Stock Market Dictionary
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| 10-K | A financial statement that shows the results for the whole year, including the periods covered by the preceding 10-Q filings as well as the fourth ... |
| 10-Q | The 10-Q is a quarterly report filed with the SEC by a public registrant that provides an overview of the most recent quarter and year-todate ... |
| 4-2 Analysis | The method by which one determines whether a private offering is exempt from registration with the SEC because the issuer is involved with a nonpublic ... |
| 504 | Rule 504 of Regulation D provides an exemption from the registration requirements of the federal securities laws for some companies when they offer and sell ... |
| 52 Week High | Identifying a stock's 52 week trading range and where it is trading currently can provide a great deal of information. If the stock is trading near ... |
| 52 Week Low | Identifying a stock's 52 week trading range and where it is trading currently can provide a great deal of information. If the stock is trading near ... |
| 8-K | The 8-K, or current report, is filed by a public registrant to report the occurrence of material corporate events or changes ("triggering event") that are ... |
| Accelerated Filer | A company that has a market value of more than $75 million. This type of company must abide by shorter deadlines for the filing of ... |
| Accredited Investor | As defined in Rule 501 under Regulation D, refers to the type of investor that is not required to receive detailed offering materials in a ... |
| Accrued Interest | Applying mainly to convertible securities, interest that has accumulated between the most recent payment and the sale of a bond or other fixed-income security. ... |
| Acid Test | A stern measure of a company's ability to pay its short term debts, in that stock is excluded from asset value. The acid-test ratio is ... |
| Acquisition | When one firm buys another firm. ... |
| Active Account | Refers to a brokerage account in which many transactions occur. Brokerage firms may charge a fee for an account that does not generate an adequate ... |
| Actively Managed Funds | In most actively managed funds, the fund manager makes specific investments with the goal of outperforming a benchmark index. Managers do this by trying to ... |
| Aftermarket | Trading activity of a stock immediately following the event by which an operating business's stock becomes publicly tradable. More commonly referred to in connection with ... |
| Algorithmic Trading | Trading bymeans of an automated computer program. ... |
| All or None | (AON) - This order says that the client will not accept less than the entire quantity in the order, but there isno rush to get ... |
| Alternate Price Projection | (APP) Compares the price range of swings in the same direction. The most frequently used percentage alternate price projections are 62 percent, 100 percent, and ... |
| Alternate Time Projection | (ATP) Compares the time range of swings in the same direction. The most frequently used percentage alternate time projections are 62 percent, 100 percent, and ... |
| Alternative Public Offering | (APO) Somewhat misleading term used to refer to the variety of methods of going public other than an IPO. The term generally describes reverse mergers, ... |
| American Stock Exchange | (AMEX) - Securities exchange that handles approximately 20% of all securities trades within the USA. ... |
| American-Style | An options contract that settles American-style can be exercised at any time prior to expiration. Stock options settle American-style. ... |
| Amortization | A process that expenses the value of an intangible asset over time. ... |
| Analyst | A person with expertise in evaluating financial investments; he or she performs investment research and makes recommendations to institutional and retail investors to buy, sell, ... |
| Announcement Date | The date on which particular news concerning a given company is announced to the public. ... |
| Annual Percentage Rage | (APR) The periodic rate times the number of periods in a year. ... |
| Annual Report | A financial disclosure of the results of a company for the past year, although it is usually a marketing piece to entice shareholders. ... |
| Annualized Dividend | This field is a calculated value and uses the last dividend paid multiplied by the frequency. It is the amount of a dividend paid to ... |
| Annualized return | The return on investment calculated on a full-year basis, meaning increasing the rate if held less than one year, or reducing the rate if ... |
| Annuities | Annuities are products, usually offered by insurance companies, that provide payments to you for a guaranteed period in return for a premium that you pay ... |
| Arbitrage | The purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market, in order to take advantage ... |
| Ask | The lowest price acceptable to a prospective seller of a security. ... |
| Asset | A balance sheet item expressing what an individual or a corporation owns. ... |
| Asset Allocation | A form of diversification, in which emphasis is placed on dividing capital among separate markets (stocks, bonds, real estate, money markets). ... |
| Assignment | Refers to the option writer's (seller's) obligation to sell or buy a stock or other financial instrument at the strike price for which the writer ... |
| Assignment | The receipt of an exercise notice by an option writer that requires him or her to sell (in the case of a call) or purchase ... |
| At The Close | (CLO) - Designed to take advantage of market action accompanying a moment in time. At the close orders may be entered any time prior to ... |
| At-The-Money | (ATM): When the strike price of an option is the same as the current price of the underlying instrument. An option is at-the-money if the strike ... |
| Authorized Shares | Number of shares authorized for issuance by a firm’s corporate charter. ... |
| Automatic Exercise | An exercise by the clearing firm in which the firm automatically exercises an in-the-money option at expiration. ... |
| Average Daily Trade Volume | A stock's average daily trade volume is the very first thing consider. ... |
| Averaging down | Buying more of a share as it's price falls in order to establish a lower overall average entry price. ... |
| Back Spread | A back spread is essentially an inverted ratio spread.When constructing a back spread, you are selling an option closer to the underlying market or even ... |
| Backdoor Registration | A method by which a company's shares can become publicly tradable through a merger directly with a public shell, after which the private operating company ... |
| Backspread | A spread where more options (calls or puts) are bought than sold (the opposite of a Ratio Spread). ... |
| Balance Sheet | The balance sheet, also called statement of financial position, portrays the financial position of the public company by showing what the company owns and what ... |
| Bankrupt Shell | A public shell that has been created either through issuance of shares following a bankruptcy (these shares are publicly tradable under a provision of the ... |
| Bar Chart | A type of chart that consists of four significant points: the high and the low prices, which form the vertical bar; the opening price, which ... |
| Basis | In simple terms, your cost of the asset. ... |
| Bear | An investor who believes that a security or the market is falling or is expected to fall. ... |
| Bear Call Spread | A strategy in which a trader sells a lower strike call and buys a higher strike call to create a trade with limited profit and ... |
| Bear Market | A declining stock market over a prolonged period, usually lasting at least six months and normally not more than 18 months. Any market in which ... |
| Bear Momentum | When a momentum indicator is negative. In a two-line indicator, the fast line is below the slow line. A basic part of the high probability ... |
| Bear Put Spread | A strategy in which a trader sells a lower strike put and buys a higher strike put to create a trade with limited profit and ... |
| Bearish | Refers to the attitude of an investor as being pessimistic; a pessimistic outlook. ... |
| Bearish Reversal | When momentum changes from a bullish to a bearish trend. With two-line indicators, when the fast line crosses below the slow line. A momentum bearish ... |
| Best Efforts Offering | An IPO in which an investment bank will not guarantee any proceeds to the firm, but will instead make its best efforts to raise capital. ... |
| Beta | A means of measuring the volatility of a security or portfolio of securities in comparison with the market as a whole. ... |
| Bid | The bid is the highest price a prospective buyer is prepared to pay for a trading unit of a specified security. If there is a high ... |
| Bid-Asked Spread | The difference between bid and offer prices. The difference between what buyers are willing to pay and what sellers are asking for in terms of price. ... |
| Black Monday | Refers to October 19, 1987, when the Dow Jones Industrial Average fell 508 points after sharp drops the previous week. ... |
| Blank Check | As defined in SEC Rule 419, a development stage company with no business plan or whose business plan is to merge with or acquire an ... |
| Blind Pool | Term used by some in the industry to refer to a blank check which is raising or which has raised money. ... |
| Blow off Top | A large rise in price followed by a quick drop. Often accompanied with high volume. Usually a technical indicator for the end of a bullish ... |
