 months.
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Long-Term Debt/Capitalization
The debt to capitalization ratio, calculated by dividing long-term debt by available capital. The results reveal the financial leverage of a firm.
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Long-Term Liabilities
Financial obligations that are due more than one year in the future.
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Low
The lowest price at which a specific stock trades.
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Make a Market
An action where a dealer is ready, willing, and able to buy or sell a security at an appointed bid and ask price.
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Management Fees
The price charged by a fund manager to invest capital on behalf of clients.
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Management/Closely Held Shares
Shares of stock are held by a small group whose members have a close relationship with the issuing company.
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Margin
The difference between a product or service's selling price and the cost of its production.
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Margin Account
A brokerage account in which the broker lends the customer cash to purchase assets.
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Margin Call
The margin call requires additional money to be added to a margin account after it suffered a trading loss in order to meet the minimum capital requirements.
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Margin Requirement
The percentage of marginable assets that an investor must pay for with his/her own cash
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Margin Requirement (Options)
The margin requirement is 75% of the market value of a listed, long-term equity or equity index put or call option.
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Mark-to-Market
A method of measuring the fair value of accounts that can fluctuate over time. This includes assets and liabilities.
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Market Capitalization
The market value of a company represented in dollars.
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Market Cycle
Market cycles are proposed patterns that many argue may exist in stock markets.
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Market Data System
A system designed to meet the required analytical and application needs of marketers.
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Market Maker
A dealer in assets who takes up buying or selling at specified prices at all times.
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Market Not Held Order
An order that gives the broker the time and price discretion to get the best possible price.
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Market Order
An order to a broker to buy or sell stocks or other assets immediately at the best available price.
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Market Risk
The risk that an investor will experience losses due to factors that affect the overall performance of the markets.
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Market-Weighted Index
An index which weighs the participants according to the size of the company.
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Marketable Securities
Liquid financial instruments that can be easily converted into cash.
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Married Put
An options strategy where an investor, holding a long position in a stock, buys a put on the stock to mimic a call option.
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Maturity
A finite time period at the end of which the financial instrument will cease to exist. In that case, the principal is repaid with interest.
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Merger
Two existing companies uniting into one new company.
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Mid-Cap Stocks
Companies with a market cap between $2 and $10 billion.
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Mini-Refunding /the definition is for Refunding/
The process where the issuer refinances by retiring their outstanding bonds with new bonds, usually to reduce financing costs.
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Minimum Maintenance
The minimum amount of equity a brokerage asks you to keep in the account.
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Minority Interest
A partial ownership stake in a company where the majority of shares are controlled by a larger company.
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Minus Tick
When a security sells at a price less than the preceding sale
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Money Market
Trading in very short-term debt investments. They are characterized by a high degree of safety and low rates of return.
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Money Market Fund
A mutual fund that invests in high-quality, short-term debt instruments and cash equivalents.
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Money Market Instruments
Debt instruments that give the owner the unconditional right to receive a stated, fixed sum of money on a specified date.
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Moving Average
A technical analysis indicator that helps smooth out price action by filtering out the “noise” from random price fluctuations.
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Municipal Bond
А debt security issued by a state, municipality, or county to finance capital expenditures.
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Municipal Bond Funds
А fund that invests in municipal bonds.
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Municipal Note
Debt issued by state and local governments to finance capital expenditures.
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Municipal Securities Rule-Making Board (MSRB)
A regulating body that creates policies ensuring fair practices in the municipal trade industry.
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Mutual Fund
An investment vehicle consisting of different types of securities, overseen by a professional manager.
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Naked Call
An options strategy where an investor sells call options without owning the underlying security.
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NASDAQ
A stock exchange based in New York City, ranked second on the list of stock exchanges by market capitalisation of shares traded.
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National Securities Clearing Corporation (NSCC)
A subsidiary of Depository Trust & Clearing Corporation (DTCC) that provides risk management, information, centralized clearing, and settlement services to the financial industry.
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Negotiable
The price of a good or security that is not firmly established or whose ownership is easily transferable from one party to another.
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Net Asset Value
The net value of an investment fund's assets minus liabilities, divided by the number of shares outstanding.
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Net Assets
The total assets of an entity, minus its total liabilities.
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Net Earnings (Net Income)
Sales minus the cost of goods sold, general expenses, taxes, and interest.