| Blue Sky Laws | Securities laws and regulations in each of the fifty states, regulating the offering of securities in that state. In addition to the requirement to respect ... |
| Blue-Chip Company | Used in the context of general equities, a large and creditworthy company; a company renowned for the quality and wide acceptance of its products/services, and ... |
| Blue-Chip Stocks | Blue-chip stocks refer to companies with a long history of sustained earnings and dividend payments. These established companies have developed leadership positions in their respective ... |
| Bollinger Bands | Bollinger Bands are a type of envelope (or trading band) plotted at standard deviation levels above and below a moving average. Plus or minus two ... |
| Bond | A debt obligation issued by a government (i.e., Treasury bond) or corporation (i.e., corporate bond) that promises to pay its bondholders periodic interest at a ... |
| Bond trader | An individual who works for a firm and buys and sells bonds for clients. ... |
| Bonus issue | When the company gives to each stock holder, free of charge, a number of new stocks for each stock they already own. ... |
| Break even point | The price at which, if you exit your position, you will neither gain nor lose money on the trade. It is roughly your entry price ... |
| Breakaway Gap | A type of gap in trading in which the price range moves above or below the previously established trading range, including a space between a ... |
| Breakeven | The point where a position shows no profits and no losses. ... |
| Breakout | A movement by a stock or commodity above an established resistance zone or below an established support, or above an established previous top or below ... |
| Broker | An individual or firm that charges a fee or commission for executing buy and sell orders submitted by another individual or firm. ... |
| Broker-Dealer | A firm engaged in the business of effecting securities and other transactions for the accounts of others. They are required to be registered with the ... |
| Brokerage Fees | Whether you buy (and sell) funds or individual securities, the broker you use to execute your trades deserves a fee or commission for this service. ... |
| Bull | An investor who believes that a security or the market is rising or is expected to rise. ... |
| Bull Call Spread | A strategy in which a trader buys a lower strike call and sells a higher strike call to create a trade with limited profit and ... |
| Bull Market | A rising stock market over a prolonged period, usually lasting at least six months and normally not more than 18 months. Any market in which ... |
| Bull Momentum | When a momentum indicator is positive. In a two-line indicator, the fast line is above the slow line. A basic part of the high probability ... |
| Bull Put Spread | A strategy in which a trader sells a higher strike put and buys a lower strike put to create a trade with limited profit and ... |
| Bulletin Board Shell | A blank check or shell company whose securities trade on the Over-the-Counter Bulletin Board. ... |
| Bullish | Refers to the attitude of an investor as being optimistic; an optimistic outlook. ... |
| Bullish Reversal | When momentum changes from a bearish to a bullish trend. With two-line indicators, when the fast line crosses above the slow line. A momentum bullish ... |
| Butterfly | The sale (or purchase) of two identical options, together with the purchase (or sale) of one option with an immediately higher strike and one option ... |
| Butterfly Spread | A 3-leg option strategy using all calls or all puts. ... |
| Buy | To purchase an asset. ... |
| Buy Limit Order | A conditional trading order that indicates a security may be purchased only at the designated price or lower. ... |
| Buy on Close | An order stipulating to buy the security at the close of the trading session. ... |
| Buy on Margin | Borrowing to buy additional shares, using the shares as the collateral. ... |
| Buy on Open | An order stipulating to buy the security at the opening of the trading session. ... |
| Buy Order | An order to a broker to purchase a specific quantity of a security. ... |
| Buy Stop | A buy order where the price stipulated is higher than the current price. The rationale here is when the buyer believes that if the security ... |
| Buy Stop Limit | This says, “Don’t buy the stock unless it hits 65 or more, but I won’t pay more than 67.”Used by traders who believe that if ... |
| Buy Stop Order | An order to buy that is not to be executed until the market price rises to the stop price. Once the security breaks through that ... |
| Buy-and-Hold | A passive investment strategy with no active buying and selling of stocks. A long position. ... |
| Buyers Market | A market in which the supply exceeds the demand, creating lower prices. ... |
| Bylaws | Set of rules governing many aspects of a corporation's business, including the process of electing officers and directors, calling and conducting meetings, and defining protocols ... |
| Calendar Spread | Applying to derivative products, a strategy in which there is a simultaneous purchase and sale of options of the same class at different strike prices, ... |
| Call | An option contract that gives the holder the right, but not the obligation, to buy a specified amount of an underlying security at a specified ... |
| Called Away | When a call or put option is exercised against the stockholder. ... |
| Candlestick Chart | A price chart that displays the high, low, open and close for each day over a specified period of time. ... |
| Capital | The amount of money you have invested. When your investing objective is capital preservation, your priority is to try not to lose any money. When your objective is ... |
| Capital Exposure | The amount of capital (money) that may be lost if a trade moves against the initial position. In other words, the potential cost to find ... |
| Capital Gain | The profit realized when a capital asset is sold for a higher price than the purchase price. Your costs (when you buy) include the commission you ... |
| Capital Lease | After a lease term expires, a company may get ownership in the underlying property if it meets a variety of criteria (although this is beyond ... |
| Capital Loss | When a stock is sold below cost; the difference between the net cost of a security and the net sales price, if the security is ... |
| Capitulation | When investors en masse have completely given up hope on an investment or market. Capitulation often occurs on heavy, panic type selling, and is followed ... |
| Cash Commodity | The actual physical commodity, as distinguished from a futures contract. ... |
| Cash Dividends | A cash dividend is a dividend paid in cash. To be able to pay cash dividends, companies need to have not only sufficient earnings but ... |
| Cash Equivalent | A very liquid asset.That means it's available right now or is in an account with a maturity no longer than three months. ... |
| Cash Flow | Represents earnings before depreciation, amortization, and non-cash charges; sometimes called cash earnings. This indicates the ability to pay dividends. ... |
| Cash Flow Statement | A financial statement that adjusts the balance sheet and income statement to see how much money a company has generated or spent during a certain ... |
| Cash-and-Carry Shell | A shell company whose owners wish to sell most or all of the shell's ownership for cash, rather than participate as equity holders in a ... |
| CBOE | CBOE interest-rate products are based on the underlying assets of U.S. Treasury bills, 5-year U.S. Treasury notes, 10-year U.S. Treasury notes, and 30-year U.S. Treasury ... |
| CBOT | CBOT products are futures-based products trading on U.S. Treasury bills, 2-year U.S. Treasury notes, 5-year U.S. Treasury notes, 10-year U.S. Treasury notes, and 30-year U.S. ... |
| Ceiling | The highest price, interest rate, or other numerical factor allowable in a financial transaction. ... |
| Certificate of Incorporation | The filing with a U.S. state's government (typically the Department of State) to create a corporation. Some states use the term articles of incorporation, and ... |
| Chapter 11 | Provides a company a breather to attempt to turn things around. ... |
| Chapter 7 | The filing a company makes when it decides to liquidate its operations. ... |
| Chicago Board Options Exchange | (CBOE): Established in 1973, the CBOE was the first organized options exchange in the United States. ... |
| Clean Shell | A shell company which has no liabilities or other negative attributes as perceived by an operating business seeking to merge with it. ... |
| Clearinghouse | An institution established separately from the stock exchanges that ensures that the payment and delivery of stocks or options is handled accurately and efficiently. ... |
| Close | The period at the end of the trading session; sometimes used to refer to the closing price. ... |
| Close-Gap | Another term for "lap." A lap up occurs when the next day?s low is greater than the previous day?s close. ... |
| Closed Position | Exposure in foreign currencies that no longer exists. ... |
| Closed-Ended Funds | Closed-ended funds, like their more populous and popular open-ended cousins, are investment companies set up to own securities portfolios. But unlike traditional funds, closed-ended funds trade ... |
| Closing Price | The price of the last transaction of a particular stock completed during a day’s trading session on an exchange. ... |
| Closing Quote | The last bid and offer prices of a particular stock at the close of a day’s trading session on an exchange. ... |
| Collar | An upper and lower limit on the interest rate on a floating-rate note or an adjustable-rate mortgage. ... |
| Collateral | An asset than can be repossessed if a borrower defaults. ... |
| Combination Strategy | A strategy in which a put and call with the same strike price and expiration are either both bought or both sold. ... |
| Commission | The fee paid to a broker to execute a trade, which is based on the number of shares, bonds, options, and/or their dollar value. ... |
| Commodity | Any bulk good traded on an exchange or in the cash market; examples include metals, grains, and meats. ... |
| Common Gap | A trading gap, or space between one day’s close and the next day’s opening price, which occurs periodically and not necessarily as part of a ... |
| Common Stock Ratio | The percentage that common stockholders' equity reduced by intangible assets bears to total tangible capitalization (the sum of shareholders' equity and long-term debt reduced by ... |
| Compound Return | The return on investment (ROI) including reinvested dividends used to purchase additional partial shares, so that each quarter’s dividend return is based on a greater ... |
| Confidentiality Agreement | A confidentiality agreement (CA) is a legally binding contract between the target and each prospective buyer that governs the sharing of confidential company information. The ... |
| Consensus Rating | The average of analysts recommendations for a single entity. As many brokers have different ratings systems, their recommendations must be standardized so that a consensus ... |
| Consumer Price Index | (CPI) - It is a measure of price changes in consumer goods and services such as gasoline, food, and automobiles. ... |
| Contingency Order | When you place a stock or option order you can choose to place contingencies on that order, meaning that the order will be filled only ... |
| Contract | A unit of trading for a financial or commodity future; the actual bilateral agreement between the buyer and seller of a transaction as defined by ... |
| Contrarian Investing | A strategy involving making decisions contrary to the prevalent opinion, due to an observation that in the market, the majority is wrong more often than ... |
| Convertible Securities | Convertible securities can be exchanged or converted into common shares. Examples are convertible preferred stock, convertible bonds and the like. Such securities are deemed to be ... |
| Cover | The purchase of a contract to offset a previously established short position. ... |
| Covered Call | A strategy that involves buying stock shares and selling calls. If the calls are assigned, the investor must relinquish the shares. The covered call can be ... |
| Covered Call Spread | The covered call employs a strategy similar to the one used for a short put, counting on statistical long-term gains in the market, with some ... |
| Covered Option | A position offset by an equal and opposite position in the underlying security. ... |
| Covered Put | A put option position in which the option buyer is also short the corresponding stock or has deposited cash or cash equivalents equal to exercising ... |
| CPR | An abbreviation for a Closing Price Reversal, a short-term price action. ... |
| Credit | Amount that is added to the trading account when an options trader collects a premium for selling options. ... |
| Credit Spread | The difference in value of two options, where the value of the one sold exceeds the value of the one purchased to create a net ... |
| Current Liabilities | Debts that must be paid off within a company's operating cycle or within one year, whichever is greater. ... |
| CUSIP | Committee on Uniform Securities Identification Procedures. The committee which supplies a unique nine-character identification, called a CUSIP number, for each class of security approved for ... |
| Cyclical Stocks | Cyclical stock prices move with the economy. Cyclical stocks often reach their high and low points before the respective peaks and troughs of the economy.When ... |
| Daily Price Limit | The level at which many commodity, futures, and options markets are allowed to rise or fall in a day. ... |
| Day Order | When you place a Day Order you give your broker a price at which you are willing to buy or sell a stock or option ... |
| Day Trader | A very short-term trader who is usually glued to the monitor during market hours and enters and exits a trade during one trading day. The ... |
| Day Trading | Establishing and liquidating the same position or positions within one day’s trading. ... |
| Dealer | An individual or firm that acts as a principal or counterparty to a transaction. ... |
| Debit | The amount that is subtracted from a trader?s account when a trade involves the net purchase of options contracts. ... |
| Debit Spread | The difference in value of two options, where the value of the long position exceeds the value of the short position to create a net ... |
| Debt to Equity | This old standard is commonly used to get a feel for indebtedness, particularly in comparison with the rest of an industry. How to calculate debt to ... |
| Deep In the Money | (DITM) Calls: where the price of the underlying security is far greater than the call Strike price. Puts: where the price of the underlying security is far ... |
| Defensive Stocks | Defensive stocks are the stocks of companies that tend to hold their price levels when the economy declines.Generally, these stocks resist downturns in the economy ... |
| Deferred Charges | Deferred charges are expenditures for items that will benefit future periods beyond one year from the balance sheet date; for example, costs for introduction of ... |
| Definitive Agreement | The definitive agreement is a legally binding contract between a buyer and seller detailing the terms and conditions of the sale transaction. In an auction, the ... |
| Delayed Quote | A stock or bond quote that shows the bid and ask prices 15, sometimes 20 minutes after a trade takes place. ... |
| Delayed Time Quotes | Quotes which are delayed from real time. ... |
| Delta | The amount by which the price of an option changes for every dollar move in the underlying instrument. Delta measures the sensitivity of the option’s ... |
| Delta Hedge | A strategy designed to protect the investor against directional price changes in the underlying asset by engineering the overall position delta to zero. ... |
| Delta Neutral | Refers to an options position constructed so that the profitability of the position relies on the magnitude of the move - not the directional bias; ... |
| Depressed Market | Market in which supply overwhelms demand, leading to weak and lower prices. ... |
| Derivatives | Derivatives are financial instruments whose value is based on the market value of an underlying asset such as a stock, bond, or commodity. ... |
| Devaluation | The deliberate downward adjustment of a currency’s price, normally by official announcement. ... |
| Directional Trade | A trade that requires the underlying asset to move in one direction in order to produce profits. To make a profit, the trader must determine ... |
| Directionless | Refers to an investment that lacks direction and is not trending higher or lower. Certain options strategies work well when the underlying asset is not ... |
| Discount Broker | A brokerage house featuring relatively low commission rates in comparison to a full-service broker. A brokerage firm that offers lower commission rates than a full-service broker, ... |
| Divergence | A term used to describe a difference in the behavior of two instruments, or an instrument and an indicator based on that instrument. ... |
| Diversification | Spreading one's assets across a wide variety of investments within a portfolio to minimize the impact of any one security on overall portfolio performance and ... |
| Diversification Rule | Do not invest more than 30 percent of the total value of your portfolio in any one sector and no more than 20 percent of ... |
| Dividend | When companies pay part of their profits to shareholders, those payments are called dividends. A portion of a company’s profit paid to common and preferred ... |
| Domestic Market | A nation’s internal market for issuing and trading securities of entities domiciled within that nation. ... |
| Double Diagonals | Double diagonals are a favorite among professional index option traders.The double diagonal capitalizes perfectly on the moderate range of the index versus singular components by ... |
| Dow Jones Industrial Average | (DOW) The best known U.S. index of stocks. A price-weighted average consisting of 30 actively traded blue-chip stocks, primarily industrial, including stocks traded on the ... |
| Downtick | A new price quote at a price lower than the preceding quote. A downward price movement in a particular stock. A trade occurring at a lower ... |
| Downturn | The transition point between a rising, expanding economy to a falling, contracting one. ... |
| Dual listing | The situation that arises when a security is registered for trading on more than one exchange. ... |
| Earned Income | Income that is paid as a salary from a job or passed through from a schedule C or a partnership that you materially participated in ... |
| Earnings | Net income for a company during a period. ... |
| Earnings per Share | (EPS) The amount of profits of an organization divided by the number of outstanding shares. ... |