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Net Margin
The profit that is generated as a percentage of revenue.
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New Issue
A new security that is being issued for the first time.
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New York Stock Exchange (NYSE)
The New York Stock Exchange is the world's largest equities-based exchange in terms of total market capitalisation.
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NFT
Non-fungible tokens are cryptographic tokens that cannot be replicated. Different types of transactions use them, and they can create new markets.
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Nil Paid
A security that is tradeable but that originally posed no cost to the seller.
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No-Load
Shares that are sold without a commission or sales charge
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No-Load Fund
A mutual fund in which shares are sold without a commission or sales charge.
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Noise
Information or activity that confuses or misrepresents genuine underlying trends.
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Nominal Yield
The nominal yield is the coupon rate on a bond.
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Nominee Name
A name that is used by the corporation as a generic registered owner on a stock or bond certificate.
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Noncallable
A financial security that cannot be redeemed early by the issuer. The only way around that is to pay a penalty.
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Noncompetitive Tender
A bid made by a small investor to purchase a debt issue that has its price based on the average price of all competitive bids submitted.
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Noncumulative Preferred Stock
A type of preferred stock that does not pay stockholders any unpaid or omitted dividends
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Note
A financial security that generally has a longer term than a bill but a shorter term than a bond.
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NTF
No Transaction Fee
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Odd Lot
An order amount for a security that is less than the normal unit of trading for that particular asset.
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Offer Price (Mutual Fund)
An offer price is the per-share value at which publicly issued securities are made available for purchase.
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On-Balance Volume Index
A momentum indicator that uses volume flow to predict changes in stock price.
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Open Interest
The total number of outstanding derivative contracts that have not been settled.
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Open Outcry System
A method of communication between professionals on a stock or futures exchange.
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Open-End Fund
A mutual fund that can issue unlimited new shares, priced daily on their net asset value. The fund sponsor can sell shares directly to investors and buy them back.
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Open-End Management Company
An investment company responsible for the management of open-end funds.
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Opening Purchase
The initial buying or selling that establishes, or opens, a new position.
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Opening Sale
The first transaction that creates a short position for the investor.
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Opening Transaction
The initial buying or selling that creates an active position.
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Operating Margin
Measures the profit a company makes after accounting for the direct costs involved in earning those revenues.
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OPG
A qualifier that requests your order to be executed as close to the opening price as possible.
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Option
A contract which conveys to its owner, the holder, the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price on or before a specified date, depending on the style of the option
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Option Adjustments
The option to adjust an option contract due to a certain event with respect to an underlying security.
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Option Agreement
A written agreement between the company and an optionee setting forth the terms, conditions and restrictions of the option.
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Option Class
All the call options or all the put options for a particular underlying asset on a listed exchange.
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Option Series
The grouping of options on an underlying security with the same strike price and expiration month.
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Option-Income Fund
An option income fund generates current income for its investors by writing options.
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Options Clearing Corporation (OCC)
The Options Clearing Corporation works with regulators and acts as the issuer and guarantor for options and futures contracts.
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Order Book Official
An exchange employee in charge of keeping a book of public limit orders on exchanges utilizing the "marker-maker" system, as opposed to the "specialist system", of executing orders.
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Ordinary Shares
Ordinary shares give their owners the right to vote at company shareholder meetings and come with no guaranteed dividend.
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Original Issue Discount (OID)
The amount of discount or the difference between the original face value and the price paid for a bond.
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Original Issue Zeros
An original issue discount is a type of debt instrument, most often a bond, that is sold at a lower price than face value when it was originally issued.
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Other Current Assets
Things that a company owns, benefits from or uses to generate income that can be converted into cash within one business cycle.
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Over-the-Counter Market (OTC)
A decentralized market where the participants trade with one another directly, without the need for an exchange.
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Overbought\Oversold Indicator
Overbought - when a security makes an extended move to the upside. Oversold - when a security makes an extended move to the downside
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Par Value
The face value of a bond or the stock value stated in the corporate charter.
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Participating Preferred
A type of stock that gives the holder the right to earn dividends at a higher rate.
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Pass-Through Security
A pool of fixed-income securities backed by a package of assets.
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Payee
The party in an exchange who receives payment for goods and services of some type.
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Payout Ratio
The proportion of earnings paid out as dividends to shareholders.