| Earnings Per Share Progression | Look at the last four quarters of EPS growth to see if the company's earning capacity is improving or weakening. Earnings are a reflection of good ... |
| Earnings Surprises | Positive or negative differences from the consensus forecast of earnings by institutions. ... |
| EBITDA | Earnings before interest, taxes, depreciation, and amortization. ... |
| Econometric Analysis | Using mathematical formulas or models to make trading decisions with fundamental information and data. ... |
| Economic Indicator | A government-issued statistic that indicates level of current economic growth and stability. ... |
| EDGAR | The Electronic Data Gathering, Analysis, and Retrieval database run by the U.S. Securities and Exchange Commission (SEC). ... |
| Employee Stock Fund | A firm-sponsored program that enables employees to purchase shares of the firm’s common stock on a preferential basis. ... |
| End Markets | A company's end markets refer to the broad underlying markets into which it sells its products and services. For example, a plastics manufacturer may ... |
| Entry Strategy | The strategy to determine the entry conditions and specific entry and initial stop-loss prices. ... |
| Equity | A synonym for a stock, or the interest or value, which an owner has in an asset. ... |
| Equity Options | The same as stock options. ... |
| European-Style | An option contract that can be exercised only on the expiration date. ... |
| Exchange | Place where a stock or an option, a future, or other derivative is bought and sold. ... |
| Exchange-Traded Fund | (ETF) A fund that tracks an index, but can be traded like a stock. Many ETFs have options available allowing traders to profit from moves ... |
| Execution | The process of completing an order to buy or sell a security. Once a trade is executed, it is reported in a confirmation report. ... |
| Exercise | To implement the right of the holder of an option to buy (in the case of a call) or sell (in the case of a ... |
| Exercise Limits | Rules that are similar to the Position Limits. The idea here is prevent an investor (or group using same advisor) from disrupting the orderly trading ... |
| Exercise Price | The price at which the security underlying a future or options contract may be bought or sold. ... |
| Exit Strategy | The conditions to exit an open trade. The exit strategy must be determined before the trade is entered. ... |
| Expiration | The time an option contract lapses. ... |
| Expiration Date | The day when the options contract expires. ... |
| Expiration Day | Practically, it is the close of business on the third Friday of the month because we are not allowed to trade options of current expiration ... |
| Extension Date | The day on which the first option either expires or is extended. ... |
| Extraordinary Calls | There are extraordinary mandatory and extraordinary optional calls. This means that some sort of extraordinary event has occurred, and as a result the issuer ... |
| Extrinsic Value | (Time Value) - The price of an option less its Intrinsic Value. Out of the Money (OTM) options are made up entirely of Extrinsic (or ... |
| Fair Market Value | An asset’s value under normal circumstances. ... |
| Fair Value | The theoretical value calculation of an option using a pricing formula such as the Black-Scholes Options Pricing Model. ... |
| FASB | Financial Accounting Standards Board (FASB) ... |
| Fast Market | A market is fast when it is hit with a large volume of orders over a short period of time. ... |
| FDIC | Federal Deposit Insurance Corporation (FDIC). The regulatory agency responsible for administering bank depository insurance in the United States. ... |
| Federal Reserve | The U.S. central bank that is responsible for monetary policy. ... |
| Fibonacci Retracement | Where prices on a chart move off their latest tops or bottoms in swings of 38.2%, 50%, or 61.8% from their previous bottoms or tops ... |
| FIFO | First In, First Out (FIFO) ... |
| Fill | The execution of an order; also, the price at which an order is executed. ... |
| Fill or Kill | (FOK) - An order where a precise number of contracts must be filled or the order is cancelled.This order says that the client will not ... |
| Financial Adviser | A professional who offers financial advice to clients for a fee and/or commission. ... |
| Financial Analysis | An analysis of a company’s financial statement, often done by financial analysts. ... |
| Financial Analyst | A professional who analyzes financial statements, interviews corporate executives, and attends trade shows of companies in order to write reports recommending either purchasing, selling, or ... |
| Financial Leverage | Financial leverage relates a company's long-term debt and preferred stock to the company's common equity. ... |
| Fire Sale | Occasionally companies experience deep price declines due to actual or anticipated news or announcements. These declines can get out of hand, as more and more ... |
| Fiscal Periods | Because not all companies have the same fiscal year end, we, in cooperation with I/B/E/S, use FY1, FY2, etc., to identify unique fiscal periods for ... |
| Flexible Mutual Fund | A fund that invests in a variety of securities in varying proportions in order to maximize shareholder returns while maintaining a low level of risk. ... |
| Float | The initial raising of capital by putting a company's stocks on offer to the public. The total number of outstanding shares available to the public ... |
| Floor Broker | A member of an exchange who is paid to execute orders. ... |
| Floor Trader | An exchange member who trades on the floor of the exchange for their own account. ... |
| Fluctuation | A price or interest rate change. ... |
| Foating Stop | An automated trailing stop. ... |
| Forecasting | Making projections about the future performance of a stock on the basis of historical and current conditions data. ... |
| Foreign Direct Investment | The acquisition by an investor in one country of an asset in another country With the intent to manage that asset. In most cases, both ... |
| Foreign Exchange | (FOREX, FX) The simultaneous buying of one currency and selling of another. ... |
| FOREX | Foreign Exchange (FOREX, FX). The simultaneous buying of one currency and selling of another. ... |
| Full-Service Broker | A type of stockbroker who provides more than stock quotes and order execution, including (and not limited to) portfolio planning and management, investment ideas, and ... |
| Fully Invested | Used to describe an investor whose assets are totally committed to investments, typically stock. ... |
| Fund Manager | The person responsible for the allocation of pooled money invested in a particular mutual fund. He/she is charged with investing the money to attain the returns ... |
| Fundamental Analysis | A method of predicting the behavior of a company's stocks by looking at fundamental information about the company such as financial health, sales and earnings ... |
| Futures | A term used to designate all contracts covering the purchase and sale of financial instruments or physical commodities for future delivery on a commodity futures ... |
| Futures Contracts | Agreement to buy or sell an underlying security at a predetermined date at an agreed price. The difference between futures and options is that with ... |
| Futures Option | An option on futures contracts. ... |
| Gain | A profit on a securities transaction recognized by selling a security for more than the security originally cost. The gain is the difference between the buy ... |
| Gamma | The speed by which delta changes compared with the speed by which the underlying asset is moving.Gamma is a second order of delta, meaning that ... |
| Gap | Where the opening bar of a price chart opens and stays beyond (lower or higher) that of the spread of the previous bar. Gaps can be ... |
| Go Long | To buy securities, options, or futures with the intent to profit from a rise in the price of the assets. ... |
| Go Short | To sell securities, options, or futures with the intent to profit from a drop in the price of the assets. ... |
| Good Till Cancelled | (GTC) - A GTC order authorizes the broker to buy or sell a position at a particular price at any time prior to cancellation of ... |
| Gross Profit | Sales minus the cost of the goods sold. ... |
| Gross Profit Margin | The gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. ... |
| Growth Opportunity | Opportunity to invest in profitable projects. ... |
| Growth Stocks | Growth stocks are issued by companies expected to have sustained high rates of growth in sales and earnings. These companies generally have high price/earnings (P/E) ... |
| Guerrilla Trader | Similar to a scalper, but trades in bursts of several trades, then recedes to the sidelines. ... |
| Guts Spread | An expensive strategy where the trader buys OTM calls and puts to replicate the risk profile of a Strangle. Far cheaper to trade the Strangle. ... |
| Hedge | A term for reducing the risk of one position by taking other positions with options, futures or other derivatives. A transaction that reduces the risk of ... |
| Hedge Fund | A private investment partnership that can use leverage and derivatives, take both long and short positions, and invest in many markets. ... |
| Hedger | A trader who enters the market with the intent to protect a position in the underlying asset; an investor who uses the futures market to ... |