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PEG Ratio
A valuation metric that determines the relative trade-off between the price of a stock, the earnings generated per share, and a company's expected growth.
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Penny Stocks
A small company's stock that trades for less than $5 per share and trades via OTC transactions.
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Percent in Top Five Holdings
A Proportion of the total assets in a mutual fund's biggest five positions.
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Phantom Interest / Stock?
A form of employee compensation that gives employees access to stock ownership without actually owning the stock.
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Pink Sheets
Listings for stocks that trade over-the-counter in the U.S. instead on a major stock exchange.
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Pit
A specific area of the trading floor that is designated for the buying and selling of a security through the open outcry system.
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Pivot
A significant price level known in advance that traders view as important.
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Point
A point in which commercial transactions take place or may take place.
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Point and Figure Chart
A chart that plots price movements as a series of stacked X's or O's that do not take into consideration the passage of time.
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Portfolio
A collection of financial investments such as stocks, bonds, commodities, cash, mutual funds, ETFs, and others.
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Portfolio Turnover
The rate at which securities are replaced within a fund.
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Position Limits
A preset level of ownership that limits the number of shares or derivatives that a trader may own.
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Pre-Tax Margin
An accounting tool used to measure the operating efficiency of a company.
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Preemptive Right
The right given to a shareholder to buy additional shares of a new issue in order to maintain the size of his ownership stake in the company.
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Preferred Stock
A type of stock that entitles the holder to a fixed dividend, the payment of which takes priority over that of common dividends.
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Premium (Bonds)
A bond trading above its face value.
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Premium (Options)
The price that traders pay for a put or call options contract.
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Price Spread
The spread is the gap between the bid and the ask prices of a security or asset, like a stock, bond, or commodity.
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Price-Weighted Index
A stock market index in which each stock makes up a fraction of the index that is proportional to its price per share.
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Price/Book
A ratio that compares a company's market value to its book value.
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Price/Cash Flow
A ratio that measures the value of a stock’s price relative to its operating cash flow per share.
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Price/Earnings Ratio
A ratio that measures the current share price relative to the per-share earnings.
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Price/Sales
A ratio that compares a company's stock price to its revenues, helping investors to make good investments.
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Primary Dealer
A pre-approved financial institution that is authorized to make business deals with the United States Federal Reserve.
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Primary Market
A market that issues new securities on an exchange, aided by underwriting groups and consisting of investment banks.
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Principal
The money lent to a borrower or put into an investment. The term can also be used to describe a private company’s owner or the main participant in a deal.
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Principal (Bond)
The amount of money an issuer agrees to pay the lender at the expiration date of the bond.
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Private Company
A company held under private ownership with shares that are not traded publicly on exchanges.
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Private Placement
A sale of stock shares to pre-selected investors and institutions instead of using the open market.
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Privatization
A piece of property or business that turns from government-owned to privately owned.
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Profit Margin
The degree to which a company or a business activity makes money.
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Program Trading
The use of computer-generated algorithms to make trades in large volumes with great frequency, surpassing the capabilities of regular human traders.
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Prospectus
A document that is required by and filed with the SEC providing details about an investment offering that is sold to the public.
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Proxy
The authority to represent someone else, especially in voting.
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Proxy Fight
When a group of shareholders join forces and gather enough proxy votes in order to win a corporate vote.
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Public Market
In public markets, companies sell shares to the general population, who can then buy, sell or trade those shares on a stock exchange
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Public Offering Date
The date of the underwriting agreement between the company and the underwriter managing the initial public.
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Purchase Price
The price an investor pays for a security.
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Put
An option that grants the right to the owner to sell some amount of the underlying security at a specified price, on or before the option expires.
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Quarterly Report
A summary or collection of unaudited financial statements issued by companies every three months.
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Quick Ratio
A calculation that measures a company’s ability to meet short-term obligations with its liquid assets.
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Quote
A price determined at a specific instance of time for a security traded on the market.
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R-Squared
A statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable.
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Range
The difference between a stock's low and high price for a particular trading period.
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Rate of Return
The gain or loss of an investment over a specified period of time expressed as a percentage of the cost of the investment.
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Rating
An assessment tool assigned by an analyst or rating agency to a stock or bond indicating its potential for opportunity or safety.
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Real-Time Quote
Shows the actual security prices at that moment in time without a time delay.
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Realized Gains/Losses
Realised gains - when an asset is sold for more than its buying price. Realised losses - when an asset is sold for less than its buying price.
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Record Date
The last date on which shareholders are eligible to receive a dividend or distribution.
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Red Herring
A preliminary prospectus filed by a company with the SEC, usually in connection with its initial public offering.
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Redemption
The repayment of a fixed-income security on or before its maturity date.
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Redemption (Mutual Fund)
The process where an investor sells mutual fund units back to the mutual fund.
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Redemption Date
The date on which a bond matures or gets redeemed.
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Redemption Fee
A fee charged to an investor when shares are sold from a fund.
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Redemption Notice
A notice in a form approved by the company by which a holder of public shares is entitled to require the company to redeem its public shares, subject to any conditions contained therein.
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Refunding
The process where an issuer refinances by retiring outstanding bonds with new bonds, usually to reduce financing costs.
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Registered Bond
A bond that has its owner's name and contact information recorded with the issuing entity, ensuring coupon payments are correctly distributed.
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Registered Form
A paper trail that notes who bought the security and when.
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Registered to Principal Only
A registration that requires the investor to clip coupons in order to receive the interest payments of a bond.
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Registered Trader
An exchange member who executes frequent trades for their own account.
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Registrar
An institution responsible for keeping records of bondholders and shareholders after an issuer offers securities to the public.
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Registration Statement
A set of documents which a company has to file with the United States SEC before it proceeds with a public offering.
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Regular Way
A regular-way trade (RW) is settled within the standard settlement cycle, which, depending on the transaction type, can range from one to five days.
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Regulation A
An exemption from the registration requirements mandated by the Securities Act, applicable to small public offerings of securities.
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Regulation T (Reg T)
Regulation that governs cash accounts and the amount of credit that broker-dealers can extend to investors for the purchase of securities.
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Reinvestment Opportunity
When income distributions received from an investment are ploughed back into that investment instead of receiving cash
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Reinvestment Rate
The return an investor expects after reinvesting the cash flows from an investment.
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Reinvestment Risk
The risk that an investor might be unable to reinvest cash flows at a rate comparable to their current rate of return.
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Relative Strength
A technique used in momentum investing that focuses on investing in securities that have outperformed the market or a benchmark.
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Resistance (Resistance Level)
A level that the price action of an asset has difficulty rising above over a period of time.
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Restricted Account
A margin account that cannot purchase more stock on margin without putting more equity.
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Restricted Securities
A type of securities that have been acquired in a private, unregistered sale from the issuing company or from an affiliate of the issuer.
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Retained Earnings
The total net earnings or profit of a firm after accounting for dividends. Retained earnings are also known as earnings surplus.
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Retractment
The withdrawal of a bid, offer, or statement before any relevant party acts on the information provided.
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Return
The profit or loss resulting in from investing or saving.
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Return on Assets (ROA)
An indicator of how profitable a company is relative to its total assets.
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Return on Equity (ROE)
A measure of financial performance calculated by dividing net income by shareholders' equity.
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Revenue Anticipation Note (RAN)
Municipal bonds with which the government repays lenders with the revenue it generates from the financed project.
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Revenue Bond
A municipal bond supported by the revenue from a specific project. This project in question could be a toll bridge, a highway, a local stadium or something else.
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Revenues
The total income produced by a given source.
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Reverse Stock Split
The process of consolidating the number of existing shares of corporate stock into fewer, more valuable, shares.
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Rights Issue
A set of rights given to shareholders to purchase additional stock shares in proportion to their holdings.
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Rights Offering
A set of rights given to shareholders to purchase additional stock shares in proportion to their holdings.
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Risk
The risk associated with financing, including financial transactions that include company loans in the risk of default.
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Risk/Return Trade-off
The trade-off that an investor faces between risk and return while considering different investment decisions.
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Road Show
A sales pitch to potential investors that leads up to an initial public offering.
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Round Lot
A standard number of securities to be traded on an exchange. For stocks, it's any number divisible by 100.
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Rule 144
An SEC rule that regulates the resale of restricted or unregistered securities.
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Rules of Fair Practice
A code of conduct for United States broker-dealers that requires loyalty to and fair dealing with their clients.