| Hedging | A strategy designed to reduce investment risk using call options, put options, short-selling, or futures contracts. Its purpose is to reduce the volatility of a ... |
| Held Order | An order that must be executed without hesitation or if the stock can be bought or sold at that price in sufficient quantity. ... |
| High-Frequency Trading | Trading very frequently; scalping. A high-frequency trader uses tick data. ... |
| High-Tech Stock | Stocks of companies operating in high-technology fields. ... |
| Historic Volatility | Calculated by using the standard deviation of underlying asset price changes from close-to-close of trading going back 21 to 23 days. A measurement of how much ... |
| Hit The Bid | Acceptance of purchasing at the offer or selling at the bid. ... |
| Hold | To maintain ownership of a security over a long period of time. The recommendation of an analyst who is not positive enough on a stock ... |
| Hostile Takeover | A company or person that tries to buy a controlling amount of stocks in a company in order to control it. Usually this is not ... |
| Hunch Trading | Hunch stock market trading is not a logical trading decision, but purely a gut feeling. As hunch or intuition may turn out to be misleading, ... |
| IASB | International Accounting Standards Board (IASB) ... |
| Iday | An abbreviation for "inside day" which occurs whenever a day?s range is within the range of the previous day. ... |
| Immediate Or Cancel | (IOC) - Similar to the Fill or Kill (FOK) in that it has to be done immediately, but an IOC order allows for a partial ... |
| Implied Volatility | The volatility computed using the actual market prices of an option contract and one of a number of pricing models. ... |
| In the Money | (ITM) If you were to exercise an option and it would generate a profit at the time, it is known to be in-the-money. A put ... |
| Income Stocks | Income stocks have high dividend payouts, and the companies are typically in the mature stages of their industry life cycles. Stocks of companies that have ... |
| Index | A group of assets (often in a similar class of sector or market capitalization) which can be traded as a single security. ... |
| Index Funds | An index fund is a fund that follows a passive investing strategy, meaning that the fund managers attempt to match an identified benchmark index, not ... |
| Indicator | Used in the context of general equities, a technical or fundamental measurement used to forecast the market’s direction, such as investment advisory sentiment, stock trading ... |
| Individual Retirement Accounts | (IRA) Tax deferred accounts individuals can contribute to as long as they have earned income. See retirement investing for more information on IRAs. ... |
| Initial Margin | The initial deposit of collateral required to enter into a position as a guarantee on future performance. ... |
| Inside Information | Relevant information about a company that has not yet been made public. It is illegal for holders of this information to make trades based on ... |
| Insider Trading | Making investment decisions based on information that is not yet public. Although trading based on this type of inside information does occur, it is against ... |
| Insiders | Directors and senior officers of a corporation; those who have access to inside information about a company; someone who owns more than 10% of the ... |
| Interest Rate | The cost of borrowing money. The rate at which borrowed money is charged by the lender, usually annualized into a percentage figure. ... |
| Interest-Bearing Security | A type of investment on which earnings bear interest. ... |
| Intrinsic Value | This is a measure of any real value to the option. The amount by which an option is in-the-money. Out-of-the-money options have no intrinsic value. ... |
| Investment Income | The revenue from a portfolio of invested assets. ... |
| Investment Manager | The individual who manages a portfolio of investments; also called a portfolio manager or money manager. ... |
| Investment Memorandum | A letter that commits an individual to acquire a company's securities and describes the terms of the deal. ... |
| Investment Securities | Investments in debt securities are carried at amortized cost only when they qualify as 'held-to-maturity.'' To so qualify, the investor must have the positive intent ... |
| Investment Strategy | A strategy an investor uses when deciding how to allocate capital among several options, including stocks, bonds, cash equivalents, commodities, and real estate. See trading strategies ... |
| Investments | Financial securities, such as stocks and bonds. ... |
| Investor | A person whose principal concern in the purchase of a security is the minimizing of long-term risk, compared to the speculator who is prepared to ... |
| Iron Butterfly | A 4-leg option strategy using calls and puts together. ... |
| Japanese Candlesticks | A popular method of visually depicting price bars where the open, high, low, close are shown explicitly. Upward moving price bars are hollow. Downward moving price bars ... |
| Junior SPAC | Proposed type of SPAC raising a minimal amount of money to qualify for a Rule 419 exemption, and avoiding shareholder reconfirmation of investment, short time ... |
| Keogh Plan | A type of pension account in which taxes are deferred. Available to those who are self-employed. ... |
| Key Rate | Interest rate fixed by the Federal Bank for the issuance of Federal Bank money. ... |
| King Kong Syndrome | The emotional high that overtakes traders when they do exceptionally well for a period of time, such asmaking a dozen consecutive winning trades. ... |
| LEAPS | Long-Term Equity Anticipation Securities - or LEAPS - are call or put options that can be purchased for extended periods of time, some as much ... |
| Leg | One side or component of a spread. ... |
| Leg In | When a trader enters each part of a spread separately instead of entering the trade as one order with his or her broker. Legging into ... |
| Let Out | Legging out of a spread entails the opposite whereby you exit your spread one component part at a time with the intention of completing the ... |
| Leverage | Enables a trader to buy or sell a security or derivative and receive fair value for it using borrowed capital to increase investment return. ... |
| Liability | A legal obligation to pay a debt owed. Current liabilities are debts payable within 12 months. Long-term liabilities are debts payable over a period of more ... |
| Limit Order | An order to buy a stock at or below a specified price or to sell a stock at or above a specified price. Normally written ... |
| Liquidation | When the assets within a portfolio are sold or cashed out. ... |
| Liquidity | The ease with which an asset can be converted to cash in the marketplace. A large number of buyers and sellers and a high volume of ... |
| Long | Buying an investment security. Traders will go long when they expect the instrument to increase in value. ... |
| Long Call | The purchase of a call option in anticipation that the underlying asset will rise in price. ... |
| Long Combo | Essentially the same as a long straddle, except that the strike prices are different. ... |
| Long Position | A position that appreciates in value if market prices increase. When the base currency in the pair is bought, the position is said to be ... |
| Long Put | The purchase of a put option in anticipation that the underlying asset will decline. ... |
| Long Stock | A bullish strategy that involves buying and holding shares of stock. ... |
| Long Straddle | A long straddle is the simultaneous purchase of a put and a call on the same stock, with the same expiration date and the same ... |
| Long strangle | The purchase of an OTM call and an OTM put with the same expiration date. ... |
| Loss Comfort Zone | "Loss comfort zone” is the percentage of loss you can experience on a single trade and not lose sleep at night. Every investor has a ... |
| Mandatory Calls | The issuer has a mandated savings account (the sinking fund) and is required to make deposits into that account. Every so often—as detailed in the ... |
| Margin | A deposit made by a trader with a clearinghouse to ensure that he/she will fulfill any financial obligations resulting from his or her trades. Margin ... |
| Margin Account | An account in which stocks can be purchased for a combination of cash and a loan. The loan in the margin account is collateralized by ... |
| Margin Call | The brokerage's demand that a customer deposit a specified amount of money or securities when a purchase is made in a margin account; the amount ... |
| Margin Requirements | The amount of cash or marginable securities (for example, blue chip stocks) that an account holder must have in his account to write uncovered (or ... |
| Marginable Security | An investment that can be used as collateral in a margin account. ... |
| Mark to Market | Process of reevaluating all open positions with the current market prices. The daily adjustment of margin accounts to reflect profits and losses in such a ... |
| Market Capitalization | The number of outstanding shares multiplied by the value per share. ... |
| Market if Touched | Market if Touched (MIT) order - An order that becomes a market order if the price specified is reached. ... |
| Market Maker | A dealer willing to accept the risk of holding a particular security in his or her own account to facilitate trading in that security. ... |
| Market Order | An order to buy or sell securities at the price given at the time the order reaches the market. Buy or sell at the best ... |
| Market Surveillance | The department responsible for investigating and preventing abusive, manipulative, or illegal trading practices on The NASDAQ Stock Market. Considerable resources are devoted to surveilling The ... |
| Married Put | "Married put" is an equity term that does little to describe the position - buying or holding the outright shares, while purchasing a put ... |
| Maturity | The date on which a bond's principal is repaid to the investor and interest payments cease. Maturity is the number of years until the principal ... |
| Mercury Chart | A modified bar chart used in commodity futures. Each bar shows the price range for a time unit and changes in open interest and volume ... |
| Momentum | Where a market direction (up or down) is established. ... |
| Momentum Iindicator | Most price-based indicators are also called momentum indicators. In most cases, the momentum indicator represents the rate-of-change over the lookback period. The rate-of-change may reflect ... |
| Momentum Investor | Someone who buys stocks or other securities that have had high returns over the past 3 to 12 months, and sells those that have had ... |
| Momentum Reversal | A momentum reversal is when the momentum indicator reverses from bullish to bearish or from bearish to bullish. ... |
| Monetary Stops | Monetary stops are universal in options trading strategies.For long neutral delta strategies like straddles and strangles, you will need to decide a spread premium in ... |
| Moneyness | A term to define whether an options contract is in-the-money, at-the-money, or out-of-the-money. ... |
| Moving Average | Added to stock charts, these indicators represent average price over time. By averaging prices, the indicator can smooth or eliminate the fluctuations in data and ... |
| Mutual Funds | Mutual funds are the most common type of pooled investment. Funds "slice and dice" many types of investments - stocks, bonds, money-market instruments, and other securities ... |
| Naked | Selling naked options refers to a sold options contract with no hedge position in place. Such a position leaves the option seller (writer) exposed to ... |
| NASD | National Association of Securities Dealers: The American self-regulatory organization of the securities industry responsible for the regulation of Nasdaq and the over-the-counter markets. ... |
| Nasdaq | National Association of Securities Dealers Automated Quotations system. This is a computerized system providing brokers and dealers with securities price quotes. ... |
| Near the Money | (NTM) - Refers to an option with a strike price that is almost equal to the current market price of the underlying security. Where the ... |
| New York Stock Exchange | (NYSE) - The largest stock exchange in the USA. ... |
| No Dealing Desk Broker | A No Dealing Desk (NDD) Broker provides a platform where liquidity providers such as banks can offer prices to the NDD platform. Incoming orders are ... |
| No Load Fund | Mutual Fund offered by an open end investment company that imposes no sales charge (load) on its shareholders. Investors buy shares in no-load funds directly ... |
| Nontrade Receivables | The same as accounts receivable, but they are not from customers. Rather, they are from employees, officers, directors, and stockholders. The category also includes interest ... |
| Not Held | (NH) - Allowing the floor broker working the order to exercise discretion. ... |
| Note | A short-term debt instrument. They normally mature in or less than five years. ... |
| OCC | Options Clearing Corporation: Established in 1973, the organization processes and guarantees the standardized options contracts that trade on the U.S. options exchanges. ... |
| Offer | The lowest price at which the market-maker is willing to sell. ... |
| Offsetting Transaction | A trade that serves to cancel or offset some or all of the market risk of an open position. ... |
| On The Opening | (OPG) - Designed to take advantage of odd market movements that might accompany the opening. If an order is not present in the trading crowd ... |
| Online broker | A brokerage firm that allows clients to trade over the Internet using Web-based trading platforms. ... |
| Open Order | An order that will be executed when a market moves to its designated price. ... |
| Open Position | An active trade with corresponding unrealized P/L, which has not been offset by an equal and opposite deal. ... |
| Open-end Funds | An open-end fund sells shares on a continuous basis. Mutual funds are the most conventional type of open-end fund. ... |
| Opportunity Cost | The risk of an investment expressed as a comparison with another competing investment. ... |
| Option Premium | The price of an option; the amount of money that the option holder pays for the rights and the option writer receives for the obligations ... |
| Option Writer | The seller of an option (naked). ... |
| Optional Calls | These are calls that may or may not happen. They may or may not be in part or in whole because nobody knows for sure ... |
| Options | An option is a type of derivative - its value is derived from an underlying asset, such as a stock. The party that buys the ... |
| Options Calculator | A tool used by options traders to compute theoretical prices, volatility, delta, and the other so-called Greeks. ... |
| Options Contract | Options are sold in contracts; 1 contract is equal to 100 shares. The quoted price of an option is "per share". ... |
| Options Expiration Day | Options cease trading on the third Friday of their expiration month and expire at 11:59AM Central Time on the Saturday after the third Friday of ... |
| Out of the Money | Refers to an options contract that has no intrinsic value; for instance, a call option whose exercise price is above the current market price of ... |
| Over The Counter | (OTC) Used to describe any transaction that is not conducted over an exchange. ... |
| Paper Trading | Simulating a trade without actually putting up the money, usually done for the purpose of gaining additional trading experience. ... |
| Par | The nominal value of a bond that is paid back to the bondholder at maturity. ... |
| Partial Fills | A partial fill occurs when a trader places an order for a certain number of shares, let’s say for 2,000 shares of stock, and instead ... |
| Payable Date | The date on which a declared stock dividend or a bond interest payment is scheduled to be paid. ... |
| Penny Stocks | Penny stocks are speculative, low-priced stocks that generally trade on the over-the-counter markets and pink sheets. [The pink sheets provide the listings, the quotes (bid ... |
| Performance Incentive | A performance incentive - where the advisor gets paid based on how well your investments perform (the more money you get, the more money the ... |
| Pip | The smallest unit of price for any foreign currency. ... |
| Pivot | When a market is rallying and today?s low is less than the low of the highest day in the rally, that high becomes a pivot, ... |
| Portfolio | A selection of stocks chosen according to the investors individual goals. ... |
| Position Delta | The sum of all positive and negative deltas within a hedged trade position. ... |
| Position Limits | Each stock is assigned a numerical limit based on its trading volume. The exam will give you the limit, i.e. 7,500 contracts. The idea is ... |
| Position Trader | Trades longer-term trends lasting from several days to several weeks. Trades for points, not for ticks. ... |
| Preferred Stock | A security that is a hybrid of a bond and stock. A preferred typically has a fixed amount it pays in dividends, but has a ... |
| Premium | The amount of cash that an option buyer pays to an option seller. ... |
| Premium Discount Brokers | A premium discount broker could be a firm like Fidelity or Charles Schwab. The commission rates are somewhere between the discount brokers and the full-service brokers. ... |
| Pretzel Chart | A price chart connecting the open, high, low, and close in such a fashion that it resembles a pretzel with two closed three-sided spaces connected ... |
| Price Bar | The visual representation of a securities price fluctuations for a set period of time. Price bars can be for as little as one minute (or ... |
| Price to Sales | Per dollar of shareholder value, how much business does this company generate? Price to sales (P/S) is a straightforward way to answer this question. Here's the ... |
| Price-Earnings Ratio | (P/E) Ratio: A tool for comparing the prices of different common stocks by assessing how much the market is willing to pay for a share ... |
| Principal | The purchase price of a bond. ... |
| Privileged information | Information that is not available to the public. ... |
| Producer Price Index | (PPI) - A family of indices that measures the average change over time in selling prices received by domestic producers of goods and services. PPIs ... |
| Property Dividends | A property dividend is a dividend paid in a form other than cash or the company's own stock. ... |
| Prospectus | A legal document issued by a company wanting to issue shares to the public (listing), outlining the history, operations and financial situation of the company. ... |
| Proxy Statement | A proxy statement is a document that a public company sends to its shareholders prior to a shareholder meeting containing material information regarding matters on ... |
| Put | An option contract that gives the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified ... |