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Russell 2000 Index
An index that measures the performance of the 2000 smaller stocks that are listed in the Russell 3000 Index.
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Sales Charge
A commission paid by an investor on an investment in a mutual fund.
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Same-Day Substitution
A purchase and a sale of securities of the same value on the same day in a margin account which does not require an additional deposit.
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Savings Bonds
A government bond sold to the general public, yielding variable interest.
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Secondary Market
A market where investors purchase securities or assets from other investors, instead of doing so directly from the issuing companies.
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Secondary Offerings
The sale of new or closely held shares of a company that has already made an initial public offering.
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Sector Funds
A fund that invests solely in businesses that operate in a particular sector of the economy.
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Securities
A tradable financial asset, that includes any form of financial instrument.
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Securities and Exchange Commission (SEC)
A United States government agency created by congress to regulate the securities markets and protect the rights of investors.
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Securities Investor Protection Corporation (SIPC)
SIPC oversees the liquidation of broker-dealers that go bankrupt and then returns their assets to their customers.
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Sell-Out
A situation where firms or individuals are forced to sell some of their assets in order to pay certain short-term obligations.
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Sell/Write
An investor selling a stock short and, at the same time, writing puts against it.
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Serial Bonds
A bond issue where a portion of the outstanding bonds matures at regular intervals until all of the bonds have matured.
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Series
A grouping of options on an underlying security with the same strike price and expiration month.
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Settlement
The process of settling an account.
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Settlement Date
The date a trade is settled.
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Settlement Date Inventory
The entire stock of a business on the date that a trade is settled.
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Share Repurchase
When a company buys back its own shares from the marketplace. This is done to increase demand for the shares and raise their price.
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Shareholder
An individual or legal entity that is registered by the corporation as the owner of shares of a public or private corporation.
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Shareholder Services Fee
The fees paid to individuals that respond to investor inquiries and provide them with information about their investments.
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Shareholders’ Equity
A company's owner's claim after subtracting total liabilities from total assets.
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Shares Outstanding
The shares of a corporation that have been authorized, issued and purchased by investors and are held by them
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Short Account
The account of a short seller. The total of open short sales in a given subject of trade or in the market as a whole.
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Short Exempt
A short sale order exempted from the uptick rule regulated under the SEC Regulation SHO.
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Short Interest
A market indicator and the total number of shares of a security that have been sold short and remain outstanding.
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Short Position
Selling a security first and buying it back later, with the anticipation that the price will drop and a profit can be made.
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Short Sell
An investor borrows a security, sells it on the open market, and expects to buy it back later for less money.
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Short-Term Bond
A bond that matures in one to four years.
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Short-Term Bond Funds
A mutual fund that invests in short-term debt instruments with a maturity of up to 3 years.
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Short-Term Government Bond
A government bond with maturity ranging from a few days to 52 weeks
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Size
The magnitude of an offering, an order, or a trade.
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Slippage
The discrepancy between the expected price of a trade and the price at which the trade is executed.
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Small Company Funds
A fund that focuses on investing in small-cap stocks.
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Small-Cap Stocks
The shares of companies with a total market cap that ranges between $300 million and $2 billion.
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Special-Purpose Bond
A municipal bond that is paid from taxes that are collected from those who will benefit from the project that is financed by the bond.
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Specialist
A member of an exchange who acted as the market maker to facilitate the trading of a given stock.
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Spin-off
An operational strategy used by a company to create a brand new business subsidiary from the parent company.
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Split Fund
A fund that offers two distinct classes of shares and invests in an underlying portfolio of dividend-paying companies.
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Sponsor
A range of providers and entities supporting the goals of an individual or a company.
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Spread
The difference between two prices of a security or asset.
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Spread Order
A combination of individual orders that work together to create a single trading strategy. It could combine stock/stock, stock/option, option/option and others.
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Standard Deviation
A statistical measure of market volatility, displaying how widely prices are dispersed from the average price.
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Statement of Additional Information
A supplement to a mutual fund's prospectus containing extra information about the fund and its operations.
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Statement of Cash Flows
A financial statement that provides aggregate data about all cash inflows that a company receives from its operations and investment sources.
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Stock
Stock is the shares of which ownership in a corporation or company is divided
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Stock Ahead
A situation in which an order is placed, but not executed, because of a previously sent order involving the same price.