| Put Option | An option contract giving the owner the right to sell a specified amount of an underlying security at a specified price within a specified time. ... |
| Put-Call Ratio | A ratio of the trading volume of put options to call options. It is used to gauge investor sentiment. A high volume of puts compared ... |
| Pyramiding | Adding to a position as the market moves up or down. ... |
| Quote | An indicative market price, normally used for information purposes only. ... |
| Quote Currency | The second currency quoted in a FOREX currency pair. In a direct quote, the quote currency is the foreign currency itself. In an indirect quote, ... |
| Raiders | A person or group of people that attempt to buy over 50% of the shares of a company in order to control the company by ... |
| Rally | A recovery in price after a period of decline. ... |
| Ratio Backspread | A strategy using all puts or all calls whereby the trader buys OTM options in a ratio of 3:2 or 2:1 to the ITM options ... |
| Ratio Put Spread | A bullish strategy that involves the trader being short in more, lower Strike puts than those higher Strike puts he is long in, at a ... |
| Ratio Spreads | Ratio spreads are an evolution of the bull call or bear put spread. They combine long purchased options with multiple short options. ... |
| Real-time Data | A source of information that is updated live and changes instantaneously as prices change in the marketplace. ... |
| Recapitalize | To use your closed out trading profits to increase the amount of contracts, options or stocks that you normally trade. ... |
| Regulation D | Under the Securities Act of 1933, any offer to sell securities must either be registered with the SEC or meet an exemption. Regulation D (or ... |
| Regulation FD | SEC regulation adopted in 2000 that eliminated the practice of selective disclosure. ... |
| Reinvestment Date | The first day of the ex-dividend period. ... |
| Relative Strength | A ranking of near-term directional price movement. A technical indicator comparing a security’s price action as compared to that of an index or another stock. ... |
| Requoting | The practice of a broker-dealer filling an order at a price not seen on the public price feed. ... |
| Resistance Level | A term used in technical analysis indicating a specific price level at which analysis concludes people will sell. ... |
| Restricted Stock | Stock which is acquired though an employee stock option plan or other private means and which may not be transferred. ... |
| Retail investor | Individual investor making decisions for a personal portfolio. In contrast to institutional investors who make decisions on behalf of financial institutions, retail investors represent individual ... |
| Return | The income earned or a capital gain made on an investment. ... |
| Return on Equity | Return on equity is the return generated by the company for each dollar of shareholder investment. This is a way to determine how effectively the ... |
| Revaluation | An increase in the exchange rate for a currency as a result of central bank intervention. ... |
| Reversal Stop | Reversal Stop (or Stop and Reverse) order - A stop order which, when activated, reverses the current position from long to short (or vice versa). ... |
| Reverse Stock Split | A reverse stock split is defined by the SEC as a transaction that reduces the number of shares of company stock outstanding while simultaneously increasing ... |
| Rho | Rho is the measure of the sensitivity of the option to changes in interest rates.When interest rates are low, rho is not nearly as necessary ... |
| Risk | The potential financial loss inherent in an investment. ... |
| Risk Free Rate | The interest chargeable on Treasury Bills (T-Bills) is generally known as the Risk Free Rate, and it is this rate that is used as a ... |
| Risk Management | The process of managing trades by hedging risk. ... |
| Risk Profile | The graphic depiction of a trade, showing the potential Risk, Reward, and Breakeven Points as the underlying security price deviates within a range of prices. ... |
| Risk Reversal | The term risk reversal is used in a couple of different ways in trading:In foreign-exchange trading, risk reversal is the difference in delta and volatility ... |
| Rollover | Process whereby the settlement of a deal is rolled forward to another value date. The cost of this process is based on the interest rate ... |
| Root Symbol | The first part of an options symbol that represents the underlying security. ... |
| Running Stops | The practice of market makers entering orders for the purpose of hitting customer stop loss orders. ... |
| S-1 | The form for filing for an IPO. ... |
| Sales Load | The sales fee that the buyer pays in order to acquire an asset. ... |
| Scrip | Stock certificate that is evidence of ownership. ... |
| Seat | Membership in a stock or futures exchange. ... |
| SEC | Securities and Exchange Commission: A commission created by Congress to regulate the securities markets and protect investors. It is composed of five commissioners appointed by the ... |
| SEC Filings | As a general rule, the banker uses SEC filings to source historical financial information for comparable companies. This financial information is used to determine historical sales, ... |
| Sector | Sector refers to the industry or markets in which a company operates (e.g., chemicals, consumer products, healthcare, industrials, and technology). A company's sector can be further ... |
| Securities and Exchange Commission | (SEC) - Organization which regulates the US securities markets to protect investors. ... |
| Security | An instrument which can be traded (for example, stocks, bonds, and so on). ... |
| Sell Stop | Trade at the then best price, but ONLY IF a predetermined price level is met or exceeded. The order must first be triggered (or activated ... |
| Sell Stop-Limit | This is a version of the Sell Stop. This order says, “Don’t sell the shares unless they trade at 60 or less, but I won’t ... |
| Serial Bonds | The issue is bought back in stages, usually an annual installment. This is the way municipal bonds are retired—a lot of money is borrowed in ... |
| Series | All option contracts of the same class that also have the same unit of trade, expiration date, and exercise price. Option contracts of the same ... |
| Settlement | In relation to stocks it is the arrangement between broking houses for the payment or receipt of cash or shares. ... |
| Share | A unit of equity in a company. ... |
| Share Split | Increasing a companies shares outstanding by splitting the par value of existing shares and distributing additional shares pro rata to share holders. ... |
| Short | Selling an investment security in anticipation that the price will fall. ... |
| Short Call | A bearish strategy that involves selling a call option to collect the premium. ... |
| Short Put | A bullish strategy that involves selling a put option to collect the premium. ... |
| Short Selling | A risky and speculative practice involving the sale of a stock that the seller doesn't possess. The seller is effectively betting that the price of ... |
| Short Stock | Selling shares of stock in anticipation that the price will go down. ... |
| Short Straddle | A short straddle is the simultaneous sale of a put and a call on the same stock, with the same expiration date and the same ... |
| Skew | A descriptive measure of lopsidedness in a distribution. ... |
| Slippage | The difference between estimated transaction costs and actual transaction costs. The difference is usually composed of price revisions or spread and commission costs. ... |
| Small-Cap Stocks | Smaller (and sometimes newer) companies associated with high risk and high potential rewards. Can be illiquid to trade with large bid–ask spreads. ... |
| Special Memorandum Account | (SMA) - A holding place for available cash, a double bookkeeping entry.It increases when:A client’s portfolio goes to a new “all-time” high. Essentially SMA will ... |
| Speculative Stocks | Speculative stocks have the potential for above-average returns, but they also carry above-average risk of loss if the company does poorly or goes bankrupt.Speculative stocks ... |
| Speculator | An investor or trader who is willing to take large risks for a chance to make large gains. ... |
| Spread | The difference between the bid price and the ask price (buy price and sell price) ... |
| Stochastic | A technical indicator, which is an oscillator based on the relationship of the open, high, low, close of price bars. ... |
| Stock | A share of a company's stock translates into ownership of part of the company. Thus, when you own any shares of a company's stock, you ... |
| Stock Split | A stock split is when there is an increase in the number of outstanding shares without an increase in the shareholder equity. ... |
| Stop Alarm | A "Stop Alarm" is held by the broker as well. The difference is, if the stock should trigger an alarm price, the broker is directed to ... |
| Stop Limit | This is an order that says once the stock's market price touches or goes below the stop limit order price, the stop limit order is ... |
| Stop Loss | It is advisable to protect loss potential by entering an order that will "stop" the trade if the stock or option trades at a certain ... |
| Stop Market | This type of stop loss order is known by various names, such as "stop," "stop loss," and "stop market." This is an order that says ... |
| Stop Order | A stop order is an order to buy or sell a stock once the price of the stock reaches a specified price, known as the ... |