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Stock Dividend
A reward to shareholders that is paid in additional shares rather instead of cash.
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Stock Power
A legal power of attorney form that transfers ownership of shares of stock to a new owner.
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Stock Splits
Stock splitting is when a company increases the number of outstanding shares of stock to boost the liquidity of the stock.
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Stop Limit Order
A set time frame that combines features of a stop with those of a limit order and is generally used to mitigate risk.
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Stop Order
An order type that is triggered when the price of a security reaches the stop price level.
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Stop-Loss
An order for a security to be bought or sold at a market when it reaches a certain price known as the stop price.
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Straddle
An options strategy in which an investor holds a position in both a call and put with the same strike price and expiration date.
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Strangle
An options strategy where an investor holds both a call and a put on the same underlying asset.
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Street Name
Street name is when a security is held by a brokerage that holds it on behalf of a client.
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Strike Price
The price at which a derivative contract can be exercised (bought or sold).
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Strips
Separating a coupon from a bond so the two can be sold separately.
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Subject Quote
A quote for the price of a certain security in which the price is subject to future change.
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Subordinated Debenture
A bond that is classified lower than more senior debt in the event of a default. This means that the holders of more senior debt are paid first and any residual funds are made available to the holder of the subordinated debenture.
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Subscription Right
A right that allows existing shareholders in a publicly-traded company to purchase shares of a secondary offering at a discounted price.
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Subsequent Investment
Subsequent investment is any additional investment, other than the initial investment, in the company made following the transaction closing by the subordinated investor or any affiliate, whether in the form of capital contributions, or purchases of additional securities of any nature, loans or otherwise.
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Support (Support Level)
A level that the price action of an asset has difficulty falling below over a period of time.
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Symbol
A certain arrangement of characters that represents publicly-traded securities on an exchange.
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Takeover
When a company successfully closes on a bid to assume control of or acquire a target company.
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Target Fund
An investment vehicle that an investor uses to save for retirement.
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Tax Anticipation Bill
A type of short-term treasury debt sold in periods when tax receipts did not cover short-term government spending.
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Tax Anticipation Note
A type of debt security issued by a state or local government to raise money for a capital project.
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Tax-Exempt Bonds
A bond with interest income that is not subject to taxation by the U.S. federal government.
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Technical Analysis
A trading methodology that aims to predict the direction of prices based on past market data.
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Tender Offer
An offer to purchase some or all of the shareholders' shares in a corporation.
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Tenure
Loan tenure is the amount of time you are given to repay the loan.
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Term Maturity /to maturity
The remaining life of a bond or other type of debt instrument.
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Term Structure of Interest Rates
The interest rates of similar quality bonds at different maturities.
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Tick Indicator
An indicator on the market, based on the number of stocks whose last trade was an uptick or a downtick.
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Ticker
A telegraphic or electronic machine that prints out stock market information on a strip of paper.
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Time Horizon (Investment Horizon)
The period of time one expects to hold an investment for a specific goal
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Time Value
One of two key components of an option's premium.
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TIPS
Transferable Insurance Policies are life insurance policies that can be transferred.
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Total Assets
All of the assets or items of value a business owns.
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Total Debt-to-Equity Ratio /same as D to E
A ratio that indicates how much debt a company is using to finance its assets relative to the equity value of shareholders.
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Total Liabilities
The combined debts that an individual or company owes.
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Total Return
A performance measure that reflects the actual rate of return of an investment or a pool of investments over a given period of time.
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Total Return (Mutual Funds)
Combining the dividends that have been distributed during the holding period, with the absolute change in NAV, and dividing it by the NAV on the starting date.
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Total Revenue
The total revenue from recurring and non-recurring revenue streams.
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Trade
The buying and selling at a specific price.
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Trade Confirmation
A receipt of an executed order sent to the trader by the broker
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Trade Date
The month, day, and year that an order is executed in the market.
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Trading Range
When a security trades between consistent high and low prices for a certain period of time.
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Trailing P/E Ratio
Trailing price-to-earnings is calculated by taking the current stock price and dividing it by the trailing earnings per share for the last 12 months.
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Transfer
Transfer is the movement of assets, monetary funds or ownership rights from one account to another.
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Transfer Agent
An individual who agent keeps records of who owns a publicly traded company's stocks and bonds. Transfer agents ensure that investors receive their dividends on time.
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Treasuries
Debt obligations issued by the U.S. Department of the Treasury.
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Treasury Bills (T-Bills)
A short-term debt obligation issued by the United States Treasury that is backed by the U.S. government with a maturity of less than one year.
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Treasury Bonds (T-Bonds)
A treasury bond is a marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years that pays periodic interest payments.
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Treasury Direct
A website run by the Bureau of the Fiscal Service under the U.S. Department of the Treasury that allows US investors to purchase securities such as Treasury Bills directly from the government
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Treasury Notes (T-Notes)
A marketable U.S. government debt security that has a fixed interest rate and a maturity between 2 and 10 years.
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Trust Indenture
An agreement in a bond contract made between a bond issuer and a trustee that represents the interest of the bondholder.
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Turnover Ratio
A ratio that depicts how much of a portfolio has been replaced in a year.
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Type
The types of orders are market orders, limit orders, and stop-loss orders.
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Uncovered Call
When a call option is sold by itself without any offsetting positions.
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Uncovered Put
A put option contract where the option writer does not hold the underlying position to cover the contract in case of assignment.
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Underwriter (Investment Banker)
The process where a bank raises capital for a client from investors in the form of equity or debt securities.
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Uniform Practice Code
A series of rules, interpretations and explanations designed to make uniform, where practicable, custom, practice, usage, and trading technique in the investment banking and securities business, particularly with regards to operational and settlement issues.
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Unit
A combination of assets or types of assets packaged together and sold as one
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Unit Investment Trust (UIT)
UITs buy a fixed portfolio of securities and allow investors to redeem their "units," much like a mutual fund.
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Unlisted Security
A financial instrument that is not traded on a formal exchange as it doesn't meet the necessary requirements.
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Unwind
To close out a complex or large trade, or correct a trading error.
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Up-Tick Rule
A trading restriction that states that short selling a stock is only allowed on an uptick.
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Uptick
An increase in the price of a financial instrument since the preceding transaction.
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Volatility
The degree of variation of a trading price series over time.
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Volume
The amount of a certain security that was traded during a given period of time.
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Voting Trust
A legal trust created to combine the voting power of shareholders by temporarily transferring their shares to the trustee.
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W-Type Bottom
A technical analysis charting pattern that describes a bottom, a rebound, another bottom and a final rebound, forming the letter "W".
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Warrant
A warrant allows the holder to buy or sell shares of stock to or from the issuing public company at a certain price before a given date.
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Wash-Sale Rule
A regulation that prohibits a taxpayer from claiming a loss on the sale of stock while still maintaining a position.
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Weighted-Average Maturity
The average time until a portfolio's securities mature, comparative to the amount invested in the portfolio.
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White Knight
An individual or a company that saves a company from a hostile takeover by acquiring the firm at a fair consideration instead.
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Withdrawal Plan
A financial plan that allows shareholders to withdraw money from a mutual fund or another investment account at specific intervals.
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Workout Quote
A non-firm quote that requires conditions to be worked out between the sides, before the trade.
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Worst 3-Month Return
The lowest total return a stock has in a consecutive three-month period over the past five years.
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Writer
The seller of an option that collects the premium payment from the buyer.
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Yellow Sheets
Bulletins that provide bond traders with updated information.
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Yield (Bond)
The amount of return an investor will get from a bond. It is calculated by dividing the face value by the amount of interest it pays.
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Yield (Stock)
Stock yield measures the growth of an investment over time compared to the buying price.
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Yield Curve
A line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates.
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Yield Elbow
The point along the yield curve where the highest interest rates are achieved.
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Yield to Call
The yield of a bond or note if you buy and hold the security until the specified call date.
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Yield to maturity
The total return expected on a bond if the bond is held until its maturity.
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Zero-Coupon Bonds
A bond that doesn't pay interest but makes up for it by trading at a deep discount, rendering profit at maturity when it is redeemed.
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Zero-Coupon CD
A zero-coupon certificate of deposit is bought at a discounted rate. It doesn't pay out interest yearly but as a flat amount at maturity.
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Zero-Minus Tick
A security trade that occurs at the same price as the preceding trade but at a lower price than the last trade of a different price.
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Zero-Plus Tick
A security trade that occurs at the same price as the preceding trade but at a higher price than the last trade of a different price.
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