| Stop-Loss Order | An order to sell when the price of the stock declines to, or below, a stated price. The purpose of this is to reduce the ... |
| Straddle | A neutral trade that involves simultaneously buying a call and put at the same strike price and with the same Expiration Date.Requires the underlying asset ... |
| Strangle | A "Strangle" is an option strategy that gives you the potential to profit in a trade no matter which way the stock moves. This is ... |
| Strike Price | A price at which the stock or commodity underlying a call or put option can be purchased (in the case of a call) or sold ... |
| Structured Notes | A structured note, in its most popular form, is essentially a bond that’s structured so that it gives the holder (buyer) of the note a ... |
| Support | A price level at which a stock or market begins seeing increasing demand or buying interest. It serves as a floor to lower prices. ... |
| Swing Chart | A form of charting connecting prices filtered by a minimum increment; similar to point and figure charts. ... |
| Swing Trader | An individual who makes short-term trades where a stock’s price movement is in one direction; swing trading is a type of trading strategy that attempts ... |
| Symbol | A three-, four-, or five-letter sequence that denotes a stock, option, or futures contract. ... |
| Tailgating | Purchase of a security by a broker after the broker places an order for the same security for a customer. The broker hopes to profit ... |
| Technical Analysis | Using charts and charting techniques and indicators (such as prices, volume, moving averages, stochastics, etc.) to evaluate future likely price movement. ... |
| Ten Bagger | An investment which is worth ten times its original purchase price, and comes from baseball where "bags" or "bases" that a runner reaches are the ... |
| Term Bonds | The entire issue is retired in one lump sum several years later.This is the way US Treasury bonds are retired—the money is borrowed in 1980 ... |
| Theoretical Value | The Fair Value calculation of an option using a pricing formula such as the Black-Scholes Options Pricing Model. ... |
| Theta | (decay) - The sensitivity of an option price to the variable of time to Expiration. Remember that options only have a finite life (until Expiration), ... |
| Thin Spreads | Large gaps between the bids and offers caused by infrequent and illiquid trading. Thin spreads tend to move a great deal and will often move ... |
| Tick | The least amount of price movement recorded in a security. ... |
| Ticket | The details of a trade ? number of shares, type of order, prices ? that must be submitted for a trade to be executed. ... |
| Time value | The amount by which the current market price of an option exceeds its intrinsic value. The intrinsic value of a call is the amount by which ... |
| TIPS | Treasury inflation-protected securities (TIPS) are inflation-indexed bonds issued by the U.S. Treasury. The rate of return is adjusted to the consumer price index (CPI) as ... |
| Tombstones | The advertisments that are put out when a company goes public. ... |
| Trader | Someone who buys and sells frequently with the objective of short-term profit. ... |
| Trading Halt | The temporary suspension of trading in a NASDAQ security, usually for 30 minutes, while material news from the issuer is being disseminated over the news ... |
| Trading Securities | Stock or bond holdings that a company intends to sell within a short period of time (usually less than one year). These are accounted for ... |
| Trading Session | Most commonly means one of the three eight-hour sessions forrntrading FOREX over a 24-hour period - Asian, European, and North American. ... |
| Trailing Stop | Trailing stops are designed to follow the market price of a stock by a percentage amount or fixed dollar amount. The higher the market price ... |
| Trailing Stop Loss | Using a trailing stop loss allows the trader to maximize profits on a stock as it continues its trend. It is analogous to raising or ... |
| Treasury Bill | The Treasury bill, or T-bill, is a zero coupon bond issued for terms of one month to one year.The T-bill is considered to be the ... |
| Treasury Bond | U.S. Treasury bonds, also known as long bonds, are issued in 30-year terms.The T-bond is a coupon bond like the T-note with interest ... |
| Treasury Note | Treasury notes are issued in terms of 2, 3, 5, 7, and 10 years. T-notes, like T-bills, are sold at auction to institutions ... |
| Treasury Stock | When a company buys its own stock back, that stock is recorded at cost and reported as treasury stock. Treasury stock is reported as a deduction ... |
| Triple Witching Day | The third Friday in March, June, September, and December when US stock options, index options, and futures contracts all expire at the same time. The effect ... |
| Ultra-High-Frequency Trading | Trading extremely frequently, limited only by how fast you can click the mouse. ... |
| Uncovered Option | A short position where the writer does not have the underlying security (or call option) to hedge the unlimited risk position of his naked position. ... |
| Under Water | A stock option for which the option's grant price is higher than the current market price for the underlying stock. ... |
| Underlying Security | The security that may be bought with a call, or sold with a put. On Series 7 the underlying securities include:- 100 shares of a ... |
| Underwriter | A financial institution that assists in the issue of new securities by agreeing to purchase any unsold securities, thereby guaranteeing that they will be fully ... |
| Unrealized | A stock or other security has yet to be sold, even though the value of the security has changed. ... |
| Upper Indicators | Choose from several popular technical indicators. The indicators are: - Bollinger Bands - Parabolic SAR - MA Envelopes - Volume by Price - Price Channel - ... |
| Upside | The potential for a price to increase. ... |
| Value Investing | Value investing is buying shares of a business as though you were buying the business itself. Value investors emphasize the intrinsic value of assets and ... |
| Value Stocks | Value stocks are stocks that have lower prices relative to their fundamental values (growth in sales and earnings). Value stocks tend to have low P/E ... |
| Variation Margin | Funds a broker must request from the client to have the required margin deposited. The term usually refers to additional funds that must be deposited ... |
| Vega | The sensitivity of an option price to volatility. Typically, options increase in value during periods of high volatility.Vega is the measurement of the sensitivity of ... |
| Vertical spread | A spread in which one option is bought and one option is sold, where the options are of the same type, have the same underlying, ... |
| Volatility | The magnitude of price (or yield) changes over a predefined period of time. The amount by which an underlying instrument fluctuates in a given period ... |
| Volatility Skew | Whereby deep OTM options tend to have higher Implied Volatilities than ATM options. This type of discrepancy again gives the trader the opportunity to make ... |
| Volatility Stops | Monitoring implied volatility is critical in long neutral delta trading. Check the current volatility of the underlying asset regularly, and average the implied volatility of ... |
| Volume | The amount of trading activity associated with a given security during a period of time. Stock volume is measured in shares, and options volume is ... |
| Volume of Trade | The number of contracts traded during a specified period of time. It may be quoted as the number of contracts traded or as the total ... |
| Warrant | A certificate issued by a company giving the holder the right to purchase securities at a stipulated price within specific time limits or perpetually. ... |
| Wash Sale | Stock approved by the Federal Reserve and an investor's broker as being suitable for providing collateral for margin debt. ... |
| Wash Trading | Entering into, or purporting to enter into, transactions to give the appearance that purchases and sales have been made, without incurring market risk or changing ... |
| Wasting Asset | An investment that loses value over time. ... |
| Wedge | A chart pattern composed of two converging lines connecting peaks and troughs. In the case of falling wedges, the pattern indicates temporary interruptions of upward ... |
| Weighted Alpha | The Alpha is a measure of how much a stock has risen or fallen over a one-year period. ... |
| Whipsaw | Generally a sideways market ("trading market" as opposed to "trending market") with high volatility in which prices move with you for a short time, then ... |
| White Knight | A person or company that saves another company from an unwanted hostile takeover. ... |
| Wings | A term to describe a portion of a butterfly or condor. In a long butterfly, for instance, the wings are the options that are purchased ... |
| Witching Day | When two or more classes of options and futures contracts expire. ... |
| Writer | Someone who sells an option. ... |
| Yield | Refers to the annual interest on a bond divided by the market price of that bond. ... |
| Yo-Yo Stock | A highly volatile stock that moves up and down like a yo-yo. ... |
| Z Bond | A bond on which interest accrues but is not currently paid to the investor but rather is added to the principal balance of the Z ... |
| Zeta | An option price’s sensitivity to Implied Volatility. ... |
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